Posts filed under “Really, really bad calls”

CFTC Judge Allegations Should Concern Investors

“It’s an open secret among my brethren that if you get Levine, he’s not going to rule for the investor.”

-Steven Berk, an investor protection attorney in Washington


Michael Hiltzik of the Los Angeles Times takes Judge Painter‘s CFTC accusation against his fellow judge Bruce Levine to a new level:

“It would be hard for the commission to claim it has been unaware of serious issues with Levine’s work. My search found three cases in which it overturned dismissals by Levine, sometimes with harsh words for his performance.

In 2007, for instance, the CFTC concluded that Levine committed “procedural errors” and “severely prejudiced” an investor in his $74,000 complaint against a futures broker. The commission awarded the investor more than $32,000.

In another case, the commission overruled Levine’s dismissal of an investor’s complaint twice before finally transferring the matter to Painter. He awarded the investor, a 75-year-old retiree, $47,627.

In a third case, the CFTC bounced a dismissal back to Levine with instructions to waive the procedural rule that prompted his dismissal. Levine dismissed it again, throwing in for good measure harsh words about the commission’s performance.”

In light of Judge George Painter’s contention of Levine’s vow to never to rule in an investor’s favor appears to be borne out by the record.

Indeed, as Hiltzik states, “When George H. Painter says the game is rigged against the small investor in Washington, I have reason to take him at his word.

And Hiltzik expands:

“I first encountered Judge Painter nearly three decades ago, when he issued a number of stern rulings involving a Newport Beach investment operator I had been writing about.

The investment firm, Monex International, had been hawking illegal futures contracts, he ruled. In one case, he found that Monex had ignored a customer’s repeated pleas to cash out her deteriorating stake, and awarded her $20,000 in reparations.

When I reached Painter again last week, he didn’t seemed to have changed much. “It’s gone to hell,” he said, referring to the standing of the investor at the CFTC. “But it’s always been that way, hasn’t it? We’re not prosecuting the bad guys.” For the record: He sounded perfectly lucid . . .

Under normal circumstances, Painter’s view might be taken to heart by the bureaucratic establishment in Washington. It was regulatory agencies’ failures to look out for consumers that helped win enactment of a new consumer protection agency this year.”

The CFTC, which regulates the commodity futures markets, has very much been captured by the group it is charged with regulating. If you are an investor in commodities, you should expect rape and pillage as part of the “servicing” you get from the industry and its regulators.

I never thought I would say this, but the CFTC makes the absurd arbitration process for equities look almost fair by comparison.

Bottom line: Speculate in Futures with risk capital only, and assume that 1) you will lose most if not all of your monies; b) if you are wronged, you should not have any expectations of obtaining Justice through the CFTC judicial process.


Retiring CFTC judge’s allegations should concern small investors
Michael Hiltzik
Los Angeles Times, October 26, 2010,0,180301.column

Category: Commodities, Legal, Really, really bad calls

Oil’s Well That Ends Well?

It’s been a while since I paid over $3.00/gallon for gas, but had that pleasure once again very recently, as prices have been creeping slowly ever upward.  As the gas flowed, I thought back to a piece I’d written elsewhere some time ago (April ’06, to be exact) lamenting the fact that those who had…Read More

Category: Contrary Indicators, Energy, Markets, Really, really bad calls, War/Defense

Greek Yields Soar

Greek 10-year bonds tumbled for a third consecutive day; yield jumped 58 bips 10.34% according to Bloomberg. The EU revised Greek budget deficit above 15% of GDP. In a leading contender for understatement of the year, Finance Minister George Papaconstantinou said the nation had serious tax compliance issues. Thus, the ongoing European drama between Greek…Read More

Category: Credit, Really, really bad calls, Taxes and Policy

15 Inviolable Rules for Dealing with Wall Street

The never ending parade of stock scandals seems to continue unabated, the stock lending scam being only the most recent. As history has shown us — from Mexico to Orange County to analyst banking crisis to Derivatives to etc., when the Street comes aknockin, best for you to hide your wallets. For reasons we are…Read More

Category: Apprenticed Investor, Corporate Management, Investing, Really, really bad calls, Rules

Updating Mankiw

Last week, in response to a NYT column by Greg Mankiw, I posed several questions about what I took to be holes in the column’s premise. Namely, that small changes in tax rates had outsized impact on human behavior. The questions also challenged the Harvard Professor (and former CEA chair)’s assertion that this marginal increase…Read More

Category: Really, really bad calls, Taxes and Policy, Weblogs

Chamber of Commerce to Buy US Elections

Fantastic chart, very consistent with my view that politics has been utterly corrupted by dirty corporate money. If you want to understand why the Banks and investment houses are so influential in DC, why Financial Regulation was so milquetoast (or why Deregulation occurred in the first place), look no further: > click for ginormous chart…Read More

Category: Digital Media, Politics, Really, really bad calls

Welcome to life in the Grifter Archipelago

Matt Taibbi’s new book, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America, comes out next month. There is an excerpt at that is well worth your time to read: “America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big…Read More

Category: Bailouts, Really, really bad calls

What is more important than survival? On planet Earth, nothing. The most basic rule of life is SURVIVE. The Biological imperative of living things is to perpetuate their existence — survive, procreate, further the species. It is hardwired in the DNA of every living organism. Those that do not succeed in satisfying these imperatives are…Read More

Category: Bailout Nation, Bailouts, Corporate Management, Really, really bad calls

Foreclosure Fraud For Dummies, 1: The Chains and the Stakes

This is the first of a 5 part series from Mike Konczal, a former financial engineer, is a fellow with the Roosevelt Institute, who also blogs at New Deal 2.0, and is working on financial reform, the 21st century economy, structural unemployment, inequality, risk sharing, consumer access to financial services and more generally what it means to have a social contract in a financialized, post-industrial economy.


This is a series giving a basic explanation of the current foreclosure fraud crisis: This is Part One. Parts Two, Three, Four, and Five. will all be posted the each day rest of the week at The Big Picture.

The current wave of foreclosure fraud and the consequences for the economy are difficult to follow. As such, I’m going to write a few posts to simplify what is going on so you can follow stories as they unfold.  This is very 101 level, and will include a reading list of blog posts and articles at each stage to help provide depth.   (Special thanks to Yves Smith and Tom Adams for walking me through much of this.)  Let’s make three charts of the chains involved in the process. The first is what is currently going on with foreclosure fraud (click through for larger).

As you can see, in judicial review states like Florida the courts require that servicers, or those who administer the bonds that are full of mortgages (securitization, residential mortgage backed securities, RMBS, are all phrases for them), say that they have everything necessary in order to have standing to bring a foreclosure. They need to have the note for a mortgage, which is supposed to be in the trust – part of the mortgage backed securities – that they administer.

What is breaking down here? In Florida, a judicial review state, it was found that one person was notarizing documents far faster than anyone could reasonably have. Forged documents necessary for the foreclosure process like the note were found. A separate court system was set up to resolve these foreclosures faster at the expense of allowing serious challenges to the documents. Here’s Smith on how kangaroo these courts look up close. Here’s WaPo on one individual and the nightmare of trying to challenge an invalid foreclosure. Keep him in mind when you hear about deadbeats and whatnot: the current system is designed to make it difficult for anyone to challenge their case.

Meet the robo-signer who kicked it off here at this WaPo story. I almost feel bad for this patsy; the real battle here is between junior and senior tranche holders, and this doofus could end up in jail in order to keep John Paulson rich. After reading about this guy I’m asking our elites to take care of their patsies better. (Can we get a Financial Patsy Fordism social contract movement going? If you are going to be a patsy for GMAC, you should be paid enough able to be able to buy GMAC’s services or something.)

Read More

Category: Credit, Really, really bad calls

Shared Profits, Not Losses

> The MSM article of the day is a NYT takedown of JP Morgan’s raping and pillaging of various cities and pension funds. The accusation: Shared profits, client’s losses. When hedge funds do this, the private placement memorandum covers the terms. It is less clear that a brokerage firm can do this legally. This follows…Read More

Category: Derivatives, Investing, Really, really bad calls