Tag Archives: President Obama

Obama at the No 10 Barbecue

Large men wearing shades, wires dangling from cauliflower ears and overcoats neatly folded in front of them stand very still. They are watching a little man running about putting the last touches to the seating arrangements. Sweat is pouring down his pink face. He looked quite neat when he arrived with the milk at 4.00 a.m. Now he looks like a sweating anaemic blood orange in a crumpled grey suit. 

At last his master summons him.  “Clegg!” 

The Prime Minister, looking very casual in his white shirt, navy blue suit trousers, black brogues, pulls off his tie and hands it to the hapless Clegg. “Get rid of this. Don’t lose it. When my bestest chums Barack and Michelle arrive, take their coats and put them somewhere safe. Can you manage that? I don’t want any more fuck-ups. Speaking of fuck ups, how’s the Huhne thing going?”

“Well, your Highness……….”stammers Clegg, “I…..I…..I. Sorry your Eminent and Serene…..Highness….”

“Just shut the fuck up and get rid of the tie, Make sure that you fold it properly.”

Clegg scuttles off pausing only to be searched and for the tenth time, have a metal detector waved over him by a gorilla in RayBans.

He runs into No 10, through the French windows, up a short flight of stairs, into the lavatory. He decides to have a quick pee but in his blind haste, he wets the Prime Minister’s tie. “Fuck!”  he mutters. Another bollocking.

Imperceptibly, the mood in the Rose Garden changes. The Special Service psychos suddenly stand a bit straighter whilst the biggest one – the one with shoulders like an overstuffed sofa speaks into his sleeve. They’re here! 

An immaculate and very cool Obama sweeps through into the garden . Michelle, looking casual yet expensively glamorous follows discreetly.

The “Mwwwah! Mwwwah” ceremony between the Camerons and the Obamas is quickly concluded as the rest of the Cabinet lines up for the handshakes. Hague is looking especially resplendent in his New York Yankees baseball hat, multi-coloured Hawaiian shirt, khaki shorts and Argos trainers. Cameron looks across at Hague, just as the Foreign Secretary says to Michelle ” Hello, Nice day”.

“Twat!” thinks Cameron as he watches Sam fuss over the pre-cooked, pre-tasted,  Texan burgers on the grill .

” Would you like a burger, Barack?”  he shouts over to the President who at that moment stands shaking hands with the Home Secretary who once again is wearing her leopard print “Fuck me” shoes.

The President is relieved to have finished the gladhanding , grabs Michelle by the hand and returns to the comparative sanctuary of the blazing-hot barbecue.

Cameron repeats: ” Burger Barack?”

Barack pulls a sheet of paper from his trouser pocket.

“As the white-hot fingers of the London sun caress the pale face of this momentous day in this Rose Garden, I would ask something of you – my fellow  human being and servant of the people…Mr Prime Minister………..something that I am not just asking of you. It is something that I would ask of anyone. Take your wooden tongs , and reach…………yes, reach for that burger bun ( Yes we can!) and having split it with the ice-sharp steel of your artisan knife – thrust into it one , just one  onion-laced beef patty and hand it to me –  for I am like you . I am your brother and I know that you also feel my hunger and the hunger of the people, your people, my people……OUR PEOPLE!  The people of the world! We are the people!  And when you have handed it to me, I will endeavour to accomplish what has been instituted by families up and down this great land of Ingerland since the mists of time parted.  They parted to reveal our forebear – the common man ( Yes we can!). I am not asking for anything more that a bite – or if it pleases you, my dear and gracious Prime Minister Cameroon –  just the opportunity of a bite. Now if that bite seems unpleasant or offensive in any way – we neither make nor demand apology  – we simply ask the one question that matters – ketchup or none? Cheeze or no cheeze I do not yet know the answer but…..we shall begin our journey, this barbecue journey together and  we shall find out! It will be our quest! We may not get it right first time but one day soon  we will know! Maybe even before the end of this great day! God Bless the County of Ingerland and  the United States of America!”

Cameron and Sam are now beginning to look quite ill-at-ease. Sam turns to her husband who appears to have gone into “shut-down”. “What the fuck was that all about. Does he want a fucking burger or not?”

Just  as President Obama pauses for applause an embarrassed Michelle steps in. The only person clapping, jumping up and down, waving an American flag  is Clegg. One of the Secret Service gorillas looks as if he is about to shoot the Limey faggot with the wet stains down the front of his trousers.

Michelle helps the Camerons ” He means ‘yes please’. Can you please give him a burger in a bun. Sorry about that but I’m always having to do this. He does get carried away”

Clegg approaches the great man. He is clutching a worn schoolboy autograph book.

“Can I have your autograph, please?”  He is barely managing to hold back the tears of joy.

” Of course, Clegg. Should I do it ‘to Nick’ ?” Clegg is so overcome, all that he can do is nod.

Cameron signs his name. “Now piss off and help with the washing up.”

Goldman Sachs on the run

“Hey wise guy! Wanna buy any synthetic collateralised debt obligations?”

Over the last few years, I have written a great deal about Goldman Sachs and  its Svengali-like hold over successive U.S Governments.  Some of what I’ve written remains on this site. Hopefully, President Obama’s current  initiative, in tandem with the SEC is the dawn of a new relationship between Government and the banking industry.

It seems that the “minders”  Goldman Sachs used to have at U.S. Government level have disappeared.  Obama has, quite rightly finally set his dogs on them.

A few days ago the company was accused of fraud. What at first appeared to be slight financial naughtiness turns out to have been very bad indeed. Goldman Sachs is accused of eliciting investments from clients into financial ” instruments”  which had been designed (by them) to fail. The very same  family of products which precipitated last year’s banking crisis.

Not only that but they knew that yet another client of theirs , a hedge fund manager was “betting” on those products to fail and thus make a profit. The hedge fund manager had even helped Goldman Sachs to design that particular product.

John Paulson (no relation to Henry Paulson, former Treasury Secretary Henry Paulson and former Goldman CEO) is the owner of Paulson & Co, the hedge fund which was betting on the American Housing market to collapse. “

During the American sub-prime lending orgy, “exotic” mortgage-backed products had been designed with only one purpose – to generate a profit not-only for hedge-funds such as Paulson & Co but also for investment houses like Goldman Sachs.

The so-called “exotic trades” were no more than pooled mortgages worth billions. These mortgages had been granted to the so-called American Ninjas (No Income, No Job or Assets).  It was generally accepted that because these people had absolutely no chance of keeping up with any mortgage repayments, any product based on their mortgages would “tank” – and so it proved.

These mortgages were then “securitised”, that is to say, they were lumped together into what can only be described as a quasi-fund. Then, both private and corporate investors were encouraged to invest.

For instance, imagine  1000 Ninjas with  1000 mortgages worth £100,000 each. Lump them all together and you have a fund totalling £100,000,000. This should produce an income (mortgage repayments ) totalling say £5,000,000 per annum (at 5%). On the face of it, that’s quite a good investment – but only if you omit to mention that within a few months none of the mortgagors will have made any payments.

So, whoever “securitised” these  useless mortgages was able to pull-in yet more money which, believe it or not was subsequently  lent to other “Ninjas” and the cycle repeated.

Many investors found these potentially worthless investments very attractive – especially our banks. The rest, as they say is history. The only mildly interesting thing is that the banks didn’t understand what they were investing in and neither did the Financial Services Authority here in the UK or the US  Securities and Exchange Commission.

The Golman Sachs employee (I hesitate to use the word “banker”) at the centre of this potential scandal is Fabrice Tourre. He boasted that he had created the products “without necessarily understanding all of the implications of those monstrosities.”

 He obviously did a good selling job because he managed to lose Goldman Sachs clients who invested in these mortgage-based products over £645 million.  At the time, Mr Tourre was himself earning £1.5 million per year.

He has been accused of lying to investors – among the most gullible being our own Royal Bank of Scotland.

Meanwhile, the hedge fund owner John Paulson,  with whom the investments were placed, made himself a cool £2 billion.

Not so long ago, someone said that  if you put lipstick on a pig, it is still a pig. Mr Tourre and Goldman Sachs put so much lipstick on this pig that it looked like a glamorous dead-cert.

Mr Tourre is no doubt hoping that the Icelandic volcano continues to spew toxic fumes for ever – the last thing that he wants is to fly back to the USA to face the music. The Securities and Exchange Commission is just about to make a formal request to the British Authorities for Tourre to return to the USA to help the authorities with their inquiries and possibly face charges in conjunction with his employers.

Goldman Sachs shares are currently taking a pounding – especially as the SEC has said that it is investigating other financial shenanigans both by Goldman Sachs and other “banks”.

Unsurprisingly, Goldman Sachs has denied all charges and has said that SEC’s charges are unfounded “in law and fact” and that it intends to contest them.

However, as Goldman Sachs knows  a great deal about the US Government’s past financial machinations, there will probably be a “deal” of some sort.  But, as the SEC is also looking to recoup money lost by investors, it is hoped that Obama is strong enough to resist any easy compromises.

If money is, in effect stolen, then the mere act of returning it to its rightful owners does not usually put things right, although it can be interpreted as an admission of guilt.

It all depends on whether Goldman Sachs want to fight the action and whether it has the appetite for a lengthy trial.

Currently, it seems that Goldman Sachs does not have a leg to stand on, especially as it was paid £10 million by John Paulson to put together the mortgage-related product which was bound to fail.

Paulson took money from investors but at the same time “hedged” his bets by laying-off the risk through taking out a form of “insurance” which paid him vast amounts of cash when the investments failed ( and which he knew would fail in the first place).

These “pooled” mortgages which Goldman’s were selling were given the very impressive name of “synthetic collateralised debt obligations” – which is no more than sales talk for  “a load of potentially bad mortgages which have been lumped together for the gullible and feeble-minded to invest in”. For example, the entire banking industry.

The pill was further sweetened by Goldman Sachs through their claim that an independent third party called ACA Management Ltd had selected the pools of sub-prime mortgages. In fact a lot of the input into these potentially bad investments came from  John Paulson himself.

 This is what SEC Enforcement Director Robert Khuzami 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”

Tourre cobbled together the alleged fraud in 2007, just when the U.S mortgage market was  beginning to unravel. As a reward, he was promoted to Executive Director of Goldman Sachs in London.

John Paulson is not being pursued by the SEC  because in spite of the fact that he may have been complicit in the alleged fraud , he did not make any representations to investing clients. That was done by Goldman’s. 

Goldman’s has been an advisor to investment banking clients for many years and is also well-known for filling  high-level U.S Government posts with its directors and senior executives. Those days appear to be at an end because , as Simon Johnson, professor at MIT recently said ” I don’t think that anybody really values being connected to Goldman at this point.”

Because the SEC has indicated that it is on a financial witch-hunt, financial shares have fallen heavily in the last few days with Goldman Sachs itself losing about £10 billion in market capitalisation.

It seems that the SEC is retuning to its original role; the one in which it has so manifestly failed and that is protection of the investor. Hopefully, other financial regulators such as the UK’s Financial Services Authority will also have the courage to bare their teeth and not continue to be bullied by the banking industry, its white-collar bandits and their excesses.

Obama and the Banks.

“OMFG!”

The last twelve months have seen bank profits reach pre-crunch heights. There is no doubt that the banks were able to continue their activities only because of the intervention of world’s governments who have pumped eye-watering amounts of liquidity (money) into the banking system.

Now that the banks are producing a surplus, they have four very clear choices:

1. They can increase lending (on reasonable terms) to commerce and business.

2. They can place the money in their reserves – just in case there is another crisis or a “run” on bank assets.

3. They can repay money to the world’s taxpayers who have underwritten the banks’ past, present and future losses.

4. They can extract the money from the banking system through the medium of high salaries and bonuses.

The reality is that the banks have dabbled in all four options but through their smug bumptiousness, have created the perception that all that they are interested in is Option 4.

The banks appear to have closed ranks and decided to keep their heads down while they pick both government and taxpayer pockets.

Here in the UK, the Prime Minister and Chancellor have made increasingly strangulated noises in the bankers’ direction and attempted to appeal to the bankers’ better nature. They are yet to find it. The situation here in the UK is a delicate one because the Financial Services Industry used to add about £100 billion per annum to the country’s wealth. There are over 500 banks in the City of London and Docklands, where the majority of the business is being carried out internationally. Golden goose and all that.

To put it simply, the United Kingdon economy is over-reliant on the banks. That is why all that the politicians can do is to try and shame the bankers into complying but at the same time, they do not want London to lose its place as the world’s leading financial centre.

Our own Chancellor has stopped short of introducing legislation to curb the bankers’ excesses but instead has dabbled with a one-off bonus-related tax which the bankers have side-stepped and swatted quite neatly because they know that any levy claimed by the government will consist of no more than a refund of the government’s own money back to the government. The bankers are not-only in the driving seat but they are driving a limousine while all that the government can do is to run alongside barefoot and knock on the window while the bankers sigh, light up another Monte Cristo and count their bonuses.

Bankers used to be “middle-earners”, whereas nowadays – especially Investment Bankers, are well-and-truly in the top 10% of all earners. It is interesting to see how income distribution looks after so many years or “ersatz” socialism: The Lowest 10% of earners in the United Kingdom collect about 3% of the total earnings, whereas the top 10% of earners take home about 30% of the total.

It is doubly frustrating for a nominally socialist government which (on paper) is committed to fairer income distribution, having to stand-by as a mere spectator, while the bankers continue to plunder the economy. Some may say that the plundering is being carried out with the government’s connivance or perhaps merely as a result of the government’s intransigence and ineptitude.

That is why it was so refreshing to hear that President Barack Obama has decided to declare war on the bankers and impose some rules. The reaction of the financial markets has been spectacular and not-only indicated fear but has also demonstrated the banking industry’s foot-stamping petulance.

Bank values fell in the United States and the good news is that the “Obama-effect” is spreading .

The US Dow Jones fell by 2%. In London the Stock Exchange fell by 2.2% – led by Barclays which dropped by 3.5%. Barclays was followed by the German Deutche Bank which more-or-less matched Barclay’s fall.

The banks are fearing an imposed break-up of their operations because most of them realise that they are too big. If you listen carefully you will hear the rasping sound of Bank Directors choking on their Remys.

If a bank is too big to fail – then it is too big. THAT should be a self-evident truth.

President Obama has said that he is “ready for a  fight” with the banks. He is a very brave man because there are many within the US establishment – both Democrat and Republican who are still not 100% comfortable to see a black democrat with a social conscience running the show. Mr Obama has a difficult year ahead – but good luck to him.

He said  “Never again will the American taxpayer be held hostage by banks that are too big to fail.”

Goldman Sachs has just announced the equivalent of a £500,000 bonus to each of its US employees – each one of whom already averages about £300,000 in salary. Needless to say, Goldman Sachs shares have fallen  in value and perhaps finally, their stranglehold on the US economy will be broken. READ HERE.

In spite of Gordon Brown’s delusions, he has not been the “leader” during the global financial crisis. He is very much a follower who has always found it difficult to go out on a limb in the way that Obama just has.  Brown’s spokesman , City Minister Lord Myners said yesterday that the US proposals were “very much in accordance with the direction we have been setting” .  Since when?  Yesterday?

George Osborne, the Conservative Shadow Chancellor has said that if elected, the Conservatives would dismantle United Kingdom banks but only if he managed to secure international agreement.  It would seem that no-one wanted to be the first to blink and now that President Obama has shown the will and the courage – the bandwagon will begin its long and creaky journey to banking reform.

We should not be surprised however, if the banking industry regains the initiative any day soon by announcing its own plans for reform and reorganisation. Watch this space.

One of the main causes of the 2008/09 banking meltdown was (and still is) the habit that the banks acquired through gambling with their own money – the so-called proprietary trading . The problem is that they weren’t always using their own money – they were themselves borrowing the money from other banks and “investing ” it. Hopefully, that will now stop and they will only invest their customers’ money – which after all, is what they are supposed to do. Banks are not in the business of putting themselves into hock in order to gamble borrowed money on the stock exchanges.

Obama said: “While the financial system is far stronger today than it was one year ago, it is still operating under the exact same rules that led to its near collapse.”

He will change those rules but the more likely outcome is that the banks will comply without any bloodshed. There is a saying that “the fight is won – even before the first blow is struck.”

Obama has nothing to lose and everything to gain. He has been in office for one year and the banking fiasco has been a constant irritant from Day One. In addition, US unemployment is rising, he has a battle with his proposed health-care reforms and Republican Scott Brown has captured Ted Kennedy’s old Massachusetts Senate seat.

Make no mistake – Obama has diamond-hard resolve. His attack on the banks is no more than the play of  a wily gambler who pushes his chips into the middle and says ” I’m all in. What have you got?”

The banks are facing him across the table but at this stage they are not sure which of them is holding the weaker hand.

My money is on the President to prevail and for the rest of the world’s governments to back his hand.