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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss a new push to politically unite Europe to save the Eurozone, how the restructuring of the American job market may permanently kill America’s middle class, and the disappearance of “Made in America.”

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Why debt crisis could lead to a United States of Europe
What If Middle-Class Jobs Disappear?
Manufacturing America’s New Middle Class: Henry R. Nothhaft
Unemployment’s here to stay
Graph: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons (U6RATE)
Chance of 2012 U.S. recession tops 50 percent: Fed paper
Coffee & Markets: Are We Witnessing the Death of America’s Middle Class?

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The hosts and guests of Coffee and Markets speak only for ourselves, not any clients or employers.

Yesterday, I wondered how Nancy Pelosi and her husband were able to participate in Visa’s IPO in March 2008. It is very difficult for an individual investor to participate in IPOs, especially those which are heavily ‘oversubscribed’ as Visa’s was. It was the hottest IPO of the year, drawing what one analyst described as “extreme demand.” So, this tidbit from Newsweek’s story on Visa’s campaign to curry favor with Pelosi caught my attention:

Separately, Pelosi’s husband, Paul, a major investor in California, got a lucrative phone call from his personal broker—a pre-screen invite in March 2008 to take part in Visa’s $17.9 billion public stock offering, at the time one of the hottest stock offerings in an otherwise soft market. The initial-public-offering price was $44 per share and was limited to institutional investors and a group of specially selected individuals. Almost $18 billion was made available in public stock to preselected investors. Paul Pelosi made the cut.

Wait, what? He was called and ‘invited’ to purchase shares in the IPO? Seriously? Let’s isolate one particular sentence from this graph:

The initial-public-offering price was $44 per share and was limited to institutional investors and a group of specially selected individuals.

Specially selected individuals? Selected by whom? And, for what reasons, specifically?

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From Accuracy in Media’s Benjamin Johnson:

Since people started camping out in the name of socialism or something, there have only been half measures by the media to determine whether union organizers were using dues to provide transportation, food and lodging for the Occupiers.  Accuracy in Media infiltrated the National Nurses United for the duration of their Occupy DC protest tour. As the footage reveals, NNU in association with the AFL-CIO sent over 1,000 nurses from across the country, public and private sector, all expenses paid. It’s pretty sad to think that American veterans are sitting in a hospital room wondering where their nurse went.

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We are one of the world’s leading brokers in markets for commodities and listed derivatives. We provide access to more than 70 exchanges globally and are a leader by volume on many of the world’s largest derivatives exchanges. We are also an active broker-dealer in markets for commodities, fixed income securities, equities, and foreign exchange. We are one of 20 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York.

This quote is what investors read in MF Global’s Prospectus Supplement in August 2011. MF Global issued $325 million of 6.250% 5-yr senior notes that month. The deal was led by Investment Bank Jefferies and co-managed by Investment Banks Bofa Merrill Lynch, BMO Capital Markets, COMMERZBANK, Natixis, Lebenthal & Co., LLC, Sandler O’Neill + Partners, L.P. and US Bancorp. I provide this backdrop because you have to see that, once again, those who have a fiduciary responsibility to protect investors failed.

The banks on this deal are underwriters of securities who are obligated to perform due diligence on the issuer (MF Global) to protect investors. I have no doubt that the bankers performed their due diligence on the objective facts about the company: e.g. financial statements, management background, market share, customers, etc. But did the bankers adequately assess the character of MF Global’s management? Is it possible for a banker to protect investors from managers with impeccable credentials who are willing to take reckless risks with other people’s money?

Rating agencies, rating agencies, rating agencies. Sounds familiar huh? Moody’s, Fitch, and S&P once again did not meet their fiduciary responsibility to investors. How can a bond deal be executed in August and the company file for bankruptcy shortly thereafter? Like the bankers, the rating agencies surely did their analysis on the objective data. However, can they warn investors about reckless management?

The facts are on October 25th, Jon Corzine stated he was confident that MF Global would successfully manage its $6.3 billion exposure to European debt (Spain, Portugal, Belgium and Italy). Yet one week after a failed attempt to sell the company, MF Global filed for Chapter 11 bankruptcy on October 31st 2011.

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Kyle Wingfield in the Atlanta Journal-Constitution:

See if you can follow me here:

1. CBS’s “60 Minutes” caused a stir with its report Sunday, based on a forthcoming book by Peter Schweizer, about members of Congress who may have traded stocks based on insider information to which they were privy because of their elected offices.

2. Many members of Congress are desperate to raise new revenues any way possible, in the name of stopping our borrowing binge.

3. Some of our politicians, and even more European leaders, are partial to the so-called Tobin Tax on financial transactions.

4. In light of the revolving door in Washington — in which politicians and their appointees leave public service and then cash in by lobbying or otherwise working for the companies they used to regulate — the law professor and proprietor of the Instapundit blog, Glenn Reynolds, hasproposed “a 50 percent surtax on any earnings by political appointees in excess of their prior government salaries for the first five years after they leave office.”

Voila! How about a 50 percent tax on financial transactions by members of Congress and their staffs while they are with the government, and for five years thereafter?

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The Occupy movement’s professional victims were about to have the worst day ever thanks to a few pesky things called law and order, but thankfully, rich One-Percenter lawyers stepped in to save the debt-beguiled squatters. You know what that means: ready your pens for more Rap Sheet entries.

NEW YORK (AP) – The National Lawyers Guild says it has obtained a court order that allows Occupy Wall St. protesters to return with tents to a New York City park.

The guild says the injunction prevents the city from enforcing park rules on Occupy Wall Street protesters.

Mayor Michael Bloomberg says the city knew about the court order but has not seen it. He says the city plans to go court immediately.

Zuccotti Park was cleared overnight so that crews could clean it. Bloomberg says that was done “to reduce the risk of confrontation.”

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From Newsweek:

The effort began in earnest in late 2007. Ogilvy, one of Visa’s outside lobbying firms, picked off one of Pelosi’s government-affairs advisers, Dean Aguillen, who had close ties in the speaker’s office. Aguillen quit the speaker’s team and went to Ogilvy in December 2007. By law he was unable to lobby his former boss for a year, but he immediately registered to lobby Congress on the credit-card issue, offering guidance to other lobbyists on Visa’s team during strategy sessions, according to a lobbyist present in strategy deliberations.

Visa wanted to meet with Pelosi and her top aides to make the case against the swipe fees. That summer Visa’s outgoing CEO, Carl Pascarella, bumped into Pelosi on the street in the San Francisco neighborhood they share, and she arranged for him to contact her Washington office for a meet-and-greet, according to sources families with the encounter.

Around the same time—on July 21, 2008, to be exact—Pelosi’s reelection campaign received a $1,000 donation from Visa’s political-action committee. Two days later, according to Pelosi’s office, the speaker met Pascarella and the incoming Visa chief executive, Joe Saunders, in her Capitol Hill office. The three exchanged pleasantries and no specific legislation was discussed, according to Pelosi’s office.

Aguillen, for his part, also contributed $1,000 to Pelosi and another $1,000 to the Democratic Congressional Campaign Committee during the first half of 2008.

Separately, Pelosi’s husband, Paul, a major investor in California, got a lucrative phone call—a pre-screen invite in March 2008 to take part in Visa’s $17.9 billion public stock offering, at the time one of the hottest stock offerings in an otherwise soft market.

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Will Wednesday be a a day of reckoning for several doctors who handed out fake sick notes to government workers who protested Wiscosnin Governor Scott Walker’s labor reforms earlier this year?

The MacIver News Service reports:

[Madison, Wisc...] We’ll soon know if  Wisconsin doctors who were caught issuing fake sick notes to seemingly healthy protesters in a MacIver News video report earlier this year will face any discipline from the state.

Several medical professionals involved in the incident will be facing the Wisconsin Medical Examining Board on Wednesday, which is expected to make its final decisions about the incident, according to the Department of Safety and Professional Services.

As tens of thousands of public employees skipped work earlier this year to attend protest rallies outside the Wisconsin State Capitol, many wondered if they would face any disciplinary action for unexcused absences.

Their solution? On February 19, a group of men and women in lab coats purporting to be doctors were handing out medical excuse notes, without examining the ‘patients.’

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In a desperate move to boost their effort to recall Governor Scott Walker, the liberal Soros front group One Wisconsin Now has hijacked the Occupy Wall Street movement. The formal Democratic Party-sponsored effort to force a recall of Governor Walker starts this week, with activists needing to gather over 1,000,000 signatures in the next 60 days to recall Walker and his lieutenant governor, Rebecca Kleefisch. Today a social media effort billed as “Occupy Walker” (see here for the Twitter account) kicks off an opening week effort to disseminate as many anti-Walker “facts” as One Wisconsin Now can invent.

One Wisconsin Now, a member of the national Progress Now network, has been active in Wisconsin since 2006. The group’s executive director is Scot Ross, a boisterous, chain-smoking political hack and failed candidate for Secretary of State. Ross is best known for his involvement in the Wisconsin Caucus Scandal when he admitted to prosecutors that he worked nearly full time at taxpayer expense on a Democratic lawmaker’s campaign.

The Occupy Wall Street movement has, for now, superseded the energy and intensity of the Madison protests that took place this past spring. Then, the national spotlight covered the hundreds of thousands of union members and professional activists who mobbed the Wisconsin capitol in an attempt to intimidate legislators and Governor Walker into halting reform efforts. Now, a handful of worn-out protesters with a laundry list of run-ins with the law forlornly watch as a national movement mimicking their tactics has moved from Wall Street to streets across America.

It is perhaps no surprise that the hardcore political knife fighters who will stop at nothing short of a recall of Scott Walker have chosen to co-opt the Occupy Wall Street movement. The move will certainly generate some attention and make the recall movement more relevant with current protest events, something that could not happen otherwise since months of time have elapsed since the Madison protests. But beyond generating excitement among the liberal base, the tactic will do nothing.

Occupy Walker is just an attempt by far-left political professionals to use the Occupy Wall Street movement as a political pawn. If they fall for it, Occupy Wall Street will become just another tool in a status quo that it thinks it can change. (more…)

In the wake of the $700 billion TARP bailout, Warren Buffett apparently shaped a plan to clean up toxic assets that Treasury Secretary Tim Geithner later adopted–resulting in massive profits for Buffett.

That’s the latest bombshell revelation from investigative journalist and Breitbart editor Peter Schweizer’s sensational new book, Throw Them All Out.

According to Schweizer, after the bailout bill’s passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions.  Buffett proposed something he called a “public-private partnership fund.”  For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.

After Paulson’s exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffett’s holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its “Public-Private Investment Program,” bank stocks jumped, resulting in large profits for Buffett.

How much Buffett profited is hard to calculate, since there’s no way to know what his purchase price was. But prior to the government adopting Buffett’s plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithner’s announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May. (more…)

Today, in 1864, Union General William Tecumseh Sherman burned Atlanta and began his ‘March to the Sea.’

Just hours after local residents protested against Occupy Wall Street, New York Police Department officers are moving into Zuccotti Park, clearing activists (temporarily) and their tents (permanently) from the site.

Police have donned riot gear and have apparently prepared special equipment, including a Long Range Acoustic Device (LRAD), for possible use in confrontations with activists.

Live feed at Breitbart.tv, and another live feed below:

An aerial view is available here.

NBC New York reports:

Hundreds of police officers, some in riot gear, descended on Zuccotti Park after midnight Tuesday in a surprise sweep of the Occupy Wall Street headquarters.

It comes just two days ahead of a massive planned demonstration Thursday marking the movement’s two-month anniversary.

Police handed out letters to protesters ordering them to temporarily evacuate the park. Police said the eviction will improve health conditions.

Campers were ordered to remove all their tents. Police claimed it was a health issue.

Protesters were told they will be allowed to return to the park in several hours, after the park is inspected, but without their property, which will be brought to a sanitation garage.

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UPDATE: Me? Not so much. I was in coach, with my peeps.

On the plane with me right now:

Code Pink co-founder Jodie Evans said she is “part of the 1% who supports the 99%” and didn’t want to be photographed holding my Playboy interview.

UPDATE (11/16 8:42 am EST): Savannah police have now clarified this morning to Big Government via telephone that the shooting of Occupy Savannah activist Jonathan Brazell is being investigated as an ordinary robbery, due partly to the fact that it occurred at a significant distance from the protest site itself.

***

Social media has been the principal vehicle of communication for the #Occupy movement. Through Facebook and Twitter, the loosely-knit band of anarchists, communists and leftist agitators have coordinated their actions and disseminated news to supporters around the world. There has also been a very dark side, but we’ll leave that aside for now. This afternoon, #OccupySavannah, through its Facebook page, announced the murder of an activist at the #Occupy camp:

The posting raises many obvious questions.

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Rep. Spencer Bachus (R-AL) has responded to insider trading allegations revealed in Peter Schweizer’s new book, Throw Them All Out, and by 60 Minutes:

“Congressman Bachus makes sure to comply with the law and House Ethics rules, and his financial transactions are publicly disclosed. (more…)

Presidential candidate Rick Perry released an ad featuring the congressional insider trading scandal broken by Breitbart Editor Peter Schweizer in his new book “Throw Them All Out.”

Gov. Perry is the first presidential candidate to publicly comment on the scandal.

From KMTR:

A traffic stop of a speeding vehicle led to the arrest of three men, who claimed to be Occupy Portland demonstrators, and the seizure of incendiary devices, gas masks and fireworks.

Traffic Safety Deputy Ryan Postlewait saw a gray Subaru Outback going southbound on Interstate 5 near milepost 245 at 8:40am.  It was traveling at a high rate of speed.  Using his radar, he verified the speed of the Subaru at 81mph.  Postlewait initiated a traffic stop.

The driver of the car was identified as William Maxwell Patterson, 21.  The passengers in the car were identified as Emery Nicholas Luff, 21 and Zachary Salzwedel-Kemp, 20.  All three were from Klamath Falls.

During his initial contact with Patterson, Deputy Postlewait detected the odor of marijuana coming from the interior of the car.  A search of the car yielded a baggie of marijuana and paraphernalia for smoking marijuana.

In addition to the marijuana, Postlewait found a quantity of firecrackers and two commercially manufactured mortars like those fired into the air during professional pyrotechnic displays.  The mortars were contained in glass “Ball” canning jars.  One was found on the floorboard at Luff’s feet; the other was in a jacket belonging to Luff.  Also found in the car were two gas masks, some protective eye goggles, and safety helmet. (more…)

From NBC-New York:

Downtown residents and business owners angry that their neighborhood has been occupied for two months by the Wall Street demonstration are staging a protest of the protest Monday, declaring that City Hall has let it get out of control.

Angry over all-day drumming, people urinating and defecating on the streets and verbal attacks from protesters, organizers say they will rally at City Hall Monday to send officials a message.

“Laws are clearly being violated and we simply want them enforced,” Lower Manhattan resident Linda Gertsman told NBC New York.

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From Henry Blodget, Editor of BusinessInsider:

Yes, this behavior may be widespread on Capitol Hill.

No, there is no universe in which a reasonable person would consider this behavior ethical or in any other way okay.

According to a new book called Throw Them All Out by Peter Schweizer, as relayed by Dave Weigel at Slate, Rep. Bachus made more than 40 trades in his personal account in the summer and fall of 2008, in the early months of the financial crisis.

The fact that Bachus was a member of Congress and traded on private information he received as a result of his job is bad enough. The fact that he was the ranking member of the House Financial Services Committee at the time is simply outrageous.

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