Reno Isn't Goldman Sachs' Only ARS Victim

Yesterday, News 4 Reno did a quick piece on it.



But as we discussed yesterday, there's far more to this story than what initially meets the eye. Apparently, Goldman Sachs convinced Reno to issue $210 million in "auction rate securities" that ultimately cost the city far more than Goldman told them once the 2008 financial crisis hit and the "auction rate securities" (ARS) market turned out to be far less stable than Goldman claimed it was. In fact, it looks like Goldman has run into trouble on this issue before.

Last year, Goldman Sachs had to settle a law suit with Colorado's Division of Securities and buy back over $5 million worth of ARS after investors there complained about their inability to sell once the ARS market was frozen. And after New York's Attorney General began investigating Goldman in August 2008 over concerns that they pushed Fidelity Investments to sell Goldman underwritten ARS to investors, Fidelity agreed less than a month later to buy back $300 million worth of ARS from its customers.

Back in February 2008, just as the entire ARS market was starting to crash, The New York Times probed what was happening behind the scenes... And did this story that sounds awfully prophetic today.

In 2006, the Securities and Exchange Commission reached a $13 million settlement with 15 investment banks, and the industry agreed to impose a voluntary code of conduct for the auction-rate market.

The S.E.C. investigation centered on how bidding was conducted for these securities. Critics complain that investment banks have the upper hand in bidding because they can bid after seeing what other investors have bid.

Brokerage firms are not legally obligated to make a market in auction securities, or give clients a price even if there is not one in the market. But clients who are unable to sell are likely to argue that they were wrongly put into long-term securities when their intention was to buy shorter-term debt.

“If these were pitched as cash equivalents, if that is what the broker said they were, the banks may be held responsible for losses and clients’ inability to get their money out,” said Jacob H. Zamansky, a securities lawyer who represents individual investors.

Goldman Sachs and Merrill Lynch declined to comment.

The situation is an awkward one for investment banks and brokers that have had to tell clients that their cash is frozen until at least the next auction — if not longer. One affluent New Jersey family has sued Lehman Brothers for the declining value of its cash in auction-rate securities. Lehman has said it acted properly.

Money managers, chief executives and individual investors have been swept up by the latest turmoil in the credit markets. One wealthy investor said Goldman Sachs had sold him auction-rate securities and had described the instruments as equivalent to cash.

“It’s a moral outrage,” said this investor, who asked not to be named because he still has to deal with the bank. “Their pitch was, keep your cash with us, we get a higher rate.”

And this brings us back to Reno. Remember that in 2005 and 2006, Goldman Sachs was telling the City of Reno that ARS were essentially as good as gold when Goldman convinced Reno to issue that $210 million in ARS for the events center and railroad trench projects.

The city is seeking arbitration against the bank through the Financial Industry Regulatory Authority (basically, a private court for financial institutions), “to recover the damages it sustained due to Goldman’s misrepresentations and omissions” when the city issued the bonds in 2005 and 2006 for its downtown events center and railroad trench projects, according to complaint filed in February. Those bonds were issued on the so-called “auction rate securities” market, which collapsed amid the global financial meltdown in February 2008. [...]

Cities figured that would result in lower interest rates over time and investors thought they could get a liquid investment at higher interest rates compared to other liquid investment options like money market funds.

What cities and investors didn’t know, according to state and federal court filings against banks involved in the auction rate securities market, was the extent the market relied on the financial institutions to keep it running.

In other words, the banks were keeping the market alive by bidding on the bonds, too — and didn’t tell anyone. So when the banks stopped making those bids in February 2008 as the credit crunch began to squeeze the financial system, Reno’s interest rates spiked on the downtown events center bond and forced the city to drain a $5 million reserve fund to cover interest payments that jumped to 15 percent overnight. The city was also forced to pay millions of dollars in fees to the bank to refinance the debt.

Reno’s filing with FINRA says had the city known the market was so dependent on banks like Goldman Sachs — the Biggest Little City’s big bank of choice throughout much of aughts — it would have thought twice about issuing the debt on the auction rate securities market.

“…Goldman’s actions, misrepresentations and omissions demonstrate that it dd not deal fairly with Reno, and as a result Reno sustained extensive damages,” according to Reno’s filing.

So Reno thought that ARS would save them money over a traditional bond sale while still providing the city with needed funding for its infrastructure projects because Wall Street powerhouse firm Goldman Sachs told the city so. And investors thought ARS were "solid and safe" because Goldman Sachs told mutual fund providers like Fidelity to tell them so. What neither side knew was that both sides were being played as "Muppets", as former Goldman Sachs insiders Greg Smith and Jacki Zehner would later admit.

Here's Greg Smith in his own words (from his own New York Times Op-ed):

What are three quick ways to become a leader [of Goldman Sachs]? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus,God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

So the City of Reno may just be one of a multitude of ARS victims played by Wall Street "vulture capitalists" like Goldman Sachs. The Reno case just may be the first time that a municipality convinced into selling ARS seeks compensation for subsequent losses. And strangely enough, Reno may now be providing the Occupy/99% movement with something far more valuable than a pool complex to organize around.

Reno v. Goldman Sachs

We know Reno is still enduring some tough times. Gaming has been struggling (although the February gaming numbers suggest a turnaround may finally be underway), and employment recovery seems to be lagging behind Southern Nevada. And even the city itself has had to struggle with its finances. However, the City of Reno is now claiming that its financial problems were caused by something deeper than just the business cycle.

Yesterday, Reno announced its plans to sue Wall Street powerhouse Goldman Sachs over $210 million in supposedly "safe" bonds that Goldman persuaded Reno to issue... $210 million in "auction rate securities" that ended up essentially junked once the 2008 Global Financial Crisis triggered "The Great Recession".

Joe Peiffer, an attorney with the New Orleans-based law firm Fishman Haygood Phelps that was hired in December to represent Reno, said Wednesday those damages could total into the “multiple millions” of dollars.

He said Goldman Sachs withheld key information when it told Reno to issue bonds on the $330 billion “auction rate securities” market that ultimately fizzled in 2008 amid the global financial crisis.

“The problem was they weren’t told everything (they) needed to know to understand the risk,” Peiffer said. “It was something the banks knew and didn’t tell the cities.”

As a result of the market crash, Reno’s interest rates spiked, forcing the city to scramble to refinance through Goldman Sachs, which also served as Reno’s underwriter and broker-dealer for the bonds.

That resulted in millions in extra fees and interest payments.

This included the city draining a $5 million reserve fund to cover interest payments on the event center debt after the interest rate jumped to 15 percent and an $8 million termination fee it paid Goldman to fix the downtown trench debt.

So what exactly happened? Let me... No, I'll let RGJ's Brian Duggan explain.

So what exactly is an “auction rate security”?

It’s a relatively complex financial instrument that has been around since the 1980s (and first introduced to the municipal market in 1988 by Goldman Sachs, according to the New York Times). It allowed municipalities to issue long term debt at short-term interest rates by resetting the rate every seven to 35 days in a formalized bidding process.

Cities figured that would result in lower interest rates over time and investors thought they could get a liquid investment at higher interest rates compared to other liquid investment options like money market funds.

What cities and investors didn’t know, according to state and federal court filings against banks involved in the auction rate securities market, was the extent the market relied on the financial institutions to keep it running.

In other words, the banks were keeping the market alive by bidding on the bonds, too — and didn’t tell anyone. So when the banks stopped making those bids in February 2008 as the credit crunch began to squeeze the financial system, Reno’s interest rates spiked on the downtown events center bond and forced the city to drain a $5 million reserve fund to cover interest payments that jumped to 15 percent overnight. The city was also forced to pay millions of dollars in fees to the bank to refinance the debt.

Reno’s filing with FINRA says had the city known the market was so dependent on banks like Goldman Sachs — the Biggest Little City’s big bank of choice throughout much of aughts — it would have thought twice about issuing the debt on the auction rate securities market.

So long story short, this was just another one of Wall Street's "Get rich quick!" schemes that had municipal governments thinking they were getting a great deal on bond revenue when they were really just getting hosed. And believe it or not, a former Goldman Sachs executive has at least suggested that his former employer hosed Reno. In fact, Greg Smith, the former Goldman Sachs executive director who ran the firm's US equity derivatives business in Europe, the Middle East, and Africa took to The New York Times' Op-ed page last month to blow the whistle.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

Shortly after Smith left Goldman Sachs, Jacki Zehner, the youngest trader and first female trader to make partner in the firm, stepped forward to confirm Greg Smith's account of what happened at Goldman Sachs. And Zehner actually expressed regret over Goldman Sachs' creation and sale of "so much junk" in the form of "mortgage backed securities", credit default swaps, and auction rate securities that duped so many clients and investors and led to the 2008 financial collapse.

So much junk was created that should never have been with disastrous consequences and that will be a black mark on the whole industry for a long time, as it should be. That in and of itself is testimony to the industry in general having lost its way. When you create toxic waste and market it as if it is was not, you are indeed harming your moral fiber. I know many people who were in ‘that business’ who quit because they could not in good faith sell the crap they were being asked to create and market.

Last year, the Occupy/99% movement sprouted as a protest against Wall Street greed run amok. Back in October, Occupy Las Vegas famously made a mark on the CNN/Western Republican Leadership Conference Presidential Debate.



And of course, this was the same week that Mitt Romney infamously declared that no one should try to stop home foreclosures. Romney and his affiliated PACs have received over $1 million from Goldman Sachs so far this cycle, and he's responded with calls to repeal the kind of financial regulations that curb the kind of "so much junk" that Goldman Sachs has profited from.

Until last month, Goldman Sachs was becoming controversial because of its role in the mortgage meltdown and real estate collapse. But now, we're seeing another way that Goldman made money while putting people at risk. Now, we're seeing an entire city in crisis.

I'm sure we'll be hearing about Reno's "reckless fiscal policy" in the coming days. And yes, the City of Reno may not entirely be blameless in green-lighting this scheme to score "easy money" and avoid making tough decisions on revenue. However, I also have a hard time seeing how Reno could have done this on its own without Goldman Sachs "whispering sweet nothings" in city leaders' ears. It's increasingly looking like Wall Street's top financial powerhouse had a key role in Reno's present crisis at City Hall. We'll have to see how liable Goldman is ultimately held for this, but for now we're reminded again of what happens when we carelessly brush off regulation and oversight to let the financial industry make up its own rules.

2012: The #Occupy Election?

Last fall, attention quickly turned to the Occupy Wall Street protest/encampment that (at least temporarily) radically reshaped civic life in Lower Manhattan... And then the thousands of supportive Occupy protests that arose all over the country. Soon, we were talking about "The American Autumn". And then, all of a sudden, by November they seemed to lose steam and close up shop (either due to inclement wintry weather or by police force). At the end of last year, I was wondering how #Occupy would reemerge in 2012.

Now, we have our answer.

Inequality. Fairness. Cracking down on CEOs. These could be hand-painted slogans on Occupy movement signs.

Or they could be the takeaways from President Obama’s latest State of the Union address and his subsequent tour across several swing states. In yet another sign that the Occupy movement’s call for a focus on the income gap has solidified Democratic messaging, the President’s first big political moment of 2012 has a decidedly Occupy Wall Street tinge. [...]

“I think you can empirically say that [Occupy] has brought the issue of income inequality and basic fairness into focus in a way nothing else had for a long time,” the strategist said. “But as for the President, he has been saying the same things about fairness and rules of the road that everyone has to follow, for a long time.”

Think about it. Especially since last fall, President Obama has been talking more about economic inequality. And this subject has become front and center on voters' minds. And progressives finally seems to have a common theme to rally around.

Oh yes, and it also helps that as Democrats have (re)discovered the message of the 99%, the G-O-TEA has embraced the "mystique" of the top 1%.

Furthermore, there’s an increasing focal point for these messages: Mitt Romney. True, the polls done on Newt Gingrich’s negatives are such that most Dems go to bed at night dreaming of running against the former House Speaker. However, in their heart of hearts most believe it’s just not going to happen, and that Romney will emerge as the nominee. Even a few months ago that thought caused some to tremble: after all, at that point Romney’s path to the nomination apparently ran through taking down Rick Perry and his tea partying talk on Social Security, then presenting himself to the public as the moderate who’d taken on the extremists within his party and won. As it panned out, Romney’s had to run increasingly to the right, and the fact that he tallies so perfectly with OWS’s messages about economic unfairness is the icing on the cake. Don’t expect to see Democratic bigwigs donning Guy Fawkes masks, but do expect to hear their rhetoric draw nearer to that of the protestors.

Remember this?



And remember: Mitt Romney said that while he was here in Nevada to pander to TEA-nut extremists.

And especially as 2012 has begun, Mittens keeps reminding us why he's "Mr. 1%". Even his fellow G-O-TEA contenders are using matters of economic justice to attack Mittens!



Perhaps Occupiers weren't able to convince the Reno City Council to pass their resolution rebuking Citizens United, but they may end up influencing something far bigger: this year's Presidential Election. Again, matters of economic justice are now at the forefront of national discussion. And especially here in Nevada, we need answers on these questions. And at least thanks in part to The 99% Movement pushing to redirect focus onto economic inequality and economic justice, we may finally get them.

10 of 11: #Occupy

After "The Arab Spring" and Europe's summer of discontent, many were wondering why America couldn't protest what we supposedly couldn't stand. Well, we all now know what happened next...



"The American Autumn" began, and it came here in full force.

It probably doesn't help that despite economists marking the official end of "The Great Recession", household income continued to fall nearly 7%. No matter how much we say the recession is over, for many Americans, and a whole lot of Nevadans, it rages on as they live in fear of losing everything. But in the last couple of years, that fear has been turning into anger. In the beginning, "Tea Party, Inc." was hoping to co-opt that anger and direct it at "LIB-RULZZZ!!!" But now that Occupy Together is offering a non-corporate alternative to the "tea party" corporate front groups, people are realizing they now have a chance to redirect their anger at the forces that really caused this mess. [...]

This is why Americans are angry, and this is why Occupy Wall Street may become more than just one protest. People want jobs, but Congress does nothing. People are feeling ignored. Even while the 99% suffer, no one cares as long as the top 1% continues to prosper. Though people are demanding real economic solutions now, all they're seeing on Capitol Hill is more bickering about policies that do nothing to help formerly middle class workers.

This is why Americans are angry. They feel like the system is broken. And really, can we blame them? Can we blame them for being angry at Koch Industries buying as much "free speech" as they want with each upcoming campaign while they were continually ignored?

It even came here and reached us locally. Down south it seemed to hit a climax in October, when the G-O-TEA thought they were just going to see a debate and do a conference inside. They didn't expect an uprising outside.

Yes, there were a few conspiracy nuts. And there were some Ron Paul fans. And there were some genuine socialists.

However, there were also unemployed workers. And there were frustrated students. And there were union workers. And there were angry seniors. And there was an amazing cross-section of Southern Nevada present outside The Venetian. For all of Wall Street's efforts to smear and denigrate the Occupy/99% movement, there's obviously far more to it than just the small radical fringes that's really resonating with the strong majority of Americans. And that scares the corporate powers that be.

This is what scares them.

They just can't lump together all the Occupy/99% protesters as "crazies". It's easy to zoom in on one person and try it, but it's not so easy to dismiss this kind of crowd. And it's not easy to dismiss the policy ideas that most in Occupy support that most Americans also support, such as making the super-rich pay their fair share so we can make better investments in taking care of our seniors, putting people back to work, and educating our future leaders. The big corporate powers that be simply can't spin that as "fringe" or "extreme", and that scares them.

It seemed like The 99% Movement was about to "go big" and reshape American politics, but then it hit a snag. Winter was fast approaching (btw, Happy Solstice!), and so were the cops. And in the process, it seemed like Occupy was losing steam. Honestly, I was getting concerned.

However, I am concerned about The 99% Movement going forward. Is apathy laced diaspora the best approach to this next election? An election that can take this country in a radically different direction? An election that will again prominently feature the Supreme Court? An election that may feature [Mitt Romney or Paul-Gingrich-Perry-???], both of whom holding nothing but contempt for the 99%, as the Republicans' Presidential Nominee? An election that will either get Congress working for the 99%, or result in a Congress that's even more hostile to the 99%? When much is at stake here, I don't see the use in progressives sitting out this election to engage in street theater... While "Tea Party, Inc.", is set to spend however much it takes to take full control of the government.

If one wants to change the system, one can't just sit back as a bystander. One must work to create that change. And while protests are fine and dandy and a great way to express one's right to free speech, protests alone will not solve our problems. We have to remember to vote, too.

But then this happened, she came back, and I saw reason to hope again.

It can be quite easy to become discouraged by the whole process. And it can be quite easy to become distracted by the endless media hype and speculation over meaningless "dog and pony shows". And it be quite easy to become disgusted by all the dirty corporate money thrown around. Sometimes, it's quite difficult to remember what really matters.

However, we just can't forget. We can't forget the importance of getting involved, contacting our members of Congress, building a real movement, and ultimately using our votes to change what we don't like. That's the beauty of our system, and that's something we should never feel compelled to give up.

We can't wait for job creation. And we can't wait for an end to Congress' charade games that keep threatening middle class families. We need real, bold action on job creation. And if the current G-O-TEA House majority prevents Congress from acting, then we need to change Congress by occupying the vote.

Hopefully, this will finally come to fruition in 2012.

The Message for 2012 (Who's with the 99%)

Apparently, local media are now noticing what we have been talking about here for some time. For all the talk about President Obama facing "DOOM!!!", he looks to be the only candidate with a real grassroots base and campaign infrastructure here in Nevada.

But today, I don't want to talk about just that. I also want to discuss the message. This morning, we caught a glimpse of this continuing work in progress as top Democrats stressed the need to address job creation and income inequality while certain Republicans again used "TAXES!!!" as a proxy battle for the same old class warfare. For all the rumors about Obama "abandoning the working class", we're not seeing that as his actions speak louder than certain pundits' words.

Nick Kristof reminded us this past weekend of what President Obama has actually done.

The administration helped tug us back from the brink of economic ruin. Obama oversaw an economic stimulus that, while too small, was far larger than the one House Democrats had proposed. He rescued the auto industry and achieved health care reform that presidents have been seeking since the time of Theodore Roosevelt.

Despite virulent opposition that has paralyzed the government, Obama bolstered regulation of the tobacco industry, signed a fair pay act and tightened control of the credit card industry. [...]

In foreign policy, Obama has taken a couple of huge risks. He approved the assault on Osama bin Laden’s compound in Pakistan, and despite much criticism he led the international effort to overthrow Muammar el-Qaddafi. So far, both bets are paying off.

This looks an awful lot like support for the 99% to me.



Yet while Obama hones in on this one message, leading G-O-TEA hopefuls can't seem to pick just one!



Even conservatives know who Mitt Romney works for (hint: think 1%). And seriously, it's not like the other G-O-TEA hopefuls are all that different.

In a sign of the growing impact the 99 Percent Movement is having, New Hampshire Union Leader publisher Joe McQuaid explained today on Fox News that his paper endorsed Newt Gingrich rather than Mitt Romney for the GOP Presidential nomination because the latter represents the one percent and is politically damaged because of it. “I think — and this is crazy, but so are we — that Gingrich is going to have a better time in the general election than Mitt Romney,” said McQuaid. “I think it’s going to be Obama’s 99% versus the 1%, and Romney sort of represents the 1%.”

Indeed, Romney’s net worth is estimated to be as high as $250 million — and much of this money was made through the same sort of corporate mergers and layoffs that have continually ripped off the 99 Percent. Ironically, Gingrich is also part of the one percent, “earning $2.5 million in personal income last year,” much of it accrued from using his government connections to assist major corporations.

OK, so even Romney can stick to this message! Without a doubt, a huge contrast is forming. Who's willing to work for the 99%? And who only cares about the 1%?

This is the message going into 2012. And this points us toward the real choice we will be making with our ballots next year.

Why Occupy?

Yesterday, this happened in Northern California.

At the University of California at Davis this afternoon, police tore down down the tents of students inspired by the Occupy Wall Street movement, and arrested those who stood in their way. Others peacefully demanded that police release the arrested.

In the video above, you see [UC Davis Police Lt. John Pike] walk down a line of those young people seated quietly on the ground in an act of nonviolent civil disobedience, and spray them all with pepper spray at very close range. He is clearing a path for fellow officers to walk through and arrest more students, but it's as if he's dousing a row of bugs with insecticide.

Wayne Tilcock of the Davis-Enterprise newspaper has a gallery of photographs from the incident[...]. Ten people in this scene were arrested, nine of whom were current UC Davis students. At least one woman is reported to have been taken away in an ambulance with chemical burns.

The Davis Enterprise has even more scenes from yesterday's brutal show of force. So why did this happen?

Look at UC Davis getting shortchanged again. Look at rising tuitions. What used to be "The American Dream" has become a horrid nightmare as college education has become increasingly unaffordable for working class families.

Yet again, the 99% are under attack... And the 1% are striking back.

Visit msnbc.com for breaking news, world news, and news about the economy

If you were wondering why protesters have been risking it all, even their very lives (as the occupiers at UC Davis did), here's why. The American Banking Association's lobbyists want them to spend $850,000 on opposition research alone! And then, they want to not only smear Occupy's already controversial public image, but also use Occupy to hurt Democratic candidates across the country.

This is the intersection of crony capitalism and political corruption that has more and more Americans up in arms. When they see that the $222.7 BILLION in taxes that big corporations avoided paying could have created over 100,000 jobs in education, they get angry. And when they see that billionaires continue to abuse the tax code to avoid paying taxes, they get angrier. Is there any wonder why people are hitting the streets? It's just sad to see such brutal force being used on protesters.

As we were talking about yesterday, stuff like this can easily discourage people from taking action. However, we simply can't allow apathy to take hold. What do you think creates this?

The End of #Occupy? Or a Restart of New Economic Justice Movement?

This morning, the #OccupyOakland encampment is being shut down.

Oakland police have arrested about 25 protesters at the sprawling Occupy Oakland encampment outside City Hall while hundreds of law-enforcement officers square off against demonstrators downtown in the second such raid of the tent city.

Law-enforcement officers from numerous Bay Area agencies began arriving in force at 5 a.m. as a police helicopter flew overhead. Clad in armor and riot helmets, they stood in lines and surrounded the camp near the corner of 14th Street and Broadway adjacent to Frank Ogawa Plaza, where dozens of demonstrators have been camping to protest economic inequity and corporate greed.

And over the weekend, Occupiers were forcibly removed from encampments in Portland, OR, Salt Lake City, Denver, and elsewhere. There's still a whole lot of drama surrounding #Occupy, but it looks like its moment in the national spotlight is winding down as reports of violence (by anarchists camping there, as well as by police), homicide investigations at Occupy encampments, internal organizational strife, and just plain winter weather are taking their toll on the movement. So is "The 99% Movement" over?

Not quite. Look at what they have accomplished in less than two months. And look at how the national conversation on the economy is changing.





And look at how far the previously unchallenged dogma of inequality and austerity has fallen. Even in Politico's newest poll, there was strong support for progressive tax reform and strong opposition to gutting the social safety net! Obviously, progress is being made.

However, I am concerned about The 99% Movement going forward. Is apathy laced diaspora the best approach to this next election? An election that can take this country in a radically different direction? An election that will again prominently feature the Supreme Court? An election that may feature this guy or this guy, both of whom holding nothing but contempt for the 99%, as the Republicans' Presidential Nominee? An election that will either get Congress working for the 99%, or result in a Congress that's even more hostile to the 99%? When much is at stake here, I don't see the use in progressives sitting out this election to engage in street theater... While "Tea Party, Inc.", is set to spend however much it takes to take full control of the government.

If one wants to change the system, one can't just sit back as a bystander. One must work to create that change. And while protests are fine and dandy and a great way to express one's right to free speech, protests alone will not solve our problems. We have to remember to vote, too.

I know there's been plenty of disappointment to go around on the left side of the aisle... But come on, we can't ignore the facts. Who delivered for us the first big leap to universal health care, more opportunities for returning military veterans, financial reform, student aid, and more? And who doesn't care about smart foreign policy, ending the foreclosure crisis for good, or doing what's really needed to restore our economy?

Oh yes, and there's more at stake than just The White House. Again, if we want change, we can't keep filling Congress with the same extreme "tea party" ideologues. And we can't keep letting these extremists wreck our state houses. And we can't keep letting these extremists push more initiatives to hurt the working class and roll back our civil rights.

Long story short, we need to occupy the voting booths... And we need to be relentless in urging others to join us! That's the only way this 99% Movement can ultimately succeed. And yes, I want to see it succeed. I just don't see how endless conflicts with local governments over actual space to occupy will help the movement. Registering more voters, on the other hand, most definitely will.

GOP to Nevada: Drop Dead

This week began with Mitt Romney telling The R-J Editorial Board that he wants to see MORE home foreclosures. Here's what Romney said:

As for what to do for the housing industry specifically, and are there things that you can do to encourage housing? One is don’t try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama administration has slow-walked the foreclosure processes that have long existed and as a result we still have a foreclosure overhang.

And here's reality.

Romney’s callous disregard for families losing their homes through no fault of their own is bad enough. But it’s also not true that speeding foreclosures is good for the economy, as every foreclosure drags down the value of the homes around it. The Roosevelt Institute Mike Konczal has pointed to research showing that “foreclosures were responsible for 15% to 30% of the decline in residential investment from 2007 to 2009 and 20% to 40% of the decline in auto sales over the same period.”

And, of course, focusing only on those homeowners entering the foreclosure process legally ignores the vas amounts of fraud that banks perpetrated in order to speed foreclosures, such as robo-signing and fake notarization of documents. Romney already has the lobbyist for a notorious foreclosure mill fundraising for his campaign — perhaps he should take a moment, while he’s in Nevada, to talk to those who are on the other side of the equation.

Now guess who's piggybacking off Romney's callous disregard for formerly middle class homeowners getting roughed up by the big banks? Oh yes, that's right... New GOP frontrunner darling, Herman Cain!

Cain is championing the same group whose bad mortgage loans helped spur the financial implosion of 2008, has left over 1 million Americans with foreclosed homes, and may push an additional 5.9 million Americans to that outcome over the next few years. Banks and their lobbyists have openly “delayed, diluted, and obstructed attempts to address the problem.” Instead, banks unleashed “robo-signers,” officials who sign foreclosure forms without reading them, and managed to set a foreclosure record last year despite their self-imposed foreclosure moratoriums.

What’s more, by calling for an end to the Dodd-Frank regulations to protect foreclosure victims, Cain is jeopardizing key consumer protections for those looking to own a home. The Consumer Financial Protection Agency — which Republicans are hell-bent on obstructing — is designed to stop predatory lending by helping prevent mortgage brokers from putting borrowers into higher interest loans, regardless of their long-term ability to pay. The Dodd-Frank bill also stops banks from selling off an entire loan to avoid the risk of mortgage default, another problem that contributed to the financial meltdown. The law requires lenders to retain 5 percent of every loan — a policy banks are desperately trying to repeal.

They don't get it. They really don't get it! Nevada is still on top of the foreclosure heap, families are still losing their homes to foreclosure, and the Republican candidates have nothing to offer.



Perhaps this is why #OccupyLasVegas shouted out on Tuesday when CNN was tossing out the usual pre-debate spin. CNN was trying to keep the focus on the inane and insane inside The Venetian, but they couldn't entirely drown out the voices of the people outside. The 99% refused to be ignored.

"The Republicans want to take us low-income people, they want to take more taxes from us and give to the rich," Las Vegas resident Quenton Gavin said. "They're robbing us for what we don't have."

Nevada has the highest unemployment rate in the nation and an ongoing foreclosure crisis. The GOP debate held there offered few solutions, focusing instead on attacking undocumented immigrants, repealing health care reform, slashing taxes and easing regulations.

"It's just the same broken record," Las Vegas resident Judy Ostapow said. "Deregulate, cut taxes for the wealthy, and this is going to stimulate jobs. Well it hasn't stimulated jobs in all these years that they've had these tax cuts and deregulating and it hasn't done anything. It's just made the problem worse."

Look at what the Occupy/99% movement is demanding, what the American people want, and what the Republicans have been talking about this week. The contrast couldn't be any clearer.

Again, there's a reason why these people have been taking to the streets. There's a reason why they've become so frustrated with the current political system. And there's a reason why they couldn't relate to the crap being tossed at the Sands Expo stage on Tuesday.

Right now, the media are focusing on the RNC tag-teaming with New Hampshire Republicans to try to force the Nevada GOP to give up its early caucus. And right now, it looks like the Nevada GOP may cave to a certain extent and push its caucus back to January 17, or perhaps all the way back to February 4. What's so hilarious about this fiasco is that it all started when Florida (again) broke GOP rules by moving its primary to January 31, which drove all the "officially approved early states" to leap-frog Florida. Yet so far, Nevada looks to be the state that will be punished the most for Florida's original sin. RNC Chair Reince Preibus is now promising Nevada Republicans he will do his part to "preserve Nevada's early status in future elections", but how can he be believed when the RNC couldn't stop Florida twice?

And really, this dating drama is just a small part of the bigger picture. More importantly, why won't any of the GOP candidates propose anything to halt the foreclosure crisis, put people back to work, and invest in our economy? Why are a few TEA-nuts more important to that party than the strong majority of the American people? Is it really all about the cold, hard cash?

Nevadans especially want answers on how to solve the foreclosure crisis, how to get people back to work, how to create and implement a 21st century energy plan, and how to move our country forward. But instead, all we hear from the GOP candidates, and their fanatical fans, is how to "take our country back" to The Gilded Age by repealing Wall Street oversight, repealing health care reform, and repealing the entire New Deal. There's a giant elephant in this room that GOP leaders and media pundits either can't see or won't see. No wonder why we keep seeing poll numbers like these.

#OccupyLasVegas: The Winner of Last Night’s Republican Debate?

(Also at The Nevada View)





Apparently, the scene inside The Venetian last night turned into a complete and utter train wreck. Mitt Romney continued to call for MORE foreclosures and more families losing their homes to the big banks. He also fought with Rick Perry over which of them hates Latinos more. Meanwhile, Michele Bachmann desperately begged to stay relevant by throwing out empty emotional platitudes as Newt Gingrich effectively told us in Nevada to "suck it up" and enjoy the nukes at Yucca Mountain. Oh, and of course Herman Cain threw more pot shots at the formerly middle class workers who have been taking to the streets as part of the #OccupyWallStreet movement.

So should it really come as a surprise that the winner of last night's debate (other than Barack Obama) was #OccupyLasVegas? ProgressNow Nevada started the festivities outside The Venetian with a rally and quick press conference on what the Republican candidates were about to talk about.



Afterward, the Occupy Las Vegas activists began to show up and protest alongside the folks who showed up earlier. I know we've all heard plenty about what can be found at Occupy/99% movement events, but I wanted to give you a chance to see for yourself who makes the Occupy/99% movement.





No really, look closely at these photos (and the ones I posted at the top).





Yes, there were a few conspiracy nuts. And there were some Ron Paul fans. And there were some genuine socialists.

However, there were also unemployed workers. And there were frustrated students. And there were union workers. And there were angry seniors. And there was an amazing cross-section of Southern Nevada present outside The Venetian. For all of Wall Street's efforts to smear and denigrate the Occupy/99% movement, there's obviously far more to it than just the small radical fringes that's really resonating with the strong majority of Americans. And that scares the corporate powers that be.

This is what scares them.



They just can't lump together all the Occupy/99% protesters as "crazies". It's easy to zoom in on one person and try it, but it's not so easy to dismiss this kind of crowd. And it's not easy to dismiss the policy ideas that most in Occupy support that most Americans also support, such as making the super-rich pay their fair share so we can make better investments in taking care of our seniors, putting people back to work, and educating our future leaders. The big corporate powers that be simply can't spin that as "fringe" or "extreme", and that scares them.







The Republicans on the stage inside The Venetian last night may be in love with Wall Street robber barons, but the American people are not. That's the key takeaway from last night. And over time, it may just show that Occupy has more staying power than any of the clowns on the GOP stage in The Venetian.

Occupy Nevada?

Carrying a sign that read, “We are the 99 percent,” Michael Gonzalez shouted to passing motorists, “Jobs on Main Street, not Wall Street.”

He was one of about 75 demonstrators in Carson City on Saturday who joined the global Occupy Wall Street movement, protesting corporate greed and a disenfranchised public.

“It's multifaceted,” he explained. “It's a lack of jobs. It's our economy. It's deficit trading with China. This is not a Democrat or Republican issue, this is a people's issue.”

That was the scene in Carson City yesterday. Yes, believe it or not, #OccupyWallStreet has now reached Carson.

Of course, #OccupyLasVegas also continued to grab attention and spark intrigue. They hit Fremont Street yesterday.

Andrew Hamby is one of the many faces of the Occupy Wall Street movement.

The 23-year-old Las Vegan went from having a job at Mandalay Bay, a home and a car, to living on the street.

“I became homeless in 2007 when I got laid off along with 2,700 other people,” Hamby said. “Lost my house, lost my car, moved in with my mom for a little while until she got kicked out of her home. Then I lived under a tunnel for a couple months. Now I’m staying with friends.”

So Hamby, along with men and women and children from all walks of life, took to the streets Saturday to protest corporate greed. The group joins the core Occupy Wall Street development that has sparked similar protests in many major U.S. cities for the past few weeks.

The hundreds of Fremont Street demonstrators shared similar stories. An elderly woman who is on the verge of losing her house, a disabled vet whose friends can’t find work, and a union steward who says she’s standing up for “the working man.”

“We’re all standing together now,” Hamby said. “It’s not every man for himself anymore, or at least that’s what I hope to try and make happen here.”

There was even a crowd of 250 in Reno yesterday.

The frustration of people such as Rodgers is exactly the driving force behind the Occupy Wall Street-type rallies now occurring nationwide, said Jared Lowell, a 26-year-old UNR student who helped organize the Occupy Reno movement. While a lot of people have lost their jobs and homes, big companies continue to get away with a lot of shady behavior while enriching their pockets, Lowell said.

“We’re upset with the extremely unjust distribution of wealth in this country,” Lowell said. “What we’re doing in Reno is not so different from what people are doing worldwide. We’re bringing people together to show that we’re united and not all that different from one another.”

At the same time, Lowell and his colleagues stressed that their movement is a non-violent cause that aims to raise awareness and educate people. Lowell pointed to several workshops they have planned on topics ranging from the global financial system to the importance of buying local. They also stressed that while they might talk about the problems with corporate influence on politics, their movement is apolitical and does not favor one party over another. Their focus is not about right or left, it’s about right or wrong, supporters said.

It's looking increasingly obvious that this budding movement isn't leaving center stage any time soon. So what can we expect in the days and weeks to come? Is this "The Tea Party of the Left" that some progressives have been longing for? Is this an effort to take down the American capitalist system as we know it? Will this root out the corporate money at the center of political corruption today? Or will this go in another direction?

We have yet to see. Republicans may be publicly changing their tune now after blaming protesters for their own economic woes, but their economic policies amount to the same old autotune of more pain and suffering for the 99%. Can the goals of the G-O-TEA be compatible with those of the Occupy/99% movement?

The Occupy/99% folks say they're nonpartisan now. Does this mean they are off limits to Democrats, too? Will these people even vote next year? Do they have any real political goals for the next year?

I guess we will find out as this goes on. We will have to see what kind of role Occupy/99% plays on the political stage. But without a doubt, they don't want to leave the stage any time soon. They will be a part of this play, and we will be seeing more of them here in our acts here in Nevada as campaign season rolls onward.

Obama Is DOOMED Next Year... Or Is He?

Whenever one flips on the TV and looks at the headlines, we see crap. We see the media obsessing over nonsense while ignoring the stories that legitimate news outlets in other parts of the world would consider "real news".

A good example of the problem with America's corporate media is with the latest obsession over "Obama FAIL!!!" They scream about a poll proclaiming, "55% believe Obama will LOSE!!!", but they don't ask any questions as to why those results came out when the actual head to head polls against leading Republicans tell a completely different story. When the Republicans can't even carry a quintessential swing state like Florida or pummel Obama nationally during what's supposed to be his "WORST. MONTH. EVER!!!", why isn't anyone asking why so many Americans believe Obama is certain to lose next year when all relevant data point otherwise?

I think we know the reason why. This is the narrative the media want. They know nothing drives up ratings and campaign ad buys like a knock-down, drag-out, neck-n-neck horse race. And they know President Obama is no longer the "sexy" "new guy", so they continue to search desperately for someone, ANYONE!, in the Republican Party who they can crown as "THE Next HOT Political Commodity!" as Republican primary voters still can't figure out which flavor of "TEA" they dislike the least.

Yet while the media keep asking stupid questions and providing even more asinine answers about Campaign 2012, they continue to ignore the real story of the year that they're too afraid to publicize. This is what most of the media won't talk about:





These were Ronald Reagan's own words in 1985:

We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy. [...] Do you think the millionaire ought to pay more in taxes than the bus driver or less?

See how effortlessly they fit into what Barack Obama is saying in 2011:

Now, when I point this out, some of the Republicans in Congress say, ‘oh you’re engaging in class warfare.’ Let me tell you something. Years ago, one great American had a different view. I’m going to get the quote, just so you know I’m not making this up. A great American said that he thought it was ‘crazy’ that certain tax loopholes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary.

Alright. You know who this guy was? It wasn’t a Democrat. It wasn’t some crazy socialist. It was Ronald Reagan. It was Ronald Reagan. Last time I checked, Republicans all thought Reagan made some sense. So next time you hear one of those Republicans in Congress accusing you of class warfare, you just tell them I’m with Ronald Reagan. I agree with Ronald Reagan that it’s crazy that a bus driver pays a higher tax rate than some millionaire because of a loophole in the tax code. And by the way, I don’t mind being called a warrior for the working class. You guys need someone working for you.

When today's Republican Party is even attacking long time conservative icon Ronald Reagan as "SOE-SHUL-IST!!!", why won't the media notice? And when more and more "ordinary people" "occupy Wall Street" and ask more questions about America's entire political system and why it has to be corrupted with so much corporate money, why won't the media notice? Well, I can definitely answer that last question. It's easier, cheaper, and less threatening to corporate media owners to just "pin the blame on Obama" and craft the 2012 narrative around "Obama FAIL!!!" than dig deeper in Washington and notice the bigger problem with American politics today.

In case you missed this now viral video featuring one blogger challenging an international media empire, watch:



Right there, we have a quick summary of what's wrong with our politics, the media's coverage of it, today. It's easy to just look at the angst and frustration now commonplace throughout America and make snapshot judgments on President Obama's reelection campaign. It takes much harder work to dig deeper and tackle the more serious questions of why Congress has taken no action this year to curb unemployment and address the deepening poverty crisis, and why the Republican Party has fallen off the deep end in celebrating extremely regressive and ineffective economic policy. And of course, that kind of work by reporters may not be appreciated by their corporate overlords. So instead, we continued to be subjected to more mindless "Obama FAIL!!!" drivel as media pundits keep searching for the perfect Republican candidate of their dreams and more "ordinary people" just get more frustrated.