Thursday Reads: Thanksgiving Day

Happy Thanksgiving! I hope you all have a wonderful day today.

Even though the news has been discouraging for a long time now, we probably all have something to be grateful for. I know I do. I’m going to share some of what I’m grateful for today, and I hope everyone who comes around to to our “little blog that could” today will do likewise.

First, I’m very grateful today for all of you who have helped us get up and running these past few weeks!

Most of all, I’m grateful for my family. Although we lost my dad in March, we are fortunate to still have my mom with us. I’m grateful to have close relationships with my two brothers and two sisters. I’m grateful for my nieces and nephews and my grand-nephew and grand-niece. Children are our future, and I’m fortunate to have a chance to help make it better for them.

I’m grateful to have had the chance to pursue my education in the second half of in life. I’m grateful for my mother-in-law, who was there for me when I needed a place to live after my husband and I split up. I cared for her for 18 years, and I’m very grateful to have had her in my life, and all that I learned from her. Because she gave me a place to live, I was able to return to college and eventually earn a PhD in psychology. I’m also grateful for the state and federal government help I received during the time I was in school.

I’m grateful that I’ve been sober since May, 1982. If it weren’t for my sobriety, I wouldn’t have any of the other things I’ve mentioned. I was very fortunate to be able to turn my life around beginning 28 years ago.

As you know, I’m not that happy with how things are going for our country right now. I think our political establishment is beyond corrupt and that corrupt corporations are ruining our country and perhaps the world. I’m so thankful for the internet–without the ability to communicate with other people and share my anger at our political system, I don’t know how I would have survived. So I’m very grateful to many bloggers and commenters who have helped me know that I’m not alone in my anger and frustration.

Here are a few events in today’s news that I’m grateful for:

Texas Jury Convicts Tom Delay on Money Laundering Charges

DeLay was found guilty of money laundering and conspiracy to commit money laundering, court bailiff Gilbert Soto said. He was accused of funneling $190,000 to help elect Republicans to the state House and Senate in 2002.

At the outset of the trial, DeLay predicted the jury would clear him, and he remained unrepentant after learning the verdict..

“This is an abuse of power. It’s a miscarriage of justice,” DeLay told reporters. “I still maintain that I am innocent, that the criminalization of politics undermines our very system, and I’m very disappointed in the outcome. But you know, it is what it is, and we will carry on and maybe we can get it before people who understand the law.”

More like this, please.

HIV Prevention Pill A Big Development in Communities of Color

A new study by the National Institutes of Health suggests that a pill, known as Truvada, may be able to prevent HIV infection for gay and bisexual men. Host Allison Keyes talks with Dr. Jonathan Mermin of the Centers for Disease Control and Adolph Falcon of the National Alliance for Hispanic Health about the drug and what it could mean for communities of color which are disproportionately impacted by HIV/AIDS in the US

You can listen to the interview at the link.

Nations band together to save tigers, eye comeback by 2022

The wild tiger population is less than 4 percent of what it was a century ago, and leaders in 13 nations are taking a stand against the poaching and habitat destruction that have decimated the majestic predators’ numbers….

With the conclusion of a high-profile summit, attracting guests as notable as actor Leonardo DiCaprio and Russian Prime Minister Vladimir Putin, governments and conservation groups pledged $327 million with the goal of doubling the wild tiger population by 2022….

Poaching, illegal trade and habitat destruction have forced the animal to the brink of extinction, according to the Global Tiger Initiative, which estimates that wild tigers exist today in less than 7 percent of their historic range.

“I am confident that we will look back on this day as a turning point in the effort to save one of the world’s best-loved animals,” World Wildlife Fund Director Jim Leape said.

The St. Petersburg, Russia, summit featured leaders from all 13 countries where tigers still live in the wild: Bangladesh, Bhutan, China, India, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Nepal, Russia, Thailand and Vietnam.

U.S. prepares for new Wikileaks release

As with past document dumps by Wikileaks, U.S. officials expect that major international news outlets have been provided the documents in advance and that their news stories about what the documents contain will be published around the same time that the website reveals its cache of documents.

The White House and State Department are concerned because the documents may contain negative remarks made by U.S. diplomats about corrupt foreign leaders.

Army Pvt. Bradley Manning was arrested in June and charged with leaking a classified video of a 2007 U.S. helicopter attack in Baghdad that killed several civilians. There has been speculation that Manning also may have been the source for the Iraq and Afghanistan military intelligence reports released by Wikileaks.

He also may be the source of the State Department cables, because prior to his arrest Manning boasted in e-mails to a former hacker that he had passed along thousands of diplomatic cables to Wikileaks.

I’m sorry that some people in the government will suffer embarrassment, but the best disinfectant is sunshine.

Expert-Networking Worker Arrested for Insider Trading

U.S. prosecutors Wednesday arrested an employee of an “expert networking firm” on charges that he promoted the firm’s services by arranging for corporate executives to leak inside information to hedge funds.

According to a complaint unsealed in Manhattan federal court, prosecutors claimed that Don Ching Trang Chu, also known as Don Chu, who worked at California-based Primary Global Research, had arranged for hedge funds to get tips on companies including Atheros Communications, Broadcom Corp and Sierra Wireless.

The arrest comes amid a wide-ranging probe by U.S. authorities into potential insider trading at hedge funds, mutual funds and expert networks.

Great. Now let’s hope he rolls on the higher ups and the feds bust them too.

Trading Inquiry Widens to Big Firms

Federal authorities, intensifying an insider-trading investigation, are demanding trading and other information from some of the nation’s most powerful investment firms.

Hedge-fund giants SAC Capital Advisors and Citadel LLC, big mutual-fund company Janus Capital Group Inc. and Wellington Management Co., one of the nation’s biggest institutional-investment firms, have received subpoenas from the Manhattan U.S. Attorney’s office seeking trading, communications and other data as part of a broad criminal investigation, according to people familiar with the matter.

The Federal Bureau of Investigation also recently questioned an account manager at Primary Global Research LLC, a California company that provides “expert-network” services to hedge funds and mutual funds, people familiar with the matter say.

Such expert-network firms set up meetings and arrange calls between traders seeking an investing edge and current and former managers from hundreds of companies. The FBI is seeking information about a Primary Global consultant and his hedge-fund clients, these people say.

What are you grateful for today? Feel free to share your news links as always, and have a terrific Thanksgiving Day!!!!

SEC: Finally Functional?

The SEC seemed captured by insiders for so long and was so badly understaffed that it really was a pathetic excuse for a regulator.  All it seemed capable of doing was capturing media divas like Martha Stewart while the Bernie Madoffs were only caught when market down turns identified their PONZI Schemes.   Interestingly enough,  two Madoff employees were JUST arrested on Thursday as prosecutors are finally moving towards the Madoff family jewels. But, bigger things are afoot.

The SEC has finally gone after the bad guys with a little help from the FBI and the Manhattan District Attorney’s office in what what can only be characterized as a major investigation. It took around three years to complete.  That means it actually got stated under the Bush years which is a shocker unto itself.

Have the SEC finally traded their aging white horses for some real stallions? This can only mean good news for the small investor and those of us who are stuck in institutional funds because Congress wants to pay back their FIRE friends by giving them our money to take to their casino.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

One focus of the criminal investigation is examining whether nonpublic information was passed along by independent analysts and consultants who work for companies that provide “expert network” services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge.

Finally, some one is going after these “expert networks” which are basically groups of people that sell inside information. Yves at Naked Capitalism--some one who worked in the market for years and has some way of knowing–has been on this for years. I’ve been buried in academia and at the FED for some time, but even I knew it was bad.

Yours truly has complained off and on over the years about “consulting” and “research” firms whose entire business model revolves around the procurement and sale of inside information. These companies solicit consultants, who in the vast majority of cases are employees of major corporations, to provide insight into what is going on at their employer’s operations. These vendors are generally smart enough to make their consultants sign various waivers, which have the effect of shifting liability on to the hapless chump paid a couple of hundred dollars an hour for an hour or two for information worth vastly more than than. They are effectively exploiting the contract worker’s lack of understanding of the finer points of SEC regulations and corporate policy.

We first wrote about this abuse with weeks of starting this blog, in January 2007, when a Wall Street Journal investigation of the biggest player in this space, Gerson Lerman, led to an investigation by the New York attorney general, Eliot Spitzer (the SEC reportedly had investigations underway, although it was not clear whether Gerson Lerman was a focus).

I have had my tinfoil hat theory on Spitzer’s fall from grace  for some time. My thought is that some one went after Client 9 deliberately to stop him from finding out more about these lucrative deals and other Wall Street nastiness.  He got taken down over a game of patty cake so these guys could continue their scam.  Traders can make boatloads of money with ex ante knowledge and enough money to make the trade. Also, remember even if you’re just doing the deal, your value as a trader and analyst goes up if your assets’ value goes up.  There’s a lot of money in this game and getting in on momentum at the ground floor is a beautiful thing.

Here’s one of the more egregious examples from the WSJ article.

Another aspect of the probe is an examination of whether traders at a number of hedge funds and trading firms, including First New York Securities LLC, improperly gained nonpublic information about pending health-care, technology and other merger deals, according to the people familiar with the matter.

Some traders at First New York, a 250-person trading firm, profited by anticipating health-care and other mergers unveiled in 2009, people familiar with the firm say.

A First New York spokesman said: “We are one of more than three dozen firms that have been asked by regulators to provide general information in a widespread inquiry; we have cooperated fully.” He added: “We stand behind our traders and our systems and policies in place that ensure full regulatory compliance.”

Right.  It was just very good analysis.  We’ll see how that stands up in court.

My guess is that there will be a good deal of shaking and quaking going on shortly because the names have yet to be released.  We will undoubtedly see some Goldman Sachs names among them.  Goldman Sachs appears to be a central player in those health care company mergers.  NY magazine is being vague right now, but the network of traders and investment bankers could shake up the Street and it’s about time.  They’re poking around now which probably means their lining up their fallen angels who are most likely to turn state’s evidence to avoid having more than just a few weekends with Bernie.

The characterization of the degree of insider trading by both the FBI and SEC is that this is part of a “pervasive” culture. I smell a huge class action suit in the works against a lot of funds.   It also further puts to rest the idea that the U.S. equities markets represent anything near a rational market since prices in this instance represent two tiers of agents.  One set that only have public information.  One set that’s privy to the out of school tales of contract workers.  This should turn some of the literature  in the investment area on its heels. That’s a good thing too.  I do so want to see the death of that random walk down Wall Street hypothesis once and for all.

AND I just hate that look of a smug investment banker in the morning; especially when they try to give the impression that that it’s all about their brilliance and not about their luck or a little illegal information.   This should be more fun to watch than a James Bond movie when Sean Connery was in his prime.  It may also breathe some life into that CNN show Parker/Spitzer because Spitzer is bound to have his own little insider information on the probe and my guess is he’ll try to parlay that into higher ratings for his current enterprise of journalistic pattycake with Parker.  Eliot Spitzer could may well have the last laugh on this.