MORNING MESSAGE: 10 Reasons To Be Suspicious About Wall Street's Facebook Fiasco

OurFuture.org's Richard Eskow: "Three of Wall Street biggest and best-known financial institutions handled the Facebook IPO, so why were people immediately suspicious when the stock soared and then promptly tanked? Easy answer: Because three of Wall Street biggest and best-known financial institutions handled the Facebook IPO ... Here are ten reasons why it makes sense to be suspicious of the Facebook IPO, starting with the fact that any overview of the three institutions which handled it might best be described as 'rounding up the usual suspects.'"

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Three of Wall Street biggest and best-known financial institutions handled the Facebook IPO, so why were people immediately suspicious when the stock soared and then promptly tanked? Easy answer: Because three of Wall Street biggest and best-known financial institutions handled the Facebook IPO.

Each of them - Morgan Stanley, Goldman Sachs, and JPMorgan Chase - has a history of exactly the kinds of unethical and/or illegal behavior that might, just might, explain what happened with Facebook.

Mark Gongloff offers a good overview of Mr. Zuckerberg's Wild Ride, in which a stock that was offered at an IPO price of $38 soared to $45 and then plunged to its current (as of this writing) price of $31. A lot of people lost money - which means a lot of people made money, too.

Zuckerberg promptly sold his 30.2 million shares, netting a quick billion dollars and change. That tells you what he thinks of this investment.

Here are ten reasons why it makes sense to be suspicious of the Facebook IPO, starting with the fact that any overview of the three institutions which handled it might best be described as "rounding up the usual suspects":

1. Morgan Stanley has a history - and a culture - of tricking their own clients into making lousy investments.

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It's about time for us to break into the closed-door negotiations in Congress over a surface transportation bill.

The Leadership Conference on Civil and Human Rights is asking people on Wednesday to call their members of Congress to support "transportation equity" in the transportation bill, which will fund highway and public transportation projects for the next two years. The Leadership Conference has in mind some specific concerns affecting urban and low-income populations, but everyone concerned about making the economy work again for working-class and middle-class people has a reason to make their voice heard. This bill is too important to be left to the lobbyists who have access to the members and staffers huddled in a House-Senate conference committee.

The Leadership Conference is specifically concerned about protecting language in the Senate version of the bill that would require the federal government to continue technical assistance programs and studies related to public transportation and its accessibility to low-income people and people of color. The importance of public transportation, of course, transcends race and class—the more people use public transportation, the less clogged and the less polluted our roads are, and the less fuel we're consuming.

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This strange political season gets stranger by the day. The things I'm hearing and seeing from Newt Gingrich and Cory Booker today reminded me of a song from one of the last (and, in my opinion, underrated) albums by Culture Club; my favorite band from my 80's youth. The lyric that comes to mind is from the band's 1984 single, "Mistake No. 3," when Boy George sings of people getting "dragged into a conversation they can't hold."

It's been 28 years, and I still can't figure out what that song's about. But, it's not hard to figure out that, despite coming at Mitt Romney's Bain Capital history from opposite sides, Newt Gingrich and Booker let themselves get dragged into conversations they can't hold.

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A number of groups representing American manufacturing companies and industries have asked the Obama administration for clear language that bans currency manipulation to be included in any new trade bills.

A coalition of trade groups today sent a joint letter to U.S. Treasury Secretary Timothy Geithner and U.S. Trade Representative Ron Kirk urging them to include rules governing currency manipulation as a key point of any future trade agreements. They want this to start with the Trans-Pacific Partnership (TPP) that is currently being negotiated.

Signers of the letter include: Alliance for American Manufacturing (AAM), American Automotive Policy Council (AAPC), American Fiber Manufacturers Association (AFMA), American Iron and Steel Institute (AISI), American Mold Builders Association (AMBA), Association for Manufacturing Technology (AMT), Information Technology and Innovation Foundation (ITIF), Motor & Equipment Manufacturers Association (MEMA), National Council of Textile Organizations (NCTO), and Steel Manufacturers Association (SMA).

The letter:

May 22, 2012

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Originally published at Capital Gains and Games.

It’s not hard to understand the political motivations behind Boehner taking the position he took on the debt ceiling. He needs the support of the House GOP caucus to remain Speaker. All indications are that, as has been the case since the 2010 election, House Republicans are not in a compromising mood on anything having to do with the federal budget.

Threatening another cliffhanger battle as he did last week doesn’t provide the leadership Boehner said was needed to deal with this. Instead of simply complaining that the president had “lost his” courage when it came to the budget, Boehner should have displayed some of his own.

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At Citigroup, shareholders had their say on CEO pay -- and they yelled, "No damn way!"

Concerted action by shareholders, workers and public interest groups compelled corporate change in several other cases this spring as well.

At least three CEOs resigned. Executives truncated one shareholder meeting to 12 minutes. And across America and Europe, CEOs lamented the end of automatic approval for excessive executive compensation.

A wave of corporate change is rising because the rabble and the stockholders share an interest: decent corporate governance. To shareholders, decent means more long-term corporate vision providing reasonable returns and fewer risky, quick-profit schemes benefiting only executives. To workers, the unemployed, community and environmental groups, decent means operating corporations in the best interest of the nation, including treating workers with dignity and refraining from polluting. Together, the rabble and the shareholders wield power.

They'll be exercising it inside and outside the ExxonMobil shareholder meeting next week. Some activist stockholders will seek approval of resolutions calling for the corporation to form a task force on climate change and to reduce greenhouse emissions.

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• MORNING MESSAGE: What The Bain Debate Is Really About
• President: Bain Is "What This Campaign Is Going To Be About"
• Push To Toughen Volcker Rule
• Breakfast Sides

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The 2012 presidential election may go down as one of the strangest political seasons in recent memory, for the simple reason that the influence of the financial sector in politics, policy and the economy has caused Republicans to sound like Democrats and Democrat to Sound like Republicans — usually with confounding results. When Republicans sound like Democrats, like Newt Gingrich attacking Mitt Romney's record at Bain Capital, they tend to start arguments they can't win. When Democrats start sounding like Republicans, like Cory Booker defending Bain Capital, they tend forfeit arguments they could win. That's because, in both cases, the politicians are arguing about the wrong things, in order to avoid the real argument  — the one America needs to have, and Americans need to win; the argument over what kind of economy we will have going forward.

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I attended a lunch gathering with economist and NY Times columnist Paul Krugman, who is speaking today in San Francisco about his new book. Paul Krugman will also be speaking at the Take Back The American Dream 2012 conference that takes place June 18-20 in Washington, DC. Please click through for details and registration information.

At today's lunch gathering Krugman explained that he calls our current economic circumstances a "depression" rather than a "recession." A recession is a temporary downturn. We have had a recession. A depression is an ongoing bad economy, with high unemployment, and no sign of how we will get out of it. Krugman says this is essentially the same kind of situation that John Maynard Keynes described in the 1930s: “a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.”

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Originally posted at Capital Gains and Games.

I can't tell you the number of focus groups I've watched and polls I read where the overwhelming opinion was that federal spending could be cut without any decrease in the quantity and quality of what the government does.

Hell...As I posted about in 2010, even the recommendation from the co-chairs of the Bowles-Simpson commission -- who definitely should have known better -- proposed a reduction in the number of federal employees and the number of consultants but, presumably based on the assumption that the government wouldn't have to stop doing anything it was already doing, didn't suggest any activity be eliminated.

That's why this story in The Washington Post from several days ago caught my eye. The Defense Department has decided that what since the 1950s has been an annual show for the public at Andrews Air Force Base (now officially Joint Base Andrews) in suburban Maryland will now be held every other year. The savings are projected to be $2.1 million a year.

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False equivalence of the day:

Appearing on NBC’s “Meet The Press” on Sunday, Newark Mayor and Obama bundler Cory Booker said he was “uncomfortable” with the Obama campaign’s attacks on Mitt Romney’s career with Bain Capital.

“It’s a distraction from the real issues,” Booker said, of both attacks on Bain and Rev. Jeremiah Wright. “It’s either gonna be a small campaign about this crap, or it’s gonna be a big campaign about the issues the American public cares about.”

“I’m not about to sit here and indict private equity,” Booker added. “If you look at the totality of Bain Capital’s record, they’ve done a lot to support businesses — to grow businesses. And this to me, I’m very uncomfortable.”

No, attacks on Bain are not the equivalent of attacks on Jeremiah Wright and no, it is not a distraction from the campaign, it is the campaign. Or it should be.

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• MORNING MESSAGE: After JPMorgan Chase, Break Up The Banks
• JPMorgan Chase Scandal Deepens
• Will G8 Lead To Global Stimulus?
• Ryan Goes Orwellian
• Supreme Court May Reconsider Citizens United

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When Jamie Dimon revealed that JPMorgan Chase had lost billions through risky and legally questionable trading, he said the losses would be about $2 billion and maybe more. Apparently it is more - a lot more. People in a position to know are saying the real figure is probably in the $5-7 billion range.

The JPMorgan Chase scandal - and yes, it is a scandal - shows us why we need to break up the big banks as quickly as possible.

But that won't happen unless we can get our hands around the real scope of the problem, which is probably far greater than we're being told. That means cutting through the enveloping shroud of jargon, euphemisms and double talk - "crap," if you will - that keeps us from seeing the situation as it really is.

Here's why we need to do it, and here's how.

Talk Talk

Two images come to mind when considering too-big-to-fail banks like JPMorgan Chase: The first is of the gigantic spaceships hovering over all of the world's cities in Independence Day, leaving the citizenry in shadows and the world in fear and uncertainty.

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Facebook's initial public offering last week 'offered' the world another double dose of windfalls and greed. But Egypt's elections this week may bring an IPO of a different sort, the 'initial public offering' of an antidote to avarice.

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