Is SEC Covering Up Wall Street Crimes?\
A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation's worst financial criminals.
On May 18th of this year, SEC enforcement director Robert Khuzami sent out a mass e-mail to the agency's staff with the subject line "Lawyers Behaving Badly." In it, Khuzami asked his subordinates to report any experiences they might have had where "the behavior of counsel representing clients in... investigations has been questionable."
Khuzami was asking staffers to recount any stories of outside counsel behaving unethically. But Flynn apparently thought his boss was looking for examples of lawyers "behaving badly" anywhere, including within the SEC. And he had a story to share he'd kept a lid on for years. "Mr. Khuzami may have gotten something more than he expected," Flynn's lawyer, a former SEC whistle-blower named Gary Aguirre, later explained to Congress.
Flynn responded to Khuzami with a letter laying out one such example of misbehaving lawyers within the SEC. It involved a case from very early in Flynn's career, back in 2000, when he was working with a group of investigators who thought they had a "slam-dunk" case against Deutsche Bank, the German financial giant. A few years earlier, Rolf Breuer, the bank's CEO, had given an interview to Der Spiegel in which he denied that Deutsche was involved in %C3%BCbernahmegespr%C3%A4che %E2%80%93 takeover talks %E2%80%93 to acquire a rival American firm, Bankers Trust. But the statement was apparently untrue %E2%80%93 and it sent the stock of Bankers Trust tumbling, potentially lowering the price for the merger. Flynn and his fellow SEC investigators, suspecting that investors of Bankers Trust had been defrauded, opened a MUI on the case.
A Matter Under Inquiry is just a preliminary sort of look-see %E2%80%93 a way for the SEC to check out the multitude of tips it gets about suspicious trades, shady stock scams and false disclosures, and to determine which of the accusations merit a formal investigation. At the MUI stage, an SEC investigator can conduct interviews or ask a bank to send in information voluntarily. Bumping a MUI up to a formal investigation is critical, because it enables investigators to pull out the full law-enforcement ass-kicking measures %E2%80%93 subpoenas, depositions, everything short of hot pokers and waterboarding.
In the Deutsche case, Flynn and other SEC investigators got past the MUI stage and used their powers to collect sworn testimony and documents indicating that plenty of %C3%BCbernahmegespr%C3%A4che indeed had been going on when Breuer spoke to Der Spiegel. Based on the evidence, they sent an "Action Memorandum" to senior SEC staff, formally recommending that the agency press forward and file suit against Deutsche.
Breuer responded to the threat as big banks like Deutsche often do: He hired a former SEC enforcement director to lobby the agency to back off. The ex-insider, Gary Lynch, launched a creative and inspired defense, producing a linguistic expert who argued that %C3%BCbernahmegespr%C3%A4che only means "advanced stage of discussions." Nevertheless, the request to proceed with the case was approved by several levels of the SEC's staff. All that was needed to move forward was a thumbs-up from the director of enforcement at the time, Richard Walker.
But then a curious thing happened. On July 10th, 2001, Flynn and the other investigators were informed that Walker was mysteriously recusing himself from the Deutsche case. Two weeks later, on July 23rd, the enforcement division sent a letter to Deutsche that read, "Inquiry in the above-captioned matter has been terminated." The bank was in the clear; the SEC was dropping its fraud investigation. In contradiction to the agency's usual practice, it provided no explanation for its decision to close the case.
On October 1st of that year, the mystery was solved: Dick Walker was named general counsel of Deutsche. Less than 10 weeks after the SEC shut down its investigation of the bank, the agency's director of enforcement was handed a cushy, high-priced job at Deu
- It's being done quietly, but it might interest people to know that investigations and tighter regulatory policies have been applied, huge fines assessed, and people investigated so that they face prosecution. Stuff doesn't happen overnight.%0D
A major "clean up" has been going on thanks to the Obama White House's insistence. I'd heard it before his former economic advisor appeared on Bill Maher and made references to it when Bill asked her about it a couple of weeks ago. %0D
A major investigation was also announced in the past three days related to the mortgage irregularities. I think Obama has a problem with messaging. Other presidents nad politicians grandstand and showboat and make big announcements and pronouncements and then nothing really happens and the media never follows up on them. %0D
But in this case, there is no grandstanding, just a methodical "noose-tightening" that will not send out shockwaves and affect international markets, but will correct problems. %0D
Our media-driven culture is all about finger-pointing and placing blame, vengeance and retribution, and Obama's more "eastern" orientation is about finding solutions. %0D
If there are people "covering up" anything, they'll be outed. I don't think the climate in the Obama White House is condusive to cover- ups of this kind. %0D
They'll do what is best and proper, and I'm comfortable with that. The people shouting and criticizing would love to derail what's going on. The reality is far different from what the media sensationalizes.
- Can you believe at this late date someone has the balls to say that Obama's failure is in the way he presents his case and not the case itself?
Whatever Obama is doing, whether he talks Eastern or Western, the results will be the same.
Whatever gets done, who ever gets a slap on the wrist this time, the politicians, Wall Street, K-Street and the associated attorneys who write the laws and regulations are going to be the ones in charge of our economy and therefore whether we have a future or whether we are slaves for the rich.
Make whatever changes you want to make. Send people to jail for twenty years instead of six months.
When you are done reforming, the usual suspects going to be the ones writing the laws, taking the regulatory jobs, moving on into plum jobs, and while making sure the path is paved for their friends, family members, and Harvard Law School classmates and buddies from Stanford Business School who think just the same way they do, and who can take over and continue gouging working people when the current SEC clique is gone.
Whenever you are done and whatever you do, the bankers on Wall Street are going to look at their billion dollar portfolios and then they are going to send the people they want to make the decisions to sit in the Oval Office next to whatever president wants a second term and wants Wall Street money to get it.
You want to reform the SEC so it can't fuck over average people ever again?
Here is what you do. It's very simple.
Take everything out of the financial markets that affects the lives of working people. Make sure working people have jobs, have government pension, have single-payer health care, decent housing, education for their children, and an infrastructure that works for everyone not just defense contractors.
Get the money for that sequestered from Wall Street in perpetuity.
To make sure our money remains ours, let us, working people, elect a representative body -- a commission of average people with average incomes who are going to have to rely on social security for retirement.
Give that commission the power to make sure Wall Street and the Koch brothers ante up their fortunes to keep social security secure and to make more tax contributions when necessary.
Give the committee the confiscatory power to get the money they need to get pensions for everyone -- out at age 55 at 80% wages, that's a good starting point -- that would help unemployment also.
Appoint a commission of construction workers and local residents to determine how to rebuild the infrastructure and let local committees of regular-income people have the power of law to get Wall Street money for what their community needs in terms of roads, hospitals, and schools.
If Wall Street and the Koch brothers object, don't rewrite the regulations for the umpteenth time and pretend more than a token number of suckers are going to go to jail -- expropriate their fortunes. Then take over their businesses and run them for the public good.
Those Wall Street bastards, the Murdochs, the Kochs, and the one percenters have run this economy for generations and look at where it has got us. They have trillions in their offshore accounts.
What do the rest of us have? The remaining 99% of the population who do the work and make money for the rich? The term of art for what working people have is "diddly-squat."
You think we are going to rest easy when two or three flunkies for the super-rich go to jail every generation, the regulations get adjusted for window-dressing, and all the while the great majority of Americans slip into abject poverty?
Enough. The super rich have had their chance to run this economy to provide a wealthy society for all of us and they can't do it.
I will give you this -- you got part of it right -- The people shouting and criticizing would love to derail what's going on. Amen to that.
- Does FoxNews support the Republican party?\
Are there pedo Catholic Priests?\
Does the Pentagon have military bases outside of the USA?
- Right. You got it.
This ever occur to you?
When you finally grasp how interconnected the power structure of capitalism is and how well all their leaders have this tremendous cooperative venture enriching and empowering themselves, their families, and their friends, generation after generation at our expense, then have you ever wondered what would happen if regular people cooperated in the same way and had our own organizations?
If you suggest it, here is what you hear from the right: "You don't need to be organized -- that's old fashioned, so '60s. Grow up."
They used to say, and I remember this, "Grow up and get a job." Don't hear that anymore, do you? Their economy doesn't provide any jobs, and they know it, so they've shortened it to, "Grow up."
Of course organizational methods that would make a mafia crime syndicate envious are at the top of their list, but never mind.
On the other hand, this is what you hear from the liberals: "Of course you need need organizations, little ones, that's true. You need our organization that we will provide for you. We will even run it for you. Make all the decisions. We will decide who you can vote for. Don't bother creating your own organization. Trust us."
Remember that old one: "How a lawyer says 'Fuck you?' -- 'Trust us.'" Same thing.
This is what both sides say when they are alone and they think we can't hear them, liberals and conservatives alike, and they say it to each other: "If any of the working people get any ideas, we will crush them."
- "little ones" is ambiguous, read "precious people.""
- Does anyone white collar ever go to jail? Meanwhile rioters in London are getting year long sentences for stealing $50 items.
- Uh, OP? Most of what Wall Street did leading up to the financial meltdown was not illegal. A lot of it was unethical, but not illegal. Deregulation and lax enforcement policies for twelve years Clinton/Bush)got us to where we are since Setember, 2008. %0D\
The "crime" is in the legislation, the deregulation, and lax enforcement standards. Always remember, for one stooge up from serving as an SEC director, there are ten stooges behind the scenes undermining everything.
- I remember when the SEC had a rock solid reputation.\
Heck, I remember when banks did, too.\
Per r7, deregulation has proven to ultimately have been self-defeating for Wall Street. Who knew how important trust & integrity is to the economy!!!
- What "deregulation" real means is no rules that can not be easily broken.
-- The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. -- Anatole France.
Not only is it a question of the rich dodging the law when they break it, the rich write the laws so they get the best protection.
In a society that functions for the good of all the people it would be a crime of the highest order for speculators to gamble with pension funds.
No one would ask if speculator made money or lost money. If he tampered with the money a firefighter or a teacher was counting on for retirement -- win, lose, or draw, we would be offering the speculator a blindfold and a cigarette, after a fair trial of course, with a public defender representing him.
As it is, he gets to keep whatever money he stole from the teachers, and if he didn't steal enough to cover his expenses, then we tax the teachers and put it back in his pocket.
Then we blame the teachers for having a union and making too much money in the first place -- they're the ones who ruined the economy don't you know.
- But if you are poor? Then the law makes you a criminal for being poor:
The viciousness of the official animus toward the indigent can be breathtaking. A few years ago, a group called Food Not Bombs started handing out free vegan food to hungry people in public parks around the nation. A number of cities, led by Las Vegas, passed ordinances forbidding the sharing of food with the indigent in public places, leading to the arrests of several middle-aged white vegans.
One anti-sharing law was just overturned in Orlando, but the war on illicit generosity continues. Orlando is appealing the decision, and Middletown, Connecticut, is in the midst of a crackdown. More recently, Gainesville, Florida, began enforcing a rule limiting the number of meals that soup kitchens may serve to 130 people in one day, and Phoenix, Arizona, has been using zoning laws to stop a local church from serving breakfast to homeless people.
For the not-yet-homeless, there are two main paths to criminalization, and one is debt. Anyone can fall into debt, and although we pride ourselves on the abolition of debtors' prison, in at least one state, Texas, people who can't pay fines for things like expired inspection stickers may be made to "sit out their tickets" in jail.
More commonly, the path to prison begins when one of your creditors has a court summons issued for you, which you fail to honor for one reason or another, such as that your address has changed and you never received it. Okay, now you're in "contempt of the court."
Or suppose you miss a payment and your car insurance lapses, and then you're stopped for something like a broken headlight (about $130 for the bulb alone). Now, depending on the state, you may have your car impounded and/or face a steep fine -- again, exposing you to a possible court summons. "There's just no end to it once the cycle starts," says Robert Solomon of Yale Law School. "It just keeps accelerating."
The second -- and by far the most reliable -- way to be criminalized by poverty is to have the wrong color skin. Indignation runs high when a celebrity professor succumbs to racial profiling, but whole communities are effectively "profiled" for the suspicious combination of being both dark-skinned and poor. Flick a cigarette and you're "littering"; wear the wrong color T-shirt and you're displaying gang allegiance. Just strolling around in a dodgy neighborhood can mark you as a potential suspect. And don't get grumpy about it or you could be "resisting arrest."
In what has become a familiar pattern, the government defunds services that might help the poor while ramping up law enforcement. Shut down public housing, then make it a crime to be homeless. Generate no public-sector jobs, then penalize people for falling into debt. The experience of the poor, and especially poor people of color, comes to resemble that of a rat in a cage scrambling to avoid erratically administered electric shocks. And if you should try to escape this nightmare reality into a brief, drug-induced high, it's "gotcha" all over again, because that of course is illegal too.
One result is our staggering level of incarceration, the highest in the world. Today, exactly the same number of Americans -- 2.3 million -- reside in prison as in public housing. And what public housing remains has become ever more prison-like, with random police sweeps and, in a growing number of cities, proposed drug tests for residents. The safety net, or what remains of it, has been transformed into a dragnet. . . .
Some states are beginning to ease up on the criminalization of poverty, using alternative sentencing methods, shortening probation, and reducing the number of people locked up for technical violations like missing court appointments. But others, diabolically enough, are tightening the screws: not only increasing the number of "crimes," but charging prisoners for their room and board, guaranteeing they'll be released with potentially criminalizing levels of debt. -- By Barbara Eherenreich
They only call it class warfare when we fight back.
Yes, I understand you can make the case that the economic collapse did not come about through gross illegalities.\
That says much about what is legal and illegal in this country. What is legal and illegal tells you whose interests get protected and who gets screwed.
We''re in the clear. It''s all legal
[quote]The safety net, or what remains of it, has been transformed into a dragnet. -- By Barbara Eherenreich\
the "crime industry" generates a lot of jobs and revenue for states & local economies. from bailiffs to funeral homes.\
America''s economy depends on jailing its citizens. Just like the old USSR!!
- we''re with r13
casey anthony jurors
- Barbara Eherenreich wrote the great book "Nickle and Dimed".%0D
Very repressive governments, the ones where vast shortages of essentials are going to be the norm far into the future and the government will not, or cannot do anything, to help the situation, ration job and housing because those are essential to living, and they are always short when the economy is bad.
The way this is done, often, is to issue or revoke job cards giving someone permission to work, and the same with housing -- grant or take away someone's permission to live in public housing or to get government rent subsidies, Section 8 housing, is an example.
What the capitalists governments everywhere are trying to do, and this is especially true in Great Britain and in the United States, the assault is on in these two countries because the organizations for working people have been systemically and purposefully weakened over the years, so push back is weak.
What the political leaders are trying to do is to tighten social control by making it impossible to ever work or ever find a place to live once you stand convicted of a crime, meaing a poor person convicted of a crime. Wall Street criminals don't run the same risks, obviously.
It is not necessary to issue work cards and take them away from someone who misbehaves. In the United States and Great Britain, any chance for gainful employment for the rest of your life is gone once you stand convicted of anything, certainly a felony.
In Great Britain, the drive is on to take away housing from family members of people convicted of crimes, extending homeless in an ever-widening circle beyond those charged with anything.
She is wonderful.
- Exactly, R12/OP! That''s exactly what I was trying to point out. I hear a lot of people ragging all the time about how no one from Wall Street "went to jail" after 9.08. But%0D\
the fines and statutes, and regulatory enforcements were comparatively weak when you consider the impact of what happened.%0D\
I have heard the Obama administration has been quietly cracking down, and getting tougher, and the financial reforms haven''t ended with one piece of legislation, more is happening and more is coming down, that''s why the GOP and their minders and handlers are determined%0D\
to run Obama out of office and the Dems out of Congress. A lot of the bad Wall Street crowd really dreads a Democratic majority.
The super-rich are doing just fine under Obama. Believe me, they can live with him. \
They might prefer a Republican, they do like to hedge their bets, but Obama would never have gotten where he is today unless they gave him their nod of approval at the start. He has done very well by them.\
He has steered the economy so their wealth and social power have grown significantly on his watch and at our expense.
Obama Goes All Out For Dirty Banker Deal
by Matt Taibbi
A power play is underway in the foreclosure arena, according to the New York Times.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations %E2%80%93 the practice of chopping up assets like mortgages and converting them into saleable securities %E2%80%93 that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided %E2%80%9Csettlement%E2%80%9D is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they%E2%80%99ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline. %C2%A0
This deal will also submarine efforts by both defrauded investors in MBS and unfairly foreclosed-upon homeowners and borrowers to obtain any kind of relief in the civil court system. The AGs initially talked about $20 billion as a settlement number, money that would %E2%80%9Ctoward loan modifications and possibly counseling for homeowners,%E2%80%9D as Gretchen Morgenson reported the other day.
The banks, however, apparently %E2%80%9Cbalked%E2%80%9D at paying that sum, and no doubt it will end up being a lesser amount when the deal is finally done.
To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS.%C2%A0
So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.
But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don%E2%80%99t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it%E2%80%99s not worth paying anybody off. To quote the immortal Tony Montana, %E2%80%9CHow do I know you%E2%80%99re the last cop I%E2%80%99m gonna have to grease?%E2%80%9D They need all the dirty cops on board, or else the whole enterprise is FUBAR.%C2%A0
In addition to the global settlement, Schneiderman is also blocking an individual $8.5 billion settlement for Countrywide investors. He has sued to stop that deal, claiming it could %E2%80%9Ccompromise investors%E2%80%99 claims in exchange for a payment representing a fraction of the losses.%E2%80%9D (cont.)
Published on Thursday, August 25, 2011 by Rolling Stone
- Obama Goes All Out For Dirty Banker Deal (cont.)
If Schneiderman thinks $8.5 billion is an insufficient, fractional payoff just for defrauded Countrywide investors, then you can imagine how bad a $20 billion settlement for the entire industry would be for the victims.
In that particular Countrywide settlement deal, it looks like Bank of New York Mellon, the New York Fed, Pimco and other players negotiated on behalf of defrauded investors. They told the Times they were happy with the deal, but investors outside the talks told Gretchen they weren%E2%80%99t happy with the settlement. %C2%A0
Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to the Times, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:
It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street %E2%80%94 love %E2%80%99em or hate %E2%80%99em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.
This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!
This quote leads one to wonder just what Wylde would consider %E2%80%9Cindefensible,%E2%80%9D given that stealing is pretty much the worst thing that a bank can do %E2%80%94 and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It%E2%80%99s really an incredible quote.
The banks are going to claim that all they%E2%80%99re guilty of is bad paperwork. But while the banks are indeed being investigated for "paperwork" offenses like mass tax evasion (by failing to pay fees associated with mortgage registrations and deed transfers) and mass perjury (a la the %E2%80%9Crobo-signing%E2%80%9D practices), their real crime, the one Schneiderman is interested in, is even more serious.
The issue goes beyond fraudulent paperwork to an intentional, far-reaching theft scheme designed to take junk subprime loans and disguise them as AAA-rated investments. The banks lent money to corrupt companies like Countrywide, who made masses of bad loans and immediately sold them back to the banks.
The banks in turn hid the crappiness of these loans via certain poorly-understood nuances in the securitization process %E2%80%93 this is almost certainly where Scheniderman%E2%80%99s investigators are doing their digging %E2%80%93 before hawking the resultant securities as AAA-rated gold to fools in places like the Florida state pension fund.
They did this for years, systematically, working hand in hand in a wink-nudge arrangement with clearly criminal enterprises like Countrywide and New Century. The victims were millions of investors worldwide (like the pensioners who saw their funds drop in value) and hundreds of thousands of individual homeowners, who were often sold trick loans and hustled into foreclosure when unexpected rate hikes kicked in.
In a larger sense, even the (often irresponsible) people who simply bought more house than they could afford were victims of this scam. That's because in many of these cases, credit simply would not have been available to those people had the banks not first discovered a way to raise vast sums of money dumping crap loans on an unsuspecting market.
In other words: if Bank of America hadn%E2%80%99t found a way to sell worthless subprime loans as AAA paper to the Chinese and the Scandavians in May, you can be sure that it wouldn%E2%80%99t be going back to Countrywide in June to lend out more money for more subprime loans.
And Countrywide, in turn, wouldn%E2%80%99t then have been sending masses of reps out into the ghettoes to offer juicy home loans to undocumented immigrants and refis to confused old ladies on social security. (cont.)
Published on Thursday, August 25, 2011 by Rolling Stone
- Obama Goes All Out For Dirty Banker Deal by Matt Taibbi (conclusion)
This is as bad as white-collar crime gets. But to Wylde, it doesn%E2%80%99t rise to the level of being %E2%80%9Cindefensible.%E2%80%9D Until they do something worse than this, we apparently should support the banks, and make sure they don%E2%80%99t have to pay more than a fraction of what they made off of this kind of crime.
What is most amazing about Wylde%E2%80%99s quote is the clear implication that even a law enforcement official like Schneiderman should view it as his job to %E2%80%9Cdo everything we can to support%E2%80%9D Wall Street. That would be astonishing interpretation of what a prosecutor's duties are, were it not for the fact that 49 other Attorneys General apparently agree with her.
In Schneiderman we have at least one honest investigator who doesn%E2%80%99t agree, which is to his great credit. But everyone else is on Wylde%E2%80%99s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.
Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he%E2%80%99ll win the contributions battle against the Republicans next summer.
Which is good for him, I guess. But it seems to me that it might be time to wonder if this is the most disappointing president we%E2%80%99ve ever had.
Published on Thursday, August 25, 2011 by Rolling Stone
- The SEC will never investigate, let alone prosecute, politically well-connected individuals or firms. It always goes after the little guy who makes waves. \
It is corrupted by politics and the banksters that control it.
- Of course.
- SEC= Secretly Everything Covered.
- The big banks control the SEC.
- Addicts controlling the Pharmacy.
- Uh, R7, not true. Thousands - tens of thousands - of crimes involving investor fraud and mortgage fraud have been uncovered, documented, and... not prosecuted. Of course the SEC is covering for Wall Street - it's peopled by guys who want to go work for Wall St. firms when they're done paying their dues at a meager everyman wage.
As with war criminals in the Bush administration (and Obama administration now too), Eric Holder and his boss want to "look forward, not backward," unless it's to aggressively prosecute whistleblowers doing the right thing. Obama is not what you think he is.
That is why allowing the government to selectively enforce rules (sending Martha to jail while anyone who is elected to congress can do insider trading any day- they are immune from prosecution) results in things like Madoff.
The SEC had been told repeatedly that he was a crook, but because he was buddies with the people at the top they let it slide.
Just one example of how government "regulation" is just another way of screwing the little guys.
- That's their mission statement, isn't it?
- FDR would be horrified to see what has happened on Wall Street since his time as President.
- Why, R32?
He's the one who created the government power centers that control the economy. He would be thrilled!
- [quote]The safety net, or what remains of it, has been transformed into a dragnet. -- By Barbara Eherenreich
Full prisons create profit.
Most intelligent informative honest thread to date.
- What is unsaid here is that if interest rates rise, even marginally, from +/-1.75% to 3%, the effect on borrowing costs for the USA would be devastating.
See the link-
Paul Krugman is out with a fascinating post, Debt in a Time of Zero.
In a somewhat convoluted fashion (at one point he discusses issuing a trillion dollar platinum coin to payoff debt), he pretty much admits that price inflation is a real threat and that the Fed will have to fight it by shrinking the money supply. He writes (my bold).
It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought.
Thus, the most that Krugman can argue is the timing of developing price inflation threat, and perhaps severity. But, is Krugman more concerned than he lets on? Has he planted this inflation warning so that he can in the future point back and say, "Yes, as the start of 2013, I was fully aware that inflation would come to haunt"? And then blame accelerating price inflation on the failure of the Fed to respond in quick enough fashion?
Further, does he seriously think the Fed is going to be able to "pull back" on the monetary base, without massive upheaval in the bond market? Here, Krugman is missing the BIG upheval that's coming, even though he may be starting to fear the price inflation.
- r36 - the problem is deflation, not inflation. Sorry - a little inflation would do a world of wonders to all the creditors of all the debt in the world.
Of course, the powerful, holders of that debt - don't want inflation and that's why we have no-growth policies, austerity measures and the like.
That's why the solution is to make these big banks and the national governments write off the debt, destroy the system and replace it with a free market, which would allow anyone to use gold, silver, pork futures, APL stock- any fungible and stable collateral- as money.
Repeal legal tender laws, and let banks issue cards based on X that are immediately converted at POS (point of sale) into whatever commodity the merchant chooses, and allows the buyer to keep his "wealth" in whatever he chooses. I could exchange 2 oz of gold for a new car (using my debit card) and the seller could immediately convert it into shares of FBook. The technology is available, but the government won't allow it. Wonder why? Is it because once people realize dollars, and yen, euro and pounds are worthless promises (due to the massive debts these governments have built up) that the smart people will flee from them, and crash the central banks?
It will never happen since the banks control our government, aka FASCISM, and they will go to war rather than lose power.
- Those fucks belong in jail, the only way justice will be served is if the people not only demand justice but create it.
- There you go again, R38. Abusing a phrase that you have no fucking clue to its meaning. How very FASCIST of you.
- Sigh.... R36, posting the same post over and over again to all of your old threads, regardless of relevance, is spamming.
[quote]That's why the solution is to make these big banks and the national governments write off the debt, destroy the system and replace it with a free market, which would allow anyone to use gold, silver, pork futures, APL stock- any fungible and stable collateral- as money.
ROFL.... You do realize that your proposal is both silly and unworkable, right? And that it would do absolutely zilch to solve any financial or economic problem? Just checking.
[quote]Repeal legal tender laws, and let banks issue cards based on X that are immediately converted at POS (point of sale) into whatever commodity the merchant chooses
Yes, because such a many-to-many POS exchange system would be just so trivial to set up. I can't think of any problems with such a system. Really.
[quote]The technology is available, but the government won't allow it. Wonder why? Is it because once people realize dollars, and yen, euro and pounds are worthless promises (due to the massive debts these governments have built up) that the smart people will flee from them, and crash the central banks?
ROFL.... I do so love this idiot and his posts and "solutions" so wholly disconnected from the real world.
[quote]It will never happen since the banks control our government, aka FASCISM, and they will go to war rather than lose power.
Keep 'em coming. We can all use a good laugh.
- It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?
It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.
How Wall Street Killed Financial Reform
- Obama and Holder will have much to answer for, but the HSBC scandal will be as low a point for this administration as its illegal drone strikes. Funding terrorists? Drug cartels? No problem! Running a medical marijuana dispensary legally? Raid em and jail em!
If republicans were as adept at screaming murder at republicans, and democrats were the same, then maybe the "average joe and Jane" would wake up to the fact that BOTH parties are essentially the same.
They vary in small ways, but on 95% of the big things- killing people overseas, bailing out banks, putting innocent people in jail, giving lucrative contracts to their selected crony buddies, etc. they are the same.
Face it- a small oligarch of rich families control the US, UK, and EU and we are just pawns.
- [quote]If republicans were as adept at screaming murder at republicans, and democrats were the same, then maybe the "average joe and Jane" would wake up to the fact that BOTH parties are essentially the same.
Well, sure, if you're a total moron, ignorant of politics and policy. Out here in the real world, though, there are enormous differences between the parties. But hey, why let a little reality get in your way? It never has before.
- So, the fact that the SEC ignored Madoff for a decade is an "aberration"?
More like SoP.
- Why did the threads that showed the utter ignorance of Paul Krugman get deleted?
- Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.
But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.
It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.
- After working long hours over many months crafting new rules for Wall Street, a number of government regulators are switching sides to work for the firms that will have to follow and interpret them.
Whenever there is a major policy change in Washington like the 2010 Dodd-Frank financial overhaul, it enhances the marketability of government employees with specialized skills and contacts. But in the past, it was officials at the Securities and Exchange Commission, the Federal Reserve and the Treasury Department in particular who found their expertise and contacts most highly valued in the financial industry[...]
At least nine CFTC employees have decamped since June for firms in finance, law and accounting that are figuring out how to comply with the Dodd-Frank overhaul. Six of the staffers were directly involved in rule making and three were in enforcement.
Among the firms doing the hiring are J.P. Morgan Chase, Deutsche Bank AG, Nomura Securities, Covington & Burling LLP and PricewaterhouseCoopers LLP. Some are subject to the rules, while others advise clients who are[...]
Carl Kennedy, a staffer to Commissioner Scott O'Malia, went to J.P. Morgan, and Adedayo Banwo, a lawyer in the agency's general counsel's office, joined Deutsche Bank. Both firms and several other large banks are expected early next year to register as "swap dealers," a designation that carries with it governance rules and capital requirements.[...] critics of the revolving door between Washington and Wall Street say they worry ex-staffers could use their personal connections to pressure the agency into crafting rules favorable to their new employers.
What's really evil here is not just that these characters will provide workarounds to legislation they just crafted, but that they will influence the creation of new rules and regulations that will provide an edge for their crony firms, and create a moat that makes it extremely difficult for others to enter a sector.
- PBS Frontline’s stunning report last night on why the Obama administration has refused to prosecute any Wall Streeter involved in the financial meltdown doesn’t just implicitly indict a political and financial press that utterly abdicated its responsibility to cover such questions. It also — and as importantly — exposes the genuinely radical jurisprudential ideology that Wall Street campaign contributors have baked into America’s “justice” system. Indeed, after watching the piece, you will understand that the word “justice” belongs in quotes thanks to an Obama administration that has made a mockery of the name of a once hallowed executive department.
The Frontline report is titled “The Untouchables,” a tongue-in-cheek salute to how that term once referred to those heroes who fought organized crime and yet now appropriately describes those doing the criminal organizing. Rooted in historical comparison, it contrasts how the Reagan administration prosecuted thousands of bankers after the now-quaint-looking S&L scandal with how the Obama administration betrayed the president’s explicit promise to “hold Wall Street accountable” and refused to prosecute a single banker connected to 2008′s apocalyptic financial meltdown.
The piece by PBS reporter Martin Smith looks at how Obama has driven federal prosecutions of financial crimes down to a two-decade low. It also documents the rampant and calculated mortgage securities fraud perpetrated by the major Wall Street banks, who, not coincidentally, were using some of the profits they made to become among President Obama’s biggest campaign donors.
- Ever feel like you've been cheated?
- It's all true, how could you doubt it?
- We are not in a credit expansion. Since 2008 we've been in a credit contraction. Duh.