Goldman Sachs CEO Lloyd Blankfein dropped $26 million -- in cash -- on his new 15 Central Park West duplex.
And that was before Blankfein sold off his old apartment, a slightly "humbler" five-bedroom, seven-bath Park Avenue apartment.
According to Page Six, "The luxurious abode, asking $15 million last year, was most recently listed for $13.5 million -- on top of which a buyer must pay $11,327 a month maintenance."
Blankfein reportedly just accepted a bid on the place.
Pay and bonuses totalled £20.5bn in four months to April, compared with £24bn at height of boom in 2007
Pay and bonuses in the City are surging back to their pre-crash levels despite widespread criticism of the Square Mile and the banking industry, which was rescued by the taxpayer 18 months ago.
The steep rise in earnings is likely to put pressure on the coalition government to impose a clampdown on City pay practices, which the Liberal Democrats in particular attacked while in opposition.
Guardian analysis of data from the Office for National Statistics shows that bankers were paid £8.5bn in bonuses in the four months to April, compared with £7bn during the same period last year.
There was also a jump in pay across the industry of £1bn to £12bn as bankers shifted some of their earnings away from bonuses to avoid the former Labour government's bonus tax.
The result of the pay and bonus increases took the combined earnings for the bonus season to £20.5bn compared with £24bn at the height of the boom in 2007.
Investment banks traditionally pay staff bonuses in the run-up to the end of the tax year in April. For the last three years the Guardian has analysed ONS pay data to show how bonuses make up a large proportion of City pay. In many instances rewards amount to millions of pounds compared to an average of almost £7,000 across the industry.
Last year Vince Cable, now the business secretary in the new administration, said the City had shown "a complete lack of awareness of the extent of the financial crisis, their role in creating it and the extent to which they are ultimately answerable to the taxpayer".
Lib Dem peer Lord Oakeshott said of the new data tonight: "This is the unacceptable face of capitalism. The coalition agreement promised to bring forward proposals for robust action to tackle these practices."
A spokesman for the British Bankers Association said the bulk of workers in the industry received on small bonuses or no bonus at all. "For those who do receive a bonus, this is based on their contribution to the business during the year," he said. "The financial services sector makes a huge contribution to the UK economy and to keep that world-leading position you have to employ the best people – and that means paying a competitive remuneration package."
Recruitment consultants in the City report that appointments has gained speed in recent months as investment banks poach staff from their rivals.
One consultant said the demand for staff had increased in recent months in response to the return of mergers and acquisitions and major fundraising exercises by major corporations.
Senior back-office staff can also command high salaries and bonuses after redundancies last year left a shortage of experienced workers. More than 60,000 staff left the industry after the crash.
While Royal Bank of Scotland has continued to cut its workforce, it has insisted on paying bonuses to staff in its investment banking division. Stephen Hester, the bank's chief executive, has lobbied ministers to protect bonus payments, which he argued prevented experienced staff from leaving to join rival banks.
So obviously there is a problem.
A massive, unchecked, out of control problem that threatens to blow out the entire U.K. economy.
And considering the fact that it took just about everything that Europe could muster to bail out poor little Greece, how in the world is Europe going to be able to bail out the U.K. when their debt crisis violently erupts?
If Greece almost brought down the euro and the financial system of Europe, then what would a financial implosion in the U.K. do?
Considering the fact that the Greek economy is approximately 16% the size of the U.K. economy, it is very sobering to think what a "Greek style" debt crisis in the U.K. would mean for the entire world.
But if something is not done rapidly it will happen.
Just consider the following charts....
Now how in the world do you go from a deficit that is between 2 and 3 percent of GDP in 2007 to one that is above 11 percent in 2009? That takes some serious financial mismanagement. Not only that, but as we mentioned earlier, this year the deficit is projected to be approximately 13 percent of GDP. That is a level that is catastrophic.
Kornelius Purps, the fixed income director of Europe's second largest bank is very open about the fact that he believes that the U.K. is likely the next European nation that will face a very serious debt crisis....
"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13% of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that."
In fact, Morgan Stanley has already warned that there is a very strong probability that some of the rating agencies may remove the U.K.'s AAA status before 2010 is over.
If that happened, it would make the crisis that we just saw in Greece look like a Sunday picnic.
So what must be done?
Well, already world financial authorities are calling for "austerity measures" and deep budget cuts to be implemented in the U.K., but the reality is that those moves will cause deep economic pain.
In fact, Bank of England governor Mervyn King recently warned that public anger over the "austerity measures" that soon must be implemented in the U.K. will be so painful that whichever party is seen as responsible will be out of power for a generation.
The cold, hard reality is that the U.K. is in for economic pain in any event. Either they cut the budget and implement severe "austerity measures" which will hit people really hard economically, or they continue on the current course and risk a much worse version of what just happened in Greece.
Not that the rest of the world should be gloating about what is going on in the U.K. either.
The financial situation in Japan is even worse than what the U.K. is dealing with, and the United States is going to have the biggest economic downfall of them all one of these days.
As we wrote about yesterday, the sad truth is that the governments of the world are rapidly running out of money and are drowning in debt. It is a gigantic mess, and the term "sovereign debt crisis" is going to pop up in the news very regularly from now on.
You see, it is not just the financial systems of the U.S. and the U.K. that are broken. The entire world financial system is fundamentally flawed and is doomed to failure.
Right now the central banks of the world can do their best to try to hold things together with a tsunami of debt and paper money, but they are not going to be able to keep up this balancing act forever.
When it does all start coming apart and the dominoes do start falling, it is going to be a complete and total nightmare. Paper currencies around the globe will lose value at breathtaking speeds as central banks flood economies with cash in an attempt to stop the madness.
But more debt and more paper never solves anything. All it does is make the long-term problems even worse.
When the tipping point comes, things are going to move fast. Let's just hope that we all have a good bit more time to prepare before that happens.
NEW YORK (Reuters) - A big mystery seller of futures contracts during the market meltdown last week was not a hedge fund or a high-frequency trader as many have suspected, but money manager Waddell & Reed Financial Inc, according to a document obtained by Reuters.
Waddell on May 6 sold a large order of e-mini contracts during a 20-minute span in which U.S. equities markets plunged, briefly wiping out nearly $1 trillion in market capital, the internal document from Chicago Mercantile Exchange parent CME Group Inc said.
The e-minis are one of the most liquid futures contracts in the world, providing holders exposure to the benchmark Standard & Poor's 500 Index. The contracts can act as a directional indicator for the underlying stock index.
Regulators and exchange officials quickly focused on Waddell's sale of 75,000 e-mini contracts, which the document said "superficially appeared to be anomalous activity."
More than a week after the incident, it was still not clear what impact the unusual trading in the futures contracts had on the broader meltdown in the stock market.
Waddell manages the $22.1 billion Ivy Asset Strategy fund, which is well-known for hedging with equity index futures when manager Mike Avery, who is also chief investment officer at the company, feels uneasy about the market.
The Asset Strategy fund has dropped 2.76 percent this quarter, compared with a 0.80 percent decline in the S&P 500, data from Lipper Inc, a unit of Thomson Reuters Corp show.
Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said in congressional testimony on Tuesday that it had found one sale that was responsible for about 9 percent of the volume in e-minis during the sell-off in the U.S. markets.
Gensler said there was no suggestion that the trader, whom he did not identify, did anything wrong in only entering orders to sell. Gensler said data showed that the trades appeared to be part of a bona fide hedging strategy.
WADDELL SAYS WAS HURT TOO
It is unclear what impact the trading in the e-minis had on stock prices during the plunge, but regulators have scrutinized futures trading because the sharp decline in that market preceded the dive in the broader U.S. equities market.
The document said that during the sell-off and subsequent rally, other active traders in e-minis included Jump Trading, Goldman Sachs Group Inc, Interactive Brokers Group Inc, JPMorgan Chase & Co and Citadel Group.
During the 20-minute period, 842,514 contracts in e-minis were traded. The CME document did not provide a break-out of Waddell's trading during that crucial time, but said from 2 p.m. EDT (1800 GMT) to 3 p.m. it traded 75,000 contracts.
Overland Park, Kansas-based Waddell declined to return calls seeking comment. But in a statement, the company said: "Like many market participants, Waddell & Reed was affected negatively by the market activity of May 6."
Waddell said in its statement that it often uses futures trading to "protect fund investors from downside risk," and on May 6 it executed several trading strategies including the use of index futures contracts as part of normal operations.
The notional value of the contracts sold by Waddell was $4.2 billion, according to document. How much Waddell paid for the contracts was not stated, but typically the cost would be far less than their notional value.
The company, which advises and distributes the Ivy Funds, has made a name with good results from its family of mutual funds.
Waddell's shares fell after the Reuters report, and closed down 5.3 percent at $32.25. Volume was 1.28 million shares, more than triple the daily average this year.
Analyst Jason Weyeneth of New York brokerage Sterne Agee said he had not learned anything on Friday to lead him to change his "neutral" rating on Waddell stock.
The CFTC declined to comment.
A CME spokesman, who declined to comment on the document, said the Chicago-based futures exchange operator never discusses customer activity.
"We found no evidence of improper trading activity or erroneous trades by CME Globex customers," said CME spokesman Allan Schoenberg.
Trading in e-minis takes place entirely on the CME's Globex exchange. Hedge funds and high-speed trading firms often use the e-mini in an arbitrage strategy that seeks to capture the change in prices between the futures contract and the S&P 500.
Waddell's contracts were executed at Barclays Plc'sBarclays Capital and later given up to Morgan Stanley, according to the document.
CME said it spoke to representatives from both banks on May 6 and planned to speak to Waddell representatives the following day. The firm oversaw $74.2 billion in assets as of March 31.
Morgan Stanley told CME that it did not have concerns regarding Waddell's activity because it "would typically use equity index futures to hedge macro market risk associated with the substantial long exposure of its clients," the document said.
'QUITE A SHOCK TO THE MARKET'
Gensler said the contracts were sold between 2:32 p.m. and 2:51 p.m., the height of the meltdown.
The market for e-minis on May 6 fell more than 5 percent in a little more than 5 minutes starting at 2:40 p.m. -- the height of the crash, the document said. The e-minis began to recover before stock prices turned higher.
An order the size of the Waddell contract would be a big trade to execute on a normal day, said a trader whose firm is active in the S&P 500 futures market. About 50,000 contracts are typically traded in an hour, the trader said.
"To get rid of 75,000 contracts, that's a lot of trading even if the market is healthy," the trader said. "But when suddenly the market changes and there's not as many bids there to trade with, 75,000 is going to cause quite a shock to the market.
"That's an enormous position for anybody, whether it's a hedge or whether it's a trade. It's a big position, no doubt about it," the trader said.
Both the CME and ICE trading systems, have multiple market protection mechanisms which would make this impossible. Both reject orders placed outside of a reasonable price range and limit the number of contracts one can trade per given transaction. CME also has a “Stop Spike Functionality” which prevents against a cascade of stop orders from triggering a precipitous collapse. Lastly, every time a trade is entered a “Review Order” screen pops up that repeats your desired trade and basically asks – are you sure you want to do this? The “Fat Finger” theory doesn’t hold water. What does hold water, however, is the removal of a long standing SEC rule designed to protect against short sellers driving a stock into the ground – The Uptick Rule.
The Uptick Rule (SEC Rule 10a-1) went into effect in 1938, following a crash in the previous year. The rule is quite simple – Short sellers can only short a stock after an “up tick” (increase) in price. This mechanism, which remained in effect until July 2007 , prevented free fall stock prices for nearly 70 years. Months after the removal of the uptick rule, stock prices plummeted in a manner which was reminiscent of crashes experienced 70 years earlier.
The history of the Uptick rule is interesting. It was created by a market manipulator who amassed a fortune by short selling stocks into the ground during the crash of 1929. As the country reeled through the depression, this investors net worth climbed from $4 million in 1929 to $180 million by 1935 and he would go on to become the 1st Chairman of the SEC, working to fill the very market vulnerability that made him reach years earlier. His name, of course, was Joseph P Kennedy (Father of John F Kennedy).
Kennedy was ‘uniquely qualified’ to expose the inefficiencies of the stock market. The zero uptick which was formed under his SEC prevented the 50% to 90% crashes that were common during his era. The SEC, in their infinite wisdom, decided to try things out for a while without the rule. Well, it didn’t work. The question is when will our politicians speak out and takes steps to protect investors rather than the powerful hedge fund interest who like the way thing are “Just fine.”
By Unattributed Intelligence Sources for Veterans Today
Foreword by Gordon Duff, Senior Editor
Veterans Today realized some time ago that Pakistan would be the key to US security. Toward that end, we formed a partnership with Opinion-Maker (www.opinion-maker.org), one of the most influential publications in that country and one that takes courageous stands in a country new to democracy. Jeff Gates and I traveled to Pakistan this spring at the initiation of VT co-editor Raja Mujtaba. While in Pakistan, we were briefed by the highest levels of the military and intelligence communities in what were frank and open exchanges. These exchanges were open to a degree where considerable trust was shared and much of the information given could never be released. Those agreements related to the lives and safety of American and Pakistani soldiers in the field and were based on relationships of honor and trust. Those promises will be kept.
I can still tell my grandchildren that I had dinner with former ISI Chief Hameed Gul and tea with Colonel Imam, the famed intermediary with the Mujahideen now missing and presumed held prisoner by the Taliban. In military circles, being able to claim former Chairman of Pakistan’s Joint Chiefs of Staff, Admiral Sirohey a friend or being consulted by former Head of the Army General Beg is well up the “name dropping” scale. It isn’t who you meet, it is what is done, what is contributed that counts. Toward that end, these individuals and those we can’t name, along with Raja Mujtaba’s associates led by military strategist and author BG Asif Haroon Raja, Jeff and I felt we had a rare privilege and a rare look into the inner workings of Pakistan’s intelligence community.
Our point was to make sure everyone could take the gloves off and let fly, say what they thought and not play journalist or whatever it is when America sends officials into Pakistan to be told what they want to hear. Lack of status has its rewards at times and this was one of those rare times when views and doubts could be expressed and shared. This leads us to the document below. What is it?
It comes from Pakistan and bears the seal of approval of, well, I know where it comes from. How it is taken and what is done is another story. I have been assured that witnesses, recordings and such exist. I recognize the methodologies used and attributed to American intelligence agencies. I also see the untold hand of India and Israel, names not included for reason of, frankly, survival.
No mention of a 65 billion dollar per year drug trade is made either but I strongly suggest that, where appropriate, a texture, a backdrop be constructed that includes mercenary contractors, Mossad and RAW agents and a sea of drug cash. The story itself is simple, a tale of betrayal. Why would the US have an intelligence agency involved in such convoluted plots as seen below? What is the role of Israel or India? How much of what is going on is driven by so many other concerns, not just drugs but religion, jealousy and hate?
What is clear, or should be is that what is done, what has been done did not serve the security of the United States. Another agenda was there. Security services that Americans pay tens, even hundreds of billions of dollars per year to be protected by have, for decades, often answered to a different call, one related to power, criminalism and deceit. Our culture is filled with such stories, none will be unfamiliar.
We can pretend it is just movie. Keep telling yourself this.
And the story opens as follows:
The secret web of betrayal and treachery – The untold story of Khalid Khawaja, Hamid Mir, Mullah Barader and Faisal Shehzad
Any links between the three?? Seems impossible! But not in this high stakes State-sponsored dirty, sinister world of covert ops, double agents, sting operations and assassinations.
Lets start the story:
Americans have been trying to play a sinister game. They had penetrated into the ranks of Afghan Taliban especially into the Popalzai tribe and had cultivated a high level Afghan Taliban leader to be pitched against Mullah Umer. Basically, CIA was creating a “coup” within Taliban. Hold your breath, sit back and prepare yourself to know who this secret “CIA asset” within the Taliban was.. It was Mullah Barader! Yes, the same one captured in Karachi by ISI and US is desperate to have him.
The CIA plan was that Mullah Barader would be brought to Karachi and then ISI would be tipped to arrest him. Then US were to ask the custody of the Afghan leader and Pakistan government would hand over the Afghan Talib leader to US. The result would be catastrophic for Pakistan as all pro-Taliban elements would then condemn ISI and Pakistan as CIA puppets and a serious breach of trust and confidence would appear between Pakistani security establishment and Afghan Mujahideen. This would also humiliate army and ISI in front of the nation. CIA and US administration were extremely upset when ISI refused to hand over Mullah Barader to US, despite the pressure from Zardari mafia. ISI initially did not know the CIA game. They just refused to hand over Barader to US and insisted upon their own interrogation first. Unknowingly, ISI was seriously damaging the US game plan of staging a coup against Mullah Omar as well as against ISI. During the interrogation, the entire game became exposed to the ISI.
The Zardari clan was equally desperate to hand over Barader to US. Here, enters Khalid Khawaja!
Out of his love for Taliban, unknowingly that he is entering to a global game of espionage and betrayal, KK filed a petition into the SC taking a stay order against handing over of Mullah Barader to US. Now US were furious. KK had signed his death warrant and now was marked for death.
KK (Khalid Khawaja) had been going to North Waziristan and dealing with TTP, trying his best to start a reconciliation process between Pakistan and TTP. He was also aware of the fact that a “Lashkar Jhangvi” faction of TTP was opposed to these attempts at peace talks. These include Ilyas Kashmiri gang commonly called Punjabi Taliban. When KK was returning from talks with Hakim Ullah Mehsud, he was invited by Punjabi Taliban group and taken prisoner along with Col Imam and Asad Qureshi, the journalist.
Initially, TTP was unaware of KK and his party’s being taken prisoner by the Punjabi Taliban. Later, when Hakeem Ullah Mehsud came to know of the drama, he tried to secure the release of the men. But then, enters another treacherous character from Geo TV.
Hamid Mir, makes a call to the Punjabi Taliban and ask them not to release KK and instigates them to assassinate KK as a spy! Hamid Mir, talks to Punjabi Taliban (PT) in detail and this entire conversation is recored by the PT and the tape is taken to HakimUllah Mehsud. The allegations, charges and accusations against KK which were leveled by Hamid Mir were so severe that HakimUllah Mehsud also fell for the trap and allowed the execution of KK after making him read the confessional statement which was exactly what Hamid Mir had dictated to the PT. This tape is now available and is the most direct incriminating evidence against Hamid Mir. It is clear that Hamid Mir was launched by Americans to use his influence on the TTP and PT to get KK assassinated. It was done with precision, except for one blunder – the tape is now with Pakistani secret services.
The American desire is to wage a war in North Waziristan against Haqqani / Afghan Taliban networks. Pakistan army is not willing to do that. Americans tried to use Mullah Barader to create serious mistrust and hatred between Afghan Taliban and Pakistan army. That was failed when Barader was not handed over to US and Khalid Khawaja unknowingly became a major setback for the Americans when he took a court order against Barader’s extradition. Khalid was trapped and Hamid Mir was used to mislead TTP into assassinating KK. But in the end, the US plan of waging a war in North Waziristan fizzles out.
Now a backup plan was required to create reasons to initiate a war into North Waziristan. – Here enter Faisal Shehzad – a false flag operation to implicate Pakistani Taliban and then threaten and force Pakistan to “do more” in North Waziristan! Another Pakistani is arrested in Chile in the US embassy with traces of explosives on his luggage and clothes. More Pakistanis are being arrested and a massive media disinformation war is being launched that all global terrorism is emerging from Pakistani tribal pocket of North Waziristan and ISI/army is either hands and gloves with Taliban or nor willing to do more.
So now, you understand the tone, language and demeanor of Hillary and US media over Faisal Shehzad! Despite the fact that US army Generals have confirmed that Faisal had no links with anyone in FATA.
Pakistan was being setup for a possible geopolitical disaster. Allah protected Pakistan. US and Indians through their assets in Media and in terrorist groups continue to kick dust and deceive the world and Pakistani nation. But now, this time at least, their game is exposed.
=======================================
Bank of England Governor Mervyn King says:
We are still halfway through the world's worst financial crisis ever.
He is in good company.
The following experts have said that the economic crisis could be worse than the Great Depression:
- Fed Chairman Ben Bernanke
- Former Fed chairman Alan Greenspan (and see this)
- Former Fed Chairman Paul Volcker
- Economics scholar and former Federal Reserve Governor Frederic Mishkin
- Economics professors Barry Eichengreen and and Kevin H. O'Rourke (updated here)
- Nobel prize winning economist Joseph Stiglitz
- Investment advisor, risk expert and "Black Swan" author Nassim Nicholas Taleb
- Well-known PhD economist Marc Faber
- Former Goldman Sachs chairman John Whitehead
- Morgan Stanley’s UK equity strategist Graham Secker
- Former chief credit officer at Fannie Mae Edward J. Pinto
- Billionaire investor George Soros
