The Chairmen of two senate committees have written to the head of the SEC saying they are troubled by the agency’s handling of accusations that political consideration’s impeded the investigation of a prominent hedge fund, Pequot Capital Management. They were Republicans Arlen Specter and Charles Grassley. The SEC report to the Senate was inconsistent, incomplete and contradicted by documentary evidence. In other words the SEC lied about their prosecution of the matter. Someone should tell the Senators we have two separate rules for jurisprudence in America. One for the rich and connected and one for the rest of us. They know that so for them to address the SEC the cover-up must have been very blatant. The SEC said they were seemingly unaware of these important documents and meetings involved in the investigations. They would be aware if it was a small broker, small brokerage firm or some newsletter writer. The SEC was succumbing to political pressure that is rife under this Republican administration. There has never been a charge against Pequot or Morgan Stanley’s CEO John J. Mack, who is a major fundraiser for Mr. Bush. They are guilty and the whole deal stinks to high heaven. Originally when SEC investigator Gary Aguerre pressed the matter he was fired by the SEC. These people are real scum. It hasn’t been this bad since the 1930s. This case is a landmine if it ever could get to court, many would go to jail including several present and former SEC employees. Even the Inspector General lied and the Senate is after him as well. This is typical for the crooks at the SEC, on Wall Street and in Washington.
The backdating of company options has been accompanied in some instances with very serious fraud as in the case of Converse Technology. Corporate America, Wall Street and Washington as usual are trying to minimize what has been going on for a long time and that is back-dating options is fraud and a felony. There is nothing ambiguous about fraud. Just to show you how corrupt corporatist fascist America is there are 80 companies now under investigation. This is a criminal epidemic. All guilty should all go to jail but that won’t happen in our two-tiered system of justice. These executives are powerful and rich and have big connections in the Council on Foreign Relations and other such groups or they gave handsomely to the Republican Party or raised money for them. One crook at Converse sent $57 million to safety in Israel. They don’t extradite Jews or their assets. Eighty is only a start – there may be thousands of companies and individuals yet to be caught. America has become a vast criminal enterprise.
Ben Bernanke tells us the housing retreat will be orderly and it will have a soft landing. In an industry that has a 50% reduction in orders, that has to give away so many incentives, that makes little money on their sales, that has produced 70% of the growth in the economy for six years, look like it will have a soft landing? We don’t think so.
The MBA Index of mortgage applications for the week ended 8/11 rose 1.4%. The 30-year fixed rate mortgage was 6.54%, up 9 BPS from the previous week. The mortgage index, a timely gauge of home sales, fell 0.8%. Refi apps increased 4.6%.
The loss of manufacturing jobs has helped drive down home prices in 26 metro areas during the 2nd quarter. That is ten more areas than in the 1st quarter and that is not something the media chose to cover. The reason Danville, Illinois home prices fell 11% in the 2nd quarter after dropping 25% in the 1st quarter, which wire services failed to mention, was that GM, GE and Hyster, the forklift makers, all shut plants in Danville leaving massive unemployment. We hope they appreciate those jobs in China, Mexico and India.
Voter advocates have filed a lawsuit seeking to stop Pennsylvania Counties from using paperless electronic voting machines, saying that such systems leave no paper trail record that could be used in the event of a recount, audit or other such problem. They want the machines decertified in 58 of 67 countries. The other counties use optical scanners, which the plaintiffs say should be used statewide. They also say paperless voting machines violate the state’s election code and constitution. In a similar lawsuit New Mexico was forced to use optical scanner ballots earlier this year. Are you accomplishing the same thing in your state and county?
As we reported to you before, the Bush administration, namely Dick Cheney, engineered the Israeli invasion of Lebanon. He instructed Israel to use the same losing tactics he used in Iraq where our troops have been bogged down for so long. Israel lost the war and in spite of that Cheney and his band of neocons want to attack Iran in the next two months trying to force voters to bring the Republicans back into power in the House and Senate and keep as many incumbents in office as possible. The excuse will be that Iran will say no to a UN deadline to halt their uranium enrichment project. The same tactics will be used against Iran that Israel used against Lebanon. This is the last effort to form the bloc of states in the Middle East to control their oil and to form a geopolitical position. The bloc will be Georgia, Azerbaijan, Turkey, Afghanistan, Iraq, Israel, Lebanon, Syria and Iran. This is why we had our latest phony terrorist event. That was to condition the public for revenge on the Muslim hordes. Cheney knows after Lieberman’s defeat the Democrats, if in charge of the House and Senate, will withdraw US troops from the Middle East, whereas Cheney wants to keep them there indefinitely. It is the neocon-Cheney plan to restart hostilities in Lebanon soon. The whole episode now has put geopolitical positioning into a secondary position. The attack on Iran is now being driven by wholly political considerations, such as survival.
Bankruptcy filings are on the rise. Chapter 7 filings were up 54% in the 2nd quarter versus the 1st quarter. Thus filings are running 2,300 per business day, more than 4 times the level of November 2005, after the bankruptcy law went into effect. In the 3-months ended June, 85,449 Chapter 7 cases were filed and 142,815 cases overall, a 39% increase from the previous quarter. Chapter 13’s rose 21.3%. Even with much more difficult criteria the bankruptcy juggernaut was just stalled, not cured by the new law. Credit counselors say filers have to undergo counseling before they can proceed with their cases, and the sessions comprise 1/3rd to ½ of their caseloads, plus the attendees cannot pay for the counseling and so the services lose money. As we predicted, consumers are being unduly punished and nothing happens to the irresponsible lenders. So what else is new? Credit counselors are reporting an increase in the number of debtors seeking help because of high gasoline prices and adjustable rate mortgages that have been reset at higher rates. Those debtors may well enter the bankruptcy pipeline in the next year or so. The new higher fees will keep people who have nothing from filing. It costs $2,000 to file for Chapter 7 and $4,000 to file for Chapter 11. Experts say filings will eventually return to 90% of the old rate.