10 February 2011
Patient Zero
(Patient Zero Joe Cassano emerging from his posh lair in Mayfair, near famed Harrods. Department Store Guardian Photo.)
I noted with interest this morning that the New York Stock Exchange is supposedly “in advanced talks” with the Germans to sell themselves to the owners of the Frankfurt Exchange. It is sort of far out, I thought, that Wall Streeters should be so bereft of any connection to their nation that they could contemplate getting rid of the iconic center of their physical world.
Of course, technology has rendered the actual trading floor irrelevant. Trading follows the working day around the world; my pal the Detroit Day Trader instructed me a couple weeks ago on how to schedule after-hours trades on the market by my home computer.
So the brick-and-mortar structure of the NYSE is kind of irrelevant Temporal or spatial locations mean nothing in the world of finance any more, so what the hell. Sell it off.
I doubt that douchebag Joseph Cassano, dubbed Patient Zero in the financial meltdown, ever spent an honest day in The Pit shouting out orders. He was much more cerebral in his approach to ruining the world, and he was a lying son-of-a-bitch then, and he is continuing to lie now.
Let’s accept him as Patient Zero in the mess, or at least let him be the Poster Boy for greed incarnate.
I was going to run a compilation of pictures of the former Masters of the Financial Universe today, hoping to put human faces on the scum that ruined America. I discovered that it had all been done already.
Those equally slimy jerks at ACORN had organized bus tours of the posh Connecticut homes of some of the major players in the massive Ponzi scheme, and much as I despise the criminally malicious conduct of the financiers, I am not a proponent of mob rule.
At least not yet.
In the early years of the AIDS plague, epidemiologists were hot to tag how it arrived in the bathhouses of New York and San Francisco. Experts at the CDC in Atlanta settled on a human face on whom to put the blame. They picked a sexually active flight attendant named Gaetan Dugas as Patient Zero, and vilified accordingly. The case against him has become murkier of late. I always thought that a 1977 port visit to Mombasa, Kenya, by the then San Francisco-based aircraft carrier USS Enterprise was just as likely a vector, but Gaetan was unapologetic and a likely villain.
So is Joe Cassano.
Joe’s Dad was a New York City Cop, so you would think there was some sort of concept about God Guys and Bad Guys, and an honest look at a blue-collar paycheck, but oh well. Joe graduated from Brooklyn College in 1977, the year I went into the Navy, and he went to Drexel Burnham to work for noted philanthropist and convicted criminal Mike Milken, the Junk Bond King.
(Junk Bond King Mike Milken in bad toupee.)
1987, American IG hired Cassano as one of the first ten people in their new Financial Products unit. In 1998, Joe was given the keys to the Engine of Doom as he was appointed head of the Transaction Development Group. In that role, he accepted the 1998 proposal by JP Morgan to package credit default swaps as Broad Index Secured Trust Offerings (nicknamed Bistros).
There is was- the mechanism to make him rich beyond measure. It worked because the Regulators were out to a very long lunch.
British blogger John Manchester sums up US Administration policy over the last twenty years this way:
· Insistence on free movement of capital across borders
· Repeal of depression era regulations separating commercial from investment banking
· A Congressional ban on the regulation of credit default swaps
· Major increases in the amount of leverage allowed to investment banks
· A Securities and Exchange Commission asleep at the regulatory switch
· An international agreement to allow banks to measure their own riskiness, supported by Alan Geenspan at the Fed
And finally, an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation
Here is how Joe played that negligence, right down the line. He sold hundreds of billions of credit protection in the form of CDOs without having to put up any real money as collateral. He didn’t have to, since that shit-heel Phil Gramm had rammed the Commodity Futures Modernization Act of 2000 through the Senate and got the twilight of Bill Clinton’s Administration to sign it into law.
When the house of cards of the sub-prime mortgage arrived, investment banks headed by the lead carnivore Goldman Sachs lined up to collect their insurance money to pay for the shorting of their “shitty loans.” Those are not my words- those belong to Goldman account execs in their internal e-mails, as read aloud by an incredulous Senator Carl Levin a couple years later.
The cupboard was bare, since Joe had never bothered to back his shitty CDOs with cash. That is how the American taxpayer wound up paying for Joe’s luxury flat in Mayfair.
In his twenty year career devoted to destroying the American Dream in the pursuit of his own, Cassano was compensated $315 million: $280 million in cash and the remainder in bonuses awarded for his reckless conduct. It sounds like a lot, but really, divvied up over twenty years, it only amounts to $16 million a year, though thankfully he was able to scrape by on some very handy tax breaks.
For the record, Joe was an equal opportunity political supporter, donating to Democratic Senator Chris Dodd, Chairman of the Senate Finance Committee, President Obama, and Republican Representative Nancy Johnson.
It gets still more exciting. Even after he was forced out of AIG, Cassano had a little cushion- even as Western Civilization was melting down, he scored a million-a-month consulting retainer based on what AIG CEO Martin Sullivan testified to Congress was his desire to keep his extensive and useful knowledge.
For the record, I think Mr. Sullivan ought to be in jail, too. He took over AIG in 2005 and stayed until the crisis was in full bloom. The guy who drives he getaway car in a capital crime pays the same price as the shooter, right?
Since Joe wisely fled the US for London, where his unit had a major office, there was talk about the UK’s Serious Fraud Office opening charges, and apparently even some regulators at the SEC roused briefly to consider if his conduct had been merely greedy, stupid or criminal.
They were all three, of course, but I have heard nothing about it lately and maybe they all went back to sleep. Mr. Cassano would not comment for this article, though I didn’t bother to ask him any more than he asked me about whether I wanted my life turned upside down.
The Administration appointed a Special Master to look into executive compensation on Wall Street as the trigger for the antics of all those Patient Zeros, who were willing to risk the world for their personal gain, but apparently the air has come out of that effort, and Goldman Sachs was permitted to engineer the commodities bubble in 2009 that tripled the cost of oil.
I can understand why the sale of The New York Stock Exchange, a symbol of American capitalism for more than two centuries, may rouse some angst.
It is all symbolic, though. The sale, if done, will create something really really Too Big To Fail.
Did you know that the City of Chicago sold the rights to operate its parking meters to a syndicate based in the UAE for the next seventy-five years? If one of the legendary Aldermen of the City o Broad Shoulders wants to shut down a block for a celebration, the city will have to pony up the lost parking revenue to the Gulf States.
It is a hoot. Chicago got cheated, which will be one of Rahm Emanuel’s challenges, if he gets elected.
It gets better, though. Did you know that the governor of Pennsylvania, Ed Rendell, was in the Middle East attempting to sell the long term rights to operate the Pennsylvania Turnpike?
I am not nearly as angry as I was yesterday. I realized today that the damage has been done, and nothing significant is in motion either to fix it, or to punish those who did it.
But of course, I doubt that we own our own government any more. Crap.
Copyright 2011 Vic Socotra
vicsocotra.com | Subscribe to the RSS feed!