Category Archives: Bahhd regulators

Part I: How To Harass A Journalist

My close friends — Jonathan and Vahni — flew from London to Jersey this winter to oversee the packing of my things, mostly personal belongings and papers, after the Jersey authorities flagged me for removal at the UK border following my research into the Haut de la Garenne scandal.

These things also included fancy dress shoes, which were of apparent interest to the authorities.

The boxes arrived in the U.S. many weeks later, slashed open by X-Acto knives and in some cases (such as the box pictured below) ripped open by human hands. The boxes arrived with a form stating that a “contaminant” was found inside, but it did not say what that contaminant was. Frankly, it’d be nice to know.

Below, a transcript between Vahni and the United Parcel Service, which was entrusted with my packages, hinting that the possibility of poisonous UK-Jersey soil on my dress shoes had established grounds for a lengthy search of my belongings. All of which makes one wonder why we are allowed to walk off planes in street shoes after taking international flights?

Based on the fact all the boxes were opened and the shipment arrived weeks late, we can only deduce someone had a very strong interest in going through my stuff.

 

 

 

 

 

 

 

 

 

FEBRUARY 2012

Initial Question: Receiver [Leah McGrath Goodman] has just told me that ALL packages opened/damaged. Things actually spilling out of them. They were just left at side door without knocking. They were delivered after the promised delivery date.

UPS Sammy A.: Hi, this is Sammy A.. I’ll be happy to assist you!
Vahni: As you can see – not happy!

UPS Sammy A.: I need to connect you with a representative who can track your international package. Can I connect you now?
Vahni: yes please
UPS Sammy A. has disconnected.
UPS Ursula P.: Hi, this is Ursula P.. I’ll be happy to assist you.
Vahni: can you see my prior chat? Very unhappy with the condition of shipment.

UPS Ursula P.: Yes, I can see the prior chat. Just a moment while I review your tracking information.
Vahni: there are 7 packages in that shipment. ALL were opened and not reclosed securely.
Vahni: And were left at side door without knocking to see if anyone was there to receive them.
UPS Ursula P.: Please give me a couple of minutes to check what happen with your packages and i will also find out about the delivery.                                                                                                                                                         Vahni: We’ll be checking carefully through the items to see if anything is damaged or missing.
Vahni: if so, what is the procedure for filing a claim?
UPS Ursula P.: I understand that you need to know about this packages. I would need a couple of minutes to find all the information for this packages. Would that be okay with you?
Vahni: Yes. Basically I need to know why they arrived in such bad condition
UPS Ursula P.: Thanks, Just give me a moment.
UPS Ursula P.: Thanks for your patience. I review all the information of this tracking number in the system. The system shows that your package was held by the U.S. Customs Agency. The USDA (United States Department of Agriculture) required the package to be cleaned and disinfected the 11 pairs of shoes. Soil from another countries is not allowed to enter the USA. the customs inspector cleaned and disinfected the shoes. Then the package was back to UPS for delivery.

Vahni: Yes. but all the shoes were in one box. All the boxes were opened, and not reclosed properly.
Vahni: Things were poking out of them.
Vahni: Why?
UPS Ursula P.: I am sorry.

 

 

Sunday’s News Shows, Brought To You By Big Oil

Gold Bricks: An Interesting Backdrop For The American Petroleum Institute Sign

While Big Oil is always active during an election season, this year news and radio shows have been particularly shameless about airing back-to-back commercials propounding the virtues of oil and gas. Just yesterday, Sunday’s lineup featured a parade of ads from the American Petroleum Institute — the Washington lobby for Big Oil — hailing oil and gas companies for paying for health care and schools and saying they have created 9.2 million jobs nationwide. It did not offer any independent sourcing to back up those claims, but I am guessing it’s safe to assume we can trust them?

If an oil company is building a school, frankly, I would like to know about it. I am still waiting to hear back on the name and location of these schools. Or even just one school.

Sunday is the major news networks’ time to roll out their TV version of The New York Times Sunday section. On “This Week With George Stephanopoulos,” a commercial break featured the American Petroleum Institute, Chevron and British Petroleum — in a row.

Pandering To Oil And Gas

While it’s no secret news shows are increasingly desperate for cash, this gives the impression that some shows are literally for sale. If that’s true, it is a bad time for it, as this country is in dire need of objective, non-ad-fueled journalism. The Fourth Estate is the last barrier against obfuscation and corruption and, lately, it is not doing the greatest job of keeping its head above the fray.

If news outlets don’t take seriously the need for diverse messaging not only in the content of their programming, but also when it comes to their commercials, it isn’t that different from narrowing the conversation to hard Orwellian limits. Here, an example of what really happens during an American Petroleum Institute commercial shoot that purports to feature “real” Americans.

So, onto the commercials themselves (which were hilarious if you could ignore for one second that a single member of the viewing public might actually believe them).

A tip to the Big Oil marketing agencies: if you are going to make a misleading ad, try to not make it so hysterical.

Surreal Oil And Gas Ads

Among Sunday’s procession, the American Petroleum Institute managed to look the least ridiculous (which is kind of like complimenting someone for being the world’s tallest midget), while Chevron’s ad featured a young blonde woman, supposedly a Chevron employee, making intense statements about how “proud” she was of the company for investing in American concrete and American steel (a little too weird).

The BP commercial, however, took the cake… Continue reading Sunday’s News Shows, Brought To You By Big Oil

Oil and Gas Politics: Just The Nonpartisan Facts

I’ve been writing a series for Fortune in recent weeks tackling questions like, if the U.S. is now selling more petroleum products than it is buying for the first time in more than six decades, why is most of the country paying around $4 a gallon for gas? And if 30% of U.S. oil is drilled from federally owned lands and territories (read: areas owned by us, the taxpayers) why are we not being paid competitive rates for them by the oil companies? 

With the Senate recently voting down a measure to eliminate billions of subsidies for Big Oil, for those not looking to attack either Republicans or Democrats, the 1% or the 99% – just those operating on common sense – it should raise some questions.

Between 2007 and 2010, more than 70% of the increase in U.S. oil drilling took place on federal territories, representing 3.5 million barrels a day, according to the nonpartisan Congressional Research Service. Since then, oil drilling in the U.S. has climbed higher, topping 6 million barrels a day  this spring for the first time since 1999.

The appeal of drilling in the U.S. has grown in recent years, as oil companies develop new technologies to capture energy resources locked in North America that were previously seen as out of reach. Big Oil also has grown wary of the legal and financial uncertainties that often plague their drilling activities in more exotic and restive regions, such as Venezuela and Nigeria, North Africa and the Persian Gulf.

Bottom line: drillers see America as the promised land compared with the dreary alternatives, because the U.S. is by far a safer and stabler place to do business.

Oil Still Fetches 1987 Rates

Yet Americans might be shocked to learn how much the oil companies are actually paying for the privilege to drill on taxpayer-owned territories. As of this writing, the starting bid for leases on parcels of land that allow an oil company to drill for 10 years is $2 an acre. Yes, the prices can get up into the thousands during the bidding process, but more often the land is sold for next to nothing.

And it’s been that way since 1987.

It is as though oil hasn’t budged from $20, the price per barrel the same year Bon Jovi released “Slippery When Wet” (no pun intended regarding the use of ‘slippery,’ however apropos.) Continue reading Oil and Gas Politics: Just The Nonpartisan Facts

Q&A With The Global Journal: Oil Trading And The Casino Syndrome

Happy National Pancake/Leap Year/Week before Super Tuesday Day, all. It has been a turbulent past few months and not just in the oil market. I will get into why very shortly but, for now, let’s just say that after a long and dark winter, I am once again available for dancing in the streets. Without any further cryptic remarks, I’d like to share an interview I just did with The Global Journal, based in Geneva, which rang me up to discuss ‘The Asylum’ and what the future holds for the energy market and gas prices during this, our illustrious Election Year.

(Q portions courtesy of Janine Huguenin-Virchaux, the magazine’s books and culture editor.)

Your book mentions that “the market is no longer reflecting supply and demand.” What is the use of a market that does not reflect the true price of oil? Do we need new hijackers?

That’s a great question – do we need new hijackers? If we could get some hijackers that could take back the market so that it does reflect supply and demand more clearly, then I would say yes, we do! However, I would also say that there is a serious debate going on about the extent to which price does reflect supply and demand. I think there is very good reason to believe that the price does not reflect it anymore. There is also a very technical reason for what has been going on that has not really been acknowledged or understood by many people. And that is the relationship between speculation and price discovery. A lot of the information that I get is from people who read the book and then they come to me and bring me stuff that nobody seems to really know about.

A lot of these guys are just regular traders who trade physical oil and feel that supply and demand is not reflected in the price correctly anymore. Whereas their entire lives – some of these men and women have been trading oil for thirty years or more – they feel the price did reflect it. So they believe there’s a huge difference in what they are seeing today in terms of the market fundamentals versus the price. And what they used to do was see price and fundamentals fit together better. They see a lot of distortion happening now. A lot of these people are concerned with that. I want to say, it’s not all about making money for these people: some of them look at this and say “Oh my God, it’s not acting the way it used to anymore and it doesn’t look like it’s headed anywhere good.” And that is aside from the fact that trading has become so ferocious that it is more about preserving a global casino than about supplying oil to people who need it.

That’s the problem. The casino aspect overshadows everything. Most of the people who play this game don’t want oil. They just want to play the game.

What is the alternative? I mean, these are the people who are speculating on the price of oil. Is there anything that can change to make it different? To make it less casino-like?

Yes, I think so. I am considering writing about this much more, the nature of speculation… Continue reading Q&A With The Global Journal: Oil Trading And The Casino Syndrome

How To Make Someone Else Swallow Your Losses, The Mastercourse

It’s official: when a Wall Street powerhouse suddenly collapses and (possibly) more than a billion dollars goes missing, it’s no longer just the ordinary taxpayer’s problem. Now, it has moved up the chain. Below, the piece I wrote today for Fortune on what traders do when you misappropriate their money.

While Occupy Wall Street was holding its two-month anniversary rally in Manhattan last week, traders were quietly mounting a rather more sophisticated version of OWS on their own. Call it Occupy Wall Street Bankruptcy Court.

FORTUNE — Big institutional investors are getting a taste of what many frustrated taxpayers experienced during the financial crisis: Being on the hook for losses of a major financial firm against their wishes.

This time, of course, it’s MF Global at the center of the dispute. A once-trusted brokerage with roots dating back to the 1700s, MF Global is now a bankrupt firm suspected of misappropriating customer funds to the tune of at least $600 million.

More than two weeks after MF Global’s Halloween bankruptcy filing, there are more questions than answers and a surfeit of conflicts in an investigation that should be aiming to restore the public’s confidence, but is doing the opposite. On Monday, the bankruptcy trustee for the case announced that there may be much more than $600 million missing from MF Global accounts — perhaps as much as $1.2 billion.

Hundreds of millions of dollars of trading capital and collateral were frozen without notice, dramatically disrupting the derivatives marketplace and ushering in a phalanx of federal prosecutors, regulatory agencies and forensic accountants working around the clock to determine where the missing money is. This, after a lawyer for MF Global assured a New York judge earlier this month “there is no shortfall.”

What’s different about this case?  One hedge fund executive summed it up best: “What is scary about MF Global is that there is no political will in this country to look out for people. Let this be a lesson that, if someone tries to steal from you, there is no one who is going to save you. I mean it is literally the most frightening thing that can happen in finance.”

Led by a sense of outrage — as well as the conviction that if they don’t look out for themselves, no one else will — investors have been pooling information and banding together to defend themselves for weeks. Continue reading How To Make Someone Else Swallow Your Losses, The Mastercourse

A Certain Stylishness In Hating The Rich

In Marie Antoinette's days, the guillotine was called the 'National Razor.'

Our national discourse on the nature of wealth has been a good cure for sanity of late.

News that a book coming out from the surviving son of Bernard Madoff, mastermind of the largest Ponzi scheme in history, elicited comments from readers that could be called anything but charitable. Alongside an interview with Madoff’s wife, Ruth, whose picture speaks volumes about the toll the scandal has taken on her life — not in the least the suicide of her other son — are comments that plainly show how bitter the feud has become between the rich and the working class in our country. In response to Ruth’s claims of not knowing of her husband’s illegal financial dealings, readers wrote:

“What a bunch of lies. Anyone in the industry knows that the returns had to be made up…the sons knew it, the wife knew it, everyone knew it.”

“I do not think Ruth knew, but she strikes me as remarkably incurious and shallow.”

And:

“This is a woman who married at 18 and never took responsibility for her own financial security. True, she raised their children but she chose to ignore the choices made by her husband.  Now she claims to be a victim. I am sorry but I do not buy this. She chose to remain ignorant.”

Overlooked was this part of the interview, in which Ruth Madoff discusses falling in love with her husband, as it would inevitably inspire some modicum of humanity.

Aside from Madoff-venting, the debates rage about the solutions. At Occupy Wall Street, which I visited last week, you have, on the one hand, a number of concerned Americans questioning — or outright decrying — capitalism in all its trappings. They suggest that the only solution is to raze and rebuild the entire political and financial system.

Unfortunately, they are still experimenting with new models to offer in its place.

On the other, you have national leaders quick to denounce the financial crisis, but just as quick to vote down any new rules aiming to prevent a financial crisis in the future.

Two G-Men (Goldman, that is): Obama and Corzine wave for the crowd

Already, we are seeing the results of this splintering of the populace: we remain effectively paralyzed to redress our own fragility, forced to lurch from one crisis to the next. Large financial powerhouses continue to fail spectacularly as the Department of Justice, the Federal Bureau of Investigation, the Securities and Exchange Commission and a smattering of other government agencies struggle to keep up with reports of unchecked theft, negligence and fraud amid budget cuts frequently meant to hobble them (as if the backlog of cases they’re drowning in wasn’t enough).

In the meantime, too much money in all the wrong places undercuts the healthy cleansing that might otherwise be achieved through a democratic elections process. As one hedge funder told me while in New York last week: “Nothing can pass C0ngress, because the Republicans believe all regulation is bad. They don’t want another financial crisis, but they don’t approve of any new rules either. They haven’t quite worked out their dogma yet.” And we know Obama and the Democrats, whatever the dogma, do not appear capable of executing a plan.

Last week, former U.S. senator, New Jersey governor and high-ranking Goldman Sachs executive, Jon Corzine, stepped down from a job he held for just over a year as head of the world’s largest futures brokerage house. The 200-year-old-plus brokerage, MF Global, handled traders’ transactions in the multitrillion-dollar futures market, where people bet on the future prices of everything from soybeans to gasoline to interest rates.

Corzine’s company, which sought to become a mini-Goldman Sachs, filed for bankruptcy after betting more than $6 billion on bonds tied to the European debt crisis and getting caught short. Corzine, a self-described son of an insurance salesman who grew up on a “small family farm” in Illinois, raked in hundreds of millions at Goldman as he ascended to its highest echelons after starting out as a bond trader there.

Given his trading background, Corzine very likely understood exactly what kind of risk his brokerage was taking ahead of its downfall. (“A good rule of thumb is, if the guy is not a former trader, he probably didn’t know what hit him,” the hedge funder told me over a nice-sized steak. “But if you’re a former trader, you get the joke. You probably wrote the joke.”) Continue reading A Certain Stylishness In Hating The Rich

Dear The Fed: You Suck

I was cleansing my inbox today and found this friendly letter to the Fed from 2007 written by our comrades at Long or Short Capital (vaguely connected to our own fake hedge fund, Intergalactic Capital). I was all ready to take a whimsical walk down memory lane, since 2007 was the year before our  financial meltdown. Yet strangely, this missive does not seem dated.

To: The Fed
From:
Long or Short Capital
Re:
You suck

Dear the Fed,

You suck.  You don’t have a backbone and as a result you are slowly and very surely making our country and our currency irrelevant.  Usually the masses rebel and bring down great empires but luckily for us democracy fixed that problem.  Unfortunately, democracy can’t fix how lame and fickle you are and so you will be our ruin.

A few things to tell you:

1) Inflation isn’t 2% like your pathetic CPI ex-Food & Energy says it is.

First of all, as far as I can tell food and  energy are the only two items you should NEVER exclude from an inflation index.  Tell your wife and kids they can have everything in the consumer basket except food and energy and you will quickly see that they are actually the two MOST important and indispensable factors in the CPI.

You can find substitutes for, or go without, everything in the basket EXCEPT those two.

Secondly, stop using “Seasonally Adjusted Intervention Analysis” it’s as sketchy as the  Seldom-Accepted-Accounting-Principles (SAAP) we use to cook the books here at LoS.  I mean writing a computer program to automatically remove any items in the basket which deviate meaningfully from the previous year?  Isn’t the point of the data to SHOW the change versus the previous year, not hide it?  Oh, I found the list of items that you’ve adjusted for and it’s embarrassing. Continue reading Dear The Fed: You Suck

Cash or Credit: A Stuffing Under the Mattress Vs. A Hiding in the Closet

It took longer than usual to take up the pen today. Probably because it was imperative to check out the “Every Single Outfit Catherine Wore on the Royal Tour” feature in the Huffington Post.

Having done that, I now turn to more important matters.

Like this cash-or-credit debate taking place in the papers. Financial vigilantes are urging consumers to cut up their credit cards and throw them away. One article in SmartMoney actually sounded the shibboleth: “I’m going all cash!”

To which readers had a range of emotional responses. Two encapsulating these:

“This is simply an irritating article. I am willing to bet $1000 that the author
is lying and in fact is still using his credit cards and not wandering around
paying for everything with cash. If you’re going to write an article, at least
please be intellectually honest. Do you think we are that stupid?’

And:

“Already living this dream. In fact it is a great reality to know that you owe nothing to anyone. We do not have credit cards either, we have covered that with an emergency fund. We own a house (no mortgage) and we have paid cash for all of our vehicles (no financing). As far as I’m concerned, living within your means and being debt free is the NEW AMERICAN DREAM.”

The most compelling reason for getting rid of your credit cards is obvious: ordinary folk have to pay 14% interest on average for them. Yet banks pay less than 1% whenever they feel like borrowing from the government (yes, that includes JPMorgan Chase, Bank of America — even Goldman Sachs and Morgan Stanley, which received “bank holding company” status during the credit crisis).

Kind of annoying that the Big Banks get to play with money for almost nothing, but not us Little People, isn’t it? Continue reading Cash or Credit: A Stuffing Under the Mattress Vs. A Hiding in the Closet

Interview on ‘Keiser Report’ – Russia Today

Many of you have written to ask for a good bit more on the shenanigans prevalent in today’s oil market. Check out this show, aired today, from minute 14 on…(Thankfully, you can scroll through to the juicy stuff.) More to come on DOJ, FTC, CFTC and FERC investigations into the price of oil and gas — and where the biggest challenges lie for those who seek to break the back of the corruption.

 

Quote from a great piece in this month’s Vanity Fair, penned by the illustrious Mr. S…

“Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest. When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth.”

– Joseph E. Stiglitz, economist and Nobel laureate