The Mess That Greenspan Made - Part 6

Get Your Ticket Punched at the SEC

Retiring Securities and Exchange Commission trial attorney James Kidney, a key participant in the 2008 suit against Goldman Sachs, used his farewell luncheon as an opportunity to air some grievances about how the organization treats Wall Street bigwigs with kid gloves. Some of his most illuminating remarks were recorded in this story at Businessweek.

The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”

In his speech, Kidney also hit the agency for using misleading statistics to showcase its enforcement efforts. The SEC should focus on the quality of its actions, rather than try to file as many as possible just to tout its record to lawmakers and the media, he said.

“It is a cancer,” Kidney said of the agency’s use of numbers. “It should be changed.”

“I don’t think we did a very aggressive job with all the major players in the crash of ’08,” he said, noting that as a civil enforcement agency, the commission does not need to prove its cases beyond a reasonable doubt like the Justice Department does. “The SEC has a lower burden of proof and we should be pushing the envelope a bit.”

“I have had bosses, and bosses of my bosses, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.”

Also see yesterday’s quote of the day from Matt Taibbi: “There’s this really, kind of scary psychological moment that we’ve crossed in America where we no longer think of a certain kind of offender as appropriate for jail”.

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Beef Prices Reach Record High

The LA Times reports that it’s going to be pretty expensive to cook out this summer as beef prices have risen to all-time highs as shown below via as extreme weather and smaller herd have combined to limit supply.

One deli owner (think pastrami and corned beef ) noted that his costs are up 45 percent in recent years, a figure that appears to be consistent with the slope of the curve below.

We haven’t bought any steaks since last summer, so, I’m sure there will be some sticker shock the next time we pick up a four-pack at Costco, all the more reason to stick with chicken and pork where, as far as I can tell, prices haven’t seen the same kind of escalation.

One casualty of higher beef prices is that the popular $1 value meals at some fast food restaurants might go the way of the dinosaurs.

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Wednesday Morning Links

Respected Analyst Warns Russian Invasion Imminent – Forbes
Russia tries to reassure West, Ukraine over troops – Reuters
Kerry, Congress Agree: Superpower Status Not What It Was – Bloomberg
IMF warns of risks as global economic recovery continues to improve – xinhuanet
Study: Whites more conservative when told they’re becoming a minority – Vox
Manipulate Me: The Booming Business in Behavioral Finance – Bloomberg
A Closer Look at Post-2007 Labor Force Participation Trends – macroblog
40 Central Banks Bet This Will Be The Next Reserve Currency – Zero Hedge
The 401(k) Loan: America’s Pricey New Piggy Bank – Fiscal Times
Top Medicare Doctor Paid $21 Million in 2012, Data Shows – Bloomberg
SEC lifer: We’re way too soft on Wall Street – CNBC
Why Don’t the 1 Percent Feel Rich? – The Atlantic
Beef prices hit all-time high in U.S. – LA Times

Market mood steadies after Alcoa earnings – AP
Investors’ Appetite for I.P.O.s Seems to Ebb – NY Times
Biotech Suffers Record Exit at Largest ETF Signaling Turn – Bloomberg
U.S. stock market may have stumbled, but signals still say ‘go’ – Reuters
Has the correction in stocks rebuilt the wall of worry? – MarketWatch
Treasuries Fall for First Time in Five Days Before 10-Year Sale – Bloomberg
Gold steadies near two-week high ahead of Fed minutes – Reuters
Silver Money Would Consume Half Of Total Mine Supply – SRSrocco Report
Protect Yourself Against Financial Winter with Physical Silver – GoldSilverWorlds
ETF Securities: Commodity ETPs Post Net Inflow In 1Q, Led By Silver – Kitco
Daily Nugget – gold experts are bearish – The Real Asset Co.

Explainer: Why is deflation so harmful? – CBS Moneywatch
America’s Structural Unemployment Crisis in Two Charts – Testosterone Pit
The Born Again Jobs Scam: The Ugly Truth Behind “Jobs Friday” – Contra Corner
BOJ Beat: Calibrating Kuroda’s Optimism: Easing Still Possible – WSJ
Ridiculously, investors are about to let Greece borrow again – Quartz
Renzi Cuts Italy Growth Forecast, Calls for Rich to Give – Bloomberg
IMF: UK economic growth to reach 2.9% in 2014 – BBC
China auto sales rise 9% in March – China Daily
West Coast Condo Values Continue to Rise – WSJ
When Wall Street becomes a landlord – CNN/Money
Kocherlakota: Fed could cut rates again – Reuters
Janet Yellen’s game of Jenga – Detlev Schlichter


Matt Taibbi on The Daily Show

The most memorable quote during this Matt Taibbi interview on the The Daily Show with Jon Stewart last night comes at about three minutes in when, in response to the oft-asked question of why no bankers are in jail as a result of the financial crisis, Taibbi remarks, “There’s this really, kind of scary psychological moment that we’ve crossed in America where we no longer think of a certain kind of offender as appropriate for jail”.

Sadly, it gets even better from there when talking about such things as the HSBC drug money laundering settlement and the infamous “Holder Memo” that played a key role in that memorable quote above. This is a lengthy interview and part 2 is here.

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