Archive | Dirty Rotten Scoundrels

Another One

This time, it’s Morgan Stanley. Anyone still doubt there was widespread fraud?

U.S. prosecutors are investigating whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against, people familiar with the matter said, in a step that intensifies Washington’s scrutiny of Wall Street in the wake of the financial crisis.

Morgan Stanley arranged and marketed to investors pools of bond-related investments called collateralized-debt obligations, or CDOs, and its trading desk at times placed bets that their value would fall, traders said. Investigators are examining, among other things, whether Morgan Stanley made proper representations about its roles.

Among the deals that have been scrutinized are two named after U.S. Presidents James Buchanan and Andrew Jackson, a person familiar with the matter said. Morgan Stanley helped design the deals and bet against them but didn’t market them to clients. Traders called them the “Dead Presidents” deals.

The probe is at a preliminary stage. Bringing criminal cases involving complex Wall Street deals is a huge challenge for prosecutors. The government must prove beyond a reasonable doubt that a firm or its employees knowingly misled investors, a high bar. The government launches many criminal investigations that end without any charges being filed.

Wishful Thinking

It was known long before the Obama administration took over that the MMS was rubber stamping every drilling application that came along. So why didn’t they clamp down on this from the beginning?

Regulators at the Minerals Management Service exempted 27 additional offshore drilling projects in the Gulf of Mexico from performing an in-depth environmental analysis—even after the Deepwater Horizon oil rig exploded, according to reporting by McClatchy. One of those exemptions went to BP.

The Deepwater Horizon rig had also been exempted from having to perform an in-depth environmental analysis using something known as a “categorical exclusion.” Categorical exclusions are used to fast-track drilling plans by eliminating paperwork that is deemed to be unnecessary or redundant because the drilling would probably have no significant effect on the environment.

While the granting of an exclusion is not the final step before a company is free to drill, it does expedite the review process.

The Department of Interior has put a temporary moratorium on new permits to drill offshore. MMS officials told McClatchy that giving a categorical exclusion isn’t the same as giving final approval to drill, and they “could not say” whether the exemptions would stand when the moratorium is lifted.

BP’s massive oil spill was already in progress when MMS applied the categorical exemptions to these 27 projects in the Gulf, exempting them from having to produce site-specific environmental impact statements as required by the National Environmental Policy Act.

“The BP rig still burning. The oil is spilling,” Kieran Suckling, executive director of the Center for Biological Diversity, told me. “And they give another categorical exclusion to BP, saying there’s no chance of a spill. It’s just insane.

BP’s Deepwater Horizon plans were also thought to pose minimal risk to the environment. In its exploration plan for the rig, submitted to MMS years ago, BP said “no significant adverse impacts are expected” to the environment and stated that a spill was an “unlikely event.”

In the three weeks after the rig exploded, MMS gave BP a categorical exclusion for a plan to drill “at a depth of more than 4,000 feet,”according to McClatchy. Another company, Anadarko Petroleum Corp., was given approval for a plan to drill in more than 9,000 feet of water.

SEC Investigates Moody’s

Are you telling me the stock market just figured this out – or did the stock drop because they got caught?

NEW YORK — Moody’s Investors Service stock fell sharply Monday following news that the ratings company is being investigated for possibly misleading regulators three years ago.

Moody’s disclosed late Friday that it might face a Securities and Exchange Commission administrative charge that it misled regulators when it applied for its license in 2007. Ratings agencies must be licensed by the federal government.

The investigation comes as ratings agencies like Moody’s and Standard & Poor’s continue to face scrutiny and criticism related to their role in the credit crisis.

Moody’s stock dropped $1.59, or 6.8 percent, to $21.77 Monday, although the broader market rose sharply.

Pew Survey: 70% in Money Trouble

If I had a dollar for every person I’ve met in the past few weeks who believes the Dems just added another tier of unemployment checks, we wouldn’t even need a Tier 5. I hate to sound like a broken record, but it still astounds me that Democrats are saying there’s “no political will” to add another tier of unemployment benefits, that they’re not hearing “any popular support” for spending the money.

That’s because people think that’s what Congress just passed, you morans. Are the Congressional Dems really that stupid and out of touch? Yes, they are. And they’ll pay for it dearly in the mid-terms. And you know what? They deserve whatever happens if they let all these despairing people fall off the unemployment rolls.

From The Pew Foundation:

Americans are united in the belief that the economy is in bad shape (92% give it a negative rating), and for many the repercussions are hitting close to home. Fully 70% of Americans say they have faced one or more job or financial-related problems in the past year, up from 59% in February 2009. Jobs have become difficult to find in local communities for 85% of Americans. A majority now says that someone in their household has been without a job or looking for work (54%); just 39% said this in February 2009. Only a quarter reports receiving a pay raise or a better job in the past year (24%), while almost an equal number say they have been laid off or lost a job (21%). Read more:

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