Monday, August 24, 2015

Monday's $lice of Mellon

About brunch time anyway:

"BNY Mellon pays $14.8m to settle SEC inquiry on interns" by Beth Healy Globe Staff  August 18, 2015

Bank of New York Mellon Corp. will pay $14.8 million to settle charges with federal regulators that it improperly awarded internships in Boston and London to three relatives of Middle Eastern sovereign wealth fund executives in order to keep their business.

It is the first such action the Securities and Exchange Commission has brought against a financial services firm under a federal law that bars businesses from offering foreign officials anything of value to win business. It’s also part of a broader probe of bribes by Wall Street companies to woo international clients.

The BNY Mellon case focused on the hiring of interns at the prodding of two officials at the wealth fund, which oversees investments for an undisclosed Middle East country. During 2010 and 2011, the SEC said, executives of the New York banking giant succumbed to repeated pressure from the fund officials to hire two of their sons and a nephew.

I'm thinking Saudi Arabia (or Israel; depends on who was hired).

Senior officials of the bank approved the hires, the SEC said, “in order to corruptly influence foreign officials” and win or retain contracts to manage money for the sovereign wealth fund.

It's the way our $y$tem operates and prospers, so what's the big deal?

BNY Mellon is one of several US companies that have come under scrutiny by regulators investigating similar cases. Recently, the SEC has been examining whether JPMorgan Chase & Co. hired relatives of influential Chinese officials to help win business. It also is probing whether investments in Africa by New York hedge fund Och-Ziff Capital Management Group violate the anti-bribery law.

That's the top of the top banks right there.

Andrew J. Ceresney, director of the SEC’s Enforcement Division, said in a statement, “BNY Mellon deserved significant sanctions for providing valuable student internships to family members of foreign officials to influence their actions.”

It's a $lap on the wrist.

The company agreed to pay the SEC $8.3 million worth of profits from the Middle East relationship, plus $1.5 million in interest and a $5 million penalty. 

Looks like a kickback to the government is what it looks like.

BNY Mellon neither admitted nor denied wrongdoing. In a statement, spokesman Kevin Heine said BNY Mellon cooperated with regulators and “had already taken steps to enhance our existing internal controls and procedures” regarding internships and hiring.

According to the SEC’s civil order, made public Tuesday, the three interns included the son and nephew of a Middle Eastern sovereign wealth official and the son of one of the fund’s executives in Europe. Two interns were placed at the bank’s offices in Boston; one was placed in London.

The sovereign wealth fund was a lucrative client for BNY Mellon, which provided record keeping and other services starting in 2000 on $55 billion in assets. In 2009, the fund extended more business to the bank, hiring one of its investment boutiques to manage $711 million.

In February 2010, the Middle East executive, described as a department head, made a “personal and discreet request” for BNY Mellon internships for his son and nephew, the SEC said in its order. The official allegedly had sway over sending new business to the bank.

The executive allegedly made numerous, pointed follow-up requests about the internships, even becoming angry over how long it was taking to confirm the jobs, according to the SEC. At one point, the official told his BNY Mellon contact the request was an “opportunity” for the bank, warning that he could go elsewhere if it disappointed him, the SEC said.

In an e-mail cited by the SEC, a BNY Mellon account manager told a colleague the bank was “not in a position to reject the request from a commercial point of view.” If it failed to grant the internships, “we potentially jeopardize” the business, the e-mail said.

The BNY Mellon employee also said the Middle East fund official had asked the bank not to disclose the request to the fund because it was a “personal favor.”

Around the same time, the fund’s representative in Europe asked through a subordinate that the bank provide an internship for his son, according to the SEC order. Employees acting on the fund official’s behalf asked repeatedly about the status of the internship, “including during discussions of the transfer” of more funds to BNY Mellon, the SEC said. 

All this ince$tuou$ corruption is making me $ick.

The company ultimately complied, even though the three candidates did not meet the criteria of the bank’s summer internship program. All were recent college graduates, and the bank generally sought undergraduates or students pursuing graduate business degrees. 

It's who you know!

In addition, the three special hires were permitted to bypass the bank’s normally rigorous standards for selecting interns, including a minimum grade point average, attendance at a selective school, and multiple rounds of interviews, the SEC said.

The six-month stints extended well beyond the company’s normal summer internships, the SEC said. And bank managers were not impressed: Human resources confronted the two Boston interns about frequent absences from work, and a London manager said the third intern wasn’t as hard-working as hoped.

BNY Mellon already had a code of conduct addressing the Foreign Corrupt Practices Act, prohibiting employees from offering gifts or money to clients that could be seen as bribes. But the company, according to the SEC, had “few specific controls” at the time related to hiring or internships, an area of growing scrutiny for the commission.

Related: Corruption is Good For An Economy

The law was enacted in the 1970s, after a government investigation found hundreds of companies in many industries made questionable or illegal payments to foreign government officials and political parties. But it does not explicitly make it illegal to offer a job to a family member or friend of a government official.

Over the last five years, the SEC has been aggressively pursuing anti-bribery cases against companies in industries other than financial services, including the Springfield firearms maker Smith & Wesson Holding Corp. and instrument maker Bruker Corp. in Billerica.

Yeah, they are doing such a great job!


Also seeWaiting For the Market to Open

Related: Black Monday

I may keep a running tally of what my blog roll is saying today regarding the economy, and maybe even give Rivero a listen today. 

Meanwhile, the Jewish Business News is seeing Unicorns!!! 

What the hell have they been drinking, huh?   

Also see: 

Is It Time to Get into Crash Positions?

Black Monday: Dow Drops Nearly a Thousand Points at Opening – Sleep Now in the Fire!

There is blood in the water, folks.

After 1,000-point plunge, Dow climbs back 

Oh, I'm sorry. After all the market manipulators went to work everything is now okay


All China's fault anyway, and what better way to get a call for war going?

How the Central Bank (and the FED?) Has Been Hokey Pokeying With Your Future  (Profits Before Country for Armament Makers)


"Stock slide a painful reality check, but no disaster" by Steven Syre Globe Columnist  August 24, 2015

Should you be worried now?

Probably not, at least not yet.

When someone says no twice about something, they are worried.

Chances are remote that a repeat of the 2008 market disaster is upon us. 

Of course, the bu$ine$$ pages are consistently wrong.

That’s not to deny that stocks set a new standard for gut-wrenching plunges right out of the gate Monday morning, with the Dow Jones industrial average falling more than 1,000 points in a matter of minutes, an intraday record. While the benchmark pared the loss to just 108 points by late morning, the slide resumed and the damage by the end of the day was bad: down 588.40 to 15,871.35.

But it still hurt and, stocks all around the world got clobbered Monday.

But it is really not that bad. I suppose the readership of Bo$ton need to see that.


Now whom to blame.

The culprit? China.

Of course, and there are now "worries that US growth could sputter," (even though I have been told months earlier that couldn't really happen, U.S. economy was kind of an i$land of its own) and there are now “real concern about the sustainability of China.” 

All this from guys who up until last month were saying this whole thing was going great guns.

Dramatic movements like the stock market’s plunge of recent days remind many individual investors of real calamities of the not-very-distant past — particularly the market collapse of 2008.

But there are good reasons why the current turbulent stock market is unlikely to become so devastating.

Though stocks had become expensive, they were not wildly inflated, as they had been in other market collapses.

He can't see the printing pre$$ bubble before his eyes!

And the most dangerous element to most bull markets — borrowed money, which can amplify gains but also deepen losses — does not play an especially big role in current events. Unlike in 2008, no big banks are in danger of failing. There is no tidal wave of bad mortgages about to crash over Wall Street.

Yeah, right, everything is fine. Ignore the loads of debt out thereIt's all about what Wall Street and "inve$tors" have done.

So much for the good news. Investors also need to face the fact that stock prices have been going up nearly nonstop for six years. A real setback wasn’t just inevitable, it was overdue by historical standards. they never tell us that as it climbs. 

It's always how long can this keep going -- while cheering the whole way!

In fact, the stock market has been headed generally lower for several months....


This is “perfectly normal,  scary, but normal, and it may not be over?”

Okay. See you in October!!

Stock prices will probably remain under pressure because they depend most on the profits earned by companies. Tepid economic growth around the world makes it hard to boost earnings.

Yeah, revenues are down but the thing is run on profits. It's a disconnect that benefits a very $mall $ector, folks.

A slowdown in China poses even more direct problems for companies that depend on business in that country for a large share of its revenues and profits. Apple Inc., the market’s most valuable company and the leading factor in stock indexes, now sells more iPhones in greater China than it does in the United States.

What if Apple and other conglomerates lied about profits? 

That is the word that was spreading across the blogs I looked at yesterday. Was saying all the Apple, Amazon, Google profits were coming from central banks from all over the world buying up stocks (we already knew this was happening; Japan stepped in when the Fed allegedly shut down their program, and international bankers do in fact coordinate things like that). 

In other words, there really is no "there there," other than paper and ink.

So what does this mean for individual investors? 

I don't really care. I'm not one.

The answer depends entirely on when they need their invested money. “If you need it anytime soon, you shouldn’t have a lot of money in stocks anyway,” said McMillan. “If you need it in 20 or 30 years, you should worry about it. This is a chance to find out whether your ability to tolerate risk is as high as you thought.”

You know, like TORTURE! It's FUN!

The stock market is going to struggle through the months ahead and surely could lose more ground. But Wall Street didn’t do anything stupid — borrowing money or inventing dangerous products — to make that problem this time. It’s just a setback that was a long time coming.

The mixed messages suck, but at least it's not Wall Street's fault, whatever it is!! 



What's that? Oil fell below $40 a barrel?

RelatedStock market drop stokes local fears

Not what Syre says, and look jwho is blaming China.

"China’s market turmoil echoes around the world; Major indexes all take nose dive as jitters spread" by Nathaniel Popper and Neil Gough New York Times  August 25, 2015

Yeah, them, too.

NEW YORK — The Dow Jones industrial average plunge followed a stock market rout in China — immediately named “Black Monday” by local commentators — in which the main Shanghai stock index fell 8.5 percent. The market’s struggles continued Tuesday, falling another 5.4 percent shortly after opening.

Meaning there should be a dump again here unless rigging from the Fed's market manipulation teem gets those pre$$es rolling. 

This is 1929 all over again, but on a much grander scale -- thus, historians will record this era since 2008 as the GRAND DEPRESSION.

Monday’s trading began with questions about whether the Chinese government would make further efforts to support local investors. When Chinese authorities didn’t get involved, the talk on trading floors turned to the Federal Reserve Board’s current plans to ease up on its stimulus program, and whether that might change in light of the recent tumult.


Told it was over months ago, but they kept buying to prop up the thing. Wow!

“Everything is going to be dictated by government policy,” said Kevin Kelly, the chief investment officer of Recon Capital Partners. “Whatever noise is coming from policy makers is going to determine the next couple weeks.”


The conversation about government policy is playing into a broader debate about the global economy’s ability to continue growing without the sort of extraordinary stimulus that has become the norm in recent years.

If it is the norm it is no longer "extraordinary," is it?



So the NYT is basically conceding there has been NO ECONOMIC GROWTH all this time. It's all been printed paper money inflating stock prices and creating a completely fraudulent picture of profits and the rest. 

What crap pre$$.


Investors’ worries about China’s economic slowdown and a souring view of emerging economies have rattled financial markets around the world in recent days and showed no signs of letting up.

Well, actually, on page A1, I was told don't worry.

“There was a huge amount of negative sentiment built in this morning,” said Dan Greenhaus, the chief global strategist at BTIG.

Greenhaus said many investors ended last week hoping that the Chinese government would step in over the weekend to announce some steps to support the markets, but nothing significant was announced, contributing to the pessimism Monday morning.

The negative sentiment led to the big market drops in early trading Monday....

The shares of Apple were in positive territory for a bit after its chief, Timothy D. Cook, sought to reassure investors that the company’s sales were still strong in China.

Still, few investors were seeing an end to the volatility that has shaken markets in recent weeks.

Among the biggest losers in the main indexes were oil stocks such as ExxonMobil as crude oil prices traded below $40 a barrel.

Oil is BELOW $40?! 

The LAST TIME OIL CRASHED was 2008 -- in case you missed it!

The fear index, the VIX, was up Monday morning to levels last reached in 2011, when Americans were worrying about a double-dip recession.

Just shit my pants.

Investors flocked to the safe haven of Treasury bonds....

Yes, the U.S taxpayer can always be counted upon to fork over blood money for bankers, and if not a state of martial law will be declared over civil unrest so they can be made to pay!

In China, the benchmark Shanghai composite index closed 8.5 percent lower on Monday, erasing all of the gains it had made in an extraordinary run-up this year.

Just like da' Dow!

And in Europe, stocks fell sharply, with several of the main indexes down by 6 percent or more in late-afternoon trading.

And yet somehow, the NYSE only took a brui$ing.

Many analysts have said that a correction to stock market valuations was overdue after a long bull market.

The selling in China has accelerated despite extraordinary government intervention in the last two months aimed at propping up share prices. 

Doesn't work there either, huh?

As the slide Monday highlighted, those efforts have not been a success and the damage has been felt far beyond the Chinese market. In Japan, Australia, and Hong Kong....


RelatedThe end of China’s growth model

Btw, no Tianjin today.

MID-MORNING UPDATE: US stocks surge after days of turmoil

So volatile.


Early gains erased as US stocks lose ground again

During Every Market Crash There Are Big Ups, Big Downs And Giant Waves Of Momentum

Deere cuts earnings outlook on weak farm, energy sales

Gap CEO is promising cuter clothes by spring


BNY Mellon settles with federal regulators over alleged overcharging