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Charles Gasparino,  on air editor of CNBC, is releasing a new book.  The book can be pre-ordered today and will be shipped from Amazon on November 3rd.  Just when you thought the world had enough reminders of the financial collapse and widespread corruption, the subject of the book is also wall street greed and government mismanagement.

Click below to pre-order your copy of The Sellout – How Three Decades of Wall Street Greed And Government Mismanagement Destroyed the Global Financial System. Take special note that the title says “destroyed” and not “nearly destroyed”. Goldman Sachs may be proud of their facade message about paying back TARP, but TARP is a tiny drop in the enormous bailout bucket. Goldman and every financial institution in the country is still operating today only because of taxpayer guarantees of their high risk transactions.

The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System by Charles Gasparino

Max Keiser broadcasts his opinion of United States financial firms in the video below, calling it out for what it is – a giant fraud.  After trillions of dollars in financial bailouts, the firms are hoarding cash, paying record salaries and bonuses, and hiding trillions in unrealized losses.  Don’t be surprised in 2010 when they finally come clean a second time by reporting record losses and beg for more handouts from the American taxpayers.

Part 2 of the video is below:

Julian Robertson, founder of Tiger Management, has a bleak perspective on the enormous debt load of the United States.  CNBC recently interviewed him and summarized his take in this article, the excerpts of which are below.

The US is too dependent on Japan and China buying up the country’s debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said.  “It’s not a question of the economy. It’s a question of who will lend us the money if they don’t. Imagine us getting ourselves in a situation where we’re totally dependent on those two countries. It’s crazy.”

China and Japan are still the largest foreign holders of U.S. debt.  Check out the latest report from the treasury department website to see the trends of their purchases and sales.  The image below is a subset of the data from the treasury website.

It was pretty obvious in 2008 that Warren Buffett had lost his investing touch. The financial world was showing its dirty, stinky underbelly for what is what – a giant fraud. Meanwhile, Berkshire Hathaway was accumulating shares in these turd infested companies such as Moody’s.  Moody’s sole purpose during the entire credit bubble was to stamp AAA ratings on everything that crossed their desks – including the million dollar home loans for every unemployed derelict on the planet – , and collect large advisory fees during the process.

It’s not clear if Warren Buffett has got his magic touch back, but today it was announced that he finally came to his senses on Moody’s, dumping 800,000 additional “worth less” (as Warren calls it) shares on some other poor saps.  From Yahoo Finance:

Billionaire Warren Buffett’s company has sold another 794,388 shares of Moody’s Corp. stock, leaving it with control of 16.6 percent of the credit rating agency.

Berkshire Hathaway Inc. revealed the sales in documents filed with the Securities and Exchange Commission on Thursday.

Earlier this summer, Berkshire sold nearly 8 million shares of Moody’s stock.

Just about 5 years ago, Time Magazine did a cover story on the booming town of Las Vegas, which was in the midst of non stoppable economic growth.  Here is an excerpt from that article:

The city’s casinos, hotels, restaurants, shops and clubs took in a record $32.8 billion in 2003. Vegas is the fastest-growing major U.S. city; 7,000 people move to Clark County each month, bulging the population to 1.6 million and overstretching the police, fire fighters, hospitals and schools. The unemployment rate is more than a third below the national average, and there’s more construction than in any other city in the U.S. It’s the country’s top tourist and convention spot, with Vegas taking in more money from conventions ($6.5 billion) than gambling ($6.1 billion).

Fast forward to 2009, and times have changed quite dramatically to the city.  Time Magazine just did another cover story on Las Vegas, with some very notable differences.

This has been the first major recession Vegas has experienced since it became a real city. After two decades as one of the fastest-growing metropolises in the U.S., Las Vegas has seen its population growth flatten. It’s got the highest foreclosure rate of any major metro area, and the unemployment rate jumped from 3.8% to 12.3% in just three years. Even if you have a job, it’s not a good time to have your wage be dependent on lavish tips. The No. 1 convention city has also had a wave of cancellations from the AIG effect — companies don’t want the bad publicity of being seen in Sin City. Just as Las Vegas was the epicenter of the extravagant consumption of the past 20 years, now it’s the deepest crater of the recession over the last year.

Also notable are the incredible vacation deals available in Vegas today:

The hotels, led by Wynn Resorts boss Steve Wynn, slashed room prices to increase occupancy rates to 82% from a low of 72%. On the right day in July, you could book the type of 750-sq.-ft. room that was $500 a year ago at the Wynn for $109 and get a $50 gift certificate.

As for real estate in Las Vegas, the spiraling down of property values continues, and its making room for a new breed of real estate agents.  Brooke Boemio is showcased in the article, and she specializes in helping home “owners” abandon their overvalued homes and swapping it with a new purchase of a distressed or foreclosed home.

Boemio specializes in short selling, in a particularly Vegas way. Basically, she finds clients who owe more on their house than the house is worth (and that’s about 60% of homeowners in Las Vegas) and sells them a new house similar to the one they’ve been living in at half the price they paid for their old house. Then she tells them to stop paying the mortgage on their old place until the bank becomes so fed up that it’s willing to let the owner sell the house at a huge loss rather than dragging everyone through foreclosure. Since that takes about nine months, many of the owners even rent out their old house in the interim, pocketing a profit.

My how times have changed for Vegas.  The old adage rings true in Vegas – what goes up must come down!

American Insurance Group is in the headlines again for not honoring the very insurance policies they sold.  AIG’s collapse largely stemmed from their “business” of selling trillions of dollars in credit default swaps – with no capability or reserves to honor the insurance they sold.  Here they go again, with a bit of a twist.  Apparently some homeowner policies were sold with extra benefits of fraud protection, and some Madoff victims are making claims against AIG.  Check out this story that just hit the wires at Marketwatch:

the flailing insurer [AIG] is being sued by two California residents who said their homeowner insurance-fraud protection entitled them to coverage on losses from Madoff’s Ponzi scheme.

The federal lawsuit was filed in Manhattan federal court by Robert and Harlene Horowitz, who said they lost $8.5 million in the Madoff scandal. They filed a class-action suit on behalf of all policy-holders who lost money to Madoff for unspecified damages.

According to the court filing, the Horowitzes alleged that AIG, through its units AIU Holdings and American International Insurance of California, refused to honor AIG Fraud SafeGuard coverage, even though the coverage insures against losses resulting “directly from fraud, embezzlement, or forgery.”

Also check out:

• Who Are These Alleged Madoff “Victims”?

According to this Marketwatch article, the price to rent an apartment is under downward pressure, and consumers may be able to get their rent prices reduced just by asking.  Mike Haskins, a Raleigh area renter, was profiled in the story.  He took advantage of his local market circumstances – new rental units which had just been built in combination with a low capacity in his own building – to negotiate a rent decrease.

It took some pushing — and a threat to take his business elsewhere — but before long, Haskins made a deal. When he renewed his lease, his rent was $100 lower…

In response to vacancies, 68% of landlords said they were lowering rents and 68% also said they were giving one or more months of rent free; 38% said they were reducing deposits; and 18% were offering upgrades or allowing more leniency for breaking leases or changing status, according to the Rent.com survey. Fifteen percent are offering storage or parking at reduced rates, and 8% are relaxing pet policies.

The Seattle rental market is also facing downward pressure on rents, according to this Seattle area blogger, who recently negotiated an offer from his landlord from an increase of 3.5% into a decrease of 5%.

Do you have any rental reduction stories to share?  Post them here in the comments.

Here is the latest snapshot from the prophet.net free industry group rankings, showing which industries are drawing in the most money.  The market has been on fire for the last several months, all while delivering fatal sucker punches to those who remain short.

Is this continued rally a sign of real economic growth and recovery, or just another suckers rally and head fake before the next leg down?

Answer:  It doesn’t really matter.  The strategy of the Geldpress trading team remains the same.  Continue to ride the wave up, but remain cautious, and keep the position hedges on – covered calls, married puts or collars.

Also see:

• Covered Calls – Scottrade, Tradeking, Fidelity
• Time for cover – the covered call
• Married Puts, Collars, And Hybrid Hedging
• Option Collar Length – Front Month Or Leaps

Andrew Hall, one of the gamblers oil traders working for Citibank, wants the firm to pay him a $100 million dollar bonus for his performance on winning the coin toss bet prediction he made with taxpayer money.  From Mail Online:

Hall, 58, is in line for a $100million bonus from his employer Citigroup.

The bank wants to pay the money because it wants to hold on to Hall and his money-making expertise, which is reckoned to have reaped hundreds of millions of pounds in profits for Citi-group through its oil-trading offshoot Phibro.

But Citigroup – which was bailed out with £27billion of US government funds – is under pressure from the Obama administration’s ‘pay czar’ Kenneth Feinberg to cap payouts to traders who take big risks on behalf their bank employers.

Hall, a British-born graduate of Oxford University, lost money as a trader during the first Gulf war when oil prices fell.

The real question for Citibank, which is technically insolvent and living off of taxpayer donations, is what would be the fate of Hall had he lost the oil bet and squandered away hundreds of millions of taxpayer dollars in the process?  The answer is simple – more bailout begging, and more coin flipping gambles on the direction of oil.  Eventually, everyone gets it right, and eventually everyone gets it wrong.  Wouldn’t it be wonderful if all the wrong sided bets were cancelled out with taxpayer funds, and all the right sided bets were rewarded?  That there is the essence of the financial world.

According to this Marketwatch article, Illinois is gearing up to broaden its gambling appeal, and looking toward the money losing slot machine players to plug a whole in its budget.

Under the measure, bars, restaurants that serve liquor, social clubs and truck stops can have up to five machines. The state gets 30% of the take, which some estimates put at $300 million a year once in place. The Illinois Gaming Board has about two months to come up with regulations.

Meanwhile, across the world, Russia has taken a different approach, outlawing gambling completely, except for in special zones which do not yet exist.

Russia’s casinos are getting the boot, but the specially designated zones where they are to move are not ready. Casino owners say they are ready to leave the country, while millions of Russians lament the savings they lost in cheap casinos and slot machines. Will the new law help?

In the days of the USSR, the authorities strictly forbade any games of chance: even the word “chance” was excluded from the Soviet dictionary.

The first gambling establishments appeared after the collapse of the Soviet system. The casinos became a kind of symbol of a new era, when money could be conjured out of the air and just as easily lost at the roulette wheel. The number of gambling es-tablishments in the country grew steadily, from about 800 in the mid-1990s to more than 60,000 by the beginning of the new century.

At the same time, respectable casinos with luxurious rooms and high stakes were in the minority. For the most part it was about gaming machines, which started appearing in just about every baker’s shop. Any pensioner or schoolchild could easily try their luck.

No one even suspected the existence of “gambling addic-tion”. According to Vladimir, founder of the Moscow Gamblers Anonymous society, neither he nor those close to him could imagine that he was seriously ill.

“I would lose my money, then other people’s money; I borrowed money from banks and lost that too. It got to the point where I’d gambled away all the furniture from my flat. One day, I was so ‘drunk’ on gambling, I carried the fridge out of the flat, sold it to the first taxi driver who came along, and within 15 minutes I’d put all the money into a slot machine. My friends and family couldn’t understand why I couldn’t stop gambling.”

According to Russia’s Ministry of Health, in Moscow alone approximately 300,000 people suffer from gambling addiction. Gamblers Anonymous puts the overall number of gambling addicts in Russia at about three million.

Also see:

• Congratulations, you beat the casinos at this new game.
• MGM City Center Ready To Default – Thanks For The Memories
• Free Government Grant Info
• Overbought And Oversold Stochastic Indicators