Peace, Mr. Pittman, Peace

The untimely death of Mark Pittman at age 52 from “unknown” causes has provoked notions of conspiracy and murder. I can neither debunk nor corroborate such theories.

It’s fair to say that Pittman was one of the most serious threats to the financial oligopoly that now has our government in a death grip. It is also fair to say that the people in power have an unrestrained form of arrogance that displays contempt for any notion that they could be caught, punished or hurt. So any conclusion that Pittman met with foul play is probably not supportable. I mention it because so may people have expressed concern for my health and my protection. The best I can do is what Pittman did — keep pushing, encouraging, exposing and embarrassing the banksters in and out of court — until I can’t anymore, whatever the reason.

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Boston.com

MARK PITTMAN, 52; reporter who foresaw subprime crisis

By Bob Ivry, Bloomberg News | November 28, 2009

NEW YORK – Mark Pittman, the award-winning investigative reporter whose fight to open the Federal Reserve to more scrutiny led Bloomberg News to sue the central bank and win, died Wednesday in Yonkers, N.Y. He was 52.

Mr. Pittman suffered from heart-related illnesses. The precise cause of his death was not known, said his friend William Karesh, vice president of the Global Health Program at the Bronx-based Wildlife Conservation Society.

Mr. Pittman, a former police beat reporter who joined Bloomberg News in 1997, wrote stories in 2007 predicting the collapse of the banking system. That year, he won the Gerald Loeb Award from the Anderson School of Management at the University of California, Los Angeles, the highest accolade in financial journalism, for “Wall Street’s Faustian Bargain,’’ a series of articles on the breakdown of the US mortgage industry.

Mr. Pittman’s fight to make the Fed more accountable resulted in an Aug. 24 victory in Manhattan Federal Court affirming the public’s right to know about the central bank’s more than $2 trillion in loans to financial firms. Mr. Pittman drew the attention of filmmakers Andrew and Leslie Cockburn, who gave him a prominent role in their documentary about subprime mortgages, “American Casino,’’ which was shown at New York City’s Tribeca Film Festival in May.

“Who sues the Fed? One reporter on the planet,’’ said Emma Moody, a Wall Street Journal editor who worked with Pittman at Bloomberg.

“The more complex the issue, the more he wanted to dig into it. Years ago, he forced us to learn what a credit-default swap was. He dragged us kicking and screaming.’’

James Mark Pittman was born in Kansas City, Kan., where he played linebacker on the high school football team. He took engineering classes at the University of Kansas in Lawrence before graduating with a degree in journalism in 1981.

He was married soon after and had a daughter, Maggie, in 1983. The marriage ended in divorce.

Mr. Pittman’s first reporting job, covering the Police Department for the Coffeyville Journal in southern Kansas, paid so little he took a part-time job as a ranch hand across the border in Lenapah, Okla., according to an interview he gave to Ryan Chittum for the Columbia Journalism Review’s The Audit, a watchdog for the business press.

“What a funny guy – huge personality,’’ Chittum said in an e-mail message.

“Mark was my favorite reporter working. In a time when too much journalism is timid or co-opted, Mark personified the whole ‘afflict the comfortable’ tenet of the business. Mark’s passing is a huge loss for journalism at a time when we can least afford it.’’

Mr. Pittman spent a year in Rochester, N.Y., with the Democrat & Chronicle newspaper and 12 years at the Times Herald-Record in Middletown, N.Y., where he met his wife, Laura Fahrenthold-Pittman, in 1995.

“All I know is we fell in love the moment we met,’’ Fahrenthold-Pittman said in an interview yesterday.

“We moved in together a week later. He was as serious about his family life as he was about work. Mark did nothing in a small way.’’

In 2007, Mr. Pittman was writing about the securitization of home loans when subprime borrowers, who have bad or limited credit histories, began missing payments on their mortgages at a faster pace.

Mr. Pittman’s June 29, 2007, article headlined “S&P, Moody’s Hide Rising Risk on $200 Billion of Mortgage Bonds’’ was excoriated at the time by Portfolio.com for “trying to play gotcha’ with the ratings agencies.’’

Mr. Pittman’s story proved prescient. So did his reports on US banks exporting toxic mortgages overseas, on Treasury Secretary Henry M. Paulson’s role in creating those troubled assets while he was chief executive officer of Goldman Sachs Group Inc., and on the US bailout of American International Group Inc.

“He’s been on this crisis since before the crisis,’’ said Gretchen Morgenson, the Pulitzer Prize-winning financial columnist for The New York Times.

“He was the best at burrowing into the most complex securities Wall Street could come up with and explaining the implications of them to readers of all levels of sophistication. His investigative work during the crisis set the standard for other reporters everywhere. He was a giant.’’

In the “Faustian Bargain’’ series, Mr. Pittman explained how 5 percent of US mortgage borrowers missing monthly payments could lead to a freeze in lending throughout the world.

Public policy would be more effective if reporters, lawmakers, and citizens understood how the financial system worked and why the crisis happened, Mr. Pittman said during the interview with Chittum in February.

“We need to know how to prevent it from happening again, and we need to know who did it,’’ he said.

“I always learned something new when I spoke with Mark,’’ said Representative Scott Garrett, a New Jersey Republican on the House Financial Services Committee.

Bloomberg’s lawsuit against the Fed, which was filed after Mr. Pittman’s requests under the US Freedom of Information Act were denied, continues without him. The central bank won a delay pending an appeal, which is scheduled for the week of Jan. 4.

At the time of his death, Mr. Pittman’s outgoing messages offered a link to a black-and-white photo of Woody Guthrie. Written on Guthrie’s guitar: “This machine kills fascists.’’

© Copyright 2009 The New York Times Company

5 Responses

  1. So AIG is still getting back door bailouts, selling junk to the FED.

  2. NEW YORK (CNNMoney.com) — American International Group announced Tuesday that it completed a deal wiping out $25 billion of its debt by selling two subsidiaries to the Federal Reserve Bank of New York.

    AIG said it is receiving the money in preferred shares for its life insurance companies, American International Assurance Co. and American Life Insurance Co. The deal was originally announced in March.

    This will bring the New York-based insurer’s debt to the New York Fed down to $17 billion. AIG also still owes the U.S. Treasury $44 billion from a separate Troubled Asset Relief Program (TARP) loan.

    AIG Chief Executive Bob Benmosche said, in a press release, that the debt reduction “sends a clear message to taxpayers: AIG continues to make good on its commitment to pay the American people back.”

    The Federal Bank of New York initially provided $85 billion worth of support to AIG.

    AIG’s stock rose about 5% on the news in pre-market trading.

    AIG shares tumbled 15% Monday, after Bernstein Research analyst Todd Bault told investors that he cut the 12-month price target to $12 a share from $20 because the insurer’s “loss reserves are significantly deficient again, much sooner than we would have forecast two years ago.”

    On Nov. 25, AIG announced that he had resolved its legal dispute with former chairman Maurice “Hank” Greenberg.

  3. NEIL, I strongly believe that we all attract to us what we believe and think about the most, your attitude is a challenge for the truth, it is the essence of who you are and what you believe in! i am truly inspired by your conviction on your views, interpretations and your pursuit for justice, true leaders have always been challenged in many ways by many, some have paid the ultimate price, but their ideology, believes, lessons and legacy has been ingrained so deeply in our souls that their physical bodies are gone but their gift to freedom and justice will live forever through the ones left behind.

    I can see you going on for many, many years to come, and the only way i see you departing this world is by the hand of our Creator, he is the only one that will call upon your name and you will listen.
    Neil and company you are my heroes. I have faith on the most omnipotent law, the only law by which ALL humans are ruled, judged and called to answer to, the very law that protects you today! my utmost respect to you Neil! Charlie. To victory America!!!!!

  4. I doubt if this guy’s untimely demise was any accident.

  5. We also note the passing this past Friday of Fred Joseph, 72 who oversaw the creation of the junk bond way of financing risk and revolutionized the financing of corporate takeovers on Wall Street.

    Can we not draw a predictable line straight from Joseph/Milken’s innovation in leveraged risk financing to the securitization craze?

    ALLAN
    B e M o v e d @ A O L . c o m

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    FRED JOSEPH AT 72; FORMER CEO OF DREXEL BURNHAM

    By Globe Staff And Wire Reports
    November 30, 2009 A.D.

    As a teenager, Fred Joseph became a fighter on the streets of Dorchester and Roxbury. To many in the boardrooms of high finance, he remained a fighter the rest of his life.

    Mr. Joseph, who HELPED ESTABLISH THE MARKET FOR JUNK BONDS, ran one of the most dynamic financial firms in the world, Drexel Burnham Lambert Inc., and then oversaw that firm’s demise, died Friday. He was 72.

    He died at New York Presbyterian Weill Cornell Medical Center after battling multiple myeloma, according to investment banker John Sorte in a statement. Sorte and Mr. Joseph helped start the investment bank Morgan Joseph & Co. in 2001.

    As chief executive at Drexel, Mr. Joseph supervised trader MICHAEL MILKEN, a pioneer in junk bonds.

    Before Milken and Drexel, most investors considered junk bonds – which are sold for companies whose credit ratings fall below investment grade – too risky. Milken and his team, however, developed a revolutionary idea: A corporate raider with relatively little free cash could use proceeds or promises from junk bond sales to leverage buyouts of companies. The innovation led to a surge of massive takeovers, including Kohlberg Kravis Roberts’ bid for RJR Nabisco.

    Orchestrating such deals, Drexel became one of the most revered – and feared – firms on Wall Street.

    US Attorney Rudolph Giuliani, however, led a four-year criminal investigation into charges that traders at Drexel had used inside information to swap shares of companies considered takeover targets.

    Milken pleaded guilty in 1989 to securities violations, served 22 months in prison, and faced $600 million in fines, according to the Associated Press.

    Negotiating with prosecutors, Mr. Joseph agreed that Drexel would plead guilty to several felony charges and pay hundreds of millions of dollars in penalties. At the time, he said he was appalled and shocked at the litany of questionable practices that the federal investigation unveiled. He denied direct involvement in the insider trading schemes but admitted to “surprising naiveté’’ in overseeing the traders.

    The scandal prompted investors and takeover tycoons to flee Drexel. After failing to secure a sale to investors or a bailout from the federal government, Mr. Joseph took Drexel into Chapter 11 bankruptcy protection in February of 1990. The firm was split into several companies.

    The Securities and Exchange Commission cleared Mr. Joseph of direct involvement in the insider trading scandal but barred him from managing a securities firm for a decade. Through much of the probe, the SEC was led by John Shad, who had hired Mr. Joseph for his first investment banking job, at E.F. Hutton in 1963.

    Mr. Joseph “was part of the creation and maturation of a major investment security category,’’ Samuel L. Hayes, a professor emeritus of investment banking at Harvard Business School, told Bloomberg News yesterday. “The worst things that he can be accused of is closing his eyes to things where he should have blown the whistle.’’

    Frederick Joseph was born April 22, 1937, in Boston. His father became a taxi driver when his business in appliance repairs failed. His mother was a dental hygienist.

    According to the book “The New Crowd,’’ the young Joseph joined with Jewish youths who battled ethnic gangs on the streets of Roxbury. Despite this, the youth was a straight A student at Roxbury Memorial High and earned a scholarship to Harvard University.

    He was a three-time boxing champion in his weight class for Harvard’s club. He received his undergraduate degree in English from Harvard in 1959 and his master’s in business administration in 1963.

    After a stint in the Navy and working at E.F. Hutton, he joined Shearson Hammill in 1970 and he eventually became chief operating officer. Mr. Joseph joined Drexel as a co-manager of the firm’s corporate finance department.

    “I remember the first time I met Michael,’’ Mr. Joseph told Fortune in 1990, describing the meeting with Milken on the trading floor in 1974. “He was very friendly, but he had one ear on me and one on the phone, executing trades, watching the tapes, quoting prices to people on the other end, and telling his own people what to do.

    “I became convinced he was brilliant, and I’ve never changed my mind about that.’’

    Mr. Joseph was named chief executive in 1985.

    After the unraveling of Drexel, Mr. Joseph stayed out of the securities business until 1994, when he became chairman of Clovebrook Capital, an investment- banking consulting firm.

    From 1998 to 2001, he was a senior adviser and managing director of ING Barings LLC, spending his leisure time at his dairy farm in New Jersey.

    He joined Morgan Joseph as a managing director where he started to get back into the junk bond business selling issues of between $50 million and $150 million, which larger firms view as too small to underwrite.

    “All of us will miss his sage advice, his iridescent smile and the warm professional manner that endeared Fred to everyone, from first year associates to long-time clients,’’ Sorte said.

    Material from Bloomberg News was used in this obituary.

    © Copyright 2009 A.D. The New York Times Company

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