Surprise...the game is rigged

[DiscoBiscuit]

You are right in pointing out that the fundamental problem to fixing all of our problems is societal wide corruption or, in other words, our system of governance has failed due to systemic corruption. This is honestly just what happens when hegemonic empires get old and go into decline. Rome was ripe with corruption and monetary debasement as it faded into the pages of history.

Basically that's it. Although I would say it's going into the pockets of the government (entitled) class, petite bourgeois, and the bourgeois.

It's the working proles who end up getting the shaft.

Astounding. Just my opinion but folks making millions, tens of millions, hundreds of millions (every year) are the entitled.

10,000 Americans avoid taxes completely. The Koch's will spend $400 million dollars for 2012 alone. Two or three men have the money and the power to stick a banana up our tailpipe every election. Let em have their way and they'll keep doing it.

Does your future involve going from catcher to pitcher? I hope so or you might be voting against your own economic interests.

 

[SpasticGramps]

I hope so or you might be voting against your own economic interests.

IMO, if you vote either way in America you are voting against your own interests.

 

[bombadil.360]

Basically that's it. Although I would say it's going into the pockets of the government (entitled) class, petite bourgeois, and the bourgeois.

It's the working proles who end up getting the shaft.

inherently, we all share the same human nature that's easily corruptible; it makes no difference if someone can be defined as 'working prole' or 'elite', if given a chance to be in a position to get that money, most simply will.

plus, my advice is that you stop using those terms such as 'petite bourgeois', as it makes you fall into the category of 'chavista', or in other words: the most corrupt band of people alive on earth at the moment.

 

[DiscoBiscuit]

Gub's only a slice of the population. If it's logical to assume we have corrupt lawmakers, it's logical to assume we have corrupt corporate executives.

No reason to treat the good executives like the bad ones. But for those bad ones, we need equal and opposite reaction against fraud and corruption.

We can vote out the bad lawmakers. We can't touch fraudulent civilians without laws to go after em.

 

[bombadil.360]

We can vote out the bad lawmakers. We can't touch fraudulent civilians without laws to go after em.

the problem is that the 'proles' will not vote out the bad-lawmakers, the bad politicians; because the voting 'proles' mostly vote basing themselves on the premise of 'what will these peeps I'm voting for will do for me personally?'.

this means, if a democrat or republican vote for X or Y, they only do so by seeing whether or not their vote will bring about personal benefit; forget about what's right and just; the sole goal is whomever gets elected, must grease that hand that voted.

in places like venezuela, this is really easy to see, you sign yourself up in one of the 'missions', you need not do any work of course, and you get a monthly allowance/pension, and in turn you vote for the official party, so as to maintain this pension comming in.

easy to do when you have that oil money flowing in.

then you use the statistics of all the people signed into said 'missions' and sell this to other countries by painting it as some kind of 'revolution', where the 'people', the 'proles' have signed into any given 'mission', to educate, to clean, to heal, etc... as if it were a really working organized effort to better themselves.

in reality, there's no working 'missions' at all, and what the 'people', the 'proles' actually do, is sit home to watch tele-novelas, drink beer and snort cocaine.

viva la revolucion !

 

[DiscoBiscuit]

Interesting read. Call me an optimist, I see the system as capable of extricating lawmakers. Good points that every interest is special interest and we don't typically make efficient use of the system. We get a little help on that. Party apparatchiks spend their working hours making corporate policy sound palatable to the average voter.

Where I consider myself different than typical special interests is I don't seek personal favors. I'm willing to pay more taxes but only if we return the top rate to fiscal sanity. I'm pro ending top/down policies that favor the rich. I don't expect to match wrung-for-wrung their steps up the ladder but 1:300 is too imbalanced. The more powerful these folks get the more legislation they buy.

Maybe I'm wrong-headed but I don't consider lifting all boats as personally motivated any more than the wish the whole country improves economically. Top/down exacerbates macro contraction.

 

[avant gardener]

Capitalism: The extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all.

 

[HempKat]

IMO, if you vote either way in America you are voting against your own interests.

I'll agree with that as long as we keep playing the Republican/Democrat throw in an independent to seem fair game.

 

[HempKat]

the problem is that the 'proles' will not vote out the bad-lawmakers, the bad politicians; because the voting 'proles' mostly vote basing themselves on the premise of 'what will these peeps I'm voting for will do for me personally?'.

What's really ironic is the vast majority keep doing this inspite of the fact they very rarely get what's promised. At one point I resigned myself to the belief that whatever promises a politician makes to benefit most voters when he gets elected is exactly what doesn't get done. Once I came to accept that I started being much less surprized by the performance of politicians.

 

[HempKat]

The more powerful these folks get the more legislation they buy.

Funny, you sound more like a realist then an optimist.

 

[DiscoBiscuit]

BOA's in a scrape with their own shareholders.

Bank Of America Accused Of Hiding Merrill Lynch Losses From Shareholders Before Acquisition



Reuters | Posted: 06/04/2012 12:51 pm Updated: 06/04/2012 2:34 pm


* BofA accused of hiding Merrill losses, earnings dilution

* Investors who owned stock, call options claimed losses

* Ex-CEO Lewis says relied on legal advice

* Bank says shareholders were not deprived of voting rights

By Jonathan Stempel

June 4 (Reuters) - Top executives at Bank of America Corp did not tell shareholders just prior to a 2008 vote on its purchase of Merrill Lynch & Co that losses were mounting and expected to weigh down earnings for years, papers filed in private shareholder litigation show.

But the bank and former Chief Executive Kenneth Lewis said in their own court papers that they should not be liable to shareholders who claimed to have lacked information they needed to vote on the once $50 billion merger.

Lewis also said he had been advised by the bank's law firm and chief financial officer that no disclosure was necessary.

The papers, including sworn testimony from Lewis, were filed on Sunday night in class-action litigation accusing the second-largest U.S. bank of fraudulently misleading holders of shares and call options about Merrill's losses and bonus payouts.

They may also strengthen the contention that Bank of America withheld material information just prior to the Dec. 5, 2008 merger vote, a characterization that Lewis resisted in a March 27 deposition by the shareholders' lawyers.

"In all cases of securities fraud, the fight is always about who knew what, when," said Hillary Sale, a law and business professor at Washington University in St. Louis School of Law. "This deposition shows that before the actual shareholder vote, there was knowledge that the numbers were different. Call it large, call it substantial, but it is likely material."

The New York Times earlier reported some of the court papers, which were filed with the federal court in Manhattan.

Other defendants are former Chief Financial Officer Joe Price; former Merrill Chief Executive John Thain, and outside Bank of America directors. A trial before U.S. District Judge Kevin Castel is scheduled for Oct. 22.

Andrew Ceresney, a lawyer for Lewis, declined to comment. Court papers said his client relied on Price and the law firm Wachtell, Lipton, Rosen & Katz as to how much to disclose.

Bank of America spokesman Lawrence Di Rita declined to comment. The bank in court papers said shareholders failed to show damages as a result of "any alleged impairment to voting rights." It also said that to the extent it overpaid for Merrill, it is Bank of America that can assert that claim.

Lawyers for Price, Thain and the outside directors, as well as Wachtell, did not respond to requests for comment. Steven Singer, a lawyer for the shareholders, declined to comment.

Merrill's fourth-quarter loss at the time of the vote was expected to be $9 billion, according to court papers, and ultimately reached $15.84 billion.

It forced Charlotte, North Carolina-based Bank of America to get a second, $20 billion taxpayer bailout, and fueled a 93 percent drop in its share price over six months. The share price remains close to 80 percent below its level prior to the merger.


LARGE, BUT MATERIAL?

When Bank of America agreed to buy Merrill on Sept. 15, 2008, the same day Lehman Brothers Holdings Inc went bankrupt, it expected the purchase would dilute earnings by 3 percent in 2009, and be "break even" or slightly better in 2010.

According to court papers, Lewis echoed this forecast at the Dec. 5 shareholder vote. But Lewis testified in the deposition that by this time, the bank believed that the merger would be 13.1 percent dilutive in 2009 and 2.8 percent in 2010.

"That's a significant change in the dilution and accretion analysis; you would agree with that?" he was asked.

"Yes," Lewis responded.

The bank's former treasurer Jeffrey Brown testified that Merrill's shrinking of its balance sheet, under Bank of America's orders, could reduce the combined companies' annual earnings power by $1 billion before taxes, court papers show.

Lewis appeared to resist the thought that the projected $9 billion Merrill loss had a "material" impact on that company's capital and tangible common equity, which had been $26 billion.

"I would say -- I mean, there was an effect," Lewis said.

"You would agree with me that is a substantial amount?"

"I would say that's a large amount, yes."

In a filing, Lewis maintained that he knew of "no red flags" for him to reject the "considered judgment" of Price and the lawyers about disclosing Merrill's fourth-quarter performance.

Shareholders, however, said Lewis' sworn statements "leave no genuine dispute" that his statement at the Dec. 5 meeting regarding dilution was "materially false" at the time.

"Reliance on a lawyer's advice is an interesting argument," Sale said. "It could give you a defense that you did not intend to mislead, and therefore did not commit fraud. That causes a problem for Wachtell. It could admit it gave that advice, but that raises a specter of malpractice. It's pretty messy."

Merrill has more recently aided Bank of America's results, offsetting losses from mortgages and other litigation.

In 2010, U.S. District Judge Jed Rakoff approved the bank's $150 million settlement over Merrill with the Securities and Exchange Commission, which included no admission of wrongdoing.

Bank of America, Lewis and Price also face a civil fraud lawsuit by New York Attorney General Eric Schneiderman, under a state law that does not require proof of intent. Schneiderman's office did not immediately respond to a request for comment.

Lewis retired at the end of 2009 and was replaced by Brian Moynihan, who remains chief executive. Thain is now chief executive of the business lender CIT Group Inc.

Bank of America shares traded Monday afternoon down 14 cents at $6.88. They traded at $33.74 when the merger was announced.

The case is In re: Bank of America Corp Securities, Derivative, and Employee Retirement Income Security Act (ERISA) Litigation, U.S. District Court, Southern District of New York, No. 09-md-02058.


http://www.huffingtonpost.com/2012/...ers-merrill-lynch_n_1568333.html?ref=business

If they'll screw their own shareholders, imagine the disdain these goons feel for everybody else.

 

[HempKat]

BOA's in a scrape with their own shareholders.




If they'll screw their own shareholders, imagine the disdain these goons feel for everybody else.

I find it hard to believe the shareholders didn't know what was going on at the time. I remember people at the time, who have no real investment knowledge or experience talking about how foolish the purchase of Merrill Lynch was at the time. Also I remember many people at the time were feeling more like it was the taxpayers bailout money that bought Merrill Lynch for them.

I mean it sounds to me more like people just didn't think things were going to get so bad and now that they are, because nobody is making any money, consumers aren't as able to consume and investors are holding back on investing, they seem like they're trying to find someone to point thier finger at and cry foul rather then accept they're not going to make more money until things significantly improve. It's this very refusal to accept losses and settle for less then hoped for that created much of the problems. If investors hadn't insisted on trying to jack up interest rates on all those ARM's they sold to the sub prime market perhaps all the foreclosures that has killed the real estate market might not have happened? I mean isn't it better to make less profit but still a profit, rather then have your profit become a toxic asset?

 

[DiscoBiscuit]

Great points. Shareholders are people too and they're part of the management structure. Looks like BOA shareholders are saying things were far worse at ML than initially disclosed. Also looks like Lewis is avoiding that idea, suggesting that voters rights weren't impinged. It appears their information was impinged.

I remember the 08 or 09 Rolling Stone(?) article about Hank Paulsen's hand in the forced acquisition. At the time, the article stated Ken Lewis didn't want ML's large chunk of junk mortgages and didn't want BOA's share of bailout 1.0.

According to the article, Paulsen said BOA had to accept both ML and the bailout money or they'd be rebuffed by the taxpayer should BOA collapse. Lewis told shareholders ML was an "asset" and disclosed roughly half ML's losses.

It might not be illegal but has the appearance of deception. I'm glad I'm not a part of that world. Might be more business-as-usual than I realize.

 

[HempKat]

Great points. Shareholders are people too and they're part of the management structure. Looks like BOA shareholders are saying things were far worse at ML than initially disclosed. Also looks like Lewis is avoiding that idea, suggesting that voters rights weren't impinged. It appears their information was impinged.

I remember the 08 or 09 Rolling Stone(?) article about Hank Paulsen's hand in the forced acquisition. At the time, the article stated Ken Lewis didn't want ML's large chunk of junk mortgages and didn't want BOA's share of bailout 1.0.

According to the article, Paulsen said BOA had to accept both ML and the bailout money or they'd be rebuffed by the taxpayer should BOA collapse. Lewis told shareholders ML was an "asset" and disclosed roughly half ML's losses.

It might not be illegal but has the appearance of deception. I'm glad I'm not a part of that world. Might be more business-as-usual than I realize.

Well in the end all that matters is that it's not illegal. I mean it sounds like BOA was forced into it and if so then yeah I guess the shareholders voting was impinged but not by BOA as much as by Paulsen.

 

[DiscoBiscuit]

Disclosure would probably up to BOA, not Paulsen. I hope they're found guilty. Lewis, Thune and a few executives made bank, at least in part off shareholders losing 80% of their investment.

When Glass Steagall was intact, I used to chuckle when John Housman would say, "They make money the old-fashioned way, they EARNNNN it! Back then it was like, "who doesn't earn their money?"

These days, banksters are able to act like this guy and get away with it.

[YOUTUBEIF]Wc2o8ywKqos[/YOUTUBEIF]

 

[DiscoBiscuit]

Disclosure would probably be up to BOA instead of Paulsen. Lewis, Thune and other executives made bank, at least in part off shareholders losing 80% of their investment.

When Glass Steagall was intact, I used to chuckle when John Housman would say, "They make money the old-fashioned way, they EARNNNN it! Back then it was like, "who doesn't earn their money?"

These days, banksters are able to act like this guy and get away with it.

[YOUTUBEIF]Wc2o8ywKqos[/YOUTUBEIF]

 

[SpasticGramps]

I hope they're found guilty. Lewis, Thune and a few executives made bank, at least in part off shareholders losing 80% of their investment.

Not a chance any of them go to jail. Maybe some 30 yr old green patsy may get thrown under the bus, but the architects of this thievery? Ha. Never. This is America. Raping the proles is completley legal and encouraged.

Their investors got "Corzined". Sorry, the money "evaporated" as Corzine would say. None of these gangsters will ever go to jail and as market participants watch these well dressed thugs steal everything they can get their hands on with impunity confindence in the market will continue to evaporate. And without CONfindence this sham of an economic model (usury is what they use to call it) will collapse.

Good riddance to it.

 

[DiscoBiscuit]

That's like saying Madoff customers got Richard Allen Fingerized.

Madoff came before Finger and ripped of tens of billions more.

 

[SpasticGramps]

True. I think the correct analogy would be that we've all be Charles Ponzi-ized.

In the end. The most corrupt people have the most power and continue to utilize it to steal the lower classes savings and wealth with impunity. History shows us that this is only sustainable until the lower classes have nothing left, but the desire to seek retribution.

 

[SpasticGramps]

That's like saying Madoff customers got Richard Allen Fingerized.

Madoff came before Finger and ripped of tens of billions more.

Just out of curiosity, do you believe Corzine should be walking the streets?