Greg Skidmore, Brandon Lacoff and Tim Davidson, who work at an asset management firm in Greenwich, one of the most affluent towns in America, came forward as the lottery winners Monday. Their lawyer said they formed a trust to manage the money after Davidson bought the $1 winning ticket at a Stamford gas station.

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The three men work at Belpointe, which provides investment advice, much of it to wealthy people, according to the Securities and Exchange Commission. The company manages $82 million, according to the SEC.

But Thomas Gladstone, who identified himself as the landlord for the men’s company, said he was surprised to learn Lacoff was among the winners because he made no mention of it when he saw him Friday. So Gladstone called Lacoff on Monday night.

“He said, ‘No, I didn’t win the lottery. We’re representing the guy who did,’” Gladstone said. “He said he represents the guy who’s staying anonymous.”

Asked who the real winner is, Gladstone said, “They’re protecting him. That’s the whole purpose of putting this in this trust.”

He said the real winner, a client of the men’s firm, wants anonymity because people “get harassed and hounded when they win the lottery.”

His claim was first reported by the Daily Mail newspaper of Britain.

A statement from the men’s Putnam Avenue Family Trust said “there has been much speculation and quite a bit of misinformation over the last 24 hours.” It said the trust was established to manage the winnings to help those who can benefit from the money.

“And to be clear, there are a total of three trustees and there is no anonymous fourth participant,” the statement said.

The trust promised to distribute $1 million in the next 10 days to organizations in the New York-New Jersey-Connecticut area that help military veterans.

“The three trustees consider this the first stop on what we see as a journey of philanthropy in the months and years to come,” the statement said. “We recognize that we have been literally blessed with a winning hand when it came to playing a simple game of chance. We also recognize that, as a result, we have a moral obligation to ensure these dollars are put to their best possible use in the shortest possible time to help the broadest number of people in need.”

Gladstone said the anonymous winner is the beneficiary of the trust.

But a trust spokesman, Gary Lewi, insisted there is no secret lottery winner.

“I am afraid Mr. Gladstone is mistaken,” he said.

The men’s attorney, Jason Kurland, did not return repeated telephone calls, an email and Facebook messages Tuesday. Messages also were left with the men.

Connecticut Lottery Corporation president Anne Noble said she could not confirm or deny rumors swirling around the prize. She said officials are processing the payout for the winners who came forward Monday.

Lottery winners in Connecticut are generally determined by who is holding the ticket, which is why authorities urge winners to sign the backs of their tickets. Winners are designated as public information under Connecticut’s freedom of information laws.

Lottery officials said they processed the jackpot claim “in accordance with applicable rules and integrity standards.”

“It is not uncommon for Powerball winners to be identified as individuals, trusts, partnerships or other legal entities,” the lottery said in a statement.

Kurland said Monday that the men contacted him immediately after the Nov. 2 drawing and came forward after making plans for the money. He said that the trust will take the after-tax lump sum of $103,586,824.51 cash and that a significant amount will go to charity.

“Obviously, everybody is extremely excited,” Kurland said. “These numbers are huge. This is going to benefit many people.”

The jackpot was the largest won in Connecticut and the 12th biggest in Powerball history. The largest previous lottery jackpot in Connecticut was $59.5 million in June 2005.

The three men declined to describe their relationships with one another, how they came to buy a $1 ticket together or what they would do with the money, except to say that Connecticut charities would benefit from the windfall.

Gladstone defended the move.

“I think it’s the first time somebody gave it careful thought and did a smart thing,” he said.

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The New York Times reports that three Connecticut asset managers won $254.2 million dollars in the Powerball game, the largest jackpot in the state’s history. The lucky winners-or lucky bastards depending on if you hate seeing the rich get richer-are Timothy C. Davidson, Brandon E. Lacoff and Gregory H. Skidmore, three executives at Belpointe Asset Management, an investment firm based in Greenwich, Conn.

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The three men made — or rather, multiplied — their fortunes with a single $1 ticket purchased at a gas station in neighboring Stamford, a Connecticut Lottery spokeswoman said. Mr. Davidson bought the ticket on Nov. 1, using the “pick six” option to allow the lottery’s computer to choose random numbers. The winning digits: 12, 14, 34, 39, 46 and the Powerball number, 36.

With unemployment still hovering above 9 percent and millions of Americans struggling to pay their bills, you would have hoped that such a money pot would have gone to those, how should we put, less fortunate. But some see it differently.

“The lottery is all about dreaming, and that runs across all demographics and all people,” said Anne Noble, the Connecticut Lottery’s chief executive.

Oh really?

How do you feel about three fat cats getting a $254.2 million dollar Christmas gift in November?

Read the full story at The New York Times.

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McMillan serenaded Wall Street protestors at Zuccotti Park in New York City with a few words of wisdom.

VIDEO:

Read more at theGrio.com

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The group Occupy Wall Street has been camped out in a plaza in Manhattan’s Financial District for nearly two weeks staging various marches, and had orchestrated an impromptu trek to Brooklyn on Saturday afternoon. They walked in thick rows on the sidewalk up to the bridge, where some demonstrators spilled onto the roadway after being told to stay on the pedestrian pathway, police said.

Yes! Cornel West Joins Protestors In Occupy Wall Street Fight

The majority of those arrested were given citations for disorderly conduct and were released, police said.

Some protesters sat on the roadway, chanting “Let us go,” while others chanted and yelled at police from the pedestrian walkaway above. Police used orange netting to stop the group from going farther down the bridge, which is under construction.

Some of the protesters said they were lured onto the roadway by police, or they didn’t hear the calls from authorities to head to the pedestrian walkway. Police said no one was tricked into being arrested, and those in the back of the group who couldn’t hear were allowed to leave.

“Multiple warnings by police were given to protesters to stay on the pedestrian walkway and that if they took roadway they would be arrested,” said Paul Browne, the chief spokesman of the New York Police Department.

Erin Larkins, a Columbia University graduate student at who says she and her boyfriend have significant student loan debt, was among the thousands of protesters on the bridge. She said a friend persuaded her to join the march and she’s glad she did.

“I don’t think we’re asking for much, just to wake up every morning not worrying whether we can pay the rent, or whether our next meal will be rice and beans again,” Larkins wrote in an email to The Associated Press. “No one is expecting immediate change. I think everyone is just hopeful that people will wake up a bit and realize that the more we speak up, the more the people that do have the authority to make changes in this world listen.”

Several videos taken of the event show a confusing, chaotic scene. Some show protesters screaming obscenities at police and taking a hat from one of the officers. Others show police struggling with people who refuse to get up. Nearby, a couple posed for wedding pictures on the bridge.

“We were supposed to go up the pedestrian roadway,” said Robert Cammiso, a 48-year-old student from Brooklyn told the Daily News. “There was a huge funnel, a bottleneck, and we couldn’t fit. People jumped from the walkway onto the roadway. We thought the roadway was open to us.”

Earlier Saturday, thousands who joined two other marches crossed the Brooklyn Bridge without problems. One was from Brooklyn to Manhattan by a group opposed to genetically modified food. Another in the opposite direction marched against poverty organized by United Way.

Elsewhere in the U.S. on Saturday, protesters assembled in Albuquerque, N.M., Boston and Los Angeles to express their solidarity with the movement in New York, though their demands remain unclear. Occupy Wall Street demonstrators have been camped in Zuccotti Park and have clashed with police on earlier occasions. Mostly, the protests have been peaceful, and the movement has shown no signs of losing steam. Celebrities including Michael Moore and Susan Sarandon made recent stops to encourage the group.

During the length of the protest, turnout has varied, but the numbers have reached as high as about a few thousand. A core group of about two hundred people remain camped throughout the week. They sleep on air mattresses, use Mac laptops and play drums. They go to the bathroom at the local McDonald’s. A few times a day, they march down to Wall Street, yelling, “This is what democracy looks like!”

There has been a growing swell of coverage in mainstream media, but there has been loud complaining the cause hasn’t been championed fast enough — or in the way protesters want.

Misinformation has added to the confusion. For instance, a rumor sprang up on Twitter that the New York Police Department wanted to use tear gas on protesters — a crowd-control tactic the department doesn’t use. The claim was eventually retracted, one of several such retractions over the past several days. On Friday, a message said Radiohead would be performing in solidarity for the cause, but the band’s management said it wasn’t playing.

Earlier clashes with police have resulted in about 100 arrests. Most were for disorderly conduct. Many were the subject of homemade videos posted online.

One video surfaced of a group of girls shot with pepper spray by NYPD Deputy Inspector Anthony Bologna. The woman claimed they were abused and demanded the officer resign, and the video has been the subject of several news articles and commentary. Police Commissioner Raymond Kelly said internal affairs would look into whether Bologna acted improperly and has also said the video doesn’t show “tumultuous” behavior by the protesters.

A real estate firm that owns Zuccotti Park, the private plaza off Broadway occupied by the protesters, has expressed concerns about conditions there, saying in a statement that it hopes to work with the city to restore the park “to its intended purpose.” But it’s not clear whether legal action will be taken, and police say there are no plans to try to remove anyone.

Seasoned activists said the ad-hoc protest could prove to be a training ground for future organizers of larger and more cohesive demonstrations, or motivate those on the sidelines to speak out against injustices.

“You may not get much, or any of these things on the first go-around,” said the Rev. Herbert Daughtry, a longtime civil rights activist who has participated in protests for decades. “But it’s the long haul that matters.”

With a report recently released claiming that Wall Street CEOs paid less in taxes than their whole corporations earned last year, the attention has turned to President Obama and his relationships with these bigwigs in campaign raising season.

Out of the 25 CEOs mentioned in the Institute for Policy Studies report, ten have relationships with Obama.

All told, these 10 CEOs with Obama connections brought in over $158 million for themselves last year. Their companies’ federal tax bill, however, was a combined net benefit of $5.4 billion — meaning the federal government actually owed these companies billions of dollars. Eight of the 10 firms not only did not pay taxes, they received large refunds. The 10 companies scored combined U.S. profits of $26.8 billion.

Read more at HuffingtonPost

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During the meeting, which lasted over an hour, Obama opened the floor to discuss hot topics such as hedge fund regulation and the deficit. But the true agenda of Obama’s roundtable discussion was to reportedly assuage financial executives, who were enraged by comments made by the president over a year ago, labeling them “fat cats” in a criticism of  their bonuses.

The event, organized by the Democratic National Convention, tried to convince Wall Street that his policies have helped bring banks and financial markets back to health.

The New York Times Reports:

The president’s top financial industry supporters say they are confident that the support Mr. Obama needs will ultimately be there, despite the financial industry’s unhappiness over his efforts to tighten regulation of their businesses. But it is clear that those supporters will have to work much harder to win over the financial services industry than they did in 2008, before Wall Street’s bust, the subsequent clashes over policy and the sometimes bitter personal differences that lingered afterward.

Read More At TheNYTimes.com

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Just ahead of the government’s monthly jobs report for May, investors got a disappointing look at the trend in hiring over the last few weeks. The monthly report from ADP Employer Services, the payroll processing firm, said that private employers added 38,000 jobs in May, lower than expectations and the smallest increase since September 2010.

Economists said that the figure in the ADP survey, far less than the 175,000 jobs that had been forecast, could have been a reflection of severe storms in many parts of the country that month, while automobile manufacturers have temporarily laid off workers in response to a disruption in supply chains. Economists from Capital Economics Ltd. said in a research note that the dip also reflected a slowdown in the growth in the service sector.

Worried investors are funneling their funds into bonds, a much safer investment vehicle, illustrating a lack of faith in the much-touted economic recovery.

Read the rest on The New York Times.

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Reporting from Washington — The recently enacted financial reform legislation tries in numerous ways to change how Wall Street companies and their federal regulators act, but a little-noticed provision aims for something potentially more difficult and controversial — altering how they look.

To promote diversity in the largely white, male world, the new law requires each of the 30 federal financial agencies and departments, including the Securities and Exchange Commission and all 12 Federal Reserve banks, to establish an Office of Minority and Women Inclusion.

Those offices will work with vaguely defined powers to boost diversity at their agencies and the companies they regulate, and to increase federal contracting opportunities for minority- and women-owned businesses. Banks and other financial firms determined to have failed to make “a good-faith effort to include minorities and women in their workforce” could lose their government contracts.

Read more at ChicagoTribune

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President Obama on Monday chided Senate Republicans for engaging in “pure partisan politics’’by blocking a bill that would offer tax breaks and ease credit to small businesses, and said the measure was necessary to boost hiring and economic growth.

On his first workday back at the White House after a 10-day vacation on Martha’s Vineyard and a trip to New Orleans on Sunday, Mr. Obama addressed the nation’s mounting economic anxieties in brief remarks from the Rose Garden. With the unemployment rate stuck above 9 percent, and the economic recovery all but stalled, he spent part of the morning huddled with his economic advisers.

While he said he and his team were ‘’hard at work in identifying additional measures that could make a difference’’ – including extending middle-class tax cuts that are set to expire this year, investing more in clean energy and in infrastructure rebuilding – the president’s most urgent call was directed at members of Congress, who return to work next week.

Read more at NYT

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Yesterday I was invited to the White House to discuss Wall St. reform along with White House officials Corey Ealons, Cecilia Rouse, as well as Howard Professor and contributor to the Grio, Leon Wilmur, and John Simon from Black Enterprise. If you missed the livestream, here is the video.

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This Wednesday, our NewsOne correspondent Casey Gane-McCalla will be at the White House with other members of the Black media to find out how “Wall Street reform affects African Americans.”

We at NewsOne want to hear from you our readers. Please provide us with some questions in the comment box area concerning the administration’s landmark reform bill. We will take the best questions and ask them tomorrow.

The Q&A will be live streamed here at 2pm.

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Wall Street Reform Signed Into Law By Obama

NewsOne is going to the White House tomorrow for a  discussion on how the  Wall St. financial reform will affect on the African American community. They want to know what questions our audience has. So please leave a question in the comment box on what you would like to know about Wall St. reform and we will take the best questions and ask them tomorrow. We will be live streaming the Q&A tomorrow at 2pm.

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Wall Street Reform Signed Into Law By Obama

From Totalfilm.com:

Could we see another sequel to a much-loved ‘80s classic from the man who’s preparing to unleash Gordon Gekko on the world for a second time?

Oliver Stone has told Total Film he loved returning to Gekko so much that there could be further surprises in store…

 “It’s been great to go back with Wall Street: Money Never Sleeps,” he enthused. “I should go back and do Son of Scarface or something!”

 Stone, in London to discuss his Hugo Chavez documentary South of the Border, wouldn’t elaborate, but, changing the story to follow (the deceased) Tony Montana’s progeny would certainly be in keeping with Wall Street 2, which gives Gordon Gekko a daughter.

Click here to read more

Click here to see our gallery of Black Hollywood stars would be good in a sequel

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FROM NYDailyNews.com:

President Obama has signed the toughest set of Wall Street regulations and consumer protections against greedy financial practices since the Great Depression.

“In the end, our financial system only works – our markets are only free – when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system,” Obama said Wednesday before signing the landmark financial reform bill.

He also emphasized that because of the new law, “the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts. Period.

“If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is “too big to fail.”

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Obama’s Accomplishments

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Obama Says Reform Will Hold Wall Street Accountable

WASHINGTON — Congress on Thursday passed the stiffest restrictions on banks and Wall Street since the Great Depression, clamping down on lending practices and expanding consumer protections to prevent a repeat of the 2008 meltdown that knocked the economy to its knees.

A year in the making and 22 months after the collapse of Lehman Brothers triggered a worldwide panic in credit and other markets, the bill cleared its final hurdle with a 60-39 Senate vote and goes to the White House for President Barack Obama’s signature.

Check out our gallery of President Obama’s accomplishments:

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The law will give the government new powers to break up companies that threaten the economy, create a new agency to guard consumers in their financial transactions and shine a light into shadow financial markets that escaped the oversight of regulators.

Large, failing financial institutions would be liquidated and the costs assessed on their surviving peers. The Federal Reserve is getting new powers while falling under greater congressional scrutiny.

From storefront payday lenders to the biggest banking and investment houses on Wall Street, few players in the financial world are immune to the bill’s reach. Consumer and investor transactions, whether simple debit card swipes or the most complex securities trades, face new safeguards or restrictions.

“When this earthquake hit, there wasn’t nearly enough oversight, transparency or accountability to shield us from the fallout,” Senate Majority Leader Harry Reid said. “This law will strengthen all three.”

Republicans said it is a vast federal overreach that will drive financial-sector jobs overseas.

At a thud-inducing 2,300 pages, the legislation doesn’t offer a quick remedy, however. Rather, it lays down prescriptions for regulators to act. In many cases, the real impact won’t be felt for years.

The Senate’s final passage of the bill, two weeks after the House approved it, is a welcome achievement for a president and congressional Democrats, both increasingly unpopular with voters four months from midterm elections that threaten to put Republicans in charge of Congress. Only three Republicans voted for it — Maine Sens. Olympia Snowe and Susan Collins, and Massachusetts Sen. Scott Brown. Democratic Sen. Russ Feingold of Wisconsin, who has said the bill is not tough enough, voted with most Republicans against it.

The law has been a priority for Obama, ranking just behind his health car overhaul enacted in March. In its final form, the package hews closely to the plan unwrapped a year ago by the White House and in some ways is even tougher. White House spokesman Robert Gibbs promptly cast the vote in political terms for a highly competitive midterm election.

“This will be a vote that Democrats will talk about through November as a way of highlighting the choice that people will get to make in 2010,” he said.

The political benefits, however, stand to be overshadowed by lingering high unemployment. And Republicans were betting that public antipathy toward big government and worries over jobs would trump their anger at Wall Street.

“We’re going to be driving jobs and business overseas with this massive piece of legislation,” said Sen. Saxby Chambliss, R-Ga.

Sen. Richard Shelby, R-ala., who worked with Dodd on certain aspects of the bill, denounced it as a “legislative monster.”

Named after Connecticut Sen. Christopher Dodd and Massachusetts Rep. Barney Frank, the Democratic committee chairmen who steered it to passage, the legislation ends a trend to ease regulations that peaked in 1999 with the elimination of Depression-era walls separating commercial banking from riskier investment banking.

And though it calls for the biggest changes in generations, it does not approach the scope of the New Deal banking rules enacted under President Franklin Delano Roosevelt. That era saw the creation of the Federal Deposit Insurance Corp., to protect consumer deposits, and the Securities and Exchange Commission to oversee the markets.

The Dodd-Frank bill’s major creation is a Consumer Financial Protection Bureau. The agency will have power to write and enforce new regulations covering lending and other consumer transactions.

Lenders face new restrictions on the type of mortgages they write and could not be rewarded for steering borrowers to higher cost loans. Borrowers also will have to provide evidence that they can repay their loans, thus halting the no-document loans that had flooded the markets.

The vote Thursday capped a year of partisan struggles and cross-party courtship. Any remaining uncertainty about the bill’s fate vanished earlier this week when it became clear three Republican senators would vote for it, thus assuring 60 votes to overcome procedural obstacles.

Industry lobbyists fought against a number of restrictions in the bill, ultimately winning some concessions. In the end, the final bill was tougher than they wanted but not as restrictive as they feared.

“Core elements of the bill will contribute to a stronger, more secure financial system,” Steve Bartlett, president of the Financial Services Roundtable, a banking group, said in a speech Thursday. “Some items in the legislation we did not support and we expressed our views accordingly. Nevertheless, we are committed to making those items work as well as possible.”

The American Bankers Association was not as conciliatory.

“The result will be over 5,000 pages of new regulations on traditional banks and years of uncertainty as to what the massive new rules will mean,” said Edward Yingling, president and CEO of the group.

Republican opponents also criticized the bill for not addressing mortgage financing giants Fannie Mae and Freddie Mac, whose questionable lending helped start a collapse in the housing market.

Some supporters of the bill also voiced reservations, claiming the bill did not give regulators specific direction on how to implement and enforce new rules.

“Congress largely has decided instead to punt decisions to the regulators, saddling them with a mountain of rule-makings and studies,” said Sen. Ted Kaufman, D-Del.

For all its ambition and reach, the legislation is dotted with exceptions.

Community banks won’t have to be examined by the new consumer bureau and would get a break on higher insurance premiums. Despite calls to end proprietary trading by large banks, the law will let them put up to 3 percent of their capital in hedge funds or private equity funds. Auto dealers won’t be covered by the rules of the consumer bureau.

“It is not a perfect bill, I will be the first to admit that,” Dodd said. “It will take the next economic crisis, as certainly it will come, to determine whether or not the provisions of this bill will actually provide this generation or the next generation of regulators with the tools necessary to minimize the effects of that crisis.”

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Obama Says Reform Will Hold Wall Street Accountable

WASHINGTON – President Barack Obama declared victory Friday after congressional negotiators reached a dawn agreement on a sweeping overhaul of rules overseeing Wall Street.

Lawmakers shook hands on the compromise legislation at 5:39 a.m. after Obama administration officials helped broker a deal that cracked the last impediment to the bill — a proposal to force banks to spin off their lucrative derivatives trading business. The legislation touches on an exhaustive range of financial transactions, from a debit card swipe at a supermarket to the most complex securities deals cut in downtown Manhattan.

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Speaking to reporters as he left the White House to attend an economic summit of world leaders in Toronto, the president said he was “gratified” for Congress’ work and said the deal included 90 percent of what he had proposed. He said the bill, forged in the aftermath of the 2008 financial meltdown, represents the toughest financial overhaul since the Great Depression.

“We’ve all seen what happens when there is inadequate oversight and insufficient transparency on Wall Street,” he said. “The reforms working their way through Congress will hold Wall Street accountable so we can help prevent another financial crisis like the one that we’re still recovering from.”

Asked by reporters whether he can get the financial measure through the Senate, Obama said, “You bet.” He said he will discuss the regulations with other leaders at the Toronto meeting because the recent economic crisis proves that the world’s economies are linked.

Lawmakers hope the House and Senate will approve the compromise legislation by July 4. Republicans complained the bill overreached and tackled financial issues that were not responsible for the financial crisis.

The bill would set up a warning system for financial risks, created a powerful consumer financial protection bureau to police lending, forced large failing firms to liquidate and set new rules for financial instruments that have been largely unregulated.

“It took a crisis to bring us to the point where we could actually get this job done,” Senate Banking Committee Chairman Christopher Dodd said.

In its breadth, the legislation would affect working class homebuyers negotiating their first mortgage as well as international finance ministers negotiating international regulatory regimes.

The bill came together during a time of high unemployment for American workers, huge bonuses for bankers and rising antipathy toward bank bailouts.

“It is reassuring to know that when public opinion gets engaged it will win,” said Rep. Barney Frank, the chairman of the House-Senate panel that merged House and Senate bills into one piece of legislation.

House negotiators voted a party line 20-11 in favor of the final agreement; senators voted 7-5, also along party lines.

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WASHINGTON – Stepping up the pressure on Goldman Sachs two days after its executives were grilled and publicly rebuked by lawmakers, the Justice Department has opened a criminal investigation of the Wall Street powerhouse over mortgage securities deals it arranged.

The criminal inquiry follows civil fraud charges filed by the government against Goldman two weeks ago and as Congress pushes toward enacting sweeping legislation aimed at preventing another near-meltdown of the financial system.

The investigation by the U.S. attorney’s office in Manhattan stems from a criminal referral by the Securities and Exchange Commission, a knowledgeable person said Thursday. The person spoke on condition of anonymity because the inquiry is in a preliminary phase.

The SEC brought civil fraud charges against Goldman and a trader in connection with the transactions in 2006 and 2007. The agency alleged the firm misled investors by failing to tell them the subprime mortgage securities had been chosen with help from a Goldman hedge fund client, Paulson & Co., that was betting the investments would fail. Goldman and the trader, Fabrice Tourre, have denied wrongdoing and said they will contest the allegations in court.

Word of the Justice Department action came a day after a group of 62 House lawmakers, including Judiciary Committee Chairman John Conyers, D-Mich., asked Justice to conduct a criminal probe of Goldman. “On the face of the SEC filing, criminal fraud on a historic scale seems to have occurred in this instance,” the lawmakers, mostly Democrats, said in a letter to Attorney General Eric Holder.

SEC spokesman John Nester declined any comment on the matter, as did Yusill Scribner, a spokeswoman for the U.S. attorney’s office in Manhattan.

Goldman spokesman Lucas van Praag said, “Given the recent focus on the firm, we’re not surprised by the report of an inquiry. We would cooperate fully with any request for information.”

The Justice Department move was the latest in a dramatic series of turns in the Goldman saga, which has pitted the culture of Wall Street against angry lawmakers in an election year, in the wake of the financial crisis that plunged the country into the most severe recession since the Great Depression of the 1930s.

At the Capitol Thursday, following days of failed test votes, the Senate lurched into action on sweeping legislation backed by the Obama administration that would clamp down on Wall Street and the sort of high-risk investments that nearly brought down the economy in 2008.

And two days earlier, a daylong showdown before a Senate investigative panel put Goldman’s defense of its conduct in the run-up to the financial crisis on display before indignant lawmakers and a national audience. The panel, which investigated Goldman’s activities for 18 months, alleges that the Wall Street powerhouse bet against its clients — and the housing market — by taking short positions on mortgage securities and failed to tell investors that the securities it was selling were at very high risk of default.

Goldman CEO Lloyd Blankfein testily told the investigative subcommittee that clients who bought the subprime mortgage securities from the firm in 2006 and 2007 came looking for risk “and that’s what they got.” Blankfein said the company didn’t bet against its clients — and can’t survive without their trust. He repeated the company’s assertion that it lost $1.2 billion in the residential mortgage meltdown in 2007 and 2008. He also argued that Goldman wasn’t making an aggressive negative bet — or short — on the mortgage market’s slide.

In addition to the $2 billion so-called collateralized debt obligation that is the focus of the SEC’s charges against Goldman, the subcommittee analyzed five other such transactions, totaling around $4.5 billion. All told, they formed a “Goldman Sachs conveyor belt,” the panel said, that dumped toxic mortgage securities into the bloodstream of the financial system.

A collateralized debt obligation or CDO is a pool of securities, tied to mortgages or other types of debt, that Wall Street firms packaged and sold to investors at the height of the housing boom. Buyers of CDOs, mostly banks, pension funds and other big investors, made money off the investments if the underlying debt was paid off. But as U.S. homeowners started falling behind on their mortgages and defaulted in droves in 2007, CDO buyers lost billions.

It wasn’t immediately known whether the Justice Department’s inquiry also encompasses the five other transactions.

The investigation, even though at a preliminary stage, opens a momentous new front in the legal aftermath of the near-meltdown of the financial system.

The Justice Department and the SEC have previously launched wide-ranging investigations of companies across the financial services industry. But a year after the crisis struck, charges haven’t yet come in most of the probes. In addition to fallen mortgage lender Countrywide Financial Corp. and bailed-out insurance giant American International Group Inc., the investigations also have targeted government-owned mortgage lenders Fannie Mae and Freddie Mac and crisis casualty Lehman Brothers.

Last August, a federal jury in New York convicted former Credit Suisse broker Eric Butler of conspiracy and securities fraud for his role in a $1 billion subprime mortgage fraud. But the swift acquittal in November of two former Bear Stearns executives in the government’s criminal case tied to the financial meltdown showed how tough it can be to prove that investment bank executives committed fraud by lying to investors. The SEC sued the two executives in a civil suit, and that case is still pending.

The government must show that executives were actually committing fraud and not simply doing their best to manage the worst financial crisis in decades, some legal experts say.

The SEC civil fraud case against Goldman — even with the lower required burden of proof than in a criminal case — also could be difficult and faces pitfalls, in the view of some experts. To prove it, they say, the agency must show that Goldman misled investors or failed to tell them facts that would have affected their financial decisions. The greatest challenge, the experts say, will be boiling the case down to a simple matter of fraud: the issues involved are so complex that Goldman may be able to introduce enough complicating factors to shed some doubt on the SEC’s claims.

Political intrigue has swirled around the SEC suit, meanwhile, as some Republicans have accused the agency of timing the April 16 announcement of fraud charges against Goldman to bolster prospects for the financial overhaul legislation while it was at a critical stage in the Senate.

The speculation was heightened by the revelation that the SEC commissioners approved filing of the charges on a 3-2 vote, along party lines, with both Republicans opposing the move.

SEC Chairman Mary Schapiro has insisted there was no connection between the timing of the agency lawsuit, which followed a monthslong investigation of the firm, and the push for the legislation in the Senate. Last week, President Barack Obama denied any White House involvement in the timing of the SEC case.

“We don’t time our enforcement actions by the legislative calendar or by anybody else’s wishes,” Schapiro told a Senate Appropriations subcommittee on Wednesday. “We bring our cases when we have the law and the facts we believe support bringing our cases.”

From CBSNews.com:

WASHINGTON – The reemergence of a Securities and Exchange Commission porn scandal may be political payback for the agency’s fraud suit against Goldman Sachs, some officials suspect.

News of salacious Internet sex surfing by dozens of SEC supervisors actually broke months ago, but it got new life after the commission’s April 16 vote to act against the financial powerhouse.

Click here to view photos:

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GOP lawmakers have loudly slammed the decision, government sources noted.

Asked whether there was any connection between the lawsuit and the recently leaked inspector general’s report on downloading porn, SEC spokesman John Nester declined to comment.

Click here to read more.

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Government Accuses Goldman Sachs Of Fraud

Obama Slams Wall Street, But Asks For Their Support

Click here to read to full text of the speech, and scroll all the way down this page for video.

NEW YORK — President Barack Obama pushed for stronger oversight on the financial industry and rebuked Wall Street for risky practices Thursday, arguing for “updated, commonsense” regulations to head off any new financial crisis.

Tighter regulations have become Obama’s top priority after the passage of his health care overhaul, and Democrats are hoping to cash in on voter unhappiness over the Bush administration’s bailouts of financial institutions and use it against Republicans in the November congressional election.

Text continues after gallery …

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The president acknowledged differences of opinion over how to best protect bailout-weary taxpayers but denounced criticism from some Republicans who claim a Democratic-sponsored bill headed for Senate action would encourage rather than discourage future bailouts of huge banks.

RELATED: Government Accuses Goldman Sachs Of Fraud

“That makes for a good sound bite, but it’s not factually accurate. It is not true,” Obama said to scattered applause. “In fact, the system as it stands — the system as it stands is what led to a series of massive, costly taxpayer bailouts.” He said the overhaul legislation would put a stop to such bailouts.

Obama’s speech at New York’s Cooper Union college came at a delicate time in negotiations over the Senate measure, which could be debated next week. The House has passed its own version of financial overhaul legislation. Obama did not say which one he favored but told an audience that included dozens of financial leaders “both bills represent significant improvement on the flawed rules we have in place today.”

He portrayed his appearance at Cooper Union college, in lower Manhattan, as a reprise of a campaign speech he gave at the same location in March 2008 to offer an agenda for financial regulatory reform.

“Since I last spoke here two years ago, our country has been through a terrible trial,” he said, pointing to the loss of more than 8 million jobs, the losing of “countless small businesses,” trillions of dollars in lost savings and people forced to put off retirement or postpone college.

RELATED: Obama Challenges Wall Street On Anniversary Of Lehman’s Collapse

“I take no satisfaction in noting that my comments have largely been borne out by the events that followed,” Obama said.

Obama’s speech was an effort to ramp up pressure on Congress for legislation imposing new financial regulations.

The sweeping regulation proposal represents the broadest attempt to overhaul the U.S. financial system since the 1930s, and aims to prevent another crisis. Democrats are preparing to bring the Senate version of the bill up for debate, but solid Republican opposition has complicated the effort. Senate negotiators say they had made progress toward a compromise bill that could command support from both sides.

Sponsors still held out hope that the Senate measure would draw some cautious Republican support. At the same time, Senate Majority Leader Harry Reid, a Democrat, told reporters he’s prepared to hold a procedural test vote on Monday if bipartisan negotiations fail to yield an agreement. “The games of stalling are over,” Reid said Thursday.

Obama’s efforts to give the financial bill a personal push toward the finish line drew skepticism from his critics.

“The truth is, the American people have had enough of the federal government,” said House Republican leader John Boehner. He said Obama-backed legislation “will enrich Wall Street at the expense of every other financial institution in the country.”

The U.S. Chamber of Commerce took out full-page ads in New York papers recognizing a need for reforms but criticizing provisions of the current legislation.

The legislation would create a mechanism for liquidating large, interconnected financial firms that are so big that their sudden collapse could shake the economy. At the height of the crisis in 2008, the Bush administration and the Federal Reserve provided billions of taxpayer dollars to prop up the giant insurer American International Group Inc., several banks and various financial institutions considered too big to fail. The moves were highly unpopular with voters.

The bills also, for the first time, would impose oversight on the market for derivatives — complicated financial instruments whose value is derived from the value of other investments. The measures also would create a council to detect threats to the broader financial system and establish a consumer protection agency to police consumers’ dealings with banks and other financial institutions.

Republicans contend that Democratic plans to create a $50 billion fund, paid for by the industry, to help unwind failing institutions would encourage Wall Street banks to take risks and to expect future bailouts. Democrats say the fund would lead to bankruptcy, not rescue. The administration does not support the fund and would not object to its being removed from the bill.

The Senate Agriculture Committee on Wednesday approved a bill to limit banks’ ability to trade derivatives and to make such transactions more open. The proposal is more sweeping than those offered by the Obama administration and the House, but it is expected to become part of the Senate financial overhaul bill.

At the same time, Senate Banking Committee Chairman Chris Dodd, a Democrat, and Sen. Richard Shelby, the panel’s top Republican, have been trying to negotiate a compromise measure that could win Republican support.

Obama’s speech came just six days after the Securities and Exchange Commission’s fraud case against the huge investment bank Goldman Sachs.

Obama has denied any White House involvement in the timing of the SEC case, but the charges have emboldened Democrats in their criticism of Republicans who oppose the administration’s overhaul proposal — even though measures in the proposal may not have stopped the transactions involved in the Goldman case.

Goldman’s CEO, Lloyd Blankfein, was among those in the audience of approximately 700 financial industry leaders, consumer advocates, presidential advisers, local officials, students, faculty and others.

Also there was New York Mayor Michael Bloomberg, who has argued that too much regulation could jeopardize the economy as much as others say tighter regulation would protect it. The industry helps fill New York City’s coffers with millions of dollars in revenue from taxes on Wall Street profits.

Watch video of the speech:

WASHINGTON – The government on Friday accused Wall Street’s most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.

And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the “exotic trades” he created “without necessarily understanding all of the implications of those monstrosities!!!”

The civil charges filed by the Securities and Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

The news sent Goldman Sachs shares and the stock market reeling as the SEC said other financial deals related to the meltdown continue to be investigated. It was a blow to the reputation of a financial giant that had emerged relatively unscathed from the economic crisis.

Goldman Sachs denied the allegations. In a statement, it called the SEC’s charges “completely unfounded in law and fact” and said it will contest them.

The SEC is seeking to recoup the money lost by investors and impose unspecified civil fines against Goldman Sachs and the executive, Fabrice Tourre. The SEC could enter into settlement negotiations over the amount if Goldman changed its stance and decided not to fight the charges in a trial.

The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson took out a form of insurance that allowed it to make a huge profit when those securities’ value plunged.

The fraud allegations focus on how Goldman sold the securities. Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create the securities. The securities are known as synthetic collateralized debt obligations.

The SEC alleges that Goldman misled investors by failing to disclose that Paulson & Co. also played a role in selecting the mortgage pools and stood to profit from their decline in value. Two European banks that bought the securities lost nearly $1 billion, the SEC said.

“Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party,” SEC Enforcement Director Robert Khuzami said in a statement.

But Goldman said in a statement that it never mischaracterized Paulson’s strategy in the transaction. It added that it wasn’t obliged to “disclose the identities of a buyer to a seller and vice versa.”

The charges name only Goldman Sachs and Tourre, who was a vice president in his late 20s when the alleged fraud was orchestrated in 2007. Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

In an e-mail to the friend, he described himself as “the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”

Tourre, 31, has since been promoted to executive director of Goldman Sachs International in London.

Stanford University spokeswoman Elaine Ray said a student by the name of Fabrice Tourre received a master’s degree in management science and engineering from the school in 2001.

A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn’t returned.

Asked why the SEC did not also pursue a case against Paulson, Khuzami said: “It was Goldman that made the representations to investors. Paulson did not.”

Paulson & Co. is run by John Paulson, who reaped billions by betting against subprime mortgage securities. He is not related to former Treasury Secretary Henry Paulson, a former Goldman CEO.

John Paulson was among the first on Wall Street to bet heavily against subprime mortgages. His firm earned more than $15 billion in 2007, and he pocketed $3.7 billion. He has since earned billions more, largely by betting against bank stocks and then buying them back after their shares plunged.

In a statement, Paulson & Co. said: “As the SEC said at its press conference, Paulson is not the subject of this complaint, made no misrepresentations and is not the subject of any charges.”

Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.

In recent years, it shifted toward taking more risks with its clients’ money and its own. Goldman’s trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.

The complaint filed in federal court in Manhattan “undermines their brand,” said Simon Johnson, a professor at the Massachusetts Institute of Technology and a Goldman critic. “It undermines their political clout. I don’t think anybody really values being connected to Goldman at this point.”

He continued: “There are many people who — until this morning — thought Goldman Sachs was well-run.”

The SEC’s enforcement chief said the agency is investigating a wide range of practices related to the crisis. The prospect of possible legal jeopardy for other major financial players roiled the stock market.

Goldman Sachs shares fell more than 12 percent Goldman and lost $14.2 billion in market capitalization. The Dow Jones industrial average finished down more than 125 points.

The SEC appears to be taking a particularly aggressive approach with Goldman. Typically, cases are resolved by firms agreeing to a settlement before the charges are made public, said John Coffee, a securities law professor at Columbia University.

“The SEC has changed its style,” Coffee said. “They wanted to tell the world what they thought Goldman had done wrong.”

The charges come as lawmakers seek to crack down on Wall Street practices that helped cause the financial crisis. Congress is considering tougher rules for complex investments like those involved in the alleged Goldman fraud.

President Barack Obama vowed Friday to veto a financial overhaul bill that doesn’t regulate mortgage-backed securities and other so-called derivatives. Legislation in Congress would for the first time regulate derivatives, whose value depends on an underlying asset, such as mortgages or stocks. Senate Republicans oppose the bill.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is “pleased that the SEC is departing from the lax enforcement of the Bush administration and is returning to the SEC’s proper role of protecting investors in the marketplace,” spokesman Steven Adamske said.

The biggest loser in the alleged fraud was ABN Amro, a major Dutch bank, and the Royal Bank of Scotland, which acquired major portions of it in 2007. The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN transactions.

IKB Deutsche Industriebank AG, a German commercial bank, lost nearly all its $150 million investment, the agency said. Most of the money the banks lost went to Paulson in a series of transactions between Goldman and the hedge fund, the SEC said.

IKB was an early casualty of the financial crisis. It issued a profit warning in 2007 saying it had been hurt by U.S. subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.

Ed Trissel, a spokesman for Lone Star Funds, declined to comment on the case.

The SEC charges come after Goldman Sachs denied last week it that bet against clients by selling them mortgage-backed securities while reducing its own exposure to them.

In an annual letter to shareholders, Goldman said it began reducing its exposure to the U.S. mortgage market in late 2006.

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Obama Challenges Wall Street On Anniversary Of Lehman’s Collapse

5 CEO’s Obama Should Fire

By Roland S. Martin

If you told me that I could take billions of dollars in bailout money from the government and shower myself and my comrades on Wall Street with $140 billion in bonuses and only get a tongue-lashing from the president and nothing more, I would want to know where to sign up.

President Barack Obama and his administration have undertaken their latest round of berating Wall Street for its bad ways.

On CBS’ “60 Minutes,” the president bristled at questions about helping the banks, saying, “I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.”

You didn’t, but you have. In your defense, this economy stinks, and the mess of the Troubled Asset Relief Program left by former President George W. Bush’s treasury secretary, Hank Paulson, didn’t solve anything; you and your administration have been trying to figure it out to no avail.

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“The people on Wall Street still don’t get it,” a frustrated Obama said. “They’re still puzzled why is it that people are mad at the banks.”

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We knew that then, and we know it now. So, Mr. President, what are you prepared to do?

Let me be on the record as saying that unless the president, his administration and Congress go after Wall Street with gusto, not a damn thing will be accomplished by the chat between the president and the top Wall Street bankers. Let me be clear: NOTHING.

President Obama blasts Wall Street for fighting financial reform on Capitol Hill. Uh, Mr. President, that’s what it does! Does anyone with half a brain think that the people who screwed the country by putting us in this financial predicament actually want to see more oversight and regulation? No! So should it come as a shock that they will use their mighty lobbying dollars – no doubt coming as a result of the profits we helped them make by virtue of the bailout dollars – and try to scuttle any change in law?

Mr. President, enough is enough with the rhetoric. You didn’t like the approach of George W. “I’m gonna kick some ass” Bush. Well, on this one, sir, that’s exactly what we need. The American people don’t need Mr. Calm, Cool and Collected. We don’t need a measured response and tone. This is your moment to do what former President Ronald Reagan did to the air traffic controllers. He made it clear: Get back to work, or all of you are fired. They said, “Try it.” He did.They got canned. And everyone in Washington learned the lesson pretty quickly: “Don’t mess with Ronnie.”

RELATED: Obama Slams Wall Street For Rich Executive Bonuses

But again, we have seen this unwillingness to engage for most of the past year.

On my TV One Sunday morning show, “Washington Watch,” I asked Housing and Urban Development Secretary Shaun Donovan why the White House didn’t mandate that banks that received bailout dollars modify loans of folks heading into foreclosure.

He said that the administration is working with the banks. I pressed him on the point that “working with” has no sense of urgency. As CNN’s Jessica Yellin has reported on many occasions, there are no penalties, no surprise inspections, nothing – just an attempt at a good-faith effort with the banks.

What’s been the result? According to Elizabeth Warren, head of the Congressional Oversight Panel, the $700 billion bailout program has done nothing for lending or stemming foreclosures. Only 4.7 percent of the folks enrolled in three-month trial programs received permanent mortgage modifications.

Let’s be clear: Bankers are selfish me-first SOBs who don’t give a flip about the average American. They are all out to protect their bottom lines and stick it to the consumer. They desperately needed to be bailed out with our money and used it to shore up their bottom lines or buy competitors, but they don’t give a lick about bailing out the American consumer.

We lost lots of leverage against the banks by not putting in mandates for how the money was to be used. That’s why they all are rushing to pay the bailout money back. They don’t want Congress to limit their pay or put any other controls on them. By paying it all back, they are free from Big Brother’s big hand.

Mr. President, get with Congress and make it clear: If the banks don’t follow through with permanent mortgage modifications, you’ll slap a windfall profits tax on them. If the banks don’t change Wall Street compensation, you’ll slap that tax on them. You and Congress should make it rain on Wall Street’s head if it doesn’t agree to those demands.

In regard to every member of Congress who carries the water of Wall Street, expose these miscreants and the money they accept in campaign donations.

Will Wall Street like any of this? No. But, Mr. President, we don’t like how it has treated us, so why should we give a hoot what it thinks?

This is one issue that easily unites Democrats and Republicans. But do you have the willingness to go this far? Sorry, sir, giving another speech does nothing. It’s time for you to kick a little tail. And there is no better place to start than Wall Street.

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WASHINGTON – The Obama administration will lose $200 billion less than expected from the federal bailout program and is looking at using part of the savings to fund new job creation efforts.

A Treasury official said Sunday that the administration now believes the cost of the financial rescue program will be at least $200 billion below the $341 billion estimate it made in August.

The official, who spoke on condition of anonymity because the administration’s new projection has not been released, said the lower estimate reflected faster repayments by big banks and less spending on some of the rescue programs as the financial sector recovered from its free fall more quickly than the administration originally expected.

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The administration had made the $341 billion estimate as part of its midsession budget review released in August.

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The official said the new estimate will become part of the administration’s new budget — meaning it at least some of the savings will be used to reduce the government’s projected deficit — which President Barack Obama will present to Congress in February.

The $700 billion financial rescue program, known as the Troubled Asset Relief Program, was passed by Congress in October 2008 at the height of the worst financial crisis to hit the country since the 1930s.

Obama is scheduled to give a speech on the economy Tuesday andWhite House officials have said it is likely that the president will talk about using repaid TARP funds for a new job-creation program.

House Speaker Nancy Pelosi and other top Democrats have been drafting a jobs bill that would tap resources in the bailout program.

Among the proposals being considered are funding as much as $70 billion in new transportation and infrastructure projects, providing new tax credits aimed at encouraging small businesses to hire workers and providing additional aid to state governments to preserve public sector jobs.

Republicans have voiced opposition to this approach, arguing that the money should be used to lower the government’s ballooning deficits.

Treasury Secretary Timothy Geithner indicated Friday that the administration was considering supporting not only increased job creation with the TARP funds but also helping to reduce future budget deficits.

RELATED: Bailout Cash Gives Little Relief To U.S. Economy

Geithner said that the administration expected to have $175 billion in repayments from the banking system by the end of next year.

Treasury has spent about $450 billion from the TARP, including around $290 billion poured into banks.

Bank of America announced last week that it would return $45 billion it had received, adding to the $71 billion already repaid by nearly 50 other financial companies. Banks have also paid the Treasury about $7 billion in dividends.

Lowering the estimated cost of TARP will also lower the administration’s projections for budget deficits.

The deficit for the 2009 budget year, which ended in September, hit a record $1.42 trillion and the administration in August projected a slightly higher deficit for the current year.

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“It’s extremely important now especially for the president to have as many women as men in his closest circle of advisors. … If women had been at the heads of the companies on Wall Street instead of these masters of the universe then we might not be in the predicament that we’re in today.” – Terry O’Neill, NOW President

Terry O’Neill finds it troubling that President Obama only hoops with the fellas. That is entirely reasonable. There are those that fear an all-boys culture is being cultivated in the White House and that’s not a good thing. If a woman’s good enough to run ball, then she should be able to do that. I’m fairly confident I know several ladies who would catch wreck in White House pick-up ball and I can say with even more confidence that Obama can’t see my cousin’s drop step.

On a more serious level, O’Neill finds it troubling that, while women make up 52% of the voting population, they are only 7 out of 22 possible cabinet-level positions. That concern is also reasonable. There’s nothing intrinsic to being a woman that should prevent them from being able to do cabinet-level work.

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I don’t have any problem with any of above. I do, however, take exception with O’Neill’s Wall Street analogy which is problematic for a few reasons.

Firstly, does she mean to assert that there is something intrinsic to being a woman that would better qualify an individual to make prudent decisions? Are these so-called “masters of the universe”–who women might have been better alternatives to–examples of what every man is or merely a personality type commonly seen in the upper reaches of Wall Street in an industry historically dominated by men (men who are predominantly white and of the Anglo-Saxon crust)?

Exactly who is O’Neill talking about?

When juxtaposing “women” against “masters of the universe,” a reader might reasonably infer that she is speaking about all men in such a way that implies men lack the ability to be reasonable. And while I’ll refrain from using something akin to a reverse discrimination argument, I do find it entirely interesting that the president of a feminist organization would craft a statement in that way. O’Neill may very well have a very particular group of people of whom she’s speaking when she says “master of the universe”, but she fails to clarify it and the analogy becomes more muddy–and seemingly of a blanket nature–when it is made in relation to those who keep the political counsel of a biracial man from Chicago by way of Hawaii.’

RELATED: VIDEO: Obama Plays Basketball With UConn Women’s Team

On a more basic level, I find the Wall Street analogy troubling because it seems to overlook the nature of greed and exactly what part it had to play in this economic crisis.

Wall Street is most certainly a dick-swinging macho enterprise in complexion. But the thing that culture pursues–money and unspeakable wealth–awakens something that I can’t appoint as only belonging to men. Money is prey and those on Wall Street are its insatiable predator. In many dangerous and tragic ways, Wall Street is a place for the shrewd but not the reasonable. Like most predators, those who participate often times do not know–or care–when enough is enough.

Again; shrewd, not reasonable.

Does O’Neill mean to assert that women who had risen to the heights of a brutal and predatory culture would have known when to call it quits in the midst of prosperity and the continued pursuit of prey?

Might women have known better…because they were women?

O’Neill’s initial points are spot-on and absolutely should not be lost in this discussion. Gender equality is improving but there is still a long way to go. Casual and seemingly informal interactions among colleagues have professional ramifications and the fellas have to be mindful of such things.

But Ms. O’Neill should mind her analogies as well.

Jonathan Pitts-Wiley is a news aggregator and contributor for The Root. You can check out his personal blog at pittsindeed.wordpress.com and follow him on Twitter at twitter.com/pittswiley. Jonathan currently resides in New York City.

NEW YORK – President Barack Obama sternly warned Wall Street Monday against returning to the sort of reckless and unchecked behavior that threatened the nation with a second Great Depression.

Even as he noted the U.S. economy and financial system were pulling out of a downward spiral, Obama warned financial titans on the first anniversary of the Lehman Brothers collapse that they could not count on any more bailouts.

He credited his administration and the $787 billion stimulus package rammed through Congress in the first days of his taking office for pulling the country back from the brink.

“We can be confident that the storms of the past two years are beginning to break,” he said.

And even as the economy begins a “return to normalcy,” Obama said, “normalcy cannot lead to complacency.”

Nevertheless, Obama said, “Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them.”

His tough message warned the financial community to “hear my words: We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

Obama spoke at Federal Hall in the heart of Wall Street before an audience that included members of the financial community, lawmakers, and top administration officials. Afterwards, he joined former President Bill Clinton for lunch at a New York restaurant as the White House announced Obama would address the annual meeting of the Clinton Global Initiative Sept. 22 while in New York for the United Nations General Assembly meeting.

In marking his determination to prevent a repeat of the crisis that nearly brought down the global financial system last fall, Obama said he was attacking the problem on several broad fronts, including asking Congress to approve new rules to protect consumers and a new Consumer Financial Protection Agency to enforce those rules. He also called for the closure of regulator loopholes and overlap that “were at the heart of the crisis” because they left key officials without “the authority to take action.”

At the Pittsburgh G-20 economic meeting later this month, Obama said the U.S. will focus on ways “to spur global demand but also to address the underlying problems that caused such a deep and lasting global recession.”

Obama and others seeking ways to better monitor the financial system and to police the products banks sell to consumers have been opposed by lobbyists, lawmakers and turf-protecting regulators. Mergers and sales of banks have consolidated lending power in even few hands. And those large firms still bet far more than the capital they have on hand.

Yet regulations have not moved. Much of the legislative motivation in Washington has been consumed by the contentious debate over changes to the health care system. Government intervention into private automakers such as General Motors have left lawmakers skittish to move further into corporate board rooms. And it’s not as if another collapse is obviously imminent.

On Capitol Hill, Sen. Judd Gregg, R-N.H., said the administration deserves “considerable credit” for acting to stabilize the financial system, but he warned that Congress should not overreact in approving new regulations.

“We must be wary of the reality that, in an attempt to address yesterday’s failures, Congress will put in place regulatory schemes which will fundamentally undermine risk taking, capital formation and entrepreneurship,” Gregg said.

Five of the biggest banks — Goldman Sachs, JPMorgan Chase, Wells Fargo, Citigroup and Bank of America — posted second-quarter profits totaling $13 billion. That’s more than double what they made in the second quarter of 2008 and nearly two-thirds as much as the $20.7 billion they earned in the second quarter of 2007 — when the economy was considered strong.

The failure of Lehman Brothers — the biggest bankruptcy in U.S. history — and the panicky sales of Bear Stearns to JPMorgan Chase and Merrill Lynch to Bank of America transformed Wall Street and gave fewer competitors increased market power.

As of June 30, three banks — JPMorgan Chase, Wells Fargo and Bank of America — held $2.3 trillion in domestic deposits, or $3 out of every $10 in deposit in the United States. Three years ago those three institutions held about 20 percent of the industry total.

Obama has sought tougher capital requirements for banks, arguing that banks’ buying of exotic financial products without keeping enough cash on reserve was a key cause of the crisis. Treasury Secretary Timothy Geithner has urged the Group of 20 nations to agree on new capital levels by the end of 2010 and put them in place two years later.

The administration also has proposed increased transparency of markets in which banks trade the most complex — and potentially risky — financial products. Obama’s broad plan also would give the Fed new oversight powers and impose conditions designed to discourage companies from getting too big.

Sen. Chris Dodd, the Democratic chairman of the Senate Banking Committee, is leading the push for those new rules and his aides hope to have legislation together before the year’s end. Already they have conducted hearings on the source of the problem and how best to prevent another.

But a key component of the Obama plan — creating an agency to oversee marketing financial products to consumers — faces a tough road to become a law. Industry lobbying against it and other proposed financial rules has been fierce and the president’s fellow Democrats have been slow to take up the cause.

]]> http://newsone.com/302067/obama-challenges-wall-street-on-anniversary-of-lehmans-collapse/feed/ 6 Obama Challenges Wall Street On Anniversary Of Lehman's Collapse (thumbnail) ionesfontaine wall-street-sign http://newsone.com/102451/lessons-from-india-what-wall-street-can-learn-from-the-satyam-fallout/ http://newsone.com/102451/lessons-from-india-what-wall-street-can-learn-from-the-satyam-fallout/#comments Thu, 05 Feb 2009 21:06:49 +0000 Smokey D. Fontaine http://newsone.com/?p=102451 ]]>

From Naked Capitalism:

Our guest blogger Lune (who in one of his past lives worked on the Hill) was just in India and gives us his take on the Satyam Computers case, which has gotten scant coverage in the US. The Indian government’s reaction to its biggest corporate scandal ever makes for a useful object lesson.

Click here to read more.

From Christopher Bateman at Vanity Fair:

A quick rundown of what bonuses look like at seven big TARP recipients this year.

Click here to check out the chart.

Hat tip: Salim Patel

President Barack Obama, who has ordered a pay freeze on six-figure White House aides, wants to talk to Wall Street executives about a report indicating payments of over $18 billion in bonuses as the economy was in virtual free fall.

“It is shameful,” Obama said from the Oval Office Thursday. “And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.”

The president’s comments, made with new Treasury Secretary Timothy Geithner at his side, came in swift response to a New York state comptroller‘s report saying that employees of the New York financial world garnered an estimated $18.4 billion in bonuses last year.

Obama’s harsh criticism of Wall Street came just one day after he brought several well-paid chief executives to the White House and praised them for being on the “front lines in seeing the enormous problems in our economy right now.”

By sunset Thursday, he was serving notice that both he and Geithner will speak directly to Wall Street leaders about government bailouts, extravagant executive perks and a public revulsion over a perceived me-first attitude in executive suites.

The corporate leaders who appeared with Obama Wednesday are not from the Wall Street financial companies that the president targeted, but rather are the heads of such well-known manufacturing and technology giants as IBM, Motorola, Xerox and Corning. Still, they get paid handsomely.

Most of those who stood with Obama earned a total 2007 compensation package of between $8 million and $21 million, according to a review by The Associated Press. Those calculations include the executives’ salary, bonus pay, incentives, perks, the estimated value of stock holdings and other compensation.

Obama called the payment of the Wall Street bonuses “the height of irresponsibility,” and said the public dislikes the idea of helping the financial sector dig out of a hole, only to see it get bigger because of lavish spending. The comptroller’s report found such bonuses were down 44 percent, but at about the same level they were during the boom time of 2004.

Vice President Joe Biden spoke even more bluntly.

“I’d like to throw these guys in the brig,” Biden said in an interview with CNBC.

Wall Street had another astounding advance Tuesday, with the Dow Jones industrials soaring nearly 900 points in their second-largest point gain ever as late-day bargain hunters stormed into the market. The Dow and the Standard & Poor’s 500 index were each up nearly 11 percent.

There didn’t appear to be any one catalyst for the surge that saw the Dow nearly double its gain in the last hour of trading. Many analysts said investors were grabbing up stocks in the belief that the market had fallen too far in recent sessions; the Dow had dropped 500 points in two days. Some said buying early in the day came from anticipation of an interest rate cut Wednesday by the Federal Reserve, and the market just followed its recent pattern of building on its gains or losses in the last minutes of the session.

“There is nothing fundamental that came out today or yesterday that would take it up or down. We’re all groping for something meaningful to talk about,” said Bob Andres, chief investment strategist at Portfolio Management Consultants. “The market is exhausted from going down.”

But given the relentless volatility in the market — out of 20 trading days this month, there have been only two that didn’t see the Dow close up or down in triple digits — no one expects that the market is now headed higher for good. After Wall Street’s devastating losses that slashed 2,400 points off the Dow in eight sessions, market veterans warned that the recovery would rocky, including huge gains followed by huge declines.

“I don’t think it will be a sustained move,” said Matt King, chief investment officer at Bell Investment Advisors, of Tuesday’s surge.

It was clear that investors wanted to buy — they looked past news of a sharp drop in consumer confidence early in the session. The Conference Board said its index of consumer confidence has fallen to 38 in October, well below the 51 analysts expected.

According to preliminary calculations, the Dow rose 889.35, or 10.88 percent, to 9,065.12. That was its second-largest point gain, coming after the 936 points the Dow jumped on Oct. 13.

The Dow was up 456 points at 3 p.m. and rose as much as 906.31 before edging back.

The gains in the 30 blue chip stocks were stunning — Alcoa Inc. was up 19.25 percent, while Verizon Communications Inc. rose 14.63 percent. Even oil stocks shot higher, withstanding another drop in the price of crude — Exxon Mobil Corp. and Chevron Corp. each rose more than 13 percent.

Broader stock indicators also surged. The Standard & Poor’s 500 index rose 91.59, or 10.79 percent, to 940.51, and the Nasdaq composite index rose 143.57, or 9.53 percent, to 1,649.47.

The Russell 2000 index of smaller companies rose 34.15, or 7.62 percent, to 482.55.

Advancing issues outnumbered decliners by more than 4 to 1 on the New York Stock Exchange, where volume came to a moderate 1.72 billion shares compared with 1.34 billion shares traded Monday.

“I guess we’re just coming out of this oversold situation. I think you’ve got a lot of players on the sidelines,” said Dan Demming, trader at Stutland Equities in Chicago. “There’s just no one standing in the way right now.”

He contends investors are also anticipating an interest rate cut. The Fed is expected to cut its target fed funds rate by half a point to 1 percent.

Bond prices were mixed as some investors looked for the safety of government debt. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, fell to 0.76 percent from 0.77 percent Monday. The lower yield indicates an increase in demand. Meanwhile, the yield on the benchmark 10-year Treasury note rose to 3.86 percent from 3.69 percent late Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude settled down 49 cents to settle at $62.73 a barrel on the New York Mercantile Exchange.

Investors worldwide snapped up stocks after posting huge declines Monday on economic worries. Japan’s Nikkei stock average jumped 6.41 percent and Hong Kong’s Hang Seng index surged 14.4 percent — its biggest gain in 11 years — a day after plunging more than 12 percent. Britain’s FTSE 100 rose 1.92 percent, Germany’s DAX index jumped 11.3 percent, and France’s CAC-40 rose 1.55 percent.

The disruptions in the normal flow of the credit markets over the past six weeks have produced widespread worries about the economy’s ability to avoid a severe downturn. The evaporation in lending is making it difficult and more expensive for businesses and consumers to get loans.

But Monday saw the start of the Fed’s efforts to revive lending in the commercial paper market, where companies turn for short-term loans. General Electric Co., for example, has said it would borrow money from the government. The Treasury has also begun to implement part of the government’s $700 billion financial bailout plan by investing directly in some banks to give them a much-need source of fresh cash.

The government’s extraordinary moves to help support borrowing and restore market confidence come as unease about the economy has buffeted trading. Some of Wall Street’s gyrations since the mid-September bankruptcy filing of Lehman Brothers Holdings Inc. and the subsequent seizing up of the credit markets are tied to massive selling by hedge funds and mutual funds trying to raise cash for nervous investors.

On Monday stocks fell sharply in the final minutes of the session, with the Dow giving up 200 points. Tuesday’s gain seemed as puzzling to some observers.

“It makes just as much sense as yesterday’s 200 point drop in 10 minutes,” said Arthur Hogan, chief market analyst at Jefferies & Co. He did say, however, that there was a “smattering of good news” that appeared to help boost stocks Tuesday.

One was the dollar’s massive rally against the yen, Hogan said, a signal that the “indiscriminate selling” by hedge funds might be hitting a plateau. Hedge funds often borrow yen to fund investments in higher-yielding currencies; recently, they’ve been forced to sell assets raise cash, so they have been buying back yen and boosting its value. That weighed on global markets on Monday.

The dollar leaped to 97.68 Japanese yen in late New York trading Tuesday from 93.93 yen late Monday.

“Was there enough good news to warrant a 10 percent rally? No,” Hogan said. “But you put things in perspective — this is a rally amidst a very difficult market.”

Wall Street’s jump came as fallout from credit market troubles popped up around the globe. Iceland’s central bank on Tuesday raised its key interest rate by an enormous 6 percentage points to 18 percent. Iceland has seen its currency tumble after its banking sector collapsed this month. Prime minister Geir Haarde said separately on Tuesday that the country will require $4 billion in financial support in addition to the $2 billion loan package announced by the IMF.

Meanwhile, Germany’s foreign minister said Tuesday that Pakistan must secure a loan from the IMF within a week to avoid sliding into a financial crisis.

Corporate profit forecasts, a jump in the dollar and falling oil prices signaled investor fears that an economic slowdown will sweep the globe even if lending begins to approach more normal levels.

The dollar hit multiyear highs against several other major currencies, weighing on commodity prices. That hurt raw materials and energy companies, while giving a boost to airlines. Technology shares fared better than the broader market following quarterly reports from Apple Inc. and Yahoo Inc.

While reduced strains in global credit markets have eased some investors’ nervousness about the economy, market anxiety remains as hundreds of companies this week report third-quarter results and issue somewhat murky forecasts that are stirring unease about the economic bumps that may lay ahead.

Wachovia Corp., which is being bought by Wells Fargo & Co., reported that it swung to a huge loss in the third quarter while the drugmaker Merck & Co. said its quarterly profit fell 28 percent and that it would cut more than 10 percent of its work force.

John Thornton, co-portfolio manager at Stephens Investment Management Group LLC in Houston, said investors’ fear has shifted from the immediate concerns about tightness in credit and the resulting difficulty in borrowing to the broader economy as companies come out with their quarterly numbers.

“Even if it weren’t for the credit crisis we’d probably be looking toward a pretty tough recession anyway,” he said. “The third-quarter earnings are kind of uninspiring but third quarter hasn’t been the real concern of people. I think the concern is the depth and duration of the downturn and the effect it’s going to have on earnings.”

According to preliminary calculations, the Dow fell 514.45, or 5.69 percent, to 8,519.21, after being down as much as 698 points in the final half hour of trading. On Tuesday, the Dow retreated 231 points after forecasts from DuPont Co., Sun Microsystems Inc. and Texas Instruments Inc. raised fears about the economy.

Broader stock indicators also fell Wednesday. The Standard & Poor’s 500 index fell 58.27, or 6.10 percent, to 896.78, and the Nasdaq composite index fell 80.93, or 4.77 percent, to 1,615.75.

Wachovia Corp., which is being bought by Wells Fargo for about $14 billion in stock, said it lost $23.89 billion in the third quarter. It earned $1.62 billion in the same quarter a year ago. Airplane maker Boeing reported its earnings slumped 38 percent as a strike halted production of commercial jets.

Merck & Co. said it will slash 7,200 jobs as part of a new restructuring program. The drugmaker’s third-quarter profit plunged 28 percent, partly due to flat sales.

Tech companies are taking a hit, too, as the economy slows and spending by consumers and businesses drops. Yahoo is slashing 1,500 jobs while it braces for a deep downturn likely to extend well into 2009.

“We are going into what is very clearly a recession mode,” Blake Jorgensen, Yahoo’s chief financial officer, said in a Tuesday interview.

Even with the aggressive steps the government has already taken, Treasury Secretary Henry Paulson says it will take time before things get turned around.

“Clearly, we’re going to have a number of difficult months ahead of us in terms of the real economy,” Paulson said Tuesday in an interview on “The Charlie Rose Show.”

Wall Street headed for a sharply lower open Wednesday when investors shifted their focus away from improving credit markets and fixated on corporate earnings.

Asian markets veered sharply lower Wednesday, with Tokyo’s Nikkei index tumbling 6.79 percent. Hong Kong’s Hang Seng was down 6.2 percent, while South Korea’s main index shed 5.1 percent. European markets also opened lower.

A week after Paulson announced the administration would spend $250 billion to buy stakes in U.S. banks, the Federal Reserve stepped up Tuesday with a new program to help money market mutual funds that have been squeezed by worried investors demanding to cash out their holdings.

The Fed said it would provide up to $540 billion in financing though a program run by JPMorgan Chase & Co. to purchase from mutual funds certificates of deposit, bank notes and commercial paper. The program, to be called the Money Market Investor Funding Facility, is designed to revive the market for commercial paper, short-term loans that are critical for keeping businesses running.

“If these money markets are not working properly, then the economy is significantly threatened because this is where businesses get their short-term financing for their day-to-day operations,” said Mark Zandi, chief economist at Moody’s Economy.com.

Money market funds hold about one-third of all commercial paper and Fed officials said that about $500 billion had flowed out of prime money market funds since August as investors became increasingly worried about their ability to redeem shares. On Sept. 18, the Treasury Department announced that it was tapping a $50 billion Treasury fund to provide guarantees for the assets in the money market accounts.

The Fed has already announced that starting next Monday it will begin making direct purchases of commercial paper in a further effort to bolster this market.

In other government actions to deal with the unfolding crisis, the Treasury Department announced that it had selected two major accounting firms to help manage the government’s $700 billion financial-system rescue program passed by Congress on Oct. 3.

The program to buy distressed assets from banks is expected to spend $100 billion initially, while Paulson announced last week that another $250 billion would be committed to buying stock in banks as a way of shoring up their capital reserves so that they will resume more normal lending operations.

Paulson said in his television interview that banks might use part of the money they receive from the government to make acquisitions of weaker banks.

“There will be some situations where it is best for the economy and for the banking system for there to be a consolidation,” he said.

That element of the program could prove controversial if strong banks employ the money they receive from the government not to make new loans but to swallow up rivals.

When the $700 billion bailout program was going through Congress, Paulson never mentioned the possibility that the money could be used to provide capital to banks, stressing instead that the other part of the program, having the government use the money to purchase distressed mortgage-related assets from the banks.

Paulson said that the emphasis in the program was changed in reaction to rapidly moving events as the situation in credit markets “became even more dire.” He said that before changing emphasis he got input from a number of people including billionaire investor Warren Buffett.

The initiatives seem to be having a positive effect. Yields on Treasury bills and the interest rates banks charge to other banks have both fallen back to late-September levels, but analysts said financial markets will see more turbulence before the credit crisis is over.

Meanwhile, members of Congress are moving forward with efforts to overhaul the regulatory system with what could be the most sweeping changes since the 1930s, another period when Congress revamped how the financial system was regulated in response to the 1929 stock market crash and a wave of bank failures.

House Financial Services Committee Chairman Barney Frank, who held hearings Tuesday on what changes should be made, said that what Congress produces next year will be “as important a set of economic decisions I think this country will be making since the Depression.”

Democrats in Congress are also pushing efforts to assemble a second economic stimulus program that could total $150 billion or more. The White House has yet to endorse the idea, but has said President Bush was at least willing to consider a second stimulus measure.