tag:blogger.com,1999:blog-30607453158423612362024-03-05T10:03:45.782-08:00The AIG Scam (and Other Financial Misdeeds)Someone needs to go to jail!!!spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.comBlogger118125tag:blogger.com,1999:blog-3060745315842361236.post-15137603194595211622016-09-18T13:09:00.000-07:002016-09-18T13:09:04.033-07:00The Untold Story of 9/11: Bailing Out Alan Greenspan’s Legacy<blockquote>
By Pam Martens and Russ Martens: September 11, 2016 </blockquote>
<blockquote>
Today marks the 15th Anniversary of the tragic events of September 11, 2001 and yet the American public remains in the dark about critical details of hundreds of billions of dollars of financial dealings by the Federal Reserve in the days, weeks and months that followed 9/11.
What has also been lost in the official 9/11 Commission Report, Congressional hearings and academic studies, is how Wall Street, on the day the planes slammed into the World Trade Towers, was on the cusp of being exposed by the New York State Attorney General, Eliot Spitzer, as the orchestrator of a fraud of unprecedented proportion against the investing public. </blockquote>
<blockquote>
That investigation was stalled for more than six months. It would have been politically incorrect to do perp walks outside Wall Street’s biggest investment banks as families mourned the loss of their loved ones; as U.S. savings bonds were renamed Patriot Bonds to rally patriotism around the country; and Congress paid homage to the heroes at the big banks, the stock exchanges and the Federal Reserve for getting the system back up and running in less than a week. </blockquote>
<blockquote>
The loony policies of laissez-faire capitalism of Fed Chair Alan Greenspan, who worshiped at the feet of Ayn Rand, were also bailed out by the events of 9/11. Members of the Senate Banking Committee praised him on September 20, 2001 for his performance. Amazingly, at this hearing, just nine days after the attack, not one Senator asked Greenspan how much money the Fed had spent or to whom it went. </blockquote>
<blockquote>
The percolating collapse of Wall Street was held off for seven more years until 2008 when it finally became impossible to deny that Greenspan’s brand of financial deregulation and the repeal of the Glass-Steagall Act he had pushed for, had left Wall Street in ruins – without any assault from the skies. </blockquote>
<blockquote>
Here’s where Wall Street and the U.S. economy stood on September 10, 2001, the day before an attack in lower Manhattan provided the excuse for the Federal Reserve to flood Wall Street with unquestioned amounts of cash: The Nasdaq stock market, filled with the stocks of rigged analyst research from the iconic firms on Wall Street (the target of Spitzer’s investigation), had imploded, losing 66 percent of its pumped up value and wiping out $4 trillion in wealth. While it wasn’t yet known at the time, being only officially acknowledged long after 9/11, the U.S. economy had contracted for two consecutive quarters and was looking at another negative quarter of growth. </blockquote>
<blockquote>
Thus, it was quite advantageous for Alan Greenspan’s legacy as Chair of the Federal Reserve and what might have been an even worse economic slump that the Fed was given carte blanche to funnel hundreds of billions of dollars to Wall Street after 9/11 with the Federal government pumping billions more in fiscal stimulus.
According to a report from the New York Fed, an “unprecedented” amount of liquidity was pumped into the system. </blockquote>
<blockquote>
The Congressional Research Service quantifies the “unprecedented” amount as “$100 billion per day” over a three-day period beginning on 9/11. But the idea that the bailout lasted only a few days or weeks is misguided. The consolidated annual reports of the Federal Reserve Banks show that the Fed’s balance sheet grew from $609.9 billion at the end of 2000 to $654.9 billion at the end of 2001 to $730.9 billion at the end of 2002 and $771.5 billion as of December 31, 2003.</blockquote>
<a href="http://wallstreetonparade.com/2016/09/the-untold-story-of-911-bailing-out-alan-greenspans-legacy/" target="_blank">Read the rest.</a>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-25936344883694184042016-01-18T06:25:00.000-08:002016-01-18T06:25:48.617-08:00"The Big Short"Saw the movie yesterday-- quite good. Basically covers a lot of what this blog has been about.<br />
<br />
Didn't realize until I saw the credits that the movie is based on <a href="http://www.amazon.com/Big-Short-Inside-Doomsday-Machine/dp/0393338827/ref=sr_1_1?s=books&ie=UTF8&qid=1453085607&sr=1-1&keywords=the+big+short" target="_blank">this book by Michael Lewis.</a>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-18148032596157725962015-07-10T06:59:00.004-07:002015-07-10T06:59:50.104-07:00Eric Holder Returns to Openly Defending Wall St<blockquote class="tr_bq">
<a href="http://www.rollingstone.com/politics/news/eric-holder-wall-street-double-agent-comes-in-from-the-cold-20150708" target="_blank">Eric Holder has gone back to work for his old firm, the white-collar defense heavyweight Covington & Burling.</a> </blockquote>
<blockquote class="tr_bq">
The former attorney general decided against going for a judgeship, saying he's not ready for the ivory tower yet. "I want to be a player," he told the National Law Journal, one would have to say ominously. </blockquote>
<blockquote class="tr_bq">
Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence.
The office thing might have been improper, but at this point, who cares? More at issue is the extraordinary run Holder just completed as one of history's great double agents. </blockquote>
<blockquote class="tr_bq">
For six years, while brilliantly disguised as the attorney general of the United States, he was actually working deep undercover, DiCaprio in The Departed-style, as the best defense lawyer Wall Street ever had.
Holder denied there was anything weird about returning to one of Wall Street's favorite defense firms after six years of letting one banker after another skate on monstrous cases of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses. </blockquote>
<blockquote class="tr_bq">
"Just because I'm at Covington doesn't mean I will abandon the public interest work," he told CNN. He added to the National Law Review that a big part of the reason he was going back to private practice was because he wanted to give back to the community.
"The firm's emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active," he said.
Right. He's going back to Covington & Burling because of the firm's emphasis on pro bono work. </blockquote>
<blockquote class="tr_bq">
<span style="font-size: large;">Here's a man who just spent six years handing out soft-touch settlements to practically every Too Big to Fail bank in the world. Now he returns to a firm that represents many of those same companies: Morgan Stanley, Wells Fargo, Chase, Bank of America and Citigroup, to name a few.
Collectively, the decisions he made while in office saved those firms a sum that is impossible to calculate with exactitude. </span></blockquote>
<blockquote class="tr_bq">
<span style="font-size: large;">But even going by the massive rises in share price observed after he handed out these deals, his service was certainly worth many billions of dollars to Wall Street.
Now he will presumably collect assloads of money from those very same bankers. It's one of the biggest quid pro quo deals in the history of government service. </span></blockquote>
<blockquote class="tr_bq">
Congressman Billy Tauzin once took a $2 million-a-year job lobbying for the pharmaceutical industry just a few weeks after helping to pass the revolting Prescription Drug Benefit Bill, but what Holder just did makes Tauzin look like a guy who once took a couple of Redskins tickets.
In this light, telling reporters that you're going back to Covington & Burling to be "engaged in the civic life of this country" seems like a joke for us all to suck on, like announcing that he's going back to get a doctorate at the University of Blow Me. </blockquote>
<blockquote class="tr_bq">
Holder doesn't look it, but he was a revolutionary. He institutionalized a radical dualistic approach to criminal justice, essentially creating a system of indulgences wherein the world's richest companies paid cash for their sins and escaped the sterner punishments the law dictated. </blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-3177202032264008022015-05-22T14:51:00.002-07:002015-05-22T14:51:34.416-07:00Scamming Continues Without End, But Some Are Caught<h1 class="headline" id="yui_3_16_0_1_1432321314601_3303">
<a href="http://finance.yahoo.com/news/ubs-says-settle-fx-probe-pay-545-million-053323621--sector.html" target="_blank">Global banks admit guilt in forex probe, fined nearly $6 billion</a></h1>
<h1 class="headline" id="yui_3_16_0_1_1432321314601_3303">
</h1>
<blockquote>
By Karen Freifeld, David Henry and Steve Slater
</blockquote>
<br />
<blockquote>
NEW YORK/LONDON (Reuters) - Four major banks pleaded guilty on Wednesday to trying to manipulate foreign exchange rates and, with two others, were fined nearly $6 billion in another settlement in a global probe into the $5 trillion-a-day market. </blockquote>
<blockquote>
Citigroup Inc <c .n="">, JPMorgan Chase & Co <jpm .n="">, Barclays Plc <barc .l="">, UBS AG <ubsg .vx=""><ubs .n=""> and Royal Bank of Scotland Plc <rbs .l=""> were accused by U.S. and UK officials of brazenly cheating clients to boost their own profits using invitation-only chat rooms and coded language to coordinate their trades.</rbs></ubs></ubsg></barc></jpm></c> </blockquote>
<blockquote>
<c .n=""><jpm .n=""><barc .l=""><ubsg .vx=""><ubs .n=""><rbs .l="">All but UBS pleaded guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the FX spot market. UBS pleaded guilty to a different charge. Bank of America Corp <bac .n=""> was fined but avoided a guilty plea over the actions of its traders in chatrooms. </bac></rbs></ubs></ubsg></barc></jpm></c></blockquote>
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<li class="list-item story" data-uuid="e5eac63a-30da-3d62-abb3-f5d3da29e1c2" id="yui_3_16_0_1_1432321314601_3217"> <a data-rapid_p="1" data-ylk="itc:0;tar:finance.yahoo.com;ct:1;sec:lst-ct;cpos:1;test:;g:e5eac63a-30da-3d62-abb3-f5d3da29e1c2;pkgt:2;prov:Reuters;" href="http://finance.yahoo.com/news/five-global-banks-plead-guilty-140847108.html" id="yui_3_16_0_1_1432321314601_3219">Five global banks to pay $5.7 billion in fines over rate rigging</a> <span class="source">Reuters</span> </li>
<li class="list-item story" data-uuid="5f05f667-b975-35f9-bfde-9d10da08ffa3" id="yui_3_16_0_1_1432321314601_3208"> <a data-rapid_p="2" data-ylk="itc:0;tar:finance.yahoo.com;ct:1;sec:lst-ct;cpos:2;test:;g:5f05f667-b975-35f9-bfde-9d10da08ffa3;pkgt:2;prov:Reuters;" href="http://finance.yahoo.com/news/ubs-pay-545-mln-over-080618199.html" id="yui_3_16_0_1_1432321314601_3207">Global banks admit guilt in forex probe, fined nearly $6 bln</a> <span class="source" id="yui_3_16_0_1_1432321314601_3221">Reuters</span> </li>
<li class="list-item story" data-uuid="551055a6-9091-30c2-b4c4-63e062af1aa0" id="yui_3_16_0_1_1432321314601_3224"> <a data-rapid_p="3" data-ylk="itc:0;tar:finance.yahoo.com;ct:1;sec:lst-ct;cpos:3;test:;g:551055a6-9091-30c2-b4c4-63e062af1aa0;pkgt:2;prov:Reuters;" href="http://finance.yahoo.com/news/banks-sec-waivers-following-forex-170916014.html" id="yui_3_16_0_1_1432321314601_3223">U.S. SEC grants waivers to banks after guilty pleas</a> <span class="source">Reuters</span> </li>
<li class="list-item story" data-uuid="5d81029d-e559-3f2e-ad0b-7c535bba5f23" id="yui_3_16_0_1_1432321314601_3367"> <a data-rapid_p="4" data-ylk="itc:0;tar:finance.yahoo.com;ct:1;sec:lst-ct;cpos:4;test:;g:5d81029d-e559-3f2e-ad0b-7c535bba5f23;pkgt:2;prov:Reuters;" href="http://finance.yahoo.com/news/ubs-says-settle-fx-probe-072657324.html" id="yui_3_16_0_1_1432321314601_3376">Global banks admit guilt in forex probe, fined nearly $6 billion</a> <span class="source">Reuters</span> </li>
<li class="list-item story" data-uuid="50df07fa-be94-3bce-919f-4fa3a2b56b34" id="yui_3_16_0_1_1432321314601_3370"> <a data-rapid_p="5" data-ylk="itc:0;tar:www.wsj.com;ct:1;sec:lst-ct;cpos:5;test:;g:50df07fa-be94-3bce-919f-4fa3a2b56b34;pkgt:2;prov:The Wall Street Journal;" href="http://www.wsj.com/articles/global-banks-to-pay-5-6-billion-in-penalties-in-fx-libor-probe-1432130400?ru=yahoo?mod=yahoo_itp" id="yui_3_16_0_1_1432321314601_3369">[$$] Banks to Pay $5.6 Billion in Probes</a> <span class="source">The Wall Street Journal</span> </li>
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<h1 class="pageTitle" itemprop="name">
<a href="http://www.democracynow.org/2015/5/21/matt_taibbi_worlds_largest_banks_admit" target="_blank">Matt Taibbi: World’s Largest Banks Admit to Massive Global Financial Crimes, But Escape Jail (Again)</a></h1>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-1704230478949200882015-03-08T06:59:00.000-07:002015-03-08T06:59:13.908-07:00Banksters of America Still freaking outrageous after these many years.<br />
<br />
Great summary <a href="http://www.creators.com/lifestylefeatures/business-and-finance/taking-stock.html">by Malcolm Berko:</a><br />
<br />
<blockquote>
Visit Google and type in "Bank of America fraud," and then read and weep. Next type in "Bank of America fines and penalties." You'll quail at the innumerous details about BAC's allegedly intentional illegal activities, all of which were said to be approved by management, the executive committee and the board of directors. Those accusations include, but are not limited to, email fraud, foreclosure fraud, consumer loan fraud, debit and credit card fraud, defective mortgage fraud, currency and commodity manipulation, money laundering, fraudulently overstating its capital ratio, defrauding Fannie Mae and Freddie Mac, and colluding to rig international benchmark levels used by fund managers. To settle, BAC paid billions in fines and legal fees. Still, management and the board, disdainful of those fines, look down their chins (not their noses) at investors and regulators. </blockquote>
<blockquote>
BAC's biggest fine, $16.65 billion, was for knowingly selling shoddy mortgages and intentionally misrepresenting their quality. </blockquote>
<blockquote>
This bank shouldn't be called Bank of America. That gives America a bad name; rather, BAC should be renamed Bank of the Mafia. I'd never recommend a bank that's run by a crew of crooks who knowingly bilked middle-class Americans out of billions of dollars. This mortgage fraud by BAC, Goldman Sachs, JPMorgan Chase, Citigroup, UBS, etc., is the primary reason the market crashed in 2008. And in the aftermath, not a single member of BAC's management, which engineered this fraud, its executive committee, which encouraged it, or its board of directors, which approved it, paid a fine or spent an hour in jail. It's good to have well-paid friends in Congress. </blockquote>
<blockquote>
The ongoing problem with public companies is that mutual funds, pension plans and institutions expect management to grow revenues, earnings and dividends every year because those metrics increase the prices of stocks. If a company fails to do so, its overcompensated CEO will be out of his or her job. And in our crazy capitalistic economy, BAC's banksters are expected to provide shareholders with annual gains regardless of the intense competition from their competitors. That's tough to do, especially when your competition is equally degenerate and the economy can't generate enough activity to improve revenues, earnings and dividends.</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-90791661729564580822014-02-15T17:00:00.000-08:002014-02-15T17:00:05.822-08:00Fuckin' Banksters<a href="http://www.rollingstone.com/politics/news/the-vampire-squid-strikes-again-the-mega-banks-most-devious-scam-yet-20140212?print=true" target="_blank">Taibbi:</a> <br />
<blockquote class="tr_bq">
The key was repealing – or "modifying," as bill proponents put it –
the famed Glass-Steagall Act separating bankers and brokers, which had
been passed in 1933 to prevent conflicts of interest within the finance
sector that had led to the Great Depression. Now, commercial banks would
be allowed to merge with investment banks and insurance companies,
creating financial megafirms potentially far more powerful than had ever
existed in America. </blockquote>
<blockquote class="tr_bq">
All of this was big enough news in itself. But it would take half a
generation – till now, basically – to understand the most explosive part
of the bill, which additionally legalized new forms of monopoly,
allowing banks to merge with heavy industry. A tiny provision in the
bill also permitted commercial banks to delve into any activity that is
"complementary to a financial activity and does not pose a substantial
risk to the safety or soundness of depository institutions or the
financial system generally."<br />
<em>Complementary to a financial activity</em>. What the hell did that mean?<br />
<br />
"From the perspective of the banks," says Saule Omarova, a law
professor at the University of North Carolina, "pretty much everything
is considered complementary to a financial activity." </blockquote>
<blockquote class="tr_bq">
Fifteen years later, in fact, it now looks like Wall Street and its
lawyers took the term to be a synonym for ruthless campaigns of world
domination. "Nobody knew the reach it would have into the real economy,"
says Ohio Sen. Sherrod Brown. Now a leading voice on the Hill against
the hidden provisions, Brown actually voted for Gramm-Leach-Bliley as a
congressman, along with all but 72 other House members. "I bet even some
of the people who were the bill's advocates had no idea."<br />
Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs
own oil tankers, run airports and control huge quantities of coal,
natural gas, heating oil, electric power and precious metals. They
likewise can now be found exerting direct control over the supply of a
whole galaxy of raw materials crucial to world industry and to society
in general, including everything from food products to metals like zinc,
copper, tin, nickel and, most infamously thanks to a recent
high-profile scandal, aluminum. And they're doing it not just here but
abroad as well: In Denmark, thousands took to the streets in protest in
recent weeks, vampire-squid banners in hand, when news came out that
Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a
national electric provider. The furor inspired mass resignations of
ministers from the government's ruling coalition, as the Danish public
wondered how an American investment bank could possibly hold so much
influence over the state energy grid. </blockquote>
<blockquote class="tr_bq">
There are more eclectic interests, too. After 9/11, we found it
worrisome when foreigners started to get into the business of running
ports, but there's been little controversy as banks have done the same,
or even started dabbling in other activities with national-security
implications – Goldman Sachs, for instance, is apparently now in the
uranium business, a piece of news that attracted few headlines.<br />
<br />
But banks aren't just buying stuff, they're buying whole industrial
processes. They're buying oil that's still in the ground, the tankers
that move it across the sea, the refineries that turn it into fuel, and
the pipelines that bring it to your home. Then, just for kicks, they're
also betting on the timing and efficiency of these same industrial
processes in the financial markets – buying and selling oil stocks on
the stock exchange, oil futures on the futures market, swaps on the
swaps market, etc.</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-5939482020271936812013-10-30T11:18:00.000-07:002013-10-30T11:18:04.414-07:00Democracy Now: Yves Smith on $13B JPMorgan Settlement <a href="http://www.democracynow.org/blog/2013/10/28/pt_2_of_yves_smith_on_13b" target="_blank">Worth watching/listening to the whole thing</a>, but excerpt: <br />
<blockquote class="tr_bq">
<strong><span class="caps">AMY</span> <span class="caps">GOODMAN</span>:</strong> This is <em>Democracy Now!</em>, democracynow.org, <em>The War and Peace Report</em>.
I’m Amy Goodman, as we turn to part two right now of what’s being
touted as the biggest banking settlement in U.S. history. JPMorgan is
set to pay a record $13 billion fine to settle investigations into its
mortgage-backed securities. Five years ago, the bank’s risky behavior
helped trigger the financial meltdown, including manipulating mortgages
and sending millions of Americans into bankruptcy or foreclosure.
JPMorgan said in a statement that its latest settlement is an "important
step." However, many in the media have portrayed the deal as unfair to
the bank. </blockquote>
<blockquote class="tr_bq">
We’re going to turn right now to Yves Smith. She is a well-known financial analyst, and she is the founder of <a href="http://www.nakedcapitalism.com/">Naked Capitalism</a>, the blog. She’s also author of <em>ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism</em>.<br />
If you could talk about—how did JPMorgan Chase violate the law? </blockquote>
<blockquote class="tr_bq">
<strong><span class="caps">YVES</span> <span class="caps">SMITH</span>:</strong>
The violated the law part, we’re not—we’re not completely clear on
JPMorgan proper. It’s important to understand there are three legal
entities involved. One is Bear Stearns, which they acquired during the
crisis. One is Washington Mutual, which they acquired during the crisis.
Jamie [Dimon] was delighted to buy those both at the time. And we may
get into that detail. These are still financially extremely attractive
deals to him. So the idea that Dimon was in any way, shape or form a
victim in doing these acquisitions is really overstated. </blockquote>
<blockquote class="tr_bq">
But the key part of this deal is that this is about liability to
investors. So, the government—the government is representing, in this
case, a whole bunch of states that have claims against JPMorgan and the
different entities, as well as the <span class="caps">FHFA</span>,
which—sorry, Federal Housing Finance Agency, the regulator of Fannie Mae
and Freddie Mac, which entered into its own deal. But basically, the
bank sold—these different banking entities sold bonds to investors that
they said would be of a certain quality, and they were way short of
that. And then, it was because they were, you know, lousy borrowers.
They basically would say that it had a higher loan-to-value ratio; that
the fellow had income, and he didn’t; that it was a primary resident,
and it wasn’t—those sort of misrepresentations. </blockquote>
<blockquote class="tr_bq">
<strong><span class="caps">AMY</span> <span class="caps">GOODMAN</span>:</strong> Is this evidence that the Obama administration is getting tough on Wall Street? </blockquote>
<blockquote class="tr_bq">
<strong><span class="caps">YVES</span> <span class="caps">SMITH</span>:</strong>
I don’t really buy that theory, because the thing that brought Jamie
Dimon to the table was actually a criminal investigation which was
initiated in 2007 under the Bush administration. It takes a long time to
develop these prosecutions of these complex criminal frauds. So that’s
why it’s been such a long lead time. And this settlement has been under
negotiation for some time. There have been various investors, private
investors, as well as the government, that has been pursuing these
investor claims. So this has been sort of cycling through on all kinds
of fronts. These suits—you know, for example, different other banks,
Bank of America and, I believe, <span class="caps">HSBC</span> has
settled their investor claims with the government. So those
claims—they’re just cycling through those kind of settlements right now. </blockquote>
<blockquote class="tr_bq">
<strong><span class="caps">AMY</span> <span class="caps">GOODMAN</span>:</strong>
Yves Smith, can you talk about the pain that was caused by this? It’s
always talked about in these sort of very un-understandable financial
terms, macro terms, so it’s hard to really understand, though millions
of people felt what JPMorgan did. </blockquote>
<blockquote class="tr_bq">
<strong><span class="caps">YVES</span> <span class="caps">SMITH</span>:</strong>
Well, there—again, this part of the settlement actually doesn’t get to
the pain. That was a settlement we had last year. The settlement last
year was the part—there was a huge federal-state settlement last year
that was supposed to be about the homeowners. But in this case,
this—these settlements are all about the investors. And so, you know, to
your point, what JPMorgan is going to pay in this settlement is larger
than what it paid in the settlement last year to homeowners. I mean,
that just intuitively seems extremely unjust, you know, the fact that
investors are basically going to get a bigger dollar compensation out of
all these banking entities than homeowners got last year. I mean,
that’s crazy by anybody’s standards.</blockquote>
<br />spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-85964757202016022732013-10-30T10:38:00.001-07:002013-10-30T10:38:23.451-07:00A Bought-Off, Shamelessly Corrupt US House of Representatives Set to Pass Bank-Written Deregulatory Legislation<a href="http://dealbook.nytimes.com/2013/10/28/house-set-to-vote-on-2-bills-is-seen-as-an-ally-of-wall-st/?ref=politics&_r=1&&pagewanted=print" target="_blank">A must-read and grimly amusing piece</a>:<br />
<blockquote class="tr_bq">
WASHINGTON –– To Wall Street, this town might seem like enemy
territory. But even as federal regulators and prosecutors extract
multibillion-dollar penalties from the nation’s biggest banks, Wall
Street can rely on at least one ally here: the House of Representatives. The House is scheduled to vote on two bills this week that would undercut new <a href="http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/financial_regulatory_reform/index.html?inline=nyt-classifier">financial regulations</a>
and hand Wall Street a victory. The legislation has garnered broad
bipartisan support in the House, even after lawmakers learned that <a href="http://dealbook.on.nytimes.com/public/overview?symbol=C&inline=nyt-org">Citigroup</a> lobbyists helped write one of the bills, which would exempt a wide array of derivatives trading from new regulation. The bills are part of a broader campaign in the House, among
Republicans and business-friendly Democrats, to roll back elements of
the 2010 Dodd-Frank Act, the most comprehensive regulatory overhaul
since the Depression. Of 10 recent bills that alter Dodd-Frank or other
financial regulation, six have passed the House this year. This week, if
the House approves Citigroup’s legislation and another bill that would
delay heightened standards for firms that offer investment advice to
retirees, the tally would rise to eight. </blockquote>
<blockquote class="tr_bq">
Both the <a href="http://topics.nytimes.com/top/reference/timestopics/organizations/t/treasury_department/index.html?inline=nyt-org">Treasury Department</a>
and consumer groups have urged lawmakers to reject the bills, warning
that they could leave the nation vulnerable again to excessive financial
risk taking. The House proposals stand little chance of becoming law,
having received a much chillier reception in the Senate and at the White
House, which on Monday threatened to veto the bill on investment advice
for retirees. </blockquote>
<blockquote class="tr_bq">
But simply voting on the bills generates benefits
for both House lawmakers and Wall Street lobbyists, critics say. For
lawmakers, it comes in the form of hundreds of thousands of dollars in
campaign contributions. The banks, meanwhile, welcome the bills as a
warning to regulatory agencies that they should tread carefully when
drawing up new rules. </blockquote>
<blockquote class="tr_bq">
In other corners of the nation’s capital,
Wall Street has received a decidedly less cordial reception. The Justice
Department recently struck a tentative $13 billion settlement with <a href="http://dealbook.on.nytimes.com/public/overview?symbol=JPM&inline=nyt-org">JPMorgan Chase</a>
over the bank’s mortgage practices. Federal regulators are also
increasingly demanding that JPMorgan and other financial firms admit to
wrongdoing when settling enforcement actions. </blockquote>
<blockquote class="tr_bq">
“The House is the
odd man out in terms of doing Wall Street’s bidding,” said Marcus
Stanley, policy director of Americans for Financial Reform, a nonprofit
group critical of the financial industry. “They’re letting Wall Street
write the law to its own benefit in ways that harm the public.” The lawmakers who support the bills say the legislation is good for the nation, not just the bank’s bottom lines. </blockquote>
<blockquote class="tr_bq">
Still,
in the case of the derivatives trading bill, Citigroup’s lobbyists
redrafted the proposal, striking out certain phrases and inserting
others, according to <a href="http://www.nytimes.com/interactive/2013/10/29/business/dealbook/29lobbyists-documents.html">documents reviewed by The New York Times</a>. The House Financial Services Committee, a magnet for Wall Street campaign donations, <a href="http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/">adopted the bank’s recommendations in 2012 and again this May</a>. </blockquote>
<blockquote class="tr_bq">
Wall
Street’s support from the House extends beyond favorable votes. When
bank executives are called to testify before Congress, industry
lobbyists distribute proposed questions to lawmakers and their staff,
seeking to exert some control over the debate, according to emails
written by staff members on the House Financial Services Committee that
were reviewed by The Times. </blockquote>
<blockquote class="tr_bq">
One House aide, in an email exchange
among House Financial Services staff members last year, warned that
lawmakers should not mimic the talking points from lobbyists.<br />
“I know that some of our members are inclined to whore, but we cannot be apes,” the Republican aide said.</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-1487551906887001142013-10-13T10:01:00.002-07:002013-10-13T10:01:26.774-07:00A Thing of Beauty and Hilarity<a href="http://www.youtube.com/watch?v=EuXf9GmQln4" target="_blank">Matt Taibbi, Sam Seder on Alex Pareene, Popping CNBC's Bubble</a><br />
<br />
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/EuXf9GmQln4" width="420"></iframe><br />spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-48236300352028806872013-09-18T08:58:00.001-07:002013-09-19T05:11:25.651-07:00NSA Spying on Financial Transactions-- Part of US Economic Sabotage Against Other Countries?A really good bit from Max Keiser that puts a lot together on what the NSA spying is really about-- the big banks:<br />
<br />
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/wsZHNdQLvOU" width="420"></iframe>
<br />
"Max Keiser and Stacy Herbert discuss economic espionage and, perhaps,
sabotage by the NSA against the corporations and innovators of
competitor nations. In the second half, Max interviews author,
journalist and filmmaker, Greg Palast of GregPalast.com, about the Larry
Summers' secret 'End Game' memo and the decriminalization of what were
once financial crimes."<br />
<br />
My personal theory is these gun massacres are not about gun control at all, but events just waiting to go off when the controllers want, to distract from news coming out that the elites don't like. This story about the NSA spying on financial transactions, is such a story, imo. Which goes along with this: <a href="http://www.techdirt.com/articles/20130916/06383524529/nsa-is-also-grabbing-millions-credit-card-records.shtml" target="_blank">The NSA Is Also Grabbing Millions Of Credit Card Records</a><br />
<br />
Also <a href="http://www.emptywheel.net/2013/09/15/double-dipping-at-swift/#more-38183" target="_blank">Emptywheel on this-- pretty weedy stuff. </a>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-6411558247377771492013-06-21T03:57:00.001-07:002013-06-21T03:57:05.361-07:00The Ratings Agency Scam<a href="http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619?print=true" target="_blank">Taibbi:</a> <br />
<blockquote>
Ratings agencies are the glue that ostensibly holds the entire financial industry together. These gigantic companies – also known as Nationally Recognized Statistical Rating Organizations, or NRSROs – have teams of examiners who analyze companies, cities, towns, countries, mortgage borrowers, anybody or anything that takes on debt or creates an investment vehicle.
Their primary function is to help define what's safe to buy, and what isn't. </blockquote>
<blockquote>
A triple-A rating is to the financial world what the USDA seal of approval is to a meat-eater, or virginity is to a Catholic. It's supposed to be sacrosanct, inviolable: According to Moody's own reports, AAA investments "should survive the equivalent of the U.S. Great Depression."
It's not a stretch to say the whole financial industry revolves around the compass point of the absolutely safe AAA rating. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for. </blockquote>
<blockquote>
That this happened is even more amazing because these companies naturally have powerful leverage over their clients, as they are part of a quasi-protected industry that enjoys massive de facto state subsidies. Largely that's because government agencies like the Securities and Exchange Commission often force private companies to fulfill regulatory requirements by retaining or keeping in reserve certain fixed quantities of assets – bonds, securities, whatever – that have been rated highly by a "Nationally Recognized" ratings agency, like the "Big Three" of Moody's, S&P and Fitch. So while they're not quite part of the official regulatory infrastructure, they might as well be. </blockquote>
<blockquote>
It's not like the iniquity of the ratings agencies had gone completely unnoticed before. The Financial Crisis Inquiry Commission published a case study in 2011 of Moody's in particular and discovered that between 2000 and 2007, the agency gave nearly 45,000 mortgage-backed securities AAA ratings. One year Moody's doled out AAA ratings to 30 mortgage-backed securities every day, 83 percent of which were ultimately downgraded. "This crisis could not have happened without the rating agencies," the commission concluded. </blockquote>
<blockquote>
Thanks to these documents, we now know how that happened. And showing as they do the back-and-forth between the country's top ratings agencies and one of America's biggest investment banks (Morgan Stanley) in advance of two major subprime deals, they also lay out in detail the evolution of the industrywide fraud that led to implosion of the world economy – how banks, hedge funds, mortgage lenders and ratings agencies, working at an extraordinary level of cooperation, teamed up to disguise and then sell near-worthless loans as AAA securities. It's the black box in the American financial airplane.</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-17705196628126910312013-06-09T17:24:00.002-07:002013-06-09T17:24:51.160-07:00Everything Is Rigged, Continued: European Commission Raids Oil Companies in Price-Fixing Probe Not trivial:<br />
<blockquote class="tr_bq">
According to numerous reports, the European Commission regulators yesterday <a href="http://www.guardian.co.uk/business/2013/may/14/bp-shell-oil-price-rigging" target="_blank">raided the offices of oil companies</a>
in London, the Netherlands and Norway as part of an investigation into
possible price-rigging in the oil markets. The targeted companies
include BP, Shell and the Norweigan company Statoil. The <em><a href="http://www.guardian.co.uk/business/2013/may/14/bp-shell-oil-price-rigging" target="_blank">Guardian </a></em><a href="http://www.guardian.co.uk/business/2013/may/14/bp-shell-oil-price-rigging" target="_blank">explains</a> that officials believe that oil companies colluded to manipulate pricing data<br />
<div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">
<br />Read more: <a href="http://www.rollingstone.com/politics/blogs/taibblog/everything-is-rigged-continued-european-commission-raids-oil-companies-in-price-fixing-probe-20130515#ixzz2VlmzfLiN" style="color: #003399;">http://www.rollingstone.com/politics/blogs/taibblog/everything-is-rigged-continued-european-commission-raids-oil-companies-in-price-fixing-probe-20130515#ixzz2VlmzfLiN</a>
</div>
</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-47422050694130504932012-12-16T10:30:00.003-08:002012-12-16T10:30:29.713-08:00HSBC Scandal-- Outrageous These Bankers Didn't Go To Jail<blockquote class="tr_bq">
<a href="http://www.democracynow.org/2012/12/13/matt_taibbi_after_laundering_800_million" target="_blank">The banking giant HSBC has escaped indictment for laundering billions of dollars for Mexican drug cartels and groups linked to al-Qaeda.</a> Despite evidence of wrongdoing, the U.S. Department of Justice has allowed the bank to avoid prosecution and pay a $1.9 billion fine. No top HSBC officials will face charges, either. We’re joined by Rolling Stone contributing editor Matt Taibbi, author of "Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History." "You can do real time in jail in America for all kinds of ridiculous offenses," Taibbi says. "Here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that. That sends an incredible message, not just to the financial sector but to everybody. It’s an obvious, clear double standard, where one set of people gets to break the rules as much as they want and another set of people can’t break any rules at all without going to jail." </blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-48161099308066529782012-09-15T10:37:00.002-07:002012-09-15T10:40:41.573-07:00How Does Japan Do It?<blockquote>
<a href="http://truth-out.org/news/item/11414-the-myth-that-japan-is-broke-the-worlds-largest-debtor-is-now-the-worlds-largest-creditor">In an April 2012 article in Forbes titled "If Japan Is Broke, How Is It Bailing Out Europe?" Eamonn Fingleton pointed out that the Japanese government was by far the largest single non-euro zone contributor to the latest Euro rescue effort. </a>This, he said, is "the same government that has been going round pretending to be bankrupt (or at least offering no serious rebuttal when benighted American and British commentators portray Japanese public finances as a trainwreck)." </blockquote>
<br />
<blockquote>
Noting that it was also Japan that rescued the International Monetary Fund (IMF) system virtually single-handedly at the height of the global panic in 2009, Fingleton asked:
How can a nation whose government is supposedly the most overborrowed in the advanced world afford such generosity?
...
</blockquote>
<br />
<blockquote>
The betting is that Japan's true public finances are far stronger than the Western press has been led to believe. What is undeniable is that the Japanese Ministry of Finance is one of the most opaque in the world ...
</blockquote>
<br />
<blockquote>
Fingleton acknowledged that the Japanese government's liabilities are large, but said we also need to look at the asset side of the balance sheet:
[T]he Tokyo Finance Ministry is increasingly borrowing from the Japanese public not to finance out-of-control government spending at home, but rather abroad. </blockquote>
<br />
<blockquote>
Besides stepping up to the plate to keep the IMF in business, Tokyo has long been the lender of last resort to both the U.S. and British governments. Meanwhile it borrows 10-year money at an interest rate of just 1.0 percent, the second lowest rate of any borrower in the world after the government of Switzerland.
</blockquote>
<br />
<blockquote>
It's a good deal for the Japanese government: it can borrow ten-year money at 1 percent and lend it to the United States at 1.6 percent (the going rate on US ten-year bonds), making a tidy spread.
Japan's debt-to-GDP ratio is nearly 230 percent, the worst of any major country in the world. Yet Japan remains the world's largest creditor country, with net foreign assets of $3.19 trillion. In 2010, its GDP per capita was more than that of France, Germany, the UK and Italy. And while China's economy is now larger than Japan's because of its burgeoning population (1.3 billion versus 128 million), China's $5,414 GDP per capita is only 12 percent of Japan's $45,920.
</blockquote>
<br />
<blockquote>
How to explain these anomalies? Fully 95 percent of Japan's national debt is held domestically by the Japanese themselves.
(snip)
</blockquote>
<br />
<blockquote>
All of this has implications for Americans concerned with an out-of-control national debt. Properly managed and directed, it seems, the debt need be nothing to fear. Like Japan, and unlike Greece and other euro zone countries, the United States is the sovereign issuer of its own currency. </blockquote>
<br />
<blockquote>
If it wished, Congress could fund its budget without resorting to foreign creditors or private banks. It could do this either by issuing the money directly or by borrowing from its own central bank, effectively interest-free, since the Fed rebates its profits to the government after deducting its costs.
</blockquote>
<br />
<blockquote>
A little quantitative easing can be a good thing, if the money winds up with the government and the people rather than simply in the reserve accounts of banks. The national debt can also be a good thing. As Federal Reserve Board Chairman Marriner Eccles testified in hearings before the House Committee on Banking and Currency in 1941, government credit (or debt) "is what our money system is."
</blockquote>
<br />
<blockquote>
"If there were no debts in our money system," said Eccles, "there wouldn't be any money."
</blockquote>
<br />
<blockquote>
Properly directed, the national debt becomes the spending money of the people. It stimulates demand, stimulating productivity. To keep the system stable and sustainable, the money just needs to come from the nation's own government and its own people, and needs to return to the government and people.</blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-90320968888773422402012-09-04T16:59:00.000-07:002012-09-04T16:59:32.476-07:00When Firms Pay CEOs More Than Uncle Sam, the Tax System Is Broken<a href="http://www.latimes.com/business/la-fi-lazarus-20120828,0,6977864,full.column">Outrageous! </a><br />
<blockquote>
Twenty-five of the 100 highest-paid U.S. chief executives pocketed more in pay last year than their companies paid in federal income taxes.
I don't know about you, but that's the kind of stat that really gets my bacon sizzling — yet more evidence of how the 1% live in a bizarro parallel universe where the normal rules don't apply.
A recent report from the left-leaning Institute for Policy Studies found that weak profits weren't to blame for the 25 companies' relatively low tax bills. All had more than $1 billion in pretax income, according to regulatory filings.
Yet thanks to a variety of tax breaks and loopholes, each of these companies was able to lavish an average of $20.6 million on its CEO and pay less than that amount to Uncle Sam.
<b>
<span style="font-size: large;">And two of the companies — Citigroup and American International Group — have received billions of dollars in bailout cash from taxpayers.</span></b></blockquote>
spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-80045910461220507632012-08-30T19:06:00.002-07:002012-09-04T16:55:42.227-07:00The Secret to Mitt Romney’s Fortune-- Greed, Debt and Forcing Others to Foot the Bill<blockquote><a href="http://www.democracynow.org/2012/8/30/matt_taibbi_the_secret_to_mitt">A new article by reporter Matt Taibbi in Rolling Stone sheds new light on the origin of Republican presidential candidate Mitt Romney’s fortune, revealing how Romney’s former firm, Bain Capital, used private equity to raise money to conduct corporate raids. </a>Taibbi writes: "What most voters don’t know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America’s top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth."
</blockquote>
<a href="http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz258H0G7d5">Link to RS article</a>.spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-52999346878222094762012-07-12T05:55:00.000-07:002012-07-12T05:55:34.874-07:00The Evil of Offshore Tax Havens<a href="http://www.nytimes.com/2012/05/06/opinion/sunday/these-islands-arent-just-a-shelter-from-taxes.html">Robert Morganthau in the NYTimes</a>:<blockquote>The favorable tax rates encourage corporations to avoid paying American taxes by structuring complicated international transactions, like Apple’s “Double Irish With a Dutch Sandwich,” recently described by The New York Times. But it’s not just the low tax rates that make these jurisdictions attractive to those following the rules. The secrecy of offshore jurisdictions allows some individuals and corporations to engage in outright tax fraud, costing America at least $40 billion each year.
And that secrecy makes offshore tax fraud almost impossible for law enforcement to detect. When I was the Manhattan district attorney, we learned of offshore accounts only through whistle-blowers, cooperators and serendipity.
Legislation shaped by Senators Carl Levin, Kent Conrad and Sheldon Whitehouse that would curb some of these tax abuses by giving the Treasury Department the muscle to respond when foreign governments hampered our tax enforcement was recently passed by the Senate, but awaits House action. Those reforms are long overdue but do not fully address the larger problem: financial secrecy laws in offshore jurisdictions.
The secrecy laws in these tax havens are at the root of serious crimes: fraud, money laundering and international terrorism. </blockquote>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-79623097387541767292012-07-12T05:53:00.001-07:002012-07-12T05:55:48.936-07:00Corporate Corruption Increasing Dramatically in the US<a href="http://www.nytimes.com/2012/07/11/business/economy/the-spreading-scourge-of-corporate-corruption.html">Eduardo Porter in the NYTimes:</a><blockquote class="tr_bq">
<div itemprop="articleBody">
Perhaps the most surprising aspect of the <a class="meta-classifier" href="http://topics.nytimes.com/top/reference/timestopics/subjects/l/london_interbank_offered_rate_libor/index.html?inline=nyt-classifier" title="More articles about Libor.">Libor</a> scandal is how familiar it seems. Sure, for some of the world’s leading banks to try <a href="http://www.economist.com/node/21558281?fsrc=scn/tw_ec/the_rotten_heart_of_finance" title="Article from The Economist.">to manipulate</a>
one of the most important interest rates in contemporary finance is
clearly egregious. But is that worse than packaging billions of dollars
worth of dubious mortgages into a bond and having it stamped with a
Triple-A rating to sell to some dupe down the road while betting against
it? Or how about forging documents on an industrial scale to foreclose
fraudulently on countless homeowners? </div>
<div itemprop="articleBody">
</div>
</blockquote>
<br />
<blockquote class="tr_bq">
<div itemprop="articleBody">
The misconduct of the financial industry no longer surprises most
Americans. Only about one in five has much trust in banks, according to <a href="http://www.gallup.com/poll/155357/Americans-Confidence-Banks-Falls-Record-Low.aspx" title="The Gallup Web site.">Gallup polls</a>,
about half the level in 2007. And it’s not just banks that are frowned
upon. Trust in big business overall is declining. Sixty-two percent of
Americans believe corruption <a href="http://www.gallup.com/poll/154571/Majority-Worldwide-Sees-Widespread-Corruption-Businesses.aspx" title="Study at Gallup Web site.">is widespread</a>
across corporate America. According to Transparency International, an
anticorruption watchdog, nearly three in four Americans believe that <a href="http://archive.transparency.org/policy_research/surveys_indices/gcb/2010_11/results" title="Global Corruption Barometer.">corruption has increased</a> over the last three years. </div>
<div itemprop="articleBody">
</div>
</blockquote>
<br />
(snip)<br /><br />
<blockquote class="tr_bq">
<div itemprop="articleBody">
In 2001, Transparency International’s Corruption Perceptions Index ranked the United States as the <a href="http://archive.transparency.org/policy_research/surveys_indices/cpi/2001" title="Transparency International Web site.">16th least-corrupt</a> country. By last year, the nation had fallen to <a href="http://cpi.transparency.org/cpi2011/results/" title="Curruption Perceptions Index 2011.">24th place</a>. The World Bank <a href="http://info.worldbank.org/governance/wgi/pdf/c228.pdf" title="World Bank Web site.">also reports</a>
a weakening of corruption controls in the United States since the late
1990s, so that it is falling behind most other developed nations.
</div>
<div itemprop="articleBody">
The most pointed evidence that breaking the rules has become standard
behavior in the corporate world is how routine the wrongdoing seems to
its participants. “Dude. I owe you big time!... I’m opening a bottle of
Bollinger,” e-mailed one Barclays trader to a colleague for fiddling
with the rate and improving the apparent profit of his derivatives book.
</div>
</blockquote>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-38304746602968180512012-07-07T06:21:00.001-07:002012-07-07T14:47:35.179-07:00To Run a Bank Is to StealAll banking executives should be put in jail.
The latest reason-- <a href="http://www.democraticunderground.com/101739205">the LIBOR scandal</a>: <br />
<blockquote>
LIBOR stands for the London InterBank Offered Rate. So what does that mean? It's basically the rate that banks around the world are lending money to each other. And the way it's calculated is each day - the banks submit what rate they can afford to borrow money at - and the average of what all the banks submit becomes the LIBOR rate. But what's really important to remember here is - LIBOR doesn't just apply to the rate banks lend money to each other. It also applies to the rate that we consumers pay on several different types of loans - including mortgages, car loans, and credit card rates. So if those rates are manipulated by banks - and artificially driven higher - then it affects a lot of people - and leads to working people paying more on their loans. Which is exactly what happened.
Earlier this week - the CEO and COO of Barclays bank resigned after it was revealed their bank was routinely manipulating LIBOR rates between 2005 and 2009. Barclays has since been hit with a $450 million fine for this criminal activity. But the question is - was Barclays alone in this? Or were other banks involved as well - and not only that - were governments and regulators involved in the scam too? Disgraced Barclays CEO Bob Diamond is alleging just that. As the Washington Post reported on Wednesday: "Fallen banking titan Bob Diamond on Wednesday described regulators on both sides of the Atlantic as partly complicit in a scandal involving the manipulation of a key interbank lending rate, telling a British parliamentary committee that government watchdogs had failed to act after his bank, Barclays, informed them of industry-wide irregularities during the U.S. financial crisis." So just how deep does this scandal go - and how much money did the banksters make this time screwing us? </blockquote>
Basically, <a href="http://www.ritholtz.com/blog/2012/07/the-big-losers-in-the-libor-rate-manipulation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29" target="_blank">the LIBOR rates were rigged, to screw over smaller fish-- in other words, all of us, via City and Local governments</a>: <br />
<blockquote>
We know that the big banks conspired to manipulate Libor rates, with the approval of government authorities.
We know that the Libor manipulation effected the world’s largest market – interest rate derivatives.
But who are the biggest victims?
Sometimes the big banks manipulated the Libor rates up, and sometimes down. Different groups of people got hurt depending which way the rates were gamed.
Bloomberg’s Darrell Preston explained last year how cities and other local governments got scalped when rates were manipulated downward:
In the U.S., municipal borrowers used swaps to guard against the risk of higher interest costs on variable-rate debt by exchanging payments with another entity and tying how much they pay to an underlying value such as an index. The agreements can backfire if rates move in unexpected directions, resulting in issuers making larger payments.The derivatives were often designed to offset the risks of increases in the short-term rates tied to auction-rate securities, fixing borrowers’ costs by trading their debt- service payments with another party. Instead, rates dropped.
The yield on two-year Treasury notes fell from about 5.1 percent in June 2007 to a record 0.14 percent on Sept. 20. On Oct. 6, the U.S. Treasury sold $10 billion of five-day cash- management bills at 0 percent.
Ellen Brown adds:
For more than a decade, banks and insurance companies convinced local governments, hospitals, universities and other non-profits that interest rate swaps would lower interest rates on bonds sold for public projects such as roads, bridges and schools. The swaps were entered into to insure against a rise in interest rates; but instead, interest rates fell to historically low levels. This was not a flood, earthquake, or other insurable risk due to environmental unknowns or “acts of God.” It was a deliberate, manipulated move by the Fed, acting to save the banks from their own folly in precipitating the credit crisis of 2008. The banks got in trouble, and the Federal Reserve and federal government rushed in to bail them out, rewarding them for their misdeeds at the expense of the taxpayers. [The same thing happened in England.]</blockquote>
In other words, the banks convinced borrowers to insure against interest rates going UP, by engaging in swaps. However, the Fed LOWERED interest rates, which the banks knew about, meanwhile encouraging taxpayers to buy these insurance swaps and screwing over ordinary people. <br />
<blockquote>
How the swaps were supposed to work was explained by Michael McDonald in a November 2010 Bloomberg article titled “Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire”:
In an interest-rate swap, two parties exchange payments on an agreed-upon amount of principal. Most of the swaps Wall Street sold in the municipal market required borrowers to issue long-term securities with interest rates that changed every week or month. The borrowers would then exchange payments, leaving them paying a fixed-rate to a bank or insurance company and receiving a variable rate in return. Sometimes borrowers got lump sums for entering agreements.
Banks and borrowers were supposed to be paying equal rates: the fat years would balance out the lean. But the Fed artificially manipulated the rates to the save the banks. After the credit crisis broke out, borrowers had to continue selling adjustable-rate securities at auction under the deals. Auction interest rates soared when bond insurers’ ratings were downgraded because of subprime mortgage losses; but the periodic payments that banks made to borrowers as part of the swaps plunged, because they were linked to benchmarks such as Federal Reserve lending rates, which were slashed to almost zero.</blockquote>
The whole thing is fairly complicated, and the last link has a lot more, but hopefully you will get the basic idea.
<a href="http://www.truthdig.com/report/item/crime_of_the_century_20120706/">Robert Scheer calls this the "Crime of the Century</a>"spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-65536278302282871262012-06-30T18:58:00.002-07:002012-06-30T18:58:12.342-07:00JPMorgan Trading Loss May Reach $9 Billion<a href="http://dealbook.nytimes.com/2012/06/28/jpmorgan-trading-loss-may-reach-9-billion/?hp" target="_blank">More trouble for the welfare queen* Jamie Diamond:</a> <br />
<blockquote>
Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.
When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank.</blockquote>
*www.bloomberg.com/news/2012-06-18/dear-mr-dimon-is-your-bank-getting-corporate-welfare-.htmlspookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-3111273847832461782012-06-30T18:55:00.000-07:002012-06-30T18:55:30.425-07:00More Bank Scams-- Barclays<blockquote class="tr_bq">
<a href="http://www.bbc.co.uk/news/business-18638357" target="_blank">Banksters at work: </a><span class="cross-head"></span>
<br />
<blockquote class="tr_bq">
Barclays was fined £290m ($450m) on Wednesday by the UK and US
authorities after an investigation into claims that several banks
manipulated the Libor rate at which they lend to each other.<br />
Investigators say that Barclays' traders lied to make the
bank look more secure during the financial crisis and, sometimes -
working with traders at other banks - to make a profit.<br />
Barclays had acknowledged that its actions between 2005 and 2009 had fallen "well short of standards".</blockquote>
</blockquote> The head of Barclays naturally just blames it all on a few bad traders.spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-2852370530871001062012-06-24T10:24:00.001-07:002012-06-24T10:24:24.540-07:00The Wall Street Crime Family SyndicateTaibbi's latest: <blockquote class="tr_bq">
....this just-completed trial in downtown New York against three faceless
financial executives really was historic. Over 10 years in the making,
the case allowed federal prosecutors to make public for the first time
the astonishing inner workings of the reigning American crime syndicate,
which now operates not out of Little Italy and Las Vegas, but out of
Wall Street. </blockquote>
<blockquote class="tr_bq">
<br />
<span style="font-size: large;">The defendants in the case – Dominick Carollo, Steven Goldberg and
Peter Grimm – worked for GE Capital, the finance arm of General
Electric. Along with virtually every major bank and finance company on
Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS,
Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall
Street wiseguys spent the past decade taking part in a breathtakingly
broad scheme to skim billions of dollars from the coffers of cities and
small towns across America. The banks achieved this gigantic rip-off by
secretly colluding to rig the public bids on municipal bonds, a business
worth $3.7 trillion. By conspiring to lower the interest rates that
towns earn on these investments, the banks systematically stole from
schools, hospitals, libraries and nursing homes – from "virtually every
state, district and territory in the United States," according to one
settlement. And they did it so cleverly that the victims never even knew
they were being cheated. </span>No thumbs were broken, and nobody ended up in
a landfill in New Jersey, but money disappeared, lots and lots of it,
and its manner of disappearance had a familiar name: <em>organized crime</em>. </blockquote>
<blockquote class="tr_bq">
In fact, stripped of all the camouflaging financial verbiage, the
crimes the defendants and their co-conspirators committed were virtually
indistinguishable from the kind of thuggery practiced for decades by
the Mafia, which has long made manipulation of public bids for things
like garbage collection and construction contracts a cornerstone of its
business. What's more, in the manner of old mob trials, Wall Street's
secret machinations were revealed during the <em>Carollo</em> trial
through crackling wiretap recordings and the lurid testimony of
cooperating witnesses, who came into court with bowed heads, pointing
fingers at their accomplices. The new-age gangsters even invented an
elaborate code to hide their crimes. Like Elizabethan highway robbers
who spoke in thieves' cant, or Italian mobsters who talked about
"getting a button man to clip the capo," on tape after tape these Wall
Street crooks coughed up phrases like "pull a nickel out" or "get to the
right level" or "you're hanging out there" – all code words used to
manipulate the interest rates on municipal bonds. The only thing that
made this trial different from a typical mob trial was the scale of the
crime. </blockquote>
<blockquote class="tr_bq">
<em>USA v. Carollo</em> involved classic cartel activity: not just
one corrupt bank, but many, all acting in careful concert against the
public interest. In the years since the economic crash of 2008, we've
seen numerous hints that such orchestrated corruption exists. The
collapses of Bear Stearns and Lehman Brothers, for instance, both
pointed to coordinated attacks by powerful banks and hedge funds
determined to speed the demise of those firms. In the bankruptcy of
Jefferson County, Alabama, we learned that Goldman Sachs accepted a $3
million bribe from J.P. Morgan Chase to permit Chase to serve as the
sole provider of toxic swap deals to the rubes running metropolitan
Birmingham – "an open-and-shut case of anti-competitive behavior," as
one former regulator described it.<br />
<div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">
<br />Read more: <a href="http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620#ixzz1yjVG55QD" style="color: #003399;">http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620#ixzz1yjVG55QD</a></div>
</blockquote>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-87405503000287583092012-06-24T10:11:00.000-07:002012-06-24T10:28:05.448-07:00Jamie Dimon, Welfare Queen<a href="http://www.blogger.com/www.bloomberg.com/news/2012-06-18/dear-mr-dimon-is-your-bank-getting-corporate-welfare-.html">Bloody outrageous, especially considering the losses they've had recently: </a><br />
<blockquote class="tr_bq">
When JPMorgan Chase & Co. Chief
Executive Officer <a href="http://topics.bloomberg.com/jamie-dimon/">Jamie Dimon</a> testifies in the U.S. House today,
he will present himself as a champion of free-market capitalism
in opposition to an overweening government. His position would
be more convincing if his bank weren’t such a beneficiary of
corporate welfare. </blockquote>
<blockquote class="tr_bq">
To be precise, JPMorgan receives a government subsidy worth
about $14 billion a year, according to research published by the
<a href="http://topics.bloomberg.com/international-monetary-fund/">International Monetary Fund</a> and our own analysis of bank balance
sheets. The money helps the bank pay big salaries and bonuses.
More important, it distorts markets, fueling crises such as the
recent subprime-lending disaster and the sovereign-debt debacle
that is now threatening to destroy the euro and sink the global
economy.
(snip)
In recent decades, governments and central banks around the world have developed a consistent pattern of behavior when trouble strikes banks that are large or interconnected enough to threaten the broader economy: They step in to ensure that all the bank’s creditors, not just depositors, are paid in full. Although typically necessary to prevent permanent economic damage, such bailouts encourage a reckless confidence among creditors. They assume the government will always make them whole, so they become willing to lend at lower rates, particularly to systemically important banks.
Implicit Subsidy
With each new banking crisis, the value of the implicit subsidy grows. In a recent paper, two economists -- Kenichi Ueda of the IMF and Beatrice Weder Di Mauro of the University of Mainz -- estimated that as of 2009 the expectation of government support was shaving about 0.8 percentage point off large banks’ borrowing costs. That’s up from 0.6 percentage point in 2007, before the financial crisis prompted a global round of bank bailouts.
To estimate the dollar value of the subsidy in the U.S., we multiplied it by the debt and deposits of 18 of the country’s largest banks, including JPMorgan, Bank of America Corp. and Citigroup Inc. The result: about $76 billion a year. The number is roughly equivalent to the banks’ total profits over the past 12 months, or more than the federal government spends every year on education.
JPMorgan’s share of the subsidy is $14 billion a year, or about 77 percent of its net income for the past four quarters. In other words, U.S. taxpayers helped foot the bill for the multibillion-dollar trading loss that is the focus of today’s hearing. They’ve also provided more direct support: Dimon noted in a recent conference call that the Home Affordable Refinancing Program, which allows banks to generate income by modifying government-guaranteed mortgages, made a significant contribution to JPMorgan’s earnings in the first three months of 2012.
Like all subsidies, the taxpayer largesse distorts supply. If the government supports corn farmers, you get too much corn. If the government subsidizes banks, you get too much credit. As of March, households, companies and government in the U.S. had amassed debts of $38.6 trillion, or 2.5 times the country’s gross domestic product. That’s up from 1.3 times in 1980. The picture is similar in the euro area, where debt outstanding is 1.8 times GDP, double the level of 1995.
</blockquote>
<br />
I would have more faith in our system, if free-market capitalism actually actually didn't depend so heavily on government subsidies... as it is, this system is rotten, rotten, rotten, and fuck the enablers of this grotesquery.spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-32000905411746398952012-05-26T18:37:00.001-07:002012-05-26T18:39:04.722-07:00Wall Street Psychology and Politics<a href="http://www.salon.com/2012/05/07/no_one_went_to_jail_so_why_is_wall_street_so_mad/">No one went to jail, so why is Wall Street so mad?
Not prosecuting any of the parties responsible for the recession has just served to embolden them. </a><br />
<br />
<a href="http://www.salon.com/2012/05/07/americas_idiot_rich/">America’s idiot rich:
The 1 percent is complaining louder than ever. There can be no reasoning with people this irrational</a><br />
<br />
<a href="http://www.salon.com/2012/04/01/how_billionaires_destroy_democracy/singleton/">How billionaires destroy democracy.
Wall Streeters have rigged the economy and the government against the people. Here's how they did it.</a>
<br />
<br />
<a href="http://www.democracynow.org/2012/5/15/crony_capitalism_after_lobbying_against_new">Crony Capitalism: After Lobbying Against New Financial Regulations, JPMorgan Loses $2B in Risky Bet</a>
<br />
<br />
<br />
<a href="http://www.thedailybeast.com/newsweek/2012/05/06/why-can-t-obama-bring-wall-street-to-justice.html">Why Can't Obama Bring Wall Street to Justice?</a>
<br />
<blockquote>
The absence of prosecutions, and the fact that the cops on the beat hail from the place that represents the banks, does not sit right with many who hoped Obama would fulfill his promise to hold Big Finance accountable. The left's frustration fuels the Occupy movement, and chills the Democratic base. And it gives Romney, the career capitalist, an opening he is avidly exploiting.
Through last fall, Obama had collected more donations from Wall Street than any of the Republican candidates; employees of Bain Capital donated more than twice as much to Obama as they did to Romney, who founded the firm. By this spring, however, resolution had come to the GOP contest, and Wall Street could see a friendly alternative to Obama. While most of Romney's contributions so far come mainly from the financial sector, Obama's donations from Wall Street have dropped sharply.
But this turn may yet help Obama, playing into the Romney-as-plutocrat theme. Just the other week, the Republican candidate quietly slipped into a fundraiser at the home of hedge-fund king John Paulson, who made a killing shorting mortgage futures (including about $1 billion on the Abacus deal). The Obama campaign pounced. Obama may yet fully liberate his inner populist--that Obama who in 2010 in an off-Prompter moment uttered a sentence that made blood run cold on Wall Street: "I do think at a certain point you've made enough money."</blockquote>
<a href="http://www.salon.com/2012/05/21/democrats_and_bain_2/singleton/#comments">Democrats and Bain-- Executives at Romney's old private-equity firm have donated more to the Democratic Party than the GOP. Why?</a><br />
(friendly treatment in Washington, of course)spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0tag:blogger.com,1999:blog-3060745315842361236.post-64854095311098086882012-04-29T05:38:00.000-07:002012-04-29T05:38:07.146-07:00About That "JOBS Act"<blockquote class="tr_bq"><a href="http://www.rollingstone.com/politics/blogs/taibblog/why-obamas-jobs-act-couldnt-suck-worse-20120409">
It's a recipe for scamming investors and fraud, and shame on Obama for passing it.</a> <br />
<blockquote class="tr_bq">
The "Jumpstart Our Business Startups Act" (in addition to everything
else, the Act has an annoying, redundant title) will very nearly
legalize fraud in the stock market.<br />
</blockquote>
</blockquote>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
In fact, one could say this law is not just a sweeping piece of
deregulation that will have an increase in securities fraud as an
accidental, ancillary consequence. No, this law actually appears to have
been specifically written to encourage fraud in the stock markets.<br />
</blockquote>
</blockquote>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
Ostensibly, the law makes it easier for startup companies
(particularly tech companies, whose lobbyists were a driving force
behind its passage) to attract capital by, among other things, exempting
them from independent accounting requirements for up to five years
after they first begin selling shares in the stock market.<br />
</blockquote>
</blockquote>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
The law also rolls back rules designed to prevent bank analysts from
talking up a stock just to win business, a practice that was so
pervasive in the tech-boom years as to be almost industry standard. <br />
</blockquote>
</blockquote>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
Even worse, the JOBS Act, incredibly, will <a href="http://www.bloomberg.com/news/2012-03-18/small-biz-jobs-act-is-a-bipartisan-bridge-too-far-view.html">allow executives</a>
to give "pre-prospectus" presentations to investors using PowerPoint
and other tools in which they will not be held liable for
misrepresentations. These firms will still be obligated to submit
prospectuses before their IPOs, and they'll still be held liable for
what's in those. But it'll be up to the investor to check and make sure
that the prospectus matches the "pre-presentation."</blockquote>
</blockquote>spookedhttp://www.blogger.com/profile/08266697181345871878noreply@blogger.com0