Wall Street blames China for meltdown - What is the truth?

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Chinese President Xi Jinping

Here we go again, when anything goes wrong in the world Obama, our politicians, and now Wall Street, blame China.  As I have written several times, maybe we should not rush to judgement until the facts have arrived.  In the meantime there are some truths that might suggest our economic experts continue to be wrong.

For example, ever since the second greatest stock market crash in history when President Obama took office, America has been struggling to regain an economic foothold.  In the past six years we have had one of the slowest recoveries in history and many people wonder if anything really did recover.

Well everyone on Wall Street certainly recovered including those nasty banks who manipulated the market and nearly destroyed the nation.  The greatest beneficiary was Goldman Sachs who also happened to be the largest contributor to the Obama campaign.

So great was their influence that Rahm Emanuel of Goldman became the first Obama White House Chief of Staff. A CBS News analysis of the revolving door between Goldman and government reveals at least four dozen former employees, lobbyists or advisers at the highest reaches of power both in Washington and around the world.

One would think after the loss of trillions of dollars of middle class wealth, home values, retirement funds, etc., Obama would have us prepared to manage another financial crisis. Yet in the most current economic crisis there is silence from the White House.  Come to think of it, after all these years since the last crisis, there has been virtually no prosecutions, no fat cats in jail, no banks dissolved, nothing considering the degree of the crime.

So here we are, six years later blaming China for our stock woes.  What happened to all the financial reforms?  Here is a list of  government agencies and congressional committees and subcommittees, the executive and legislative branch resources, to maintain our economy.

U.S. Government Executive Branch Financial Regulators

Bank and Market Financial Regulators

US Department of Treasury

US Department of Justice

Office of the Comptroller of the Currency

Office of Thrift Supervision

Securities and Exchange Commission

Federal Deposit Insurance Corporation

Commodities Futures Trading Commission

National Credit Union Administration

Non-Bank Financial Regulators

Federal Housing Finance Agency

Consumer Financial Protection Bureau

Regulatory Umbrella Groups

Financial Stability Oversight Council

Federal Financial Institution Examinations Council

President’s Working Group on Financial Markets

Non-Bank Capital Requirements

Federal Housing Finance Agency

The SEC’s Net Capital Rule

CFTC Capital Requirements

Foreign Exchange Markets

Treasury Securities

Private Securities Markets

Federal Reserve System

CFTC Is Next Agency To Consider Regulating Algorithmic Trading

By Jenny E. Cieplak on June 9, 2015

U.S. Government Legislative Branch Financial Oversight

The House of Representatives

The House of Representatives House Committee on Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit House Committee on Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee on Energy and Water Development, and Related Agencies Subcommittee on Financial Services and General Government Subcommittee on Interior and Environment, and Related Agencies Subcommittee on Labor, Health and Human Services, Education, and Related Agencies Subcommittee on Commerce, Justice, Science, and Related Agencies, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies House Committee on Armed Services Subcommittee on Emerging Threats and Capabilities House Committee on Budget House Committee on Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade Subcommittee on Energy and Power Subcommittee on Environment and Economy Subcommittee on Oversight and Investigations Subcommittee on Communications and Technology House Committee on Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions Subcommittee on Higher Education and Workforce Training Subcommittee on Workforce Protections House Committee on Ethics House Committee on Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations Subcommittee on Asia and the Pacific Subcommittee on Europe, Eurasia, and Emerging Threats Subcommittee on the Middle East and North Africa Subcommittee on Terrorism, Nonproliferation, and Trade Subcommittee on the Western Hemisphere House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit Subcommittee on Housing and Insurance Subcommittee on Capital Markets and Government Sponsored Enterprises Subcommittee on Monetary Policy and Trade Subcommittee on Oversight and Investigations House Committee on Oversight and Government Reform Subcommittee on Health Care, Benefits, and Administrative Rules Subcommittee on the Interior Subcommittee on Information Technology Subcommittee on National Security Subcommittee on Transportation and Public Assets House Committee on Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies Subcommittee on Emergency Preparedness, Response, and Communications Subcommittee on Counterterriorism and Intelligence Subcommittee on Oversight and Management Efficiency Subcommittee on Transportation Security House Permanent Select Committee on Intelligence Subcommittee on CIA Subcommittee on Department of Defense Intelligence and Overhead Architecture Subcommittee on NSA and Cybersecurity Subcommittee on Emerging Threats House Committee on the Judiciary Subcommittee on the Constitution and Civil Justice Subcommittee on Courts, Intellectual Property, and the Internet Subcommittee on Crime, Terrorism, Homeland Security, and Investigations Subcommittee on Immigration and Border Security Subcommittee on Regulatory Reform, Commercial, and Antitrust Law House Committee on Natural Resources Subcommittee on Energy and Mineral Resources Subcommittee on Indian, Insular and Alaska Native Affairs Subcommittee on Federal Lands Subcommittee on Oversight and Investigations Subcommittee on Water, Power and Oceans Subcommittee on the Legislative and Budget Process Subcommittee on Rules and Organization of the House House Committee on Science, Space, and Technology Subcommittee on Energy Subcommittee on Environment Subcommittee on Oversight Subcommittee on Research and Technology Subcommittee on Space House Committee on Small Business Subcommittee on Agriculture, Energy and Trade Subcommittee on Contracting and the Workforce Subcommittee on Economic Growth, Tax and Capital Access Subcommittee on Health and Technology Subcommittee on Investigations, Oversight and Regulations House Committee on Transportation and Infrastructure Subcommittee on Aviation Subcommittee on Coast Guard and Maritime Transportation Subcommittee on Economic Development, Public Buildings and Emergency Management Subcommittee on Highways and Transit Subcommittee on Railroads, Pipelines, and Hazardous Materials Subcommittee on Water Resources and Environment House Committee on Ways and Means Subcommittee on Health Subcommittee on Human Resources Subcommittee on Oversight Subcommittee on Select Revenue Measures Subcommittee on Social Security Subcommittee on Trade

The Senate

The Senate Senate Committee on Agriculture, Nutrition, and Forestry Subcommittee on General Farm Commodities, Risk Management and Trade Subcommittee on Conservation, Forestry and Natural Resources Subcommittee on Horticulture, Research, Biotechnology, and Foreign Agriculture Subcommittee on Livestock, Marketing and Agricultural Security Subcommittee on Nutrition, Speciality Crops and Agricultural Research Subcommittee on Rural Development and Energy Senate Committee on Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies Subcommittee on Commerce, Justice, and Science, and Related Agencies Subcommittee on Defense Subcommittee on Energy and Water Development Subcommittee on the Financial Services and General Government Subcommittee on State, Foreign Operations, and Related Programs Subcommittee on Homeland Security Subcommittee on Interior, Environment, and Related Agencies Subcommittee on Labor, Health and Human Services, Education, and Related Agencies Subcommittee on Legislative Branch Subcommittee on Military Construction, Veterans Affairs, and Related Agencies Subcommittee on Transportation, Housing and Urban Development, and Related Agencies Senate Committee on Armed Services Subcommittee on Airland Subcommittee on Readiness and Management Support Subcommittee on Seapower Subcommittee on Strategic Forces Subcommittee on Emerging Threats and Capabilities Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy Subcommittee on Financial Institutions and Consumer Protection Subcommittee on Housing, Transportation, and Community Development Subcommittee on National Security and International Trade and Finance Subcommittee on Securities, Insurance, and Investment Senate Committee on the Budget Senate Committee on Commerce, Science, and Transportation Subcommittee on Aviation Operations, Safety, and Security Subcommittee on Communications, Technology, Innovation and the Internet Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee on Space, Science and Competitiveness Subcommittee on Tourism, Competitiveness, and Innovation Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security Senate Committee on Energy and Natural Resources Subcommittee on Energy Subcommittee on Public Lands, Forests and Mining Subcommittee on National Parks Subcommittee on Water and Power Senate Committee on Environment and Public Works Subcommittee on Clean Air and Nuclear Safety Subcommittee on Superfund, Waste Management, and Regulatory Oversight Subcommittee on Transportation and Infrastructure Subcommittee on Fisheries, Water and Wildlife Senate Select Committee on Ethics Senate Committee on Finance Subcommittee on Energy, Natural Resources, and Infrastructure Subcommittee on Fiscal Responsibility and Economic Growth Subcommittee on Health Care Subcommittee on Social Security, Pensions, and Family Policy Subcommittee on Taxation and IRS Oversight Subcommittee on International Trade, Customs, and Global Competitiveness Senate Committee on Foreign Relations Subcommittee on State Department and USAID Management, International Operations, and Bilateral International Development Subcommittee on Africa and Global Health Policy Subcommittee on East Asia, the Pacific and International Cybersecurity Policy Subcommittee on Europe and Regional Security Cooperation Subcommittee on Multilateral International Development, Multilateral Institutions and International Economic, Energy, and Environmental Policy Subcommittee on Near Eastern and South Asia, Central Asia and Counterterrorism Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights and Global Women's Issues Senate Committee on Homeland Security & Governmental Affairs Subcommittee on Financial and Contracting Oversight Subcommittee on Federal Spending Oversight and Emergency Management Permanent Subcommittee on Investigations Subcommittee on Regulatory Affairs and Federal Management Senate Committee on Health, Education, Labor, and Pensions Subcommittee on Primary Health and Retirement Security Senate Select Committee on Intelligence Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights Subcommittee on Bankruptcy and the Courts Subcommittee on The Constitution Subcommittee on Crime and Terrorism Subcommittee on Immigration and the National Interest Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts Subcommittee on Privacy, Technology and the Law Senate Committee on Small Business and Entrepreneurship Senate Committee on Veterans' Affairs

So far no word from any of these groups as to what they are going to do regarding market manipulations from the kings of Wall Street.

Ironically, when it comes to the Chinese, they are all over the news with their crackdown on corruption, unfair business practices, and market manipulations.  Why is it the Chinese are going after the American companies who are introducing American crooked business practices to the Chinese market, assuming the Chinese will never figure out what went wrong.

Of course it is a safe assumption since the dozens and dozens of American regulators seem to have no interest in stopping the practices here.  Look at the headlines the Chinese have generated around the world while we sit on our butts and cast stones.

Leadership is the first requirement for fixing things and Chinese President Xi Jinping has launched one of the largest and most aggressive anti-corruption campaigns in the world. First he took on those throughout the government and now he is focusing on those who have undermined the Chinese efforts to improve the quality of life for the people.
  
As for the stock market, in China, it only takes one agency to do what the dozens of US agencies cannot do and that is the China Securities Regulatory Commission.  Once again President Jinping has attacked the problem where it is needed.  Maybe they can come here and show us what to do.

These are the headlines around the world concerning the Chinese effort to drive the crooks out of the financial markets.

China crackdown over rout chills market

China turns up heat on market players

Beijing scraps large-scale stock buying

Authorities to step up crackdown on those ‘destabilising’ market

China says 197 punished in crackdown on online rumors

China stocks slide as crackdown on speculators spreads, lose 11 percent in August

SHANGHAI

China warns securities industry as crackdown on stock market irregularities expected to intensify

Securities regulator orders industry to step up supervision after brokerage staff, officials and journalist are detained over unethical trading

China arrests nearly 200 in stock market crackdown

Shadow lending crackdown looms over China’s stock market

China stock exchanges step up crackdown on short-selling

China’s (Renewed) Crackdown on Insider Trading

Avic Units Targeted In China's Crackdown On Sell-Offs

China accuses brokers of manipulating share prices during stock market crisis

Beijing’s police ministry said it has launched a criminal investigation into unlicensed companies that financed speculative trading

China accuses trading firms of manipulating stocks

Wall Street Breakfast: China Heightens Curbs In Market Crackdown

Aug. 4, 2015 7:06 AM ET
   
China has unveiled more rules that make it harder for speculators to profit from hourly changes in stock prices. Under the new guidelines, short sellers must wait at least one day to cover their positions and repay loans used to buy shares.

Behind enemy lines - foreign hedge funds thrive in China

China stock exchanges are stepping up a crackdown on short-selling
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Health Care in America - Obama and Big Pharma - Strange Bedfellows

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The Broken American Health Care System - CPT Reprint

When he ran for office Obama pledged to get control of health care costs and the first thing he did was have his then Chief of Staff Rahm Emanuel negotiate a multi billion dollar deal with big pharmaceutical companies to get their backing for his Obamacare health program.

Details of this deal have never been made public but he did get the support and money from big pharma to lobby and pass his health care program.  As profits continue to climb and costs continue to soar for prescription drugs in America let us look at how they have fared in selling their drugs under Obamacare.

Would you like to know what contributions you are making to drug companies in America? Here are the top 15 drug sales of prescription drugs for 2010 as reported by Bloomberg News.

As you will note, the drug is first, what it treats next, the annual sales in BILLIONS of dollars, and the percentage change over the previous year.  This does not include sales for livestock, fish and poultry use which can represent up to 70% of total antibody drug sales for big pharma, tens of billions more in revenues.

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Lipitor Topped Worldwide Drug Sales in 2010; Crestor Gains Most

1. Lipitor - High cholesterol - Pfizer - $10.7 - -6%

2. Plavix - Blood clot prevention - Bristol Myers - $9.43 - -4%

3. Remicade - Rheumatoid arthritis - J&J Merck & Co. - $7.99 - N/A

4. Advair - Asthma - GlaxoSmithKline - $7.94 - 2%

5. Enbrel - Rheumatoid arthritis - Amgen/Pfizer - $7.23 - N/A

6. Abilify- -Depression Bipolar Schizophrenia - Otsuka/Bristol-Myers - $6.78 - N/A

7. Humira - Rheumatoid arthritis - Abbott - $6.55 - 19%

8. Avastin - Cancer - Roche -  $6.22 - 8%

9. Rituxan - Lymphoma Leukemia - Roche/Biogen Idec - $6.11 - 9%

10. Diovan - High blood pressure - Novartis - $6.05 - 1%

11. Crestor - High cholesterol - AstraZeneca - $5.69 - 26%

12. Seroquel - Depression Bipolar Schizophrenia - AstraZeneca - $5.3 - 9%

13. Herceptin - Breast cancer - Roche - $5.22 - 7%

14. Zyprexa - Bipolar Schizophrenia - Eli Lilly - $5.03 - 2%

15. Singulair  - Asthma Allergies - Merck & Co. - $4.99 - 7%

*Estimated, Otsuka declined to provide 2010 sales. Some year-over-year sales comparisons are N/A because there isn’t comparable 2009 data.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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Health Care in America - "Corruption at the Core of the Collapse

The Broken American Health Care System - CPT Reprint

What is the driving force behind the failure of the most expensive heath care system in the world to provide a better quality of life?  A lot of us have opinions.  So do the media, politicians and academia, but none seem to be addressing the reason behind every failure of an institution like medical care in society.

There comes a point when the institutions no longer serve the purpose they were created to address.  They evolve to a position where they believe the survival of the institution is more important than the mission of the institution.

When that happens, and inevitably it will when all good causes become their own bureaucracy, we have the seeds of corruption planted.

In America we spend about 9.9% of our disposable income on food.  Thirty years ago we spent 15% of our disposable income, meaning we spend over 5% less today on food than thirty years ago.

Now compare that to our experience with health care costs.

An article  was written June 28, 2009 by George Will titled: "Americans Will Regret Health Care Fix".  It described the cost of health care in America as follows.

The Hudson Institute's Betsy McCaughey, writing in The American Spectator, says that in 1960 the average American household spent 53 percent of its disposable income on food, housing, energy and health care. Today the portion of income consumed by those four has barely changed -- 55 percent. But the health care component has increased while the other three combined have decreased. This is partly because as societies become richer, they spend more on health care -- and symphonies, universities, museums, etc.

It is also because health care is increasingly competent. When the first baby boomers, whose aging is driving health care spending, were born in 1946, many American hospitals' principal expense was clean linen. This was long before MRIs, CAT scans and the rest of the diagnostic and therapeutic arsenal that modern medicine deploys.

In a survey released in April by NPR, the Kaiser Family Foundation and Harvard, only 6 percent of Americans said they were willing to spend more than $200 a month on health care, and the price must fall to $100 a month before a majority are willing to pay it. But according to Grace-Marie Turner of the Galen Institute, Americans already are paying an average of $400 a month.

Most Americans do not know this because the cost of their care is hidden. Only 9 percent buy health coverage individually, and $84 of every $100 spent on health care is spent by someone (an employer, insurance company or government) other than recipients of the care. Those who get insurance as untaxed compensation from employers have no occasion to compute or confront the size of that benefit. But it is part of the price their employers pay for their work.

During the past thirty years health care as a percentage of our gross domestic product has grown by more than ten times.  That does not include your taxes paid for the government expenditures on health care.  The cost now is over $2.6 trillion a year and rising, both in terms of treatment and insurance.

Make no mistake, health care, long a public service through churches, non-profit organizations, government owned facilities and other resources, has now become BIG BUSINESS.

Pharmaceutical corporations led the way into making health care a profit center, not a public service, and now virtually every aspect of our health care system is privately owned, profit centered, and financed by Wall Street.

Wall Street may be reasonably good at financing new businesses like the Internet companies and health care industry but once Wall Street takes control of the industry through controlling the financing, that company serves a new master, Wall Street profitability.

Before you get out your protest banners and decide to occupy hospitals, I mean it is fashionable to protest against anyone we think is ripping off the public, look in the mirror because you are the one embracing a system now under the control of the financial institutions.

My point is this.  Health care is more about serving Wall Street interests than the people's interest.  Of course this is America and we encourage capitalism and these health care capitalists are operating within the framework of the law.  I guess if you owned stock in enough health care companies you would be profiting from the gouging of the American public with excessive health care costs, but most of us don't own health care stocks.

Our health care industry has evolved to the point where moral and financial corruption permeate the entire system, even corrupting those in the industry who really want to help people.

The medical industry is dependent on funneling millions in campaign funds to politicians who have to vote on their funding, in bribing doctors to prescribe drugs, in bribing universities to compete on a cut throat basis for grants from private corporations for survival, and for encouraging doctors to own testing equipment which in turn has to be justified to keep.

Conflicts of interest and ethics issues dominate the health care landscape.  It has become so financially competitive that excessive and unnecessary treatment is the order of the day as a simple and nearly undetectable way to pad the revenue stream.

Why X ray a single tooth if you can X ray the whole mouth?  Why take one or two spinal X rays when you can take multiple X rays of the spine?  Why not set up follow up doctor appointments for reasons of billing for the office visits rather than transmitting test results?

If a drug company pays a doctor to prescribe their drugs, and the more drugs prescribed the more the doctor makes, don't you think more prescriptions will be written?

How can FDA employees fairly evaluate a New Drug Application (NDA) worth potentially billions of dollars in new revenue if the same employees can quit their jobs and go to work for the same drug companies for far more money?

The top five drugs in terms of sales revenue in America all make between $3 and $5 billion a year for the owners, the pharmaceutical company.  If new health research or treatment does not generate profits first and foremost, it is of little value to a profit driven health care system.

If congress or the president eliminated conflicts of interest in the industry, both in terms of the relationship between government workers and the industry and between the industry and practitioners, it would be a great start to cost reduction.

The same conflict of interest exists when doctors are convinced to own expensive equipment like CAT scan and MRI machines, blood laboratories, pharmaceutical offices and others.  If Medicare or a health insurance company allows excessive CAT scans and MRI analysis for the purpose of making sure people are diagnosed and the doctors own the machines, don't you think more screens will be prescribed?

There are a thousand and one ways to get caught in a conflict in an industry that is barely regulated.  Usually there are industry watchdogs like the Securities and Exchange Commission assigned to keep an eye on the system.  However, even they are subject to the same conflicts because the SEC failed to see the housing and banking crisis coming.  More than likely they just turned their back to it.

A comprehensive and fair conflict of interest law could be proposed by the president and approved by congress and a thorough ethics law could be adopted by the medical and health care industries and that would start to unscramble the layers of conflicts and ethics violations we face today.

Unfortunately, such leadership by our politicians and health industries is nonexistent and will be as long as the industry finances the political campaigns in Washington and through the nation.  So we also need campaign financial reform, meaningful reform, to fix that inherent problem.

Fix the conflict of interest, draw up enforceable ethics laws, and clean up the campaign finance mess and it will lead directly to reduced health care costs.  Once again, nothing has been proposed by politicians to correct this mess.

Isn't it about time to REALLY start fixing things?

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