November 5th

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November 5

Ex-Bear Stearns exec now at Fed

PAY ATTENTION!

The former chief risk officer at investment bank Bear Stearns Cos., which nearly collapsed in March, is now a senior official of the Federal Reserve division that supervises U.S. banks.

Michael Alix, who worked at Bear Stearns for 12 years and was its senior risk manager since 2006, was named a senior vice president in the bank supervision group of the Federal Reserve Bank of New York, according to an announcement by the Fed.

The appointment is apt to raise questions because of the key role Alix played at Bear Stearns and given the Federal Reserve’s role in Bear Stearns’ sale to JPMorgan Chase & Co. after its breathtaking slide. In his new job at the central bank, Alix will help oversee the financial safety and soundness of banks, which are inspected by Federal Reserve examiners.

“That’s incredible,” said James Cox, a Duke University law professor and securities law expert. “This is not reassuring. … What is there in this person’s experience and skill package” that qualifies him for the Fed position?

Cox and another expert said the selection of Alix might have made sense if he had sounded the alarm over Bear Stearns’ deteriorating financial situation.

“We don’t know what his role was within” the investment bank, said Charles Elson, a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware. On the face of it, the appointment “may raise an eyebrow,” he said.

New York Fed spokesman Andrew Williams declined to comment Tuesday.

In March, with Bear Stearns on the brink of bankruptcy, the Federal Reserve and Treasury Secretary Henry Paulson — with the involvement of Chairman Ben Bernanke and New York Fed President Timothy Geithner — orchestrated a buyout of Bear Stearns by JPMorgan. The deal was forged with a $29 billion federal backstop from the Fed acting as central bank

Federal prosecutors have been investigating the conduct of Bear Stearns managers before its blowup amid the collapse of the subprime mortgage market. Prosecutors have said they expect to bring additional criminal charges against two former Bear Stearns hedge fund managers who were accused last summer of lying to investors. The eventual implosion of the defendants’ hedge funds cost investors $1.8 billion and began a domino effect that pushed Bear Stearns itself to the brink.

Alix, who was appointed by the New York Fed’s board, officially assumed the senior vice president position Monday, the announcement said. He will be a senior adviser to William Rutledge, the executive vice president of the bank supervision division.

Alix’s appointment was first reported Tuesday by blogger Scott Rothbart.

Before becoming Bear Stearns’ chief risk officer in 2006, Alix was the bank’s global head of credit risk management from 1996-2006. Before that, he was credit officer and vice president at Merrill Lynch & Co.

In late September, the Securities and Exchange Commission ended a program of voluntary oversight for Wall Street investment banks that the SEC chairman said had not worked. Under the program, the SEC had inspected the five biggest Wall Street banks: Bear Stearns, Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Merrill Lynch and Morgan Stanley.

As the credit crisis deepened this fall, Lehman Brothers buckled under bad mortgage debt and made the biggest bankruptcy filing in U.S. history. Merrill Lynch agreed to sell itself to Bank of America Corp. That left only two independent investment banks standing on Wall Street: Goldman Sachs and Morgan Stanley. And both won approval from the Fed to change their status to bank holding companies in order to stay in business.

The regulatory shift allowed the two firms to create commercial banks that can take deposits, thereby bolstering their resources.

Nader Congratulates Obama on Campaign Victory

Senator Obama led a campaign of tactical brilliance that appears to be bereft of specific mandates. It is up to an aroused citizenry to organize behind these mandates which we were privileged to advance. These progressive mandates (living wage, Medicare for all, and a just foreign policy, and many more) reflect majority support and our long overdue redirections and reforms in our country.

Senator Obama will be President-elect Obama soon to preside over what our founders described as a representative government under our Constitution. Thomas Jefferson once said that the function of representative government is to “curb the excesses of the monied interests.” The corporate dominated government that Senator Obama inherits includes what President Dwight Eisenhower cautioned the nation against in his farewell address — the military industrial complex. It includes many other priorities entrenched by “the monied interests,” or global corporations, to drain and strip-mine the necessities and deserved justice long denied to so many Americans in their various roles.

Such challenges to apply available solutions to stagnant injustices and deprivations require a transforming leader who speaks truth with democratic power to falsehood and plutocratic power. This in turn demands a deliberate, thoughtful and challenging personality.

The Nader/Gonzalez campaign joins other Americans in wishing you well in the White House. We will remain alert to opportunities that advance those final words of the pledge of allegiance — “with liberty and justice for all.”

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It’s Finally Over
My parting thoughts on this election

I want to say that I am happy for soon to be President Elect Obama, but it’s hard, harder than I thought it would be, not for the nefarious reasons one might think after backing another candidate, but because I am battle harden after Bush, because I am worn out, because I do not trust the Democrats to do the right thing, they have let us down so many times before, so I am in a test pattern, on hold and I am watching carefully.

Last night was very pretty, Barack was pretty, his wife was pretty, his kids were pretty, Chicago was pretty and though I wasn’t moved greatly by his speech as some others may have been I understood the sentiments and effect it had in the hearts and minds of many.

What I most desire, what will bring a tear to my eye is if people actually get involved and make this public servant work for all the people. I will do my part, I hope you all will do yours, stay vigilant, aware, awake and most of all please participate, follow through and finish the job, take back your government.

thanks and goold luck!

ps be good winners reach out in an honest and positive way – then restore the Constitution and Bill of Rights.

People Demand Eviction of Bush

President Elect Barack H. Obama- what do we do now?