Archive | Banksters

From 32 to 4 since late July. Could easily drop to 2.

SunEdison, huge renewable energy developer, faces bankruptcy

From 32 to 4 since late July. Could easily drop to 2.

From 32 to 4 since late July. Could drop to 2.

Crushing amounts of debt are pummeling SunEdison, the biggest renewable energy developer in the world. Hedge funds, who used to favor the company, are dumping the stock, accelerating SunEdison’s problems. There is an unfortunate misconception that renewable energy companies are so wonderfully squeaky green clean that they are immune from Wall Street and financial machinations. SunEdison shows this quaint notion to be false.

Their dicey business plan was based on their stock always going higher, a “strategy” that always works until it doesn’t.

SunEdison was built to be a development company that would then sell wind and solar projects to its captive yieldcos. The yieldcos would buy projects (at a premium to what the market might pay) and finance them through a combination of new debt and equity, predicated on the idea that the cost of new capital would be lower than the cost of capital of the projects they were buying from SunEdison. This would help the yieldcos grow earnings and dividends, which theoretically would keep the stock price high. In theory, this could go on for many years.

All of this is a great idea but it falls apart once stock prices fall.

Well no, it’s not a great plan at all because only a fool or a charlatan says stock prices will go up for ever. Banksters were of course happy to jump in and pump up the stock price, but when the big money exits all at once, look out below.

SunEdison may be a bankruptcy candidate

With its business model falling apart, SunEdison needs a savior to finance both projects and its future operations. But that’s not going to come from hedge funds that are abandoning the company or yieldcos that now have such high yields that they can’t buy projects.

Posted in Banksters, Energy0 Comments

The top Billion dollar valuation unicorns with zero profits.

From unicorns to zerocorns. Billion dollar valuations. Zero profits

The top Billion dollar valuation unicorns with zero profits.

The top Billion dollar valuation unicorns with zero profits.

The cold dish rag of reality is smacking Silicon Valley in the face. Unicorns, private companies with ludicrous billion dollar valuations like Dropbox, Square, and Snapchat, are being downgraded by investment banks, with their projected IPO prices now lower than their last private round of investors paid for it. That means if the company IPOs, late investors will have lost money. That just wasn’t supposed to happen. Disruptive innovators were supposed to make zillions on their IPOs. Oh wait, those zillions only flow to a few, with the company itself being mostly relevant to the plans. Really, it’s just a new version of pump and dump. Once big flaw in their greedy little plans is that none of the unicorns are making a profit. Oopsie.

A bigger question is whether it will be a controlled demolition as unicorns everywhere are demoted to what we first dubbed “zerocorn” status in the coming days. To be sure, the VCs are desperate for a controlled demolition, and hoping the broader market ignores the euphoria that took place in Silicon Valley over the past 3 years, is now over, and that giddy investors overshot by at least 25-35% to the upside in the past several private funding rounds as everyone was rushing to pass the valuation hot potate to ever greater, and richer, fools.

And here is the stunner: the combined “valuation” of total US unicorns is $486 billion. Their combined profit? $0.

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Million dollar shacks in Silicon Valley. Surely this bubble is different


Step right up, get your $1.8 million beater shack in Silicon Valley. Surely prices will rise forever and this time is different. Why that’s exactly what that nice real estate broker in the Million Dollar Shack documentary says too. No matter that he thinks lesser beings who worry about bubblicious prices need to be driven out of Silicon Valley so the monied class can replace them (and pay him fat commissions.) Pay no attention to the obvious fact that many homes are bought for big prices and left vacant because this is a fine way to hide and launder money – which essentially makes at least part of the entire bubble corrupt.  And just because some Google employees live in their cars on Google parking lots is no reason whatsoever to say Silicon Valley real estate prices are in an unsustainable bubble. None, I tell you, none.

Absurd prices for rundown properties, soaring costs for rentals, even a tent in someone’s backyard that goes for $46 a night (you get an extension cord, one shower a day, and wi-fi) and all courtesy of i) greed, ii) an utter inability to learn from the past, and iii) the meteoric rise of Silicon Valley “unicorns” with stratospheric valuations.

To say “this won’t end well” would be an understatement…

As always, the comments on Zero Hedge are humorous and biting.

Ten years from now those rich buyers of today will be sleeping in their Teslas at the WalMart parking lot.

Did i see tulips growing in that video?

I wonder why nobody sees the real culprit here. It’s the easy money provided by the central banks. Even if you are a hard working tech at one of the big corps, you can’t afford housing, maybe a Sr director making 200% above average can afford a below average home, but that’s it. The tech industry does not support the housing prices at all, it’s the money from investors, which can borrow at very low rates. People should protest in front of 101 Market St and not in front of the town hall.

I work at Google and many employees are living in vans and trucks on the campus. Just today when I cycled into the parking lot I saw a guy sleeping in his car and when I went out for a stroll I saw multiple vans & RVs parked near Stevens Creek. Same situation on the Google long term parking lot. I was chatting with someone from security last Sunday and she said it is actually fairly common.

So yeah. Us ‘evil’ techies are just money conduits. Our salary goes directly from our pocket into the landlords pocket. My landlord has never ever done any work on the shack I inhabit (a wooden box from the late 60’s) and yet increases the rent by 10% every year.

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What Americans fear most: Government corruption


Americans rank fear of government corruption as their #1 fear. followed by corporate tracking of personal data, according to a Chapman University poll. While this should be a wake-up call for politicians and corporations showing the populace deeply distrusts them, it won’t be. Instead, we have completely predictable reaction from oligarch media like Washington Post trying to ridicule the survey, saying we’re just a bunch of scaredy cats and should go watch The Exorcist to chill out. No, really, that’s what their conclusion was.

“We’ve found that people who report high anxiety get more out of scary things. When you scare someone who is very anxious, it takes their pre-thinking brain offline for a second,” she said. “It makes them be present …that makes them feel good instead of worrying. They are very much in control.”

So, after you watch the next presidential debate maybe follow it up with The Exorcist.

Yuck, yuck, yuck. Ok all you shitizens, now STFU.

While the Chapman study does indeed show real discontent in the country, it’s illuminating for what it didn’t ask. Yes, it asked about government corruption. But nowhere on the list of 88 possible responses was corporate corruption. How very curious. Especially since government corruption implies corporate corruption. You can’t have one without the other.

Still though, when the number one fear is one’s own government, then something has gone very wrong indeed in D.C., in Congress, and in the White House. This isn’t a Red vs Blue thing. Both parties are culpable and complicit.

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unicorn meat

Big sale on unicorn meat coming soon to Silicon Valley

unicorn meat

All the hype about Silicon Valley being a hotbed of innovative, disruptive world changers is starting to sound a bit frantic and silly, like they’re trying to convince themselves unicorns will somehow continue to grow out whatever half-baked plan just got funded.

I know of a startup in Silicon Valley where, after getting funding, the founder took himself and ten employees to Tokyo for two weeks of “team building.” Apparently team-building can’t be done properly where the business is and requires spending tens of thousands of startup money to do correctly. A cousin has funded medical startups in Massachusetts for decades. I’m real sure none of those startups would even think of going to London for two weeks because it would be a waste of time, money, and distract them from building the business. Yet such extravagance are common in Silicon Valley. I guess they think their startup will magically transform into a unicorn or, even better, they’ll do an IPO and cash out. The focus clearly is not on building long-term profitable businesses but on cashing out.

Adam Taggart has lived in Silicon Valley, worked for a startup, and thinks the bubble is bursting.

The “engine of our economy”, the “cradle of innovation”, the “land of tomorrow” — whatever breathless hyperbole the fawning media is using this week — is a sham. Silicon Valley has become a factory of hype, funneling gobs of early-stage capital into whatever half-credible concepts it can think of, and then pimping the artificially-inflated initial results of those tarted-up ventures to whichever “greater fool” is willing to acquire it or buy its IPO. Let that idiot figure out if it will ever turn a profit…

Like the too-cozy relationship between DC and Wall Street, I see a similar one between Wall Street and the Tech sector.

Mark St. Cyr thinks Sillycon Valley needs to get the crying towels ready, using Twitter as an example. They brought back Jack Dorsey to run it even those he’s also CEO of Square. This seems a desperation move rather than good business sense. Twitter probably needs a a full-time turnaround specialist as CEO.

Twitter is (again, in my opinion) a real-time microcosm of what’s about to hit the whole Valley. i.e., A real shite storm, and here’s my reasoning…

No one else in all the world let alone Silicon Valley was up to the task? A multi-BILLION dollar publicly traded enterprise on the forefront of all that Silicon Valley represents can’t attract any other CEO talent who could devote 100% of their abilities? This makes absolutely no sense what so ever unless: the board, as well as many investors are panic-stricken on just how bad things are behind the scenes and figured; the best they could do was to bring (or convince) a person such as Mr. Dorsey back on as CEO,

As for all those coders and geeks paying insane rents in San Francisco to work for a startup. It’s all good until it isn’t. When bubbles burst, things go down way faster than they rose.

However, you know what changes everything? When the meme of “Gonna stay here till I cash-in and then I’ll buy me a McMansion!” turns into the underlying realization that quite possibly – you’re going to end up living in a shipping container! Possibly forever if things don’t change.

Suddenly Mom and Dad’s basement looks like paradise.

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Fraud triangle

What Volkswagen did may be control fraud, looting a company

Fraud triangle
Control fraud occurs when the CEO and executives of a company deliberately cook the books, announce phony profits, then personally profit from the fraud through salaries and stock options. The crucial thing to remember is they don’t care what happens to the company, the products, the employees, or customers. Their primary goal is enriching themselves. The failure of the entity is not a failure of the fraud. A truly successful control fraud will so completely loot a company that nothing of value exists.

What Volkswagen has done is very much like control fraud. They cooked the books by falsifying emissions control results, which goosed sales and profits, and those in the top echelons were well rewarded.

Control fraud occurs when a trusted person in a high position of responsibility in a company, corporation, or state subverts the organization and engages in extensive fraud for personal gain. The term Control Fraud was coined by William K. Black to refer both to the acts of fraud and to the individuals who commit them.

The concept of control fraud is based on the observation that the CEO of a company is uniquely placed to remove the checks and balances on fraud within a company such as through the use of selective hiring and firing.

Posted in Banksters

low of transnational organized crime

Fighting organized crime in the 21st Century. Mob Museum panel

low of transnational organized crime

Organized crime is increasing focused on stealing information, not things. Theft by fraud is safer for the criminal because there’s no physical confrontation. Criminal groups now are transnational, making prosecuting them more difficult. Their leaders may be in countries or areas where they are protected by corrupt governments and officials. The consensus from panelists at a talk at The Mob Museum in Vegas last night was that biggest organized crime problem today is corruption. Without corruption, the crimes would mostly not be possible.

Non-state terrorist groups often partner with organized crime to raise the money they need. Or they may be doing the crimes themselves. When corruption in a country becomes overwhelming, it can become a failed or semi-failed state, which gives terrorist groups a safe haven.

The most effective way to stop organized crime is to follow the money. The Financial Crimes Enforcement Network in the U.S. Department of Treasury monitors bank transactions, looking for patterns that may indicate money laundering. They publish a list in the Federal Register of suspect foreign institutions or entities. U.S. banks will generally stop doing business with them immediately.

Currently there is a huge phishing attack coming from Romania. If you get suspect email, forward it to the FBI’s Internet Crimes Complaint Center at, which also has useful, timely news about cybercrime and identity theft.

Traditional organized crime is of course still alive and well. The Mafia (more properly known as La Cosa Nostra), has been weakened by mass imprisonments but has hardly gone away, a sentiment echoes by former Gotti enforcer John Alite when he spoke there earlier this month.

Street gangs in the US and Central America are often the distribution networks for Mexican drug cartels. And the ‘Ndrangheta in Calambria Italy is the biggest heroin distributors on the planet. And most people have never heard of them.

Transnational organized crime mostly prefers to remain in the shadows, corrupting police and politicians, and since they have no particular home and their crimes often are not locally based, prosecuting them requires new skills and approaches.

The panelists:

Tom Ott: Senior Advisor to the Director of the Financial Crimes Enforcement Network (FinCEN)

Patrick Brodsky: Over 25 years of multidisciplinary law enforcement experience. He currently serves as ASAC over FBI Las Vegas Division’s Criminal and Support Services Branch.

Jay S. Albanese: Professor and criminologist in the Wilder School of Public Affairs at Virginia Commonwealth University, and served as Chief of the International Center at the National Institute of Justice, the research arm of the U.S. Department of Justice.

Posted in Banksters


VW CEO steps down: “Not aware of any wrongdoing on my part”


In a marvelously weasel-worded statement, Volkswagen CEO Winterkorn has resigned saying he was shocked just shocked at the “misconduct.” Further he’s not aware of any personal wrongdoing. How very curious. He doesn’t even know if he knew. But leaves the possibility he may have known. In case, y’know, some pesky prosecutor proves it.

Someone should tell Winterkorn that deliberate frauds over multiple years are not “irregularities” but serious criminality.

I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.”

And yes, the prosecution is very unequal indeed, says Zero Hedge. Another curiosity.

Meanwhile, back in the best democracy money can buy, where failure is rewarded with bailouts and where criminal death cover-ups cost less than $1 billion to settle, Mary Barra is still running GM.

Back to Volkswagen and their diesel problem. From the comments at Zero Hedge.

Just try to sell [your Passat diesel]…. or drive it in California. The good news is that you can join class action lawsuits and sue for your entire purchase price, due to fraud.

Volkswagen diesels will no longer be able pass mandatory US state smog inspections which means the cars can’t be driven legally. It’s not even clear if the diesels can be retrofitted with anti-smog devices. And if they can, then performance and mileage will drop substantially.

This wasn’t some rogue code monkey. A lot of Krauts were involved in this irregularity conspiracy. When Americans get the fix at their dealers and their cars then run like shit, this is going to be the mother of all class actions.

Posted in Banksters


Volkwawagen is in serious trouble, and it’s all self-inflicted

It will be difficult, quite possibly impossible, for VW to fix their diesels. Other diesel manufacturers spray urea onto exhaust fumes to cut down on pollution. Volkswagen doesn’t, because they said their engines were hyper-efficient. They lied. Instead, Volkswagen was engaging in deliberate, years-long, massive fraud. Retrofitting urea injectors into 500,000 diesels may be nearly impossible, assuming anyone still wants them and class actions lawsuit don’t force VW to buy them back.

The stock has cratered. Governments will impose huge fines. There will be class action lawsuits. Potential car buyers will stay away.

Once hugely respected Volkswagen has managed, probably irrevocably, to destroy its brand. Those at the top and all responsible for the fraud are criminals. My guess is it will eventually get sold off in pieces (Porsche, Audi), leaving an empty shell that will then go bankrupt.

Everyone wondered how VW met emissions standards while foregoing urea injection. As it turns out, they didn’t. It wasn’t magical German engineering. Just plain old fraud.”

There’s no easy way out of this, but they’d better figure something out, and pronto. Right now dealers are banned from selling 2.0-liter TDIs, which make up about a quarter of VW’s U.S. sales.

The intentionality behind the deceit makes this situation different from even a huge-scale recall. This isn’t a story about a part that was made one cent cheaper than it should’ve been, where a car company cut a corner to save a little cash. It’s about a huge corporation eying the rulebook and deciding there’s a competitive advantage in violating the Clean Air Act. Incompetence is one thing, but calculated mendacity is quite another.

I am so tired of corrupt corporations. How about you?

Posted in Banksters

Keystone Cops

DoJ: We’re sorry we refused to enforce rule of law against banksters

Keystone Cops

After seven years of Obama Administration policy forbidding criminal prosecution of individual banksters, the Department of Justice just promised, by golly, we’ll start enforcing the laws after all. I so totally believe them, how about you?

In a move that can only mean a presidential election campaign is upon us, the Justice Department said it is finally going to pursue individual white-collar criminals.

Pardon my cynicism, but after so much failure to prosecute, I remain doubtful that much if anything has changed. The onus is on the Justice Department to show that it’s serious by way of actions, not words in a memo.

And lookee here. The statue of limitations has expired on many of the crimes.

After the most target-rich environment for white-collar prosecution ever, the nation’s top prosecutors have suddenly realized that “Hey, crimes! We should do something about that!” By what must be the sheerest of coincidences, almost all statute of limitations on the oodles of white-collar misdeeds committed during the financial crisis have expired.

And yes, Attorney General Holder made it quite clear that prosecuting banker criminals would just be so onerous to the banking system it could not be allowed. I’m sure he will be amply rewared by the very same bankster slime for refusing to do his sworn dury, now that he is out of office.

By issuing its new memorandum the Justice Department is tacitly admitting that its experiment in refusing to prosecute the senior bankers that led the fraud epidemics that caused our economic crisis failed. The result was the death of accountability, of justice, and of deterrence. The result was a wave of recidivism in which elite bankers continued to defraud the public after promising to cease their crimes. The new Justice Department policy, correctly, restores the Department’s publicly stated policy in Spring 2009. Attorney General Holder and then U.S. Attorney Loretta Lynch ignored that policy emphasizing the need to prosecute elite white-collar criminals and refused to prosecute the senior bankers who led the fraud epidemics.

If this happened in a Latin American or African country we would make mocking comments about how corrupt they were.

Posted in Banksters


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