Puerto Rico’s payday loans: The shocking story behind Wall Street’s role in debt crisis

Via DN

On June 30, President Obama signed into law the PROMESA bill, which will establish a federally appointed control board with sweeping powers to run Puerto Rico’s economy. While the legislation’s supporters say the bill will help the island cope with its debt crisis by allowing an orderly restructuring of its $72 billion in bond debt, critics say it is a reversion to old-style colonialism that removes democratic control from the people of Puerto Rico. But does Puerto Rico really owe $72 billion in bond debt—and to whom? A stunning new report by ReFund America Project reveals nearly half the debt owed by Puerto Rico is not actually money that the island borrowed, but instead interest owed to investors on bonds underwritten by Wall Street firms including Goldman Sachs, Citigroup, Merrill Lynch and Morgan Stanley. While the Puerto Rican people are facing massive austerity cuts, bondholders are set to make mind-boggling profits in what has been compared to a payday lending scheme. For more, we speak in San Juan, Puerto Rico, with Carlos Gallisá, an attorney, politician and independence movement leader. And in New York, we speak with Saqib Bhatti, director of the ReFund America Project and a fellow at the Roosevelt Institute. He is co-author of the new report, “Puerto Rico’s Payday Loans.”

The CIA & The Drug Trade (Video)

Just as the British Empire was in part financed by their control of the opium trade through the British East India Company, so too has the CIA been found time after time to be at the heart of the modern international drug trade. From its very inception, the CIA has been embroiled in the murky underworld of drug trafficking.

There are billions of dollars per year to be made in keeping the drug trade going, and it has long been established that Wall Street and the major American banks rely on drug money as a ready source of liquid capital. With those kinds of funds at stake, it is unsurprising to see a media-government-banking nexus develop around the status quo of a never-ending war on drugs – aided, abetted and facilitated by the modern-day British East India Company, the CIA.

This is our EyeOpener Report by James Corbett presenting the history, documented facts, and cases on the CIA’s involvement and operations in the underworld of drug trafficking, from the Corsican Mafia in the 1940s through the 1980s Contras to the recent Zambada Niebla Case today…

How Goldman Sachs made it back into Washington’s inner circle…

Via

When Gary Cohn, president of Goldman Sachs, walked into Trump Tower earlier this week, it was just one of dozens of meetings President-elect Donald Trump as held with advisers, potential cabinet picks and well wishers over the last few weeks. But on Wall Street, Cohn’s presence in the gold-accented lobby represented something much bigger: One of the world’s most important banks is making its way back into Washington’s inner circle.

After years on the sideline, Goldman Sachs, and the rest of the Wall Street elite, is poised to come roaring back.

Trump has already picked several Goldman Sachs alums for several key positions. Steven Mnuchin, a 17-year veteran of the bank, is slated to be the next Treasury Secretary and Steve Bannon, Trump’s chief strategist, worked on mergers and acquisition deals for Goldman Sachs. Hedge fund manager Anthony Scaramucci began his career at the New York bank and has emerged as one of Trump’s closest advisers on his presidential transition. According to Politico, Cohn, a 26-year veteran of the Goldman Sachs, is being considered for a position heading the Office of Management and Budget.

Goldman Sachs’ sometimes controversial relationship with Washington goes back decades. One of its founders, Henry Goldman, advised on the creation of the Federal Reserve. President Franklin D. Roosevelt chose Goldman CEO Sidney Weinberg to serve on the War Production Board during World War II. And more recently, President Bill Clinton named former Goldman co-chairman Robert Rubin to head the Treasury Department. George W. Bush picked Henry Paulson, another Goldman alum for the same job.

Each in turn filled the government ranks with so many more former Goldman executives that the bank eventually earned the nickname “Government Sachs.”

“The Goldman organization has always been able to make sure they are close to power, they are very good at cultivating and maintaining relationships,” said Christopher Whalen, head of research for Kroll Bond Rating Agency.

Trump’s elevation of so many Goldman alums may signal a wider shift in Wall Street’s public standing, which has been battered since the 2008 financial crisis, industry analysts say. Even Trump played to public distrust, releasing a television ad that flashed an image of Goldman Sachs CEO Lloyd Blankfein as the Republican candidate warned of a “global power structure” that was robbing American workers.

The public’s resentment towards Goldman Sachs was so deep that Blankfein initially demurred when asked who he would vote for. “I don’t want to help or hurt anybody by giving them my endorsement,” Blankfein, who has previously supported Hillary Clinton, told CNBC.

Wall Street insiders widely expected to be largely left on the sidelines if Hillary Clinton had won the White House. They felt Clinton would have found it difficult to resist pressure by progressives in the Democratic Party that she be tough on Wall Street.

But the tone has shifted since Trump’s election. “After Nov. 8, you could say the financial crisis was over,” said Mike Mayo, a banking analyst and managing director with global boutique brokerage firm CLSA. “It was a pivot from rebuilding the banking industry to using banks to better facilitate better economic growth.”

That has some progressive groups crying foul. “These guys are galactic deal-makers, transaction merchants, not people who face the extraordinary littleness of life,” said Bart Naylor of Public Citizen. “They also know each other, attend each others’ weddings, buy each others Hamptons’ mansions … When it comes to financial policy, they know about spreads and liquidity, but not about what you can’t buy with food stamps or changes in bus schedules.”

Goldman Sachs is no stranger to such talk. The bank has been best known as a secretive, Wall Street dealmaker with the ear of the White House. It helps big institutions and billionaires bet on the markets and large corporations raise money, but until recently had little interaction with average investors — clients must have at least $10 million for its wealth-management services.

But in recent years it has tried to soften its image. It has launched programs to help women entrepreneurs, produced regular podcasts, and earlier this year offered a high-yield online savings accounts for those with as little as $1.

If Trump taps Cohn, currently the bank’s president, for a position in his administration, it would send Goldman scrambling to find a replacement. Cohn, who has been at the bank since 1990, has been widely viewed as heir apparent, poised to become CEO when Blankfein retired.

“Throughout its 147-year history, Goldman Sachs has encouraged its employees to give back to the community while they are working here and after they leave,” said Jake Siewert, communications director at Goldman. “We are proud that many have gone on to serve their country and their communities after they have left.”

Goldman CEO Gary Cohn: ‘Yea, the suckers bought Trump’s bullshit. We’re back in”

Stock market has already picked the next US president…

Wall Street loves a sure thing. Trump is too unpredictable for them…

The GOP is traditionally known as the party of Wall Street, but this year investors, for the most part, are betting against the Republican standard-bearer.

“The market appears to have decided not only that [Hillary] Clinton will win, but that it won’t be close,” David Woo, a strategist at Bank of America Merrill Lynch, said in a report distributed Monday. “Investors like landslide victories.”

Woo noted that the S&P 500 has risen more than 4% since July 5, which marks the beginning of the 90-trading-day countdown to the election on Nov. 8. During years when presidential candidates won by a margin of more than 80% of Electoral College votes, the S&P 500 posted average returns of 8.4% in the 90 days leading up to the election.

The last time stocks outperformed the current rally at the halfway point was when Ronald Reagan won in a landslide against Walter Mondale in 1984.

“To us, this implies that the market is expecting Hillary Clinton to either maintain or increase her already sizable lead over Donald Trump in the opinion polls,” Woo said, citing the Iowa Electronic Markets, an indicator giving Clinton an 80% chance of beating Trump.

The IEM is a futures market operated for research purposes by the University of Iowa Tippie College of Business.
Earlier this year, Sam Stovall, U.S. equity strategist at S&P Global Market Intelligence, noted that the S&P 500 has a fairly good record of predicting election results.

Since 1944, the incumbent person or party was reelected 82% of the time when the S&P 500 rose between July 31 and Oct. 31, according to Stovall. The only exceptions were in 1968 and 1980, when there were popular third-party candidates in the picture.

“Whenever the S&P 500 fell in price during these three months, however, it signaled the replacement of the incumbent 86% of the time,” he said.

The latest polling numbers show Clinton leading Trump in most voter surveys, according to news and data aggregator RealClearPolitics.

The S&P 500 hit a record high of 2,193.81 on Aug. 15 and is poised to extend its rally to six straight months. The Dow Jones Industrial Average also is flirting with a slight gain in August—which would be its seventh monthly rise in a row, according to FactSet.

Meanwhile, the market is also expecting a split Congress and very little change in policy, according to Woo.

The volatility of the euro-dollar pairing , which the strategist views as a good proxy to measure the risk of change in the U.S. versus the rest of the world, is at a 2016 low, implying subdued expectations for policy change.

“The combination of a Democratic president and a split Congress likely means gridlock,” Woo said. “If this scenario materializes, the experience of the past six years suggests there is little chance of a major change in the fundamental economic policies of the most important country in the world in the foreseeable future.”

As a result, investors could expect lower interest rates and a weaker dollar. But in the event the same party wins the White House and control of Congress, the greenback will strengthen and rates will rise, Woo said.