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Government regulation of banks works!

Earlier today, we reported that "Assistant Attorney General Admits On TV That In The US Justice Does Not Apply To The Banks" when we commented on last night's PBS special "The Untouchables." Explicitly, we said that it was "Lenny Breuer who made it very clear that when it comes to the concept of justice the banks are and always have been "more equal" than others. He does so in such shocking clarity and enthusiasm that it is a miracle that this person is still employed by the US Department of Justice." As of minutes ago that is no longer the case as his employment contract has been torn up. The WaPo reports, that Lanny A. Breuer is leaving the Justice Department "after leading the agency’s efforts to clamp down on public corruption and financial fraud at the nation’s largest banks, according to several people familiar with the matter....It is not clear when Breuer intends to leave, nor what he plans to do once he departs, but it is certain that the prosecutor’s days in office are winding down, according to people who were not authorized to speak publicly about the matter."

From WaPo:

Breuer is widely credited with aggressively going after white-collar crime in the aftermath of the crisis. He also stepped up the division’s involvement in money laundering cases, launching a series of criminal investigations that have resulted in multimillion-dollar settlements. ...

Critics have also decried Breuer’s routine use of deferred prosecution, which gives the agency the right to go after a company in the future if it fails to comply with the terms of the agreement. They say the use of such tactics amounts to a slap on the wrists of companies that have engaged in egregious behavior. Breuer, however, has argued that the agreements result in greater accountability for corporate wrongdoing. Or none, as the case may be.

Brauer is not only known for being the bankers' lackey: his fingerprints are also all over Fast and Furious:

During Senate hearings in 2011, Breuer admitted that he failed to alert other Justice Department officials that federal agents had allowed guns to illegally flow into Mexico and onto U.S. streets between 2006 and 2007. The practice, known as “gun walking,” was also a key part of the Obama administration’s Phoenix gun trafficking operation, Fast and Furious.

The operation came under fire when many of the weapons later turned up at crime scenes in Mexico and the United States, including two where a U.S. Border Patrol agent was killed.

Several officials at the Justice Department resigned in connection with the operation, including Jason Weinstein, a deputy assistant attorney general in the criminal division. Breuer later apologized for his inaction, when the tactics first came to his attention. Sen. Charles E. Grassely (R-Iowa) called for his resignation, but Attorney General Eric H. Holder Jr. stood behind Breuer.As one of the longest-serving heads of the criminal division, Breuer’s tenure has been filled with controversy and high-profile prosecutions. He was admonished for his role in the agency’s botched attempt to infiltrate weapon-smuggling rings in the operation dubbed Fast and Furious. And he has been accused of being soft on Wall Street for failing to throw senior bank executives behind bars for their role in the financial crisis.

Either way, Brauer is gone.

And ironically it is his departure which confirms that everything that could be wrong at the US department of INjustice, is wrong.

by Anonymousreply 1701/26/2013

And ironically it is his departure which confirms that everything that could be wrong at the US department of INjustice, is wrong.

Because, with all due respect to this banker muppet, he is merely the tiniest cog in a broken down judicial system, which works (and we obviously use the term loosely) in conjunction with the legislative and executive branches, as well as that implied fourth branch - the Federal Reserve - to further just one thing: the interests of the bankster overclass, who ever since the financial crisis have benefited to the tune of some $5 trillion, or the full amount of incurred debt that future generations of Americans will be responsible for, and yet which benefit primarily the financial oligarch right here and right now.

Fixing the unprecedented level of corruption that has gripped America will not be done with the voluntary retirement of one person who should have done more, but kept his mouth shut (for whatever selfish reasons). The system, sadly, is so rotten to the core, that only a grand reset of every social and political institution will help.

Luckily, we have the Fed for that, which courtesy of its lunatic actions is bringing this once great country every day closer to the abyss.

The good news: there is no turning back now - the entire financial system is now on crash course at a pace of $85 billion per month and accelerating.

The bad news: it will take a while before the final tide subsides for one final time as the status quo will certainly not go without a fight. A very big, and very lethal fight.

by Anonymousreply 101/23/2013

Here is a thread the webmaster closed since it pointed out how corrupt the government really is, and why the banks control the government.

by Anonymousreply 201/23/2013

WASHINGTON -- Reforms instituted after the financial crisis to prevent future taxpayer-funded bailouts are bound to fail and will likely be weakened within the next few years, the Federal Reserve's longest-serving policy maker predicted Monday.

The stark warning, offered by Federal Reserve Bank of Kansas City President Thomas Hoenig, who's been warning about the rise of too-big-to-fail banks for more than a decade, comes as international regulators finalize plans to increase supervision of and toughen requirements on the world's largest banking organizations as a reaction to the global financial crisis. Rather than break up big banks, politicians decided to simply subject them to more oversight.

Yet debate rages as to whether the requirements are too tough, or not tough at all, and whether regulators will have the backbone to follow through on their commitments. Republicans in the U.S. House of Representatives are trying to dismantle the domestic financial reform law passed last year; banks are screaming that lending will dry up, inhibiting the anemic U.S. recovery; and on the global level, regulators from some countries where large banks dominate the national economy (and thus enjoy overt taxpayer backing) are trying to weaken international accords.

For Hoenig though, the choice is clear when it comes to what to do with the financial institutions that caused the most punishing downturn since the Great Depression: break them up into pieces that regulators can understand and provide a backstop to entities engaged in the so-called real economy -- but allow those dabbling in more risk-laden activities to fail.

The Obama administration and Congress chose the alternate route in passing the Dodd-Frank financial regulation law. To Hoenig, they made a mistake.

"Following this financial crisis, Congress and the administration turned to the work of repair and reform," he said during a Monday speech in Washington. "Once again, the American public got the standard remedies -- more and increasingly complex regulation and supervision."

"The Dodd-Frank reforms have all been introduced before, but financial markets skirted them," he continued. "Supervisory authority existed, but it was used lightly because of political pressure and the misperceptions that free markets, with generous public support, could self-regulate."

Regulators will lack the will to wind down failing companies deemed systemically important financial institutions, or SIFIs, Hoenig said. The power to force large firms into liquidation was the centerpiece of the Obama administration's plan to reform the financial system in the wake of the crisis and Great Recession.

"I just can't imagine it working," Hoenig said. Speaking of the difficulty of forcing a large, complex firm like Citigroup or Goldman Sachs into bankruptcy-like proceedings, the Midwesterner admitted that if he were the one ultimately making the decision, "I would be inclined to bail them out."

by Anonymousreply 301/23/2013

Neil Barofsky, the former special inspector general for TARP, is out with a new book, Bailout. In it he details how difficult it was for him to get his job done. Gretchen Morgenson has an overview of the book:

His story is illuminating, if deeply depressing. We tag along with Mr. Barofsky, a former federal prosecutor, as he walks into a political buzz saw as the special inspector general for TARP. Government officials, he says, eagerly served Wall Street interests at the public’s expense, and regulators were captured by the very industry they were supposed to be regulating. He says he was warned about being too aggressive in his work, lest he jeopardize his future career.

And so Mr. Barofsky, who formerly prosecuted Colombian drug lords as an assistant United States attorney in New York City, is schooled in the ways of Washington. One telling vignette comes early on in his book, when he is advised by inspectors general in other agencies about how to do his job.

As Mr. Barofsky writes, he had assumed that his assignment to oversee TARP meant that he should be fiercely independent from the Treasury Department, and vigilant against waste, fraud and abuse. But after canvassing other inspector generals for guidance, he writes, he learned of different priorities: maintaining and possibly increasing budgets, appearing to be active — and not making enemies.

“The common refrain went like this,” Mr. Barofsky writes. “There are three different types of I.G.’s. You can be a lap dog, a watchdog or a junkyard dog.” A lap dog is seen as too timid, he was told. But being a junkyard dog was also ill-advised.

“What you want to be is a watchdog,” he continues. “The agency should perceive you as a constructive but independent partner, helping to make things better for the agency, so everyone is better off.” He also learned, he says, that success as an inspector general meant that investigations come second. Don’t second-guess the Treasury. Instead, “focus on process.”

Thus the collision course was set between Mr. Barofsky and a crew of complacent, bank-friendly Treasury officials. He soon discovered that the department’s natural stance of marching in lock step with the banks meant that he had to question its policies and programs repeatedly to ensure that taxpayers weren’t at risk for fraud and abuse.

“The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true,” Mr. Barofsky said in an interview last week. “It really happened. These suspicions are valid.”

----- It's unlikely that Barofsky undersands the grave problems of moral hazard that TARP created. Or how far away TARP is from a free market solutions, but his book provides an important object lesson about what really goes on in Washington D.C. That is, in this glimpse, we see how posers pretend to be conducting investigations, and brickwalls exist for those who actually think they are going to be able to investigate and change things.

by Anonymousreply 401/23/2013

Cantor’s Office Wrote Loophole into Congressional Insider Trading Bill

Remember when Congress applauded itself recently for creating insider trading laws for members of Congress. Well, they also built in a loophole.

CNN is reporting that House Majority Leader Eric Cantor’s office wrote a loophole into the House version of the Stop Trading on Congressional Knowledge Act (STOCK) by exempting Congress members’ spouses and children from having to report stock market transactions.

The Senate version of the bill requires these transactions be reported within 45 days by both its members and their families. But a memo from the Office of Government Ethics, which oversees all federal executive branch employees, used the House version, telling them spouses and children were not subject to the rule.

The law, which bars members of Congress from trading stocks based on information they get for work purposes and requires them to register any stock transactions over $1,000 within 45 days, was signed into effect in April.

by Anonymousreply 501/23/2013

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[...]

by Anonymousreply 601/23/2013

Tim Carney spots the press release just put out by Mehri & Skalet. It says in part:

After nearly three years at the Department of Health and Human Services—as the first Director of Obamacare insurance implementation, as Senior Advisor to the Secretary, and as a Regional Director—longtime insurance regulator and plaintiff’s attorney Jay Angoff is returning to DC-based Mehri & Skalet, PLLC as a partner, where he will lead the firm’s insurance and healthcare practice.

“Working at HHS has been immensely rewarding, and I’m pleased with the progress that has been made in implementing the Affordable Care Act,” said Mr. Angoff of his departure from HHS. “I look forward to returning to Mehri & Skalet to help make sure the law is enforced. The Affordable Care Act has given health insurance policyholders new rights, and will give them even more in 2014; it is critical that we defend those newfound rights.”

Carney writes:

Is it relevant that the man who helped craft Obamacare’s regulations on insurers will now make lots of money by suing insurers based on those regulations?[...]Think about the incentives at play here: If you are a lawyer working for the government, and you shape the laws in such a way as to make lawsuits easier, you are then making yourself more valuable to a potential future employer.

by Anonymousreply 701/23/2013

So-

Get a job with the government and write laws and regulations that control some area, and then leave your job and make MILLIONS!

by Anonymousreply 801/23/2013

Bump

by Anonymousreply 901/24/2013

For the gun control crowd.

by Anonymousreply 1001/25/2013

Does this freeper moron ever stop spamming?

by Anonymousreply 1101/26/2013

How Much of a Revolving Door Crony is the New Obama Appointee for Head of the SEC? I outlined my argument against her here, including her whitewash of payoffs made to get Marc Rich his pardon. But Matt Taibbi even gets her protection of crony elititsts. He writes in Rolling Stone: Choice of Mary Jo White to Head SEC Puts Fox In Charge of Hen House

I was shocked when I heard that Mary Jo White, a former U.S. Attorney and a partner for the white-shoe Wall Street defense firm Debevoise and Plimpton, had been named the new head of the SEC.

Mary Jo White I thought to myself: Couldn’t they have found someone who wasn’t a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn’t they have found someone who isn’t a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?

I’ll leave it to others to chronicle the other highlights and lowlights of Mary Jo White’s career, and focus only on the one incident I know very well: her role in the squelching of then-SEC investigator Gary Aguirre’s investigation into an insider trading incident involving future Morgan Stanley CEO John Mack. While representing Morgan Stanley at Debevoise and Plimpton, White played a key role in this inexcusable episode. Taibbi is in favor of insider trading prosecutions, I am not, The point I am pulling from Taibbi's report is that White protects the crony elitists. The fact that she is known as a "tough prosecutor" means nothing other than that she will go after those not part of the inner elite. She is the worst type of government official, going after those unprotected by the establishment and using every vicious tool at her command to do it.

It's the type of official that the crony-left loves to see in power. White is unprincipled and willing to crush free spirits. Indeed, the crony left is so much in favor of White, Tabbibi was forced to add an addendum to his report to emphasize how evil White really is: Some people I trust have written in to complain that the Mack incident doesn't encompass White's whole career, and that the mere fact that Obama chose an ex-prosecutor with a record of high-level convictions is a good sign. That may be, and the choice of White may very well represent a departure from the last four years. But White's more recent record -- dating back quite a few years now -- has been as a lawyer earning a huge paycheck representing big banks.

Earlier today, I was talking to a former hedge fund manager, a guy who’s been around on Wall Street but is out of the game now. His point about White is simple and it makes a lot of sense. She may very well at one time have been a tough prosecutor. But she dropped out and made the move a lot of regulators make – leaving government to make bucketloads of money working for the people she used to police. “That move, being a tough prosecutor, then going to work defending scumbags, you can only make that move once,” was his point. “You can’t go back again, you know what I mean?”

Think about it: how do you go back and sit in S.E.C.’s top spot after all of those years earning millions as a partner for a firm that represented Morgan Stanley, Bank of America, Goldman, Sachs, Deutsche, Chase, and AIG, among others? Think that fact that his firm has retained her firm has anything to do with Jamie Dimon coming out and saying that White is the "perfect choice" to run the S.E.C.? Think of all the things she knows but can’t act upon. Could she really turn around and target Morgan Stanley after being their lawyer for all those years?

Irrespective of the Mack incident, which incidentally really was about as bad as it gets in terms of "regulatory capture," America’s top financial cop should be someone who doesn’t owe his or her nest egg to the world’s biggest banks.

A few points on Taibbi's addendum. Taibbi doesn't seem to be aware that White's current spin through the revolving door is not her first. As I reported, White has, 3 separate times, worked at the high-powered law firm, Debevoise & Plimpton. She split those gigs up with revolving door government jobs. Translation: Total establishment revolving door operative. The unprincipled crony left doesn't mind because, and this also seems to be lost on Taibbi, with Obama as president the crushing by White, in her new SEC position, will be focused on the non-connected. It won't be the banksters. White targets will be many of others the left will love to go after. Billionaire Obama-hater Sheldon Adelson's legal bills will rise for sure.

by Anonymousreply 1201/26/2013

So, pointing out that government regulators regularly leave the government to take 7-8 figure jobs within the industries they regulated is "freeperish"?

by Anonymousreply 1301/26/2013

Jesus Christ this freeper is dumb.

by Anonymousreply 1401/26/2013

Real liberals are outraged by this bullshit.

by Anonymousreply 1501/26/2013

Yes, we find your incessant posting, your never-ending copy and paste jobs, and your lack of critical thinking to be outrageous!

by Anonymousreply 1601/26/2013

You're funny, R16.

Critical thinkers would see this kind of cronyism as cause for a revolution.

by Anonymousreply 1701/26/2013
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