OBAMA PROMISED HIS CRIMINAL BANKSTER DONORS NO PRISON TIME AND NO REAL REGULATION. DID HE DELIVER?
The JPMorgan scandal also throws into relief the government’s failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
The settlement, reported to be worth $25 billion, was announced February 9 and hailed by President Obama as a serious rebuke to the banks and boon to distressed homeowners. (See: “Obama administration brokers pro-bank mortgage fraud settlement”).
*
The social and
historical catastrophe confronting mankind is not simply the product of an
economic crisis in the abstract. This crisis is mediated by class interests,
and these class interests find expression in definite actions. Behind the
central banks and governments stand the interests of a financial elite whose
relationship to the rest of society is fundamentally parasitic.
*
THIS IS
OBAMANOMICS!
FROM HIS
FIRST DAY IN THE WHITE HOUSE, OBAMA INFESTED HIS ADMIN WITH CRIMINAL BANKSTERS,
STARTING WITH BUSH’S ARCHITECT FOR NO-STRINGS BANKSTER BAILOUTS, TIM GEITHNER.
OBAMA HAS
PROMISED HIS BANKSTERS HE WAS NOT THERE TO PUNISH THEM FOR THEIR CRIMES. IN
FACT, HE IS FUNDED BY THE CRIMINAL BANKSTERS THAT INVESTED SO HEAVILY IN HIM.
NO PRESIDENT IN HISTORY HAS TAKEN MORE MONEY FROM BANKSTERS THAN BARACK OBAMA.
DURING OBAMA’S
FIRST TWO YEARS ALONE, BANKSTER PROFITS
SOARED MORE THAN ALL 8 UNDER BUSH. SOARING BANKSTER PROFITS AND SOARING
FORECLOSURES.
*
OBAMANOMICS:
The systematic
reduction of wages, the precedent for which was set by the Obama administration
in the 2009 restructuring of the auto industry, has fueled an enormous boom in
corporate profits, which have set records for three years in a row, and are
likely to do so again in 2012. Yet these profits are not reinvested. American
corporations are sitting on about $2 trillion in cash, much of which is simply
funneled into the markets.
World Socialist Web
Site
The stock market bubble
1 February 2013
In the fifth year of the economic depression, and amid signs of
the worst global slowdown since 2008, world stock markets are booming.
In the US, the three major stock indices have either reached or
are within a few percentage points of their 2007 highs, despite the fact that
the economy has stalled, contracting for the first quarter since 2009, according
to figures released Wednesday.
Europe is in a state of disintegration, with Greece and Spain
facing conditions not seen since the Great Depression, while Germany is
experiencing a sharp slowdown. In Britain, the economy is now 3.3 percent
smaller than at the start of the downturn, but the benchmark FTSE 250 index has
doubled. China, Brazil and India have posted sharply lower figures for economic
growth, amidst a slowdown in exports. Yet global share prices have risen ten to
twenty percent in the past year alone.
These apparently contradictory phenomena—surging financial markets
and economic stagnation—are in fact intimately linked. The continued rise in
the markets is not a sign of health, but a particular expression of the
diseased state of the world capitalist system.
The world’s
ruling classes, confronting a historic crisis of productivity and investment,
have responded through the reflation of asset values—and their own
incomes—through historically unprecedented measures of wealth redistribution.
Above all, there has been a massive infusion of cash into the
financial system by the US Federal Reserve and other central banks. The US Fed
is currently purchasing some $85 billion worth of mortgage-backed securities
and treasury bills every month, essentially printing money to buy up government
debt and bad assets held by the banks. The total assets owned by the Federal
Reserve have climbed to $3.01 trillion, more than triple what it was in 2008.
All major world central banks have taken similar actions. In July,
the European Central Bank moved to lower its benchmark interest rate to the
lowest level in the history of the euro. The size of the holdings of the six
largest world central banks has likewise nearly tripled, to €14 trillion in
2012.
The actions of the central banks are invariably described in the
mass media as necessary measures to address unemployment and other social ills.
In fact, their central purpose is to make virtually unlimited sums of money
available for financial speculation.
This policy is
directly tied to the frontal assault on the working class internationally.
Awash in cash, the corporate and financial elite insists that there is no money
for health care, pensions, decent wages. Every basic right must be eliminated
in order to ensure the continued flow of funds into the banks. Millions of
people have been thrown into poverty, unemployment and destitution as a
consequence.
The decimation of wages and living standards has the additional
affect of counteracting the inherently inflationary impact of the central
banks’ policy. Under any other circumstances, the mass printing of money would
cause runaway price inflation, but falling wages and plummeting investment are
directing the flow of cash not into goods, but into asset values.
The systematic
reduction of wages, the precedent for which was set by the Obama administration
in the 2009 restructuring of the auto industry, has fueled an enormous boom in
corporate profits, which have set records for three years in a row, and are
likely to do so again in 2012. Yet these profits are not reinvested. American
corporations are sitting on about $2 trillion in cash, much of which is simply
funneled into the markets.
The entire process is completely unstable. The ruling class
stumbles from crisis to crisis, and its response to one crisis sets the stage
for the next. The economy stagnates, and new speculative bubbles threaten to
burst, unleashing a financial collapse that could far eclipse the crisis of
2008. While engorged in excess, the ruling class appears at the same time
bewildered, the measures it adopts increasingly improvisational.
At the same time, the infusion of cash into the world economy is
undermining the global exchange system and fueling currency wars and
competitive devaluation. This month, Japan became the latest economy to
announce an expansion of its money supply in what was widely seen as an attempt
to bolster exports by devaluing the yen. The breakdown of the international
monetary system, and consequent turn to trade war measures that characterized
the response of governments to the Great Depression, are once again being
repeated.
The social and
historical catastrophe confronting mankind is not simply the product of an
economic crisis in the abstract. This crisis is mediated by class interests,
and these class interests find expression in definite actions. Behind the
central banks and governments stand the interests of a financial elite whose
relationship to the rest of society is fundamentally parasitic.
A solution to the crisis must take a political form. To the
interests of the ruling classes, the international working class must
counterpoise its own program, its own solution. At the center of this program
must be the understanding that a way forward is possible only through the transformation
of society as a whole, placing it on new foundations.
The only force capable of breaking the political stranglehold of
these social parasites is the international working class. It must be armed
with a socialist program, fighting to place the major corporations and banks
under democratic control, and reorganize the economy on a rational and
egalitarian basis.
Andre Damon
*
Is the Stock Market Clueless or
Disconnected?
By
Matt Nesto
It's
nothing new that Wall Street's reaction to certain events is sometimes
baffling, but there's a sentiment right now that there's a certain disconnect
between the stock market and general economic conditions.
A
recent example is the rally that came after the January jobs data, which saw
the unemployment number rise and might have been dubbed an outright disaster
had it not been for a series of sweeping revisions that made the trailing data
look a little better. And yet, stocks rallied on the news and investors pushed
the Dow about 14,000.
There
are other examples, but the fact remains that Wall Street is aiming at the
clouds and not bothering with the mud beneath its feet.
"There's
a simple reason stocks are going up higher: it's because the Fed says so,"
spouts Dan North, chief economist at Euler Hermes, in the attached video. While
consumer inflation remains low, he says asset inflation is soaring. "If
you look at stocks, bond yields, gold has doubled since QE1 started. Silver has
almost tripled." This all coming at a time when unemployment, housing and
real GDP growth have been missing.
Political
risk has all but disappeared lately, with stocks posting their best January
advance in over a decade. Even earnings, while (predictably) coming in ahead of
much-lowered analyst expectations, are facing a disconnect as profit growth
slumps and various valuation measures tilt towards the expensive column.
There
are other examples of this disconnect, as well as some positive reasons why
stocks are performing as well as they are, but the overriding rift is
undebatable, especially when markets are back to pre-recession levels and
economic progress is still in low gear.
DURING
OBAMA’S FIRST YEAR, 2/3s OF ALL JOBS WENT TO IMMIGRANTS, BOTH LEGAL AND ILLEGALS.
THIS IS HOW THE DEMS KEEP CORPORATE PROFIT MARGINS HIGH AND WAGES DEPRESSED!
DURING
OBAMA’S FIRST TERM WORKPLACE ENFORCEMENT OF LAWS PROHIBITING THE EMPLOYMENT OF
ILLEGALS WAS DOWN 70%. OBAMA HAS PROMISED LA RAZA THE OTHER 30% WILL BE GONE AS
SOON AS AMNESTY IS PASSED.
MEANWHILE,
FOR THAT AMNESTY, THE MEXICAN HORDES ARE CLIMBING OUR BORDERS THIS VERY DAY!
“Almost four million workers have been out of work for
more than a year…we haven’t had anything like that since the ‘30s” [and]…
there’s lots of unused capacity…a lot of savings that have nowhere to go.”
U.S. Still Suffering Depression Conditions: Paul Krugman
By Bernice Napach | Daily Ticker – Tue, Jan 29, 2013 6:54 AM EST
When Federal Reserve officials sit down today for
their first policy-making meeting of the year they should consider continuing
easy monetary policy well into 2015, says Nobel prize-winning economist Paul Krugman.
“If the Fed can convince people that it‘s going to
keep the pedal to the metal…that still has some leverage on the economy,”
Krugman tells The Daily Ticker.
The Fed had been saying it would maintain near-zero
low rates until mid-2015, and then until unemployment falls to 6.5% or below,
but recently some Fed officials have suggested that the Fed may
consider slowing or ending its asset purchases (quantitative easing) sooner
than later.
The economy now needs all the help it can get, says
Krugman, author of End This Depression Now!
whose
paperback edition has just been released with a new preface.
“The U.S. economy is recovering but slowly,” and
still experiencing “depression conditions,” says Krugman. “Almost four million workers have been out of work for
more than a year…we haven’t had anything like that since the ‘30s” [and]…
there’s lots of unused capacity…a lot of savings that have nowhere to go.”
Krugman’s solution: More government spending, not
less, in order to grow the economy. “A growing economy is the best solution to
all our problems,” says Krugman, also an economics professor at Princeton
University.
Krugman is not concerned that more government
spending will lead to bigger deficits. “There is no good reason dealing with
debt should be a priority today,” says Krugman, and “the 10-year outlook for
debt [in the U.S.] is not too bad.”
Even a little more inflation in the U.S.--say 3 or
4%-- could be helpful, Krugman says,
For starters, he suggests that the federal
government reverse state and local budget cuts in infrastructure and education.
“Just undoing that would lead a long way back to full employment. It is in fact
that easy,” says Krugman.
Critics disagree and argue that this is not the
time to add to a budget deficit, when the debt-to-GDP ratio currently tops 100% of GDP.
Krugman’s response: Japan is much more in debt than the U.S. (its
debt-to-GDP ratio near 200%) but has now instituted an expansion of fiscal and
monetary policy.
“Markets are not punishing [Japan],” says Krugman.
"Markets are rewarding them."
Tell Us What You Think!
Do you agree with Paul Krugman that the U.S.
government should spend more now to revive the economy?
*
US Treasury rubber-stamps bonus requests from bailed-out firms
OBAMA and his CRIMINAL BANKSTERS – THERE IS A
REASON WHY THE BANKSTERS INVESTED SO HEAVILY IN BARACK OBAMA, ONE OF THE MOST
CORRUPT PRESIDENTS IN AMERICAN HISTORY.
NO PRESIDENT IN HISTORY TOOK SO MUCH DIRTY MONEY
FROM BANKSTERS THAN BARACK OBAMA. DURING HIS FIRST TWO YEARS THE BANKS LOOTED
MORE PROFITS THAN ALL EIGHT UNDER BUSH!
“I’m not here to punish banks!” Barack Obama – Floor of the Senate – STATE of the UNION MESSAGE.
“Gretchen Morgenson, in a
New York Times op-ed entitled “Surprise, Surprise: The Banks Win,”
wrote: “If you were hoping that things might be different in 2013—you know,
that bankers would be held responsible for bad behavior or that the government
might actually assist troubled homeowners—you can forget it.”
“In concluding the pittance of a settlement, a fraction of the
billions taken in by the banks from the sub-prime mortgage racket, the Obama
administration is once again letting the banks get away with massive crimes
that have had devastating social consequences, while giving them a green light
to continue similar practices.”
Another sweetheart bank settlement on
mortgage fraud
By
Andre Damon
9 January 2013
9 January 2013
Ten major financial firms
agreed on Monday to pay $3.3 billion in cash to settle allegations of mortgage
fraud by the Office of the Comptroller of the Currency (OCC) in the latest in a
string of sweetheart settlements between the major Wall Street banks and their
nominal regulators. As usual, there were no criminal charges and no bank
officials were held accountable.
The settlement, which
nominally totals $8.5 billion, includes $3.3 billion in direct payments to
borrowers and $5.2 billion in loan modifications and other forms of “borrower
assistance” left largely at the discretion of the banks.
The settlement with
the OCC, a branch of the Treasury Department, relates to widespread fraud
committed by the banks in their rush to foreclose on as many homes as possible
in 2009 and 2010. To expedite the foreclosure process, the banks had employees
or contractors sign off on thousands of mortgage documents every month,
swearing that they had intimate knowledge of their contents when in reality
they had not even read them.
In many cases, banks illegally imposed fees on targeted
homeowners or failed to inform them of their rights.
In concluding the pittance of a settlement, a fraction of
the billions taken in by the banks from the sub-prime mortgage racket, the
Obama administration is once again letting the banks get away with massive
crimes that have had devastating social consequences, while giving them a green
light to continue similar practices.
In all the scandals relating to the banks’ criminality in
the run-up to and aftermath of the 2008 financial crisis, the government has
deliberately avoided bringing cases to trial. This is not only to protect the
banks’ activities from further public scrutiny, but also to cover up
regulators’ complicity in facilitating the banks’ illegal activities.
The number of households
that will get a share of the $3.3 billion in payouts, averaging $868 for each
of the 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010,
has not been disclosed. Under previous guidelines issued by the federal
government, homeowners who were put in foreclosure but were not really in
default would theoretically receive $15,000 and a reversal of the foreclosure,
or $125,000 if a reversal was not possible. The actual amounts that are ultimately
paid out could be far lower.
The settlement puts to an
end the “Independent Foreclosure Review” imposed as a regulatory action by the
OCC on fourteen banks in April 2011. Under the program, banks paid contractors
to examine each claim of improper foreclosure. The cost to the banks had
reached $1.5 billion when the government agreed to end the investigation.
With the new settlement,
the banks themselves are left to determine where abuses took place, with only a
handful of cases to be examined by regulators.
Comptroller of the
Currency Thomas Curry sought in a press conference Monday to present the
settlement as a means of getting money to consumers as soon as possible. “When
we began the Independent Foreclosure Review, the OCC pledged to fix what was
broken, identify who was harmed, and compensate them for that injury,” Curry
said. “While today’s announcement represents a significant change in
direction,” he continued, “it meets those original objectives by ensuring that
consumers are the ones who will benefit.”
The settlement prompted
an outpouring of denunciations from consumer advocates and even some media
commentators. “The regulators have decided to replace the fox in the henhouse
with the wolf,” commented John Taylor, head of the National Community Reinvestment
Coalition, a community development nonprofit. “It is just incomprehensible to
me that they could not find a third party that has the wherewithal and
independence to fairly determine what the damage is to homeowners.”
Gretchen Morgenson, in a New York Times op-ed
entitled “Surprise, Surprise: The Banks Win,” wrote: “If you were hoping that
things might be different in 2013—you know, that bankers would be held
responsible for bad behavior or that the government might actually assist
troubled homeowners—you can forget it.”
The settlement includes Bank of America, Citigroup,
JPMorgan Chase, Wells Fargo, MetLife Bank, PNC, Sovereign, SunTrust, US Bank
and Aurora. Four other banks that were included in the investigation refused to
take part in the settlement.
The settlement by the OCC
is of a piece with the agreement announced last February between 49 state
governments and five top Wall Street banks over similar types of mortgage
fraud. In last year’s settlement, the federal government put pressure on state
attorneys general to wind down their investigation into criminal abuses by the
banks, leaving them to pay only $5 billion in payouts and a largely meaningless
$17 billion in mortgage modifications.
Under the de facto
protection of the government agencies that are supposed to police them, the
banks are allowed to violate securities and other laws knowing that they can
treat any fines that may eventually be imposed as part of the cost of doing
business.
The same applies to the
settlement also announced Monday between Bank of America and the
government-sponsored mortgage finance giant Fannie Mae, in which the bank will
pay $3.55 billion to Fannie and buy back 30,000 low-performing mortgages for
$6.75 billion.
The settlement covers
allegations that Countrywide Financial, bought by Bank of America in 2008,
knowingly sold Fannie Mae toxic mortgages that produced billions of dollars of
losses. The loans were made between 2000 and 2008 and were originally valued at
$1.4 trillion. The collapse of these assets triggered a $116 billion government
bailout of Fannie and helped precipitate the financial crisis that led to the
loss of millions of jobs.
The deal follows a
similar 2010 agreement in which Bank of America repurchased $2.87 billion of
bad loans from Fannie’s fellow government-backed mortgage company, Freddie Mac.
More than four years
after the financial crash of September 2008, not a single top Wall Street
executive has been criminally prosecuted.
*
NO PRESIDENT IN HISTORY HAS TAKEN MORE LOOT FROM CRIMINAL
BANKSTERS THAN BARACK OBAMA! WHILE HIS DOJ IS OUT HARASSING LEGALS ON BEHALF OF
OBAMA’S LA RAZA PARTY BASE OF ILLEGALS, THE BANKSTER GO UNPUNISHED!
DURING OBAMA’S FIRST TWO YEARS ALONE, HIS CRIMINAL
BANKSTERS’ PROFITS SOARED GREATER THAN ALL EIGHT UNDER BUSH!
BANKSTERS’ PROFITS AND CRIMES ARE SOARING… so are
foreclosures!
US treasury secretary covered up banks’ rigging of global rates
OBAMA and HIS CRIMINAL BANKSTERS – THE LOOTING OF A NATION CONTINUES!
http://mexicanoccupation.blogspot.com/2012/06/obama-and-his-criminal-banksters-their.html
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
Banking Is a Criminal Industry Because Its Crimes Go Unpunished
Posted: 07/16/2012 8:23 am
Consider just this month's news in financial
services.
First, Barclay's has been manipulating the Libor,
the main interest rate upon which most other interest rates and financial
transactions are based, since 2005. Moreover, Barclay's traders were colluding
with traders in many other banks to assist them in manipulating the Libor too,
so that they could all profit from their bets on it.
Second, JP Morgan Chase is having a really great
month. Recent reports describe how it is resisting Federal subpoenas related
to price-fixing in U.S. electricity markets. It is also accused (by former
employees among others) of deliberately inflating the performance of its
investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has
now cost over $5 billion, is being investigated to determine whether the loss
was initially concealed from regulators and the public.
Third, HSBC is paying a fine because it allowed
hundreds of millions, perhaps billions, of dollars of money laundering by rogue
states and sanctioned firms, including some related to terrorist activities and
Iran's nuclear efforts. But HSBC is only one of at least 12 banks now known to
have tolerated, and in some cases aggressively courted, money laundering by
rogue states, terrorist organizations, corrupt dictators, and major drug
cartels over the last decade. Others include Barclay's, Lloyds, Credit Suisse,
and Wachovia (now part of Wells Fargo). Several of the banks created special
handbooks on how to evade surveillance, created special business units to handle
money laundering, and actively suppressed whistleblowers who warned of drug
cartel activities.
Fourth, a new private lawsuit cites documents indicating that Morgan
Stanley successfully pressured rating agencies into inflating the ratings of
mortgage-backed securities it issued during the housing bubble.
Fifth, Visa and Mastercard have just agreed to pay $7 billion to settle a
private antitrust case filed by thousands of merchants, who alleged that Visa
and Mastercard colluded to fix fees and terms of service.
Just another month in financial services. Is it
unusual? No, it's not. If we go back just a little further, we have UBS, HSBC,
Julius Baer, and other banks actively marketing tax evasion services to wealthy
U.S. and European citizens. We have senior executives of several banks
(including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was
running a Ponzi scheme, but deciding to make money from him rather than turn
him in. And then, of course, we have the financial crisis and everything that
led to it. As I show in great detail in my book Predator Nation, we now
possess overwhelming evidence of massive securities fraud, accounting fraud,
perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment
banks, and credit insurers (including senior executives of Countrywide,
Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman
Brothers) during the housing bubble that caused the financial crisis. If we go
back to the late 1990s, we have the massively fraudulent hyping of Internet
stocks, and several banks (including Merrill Lynch and Citigroup) actively
aiding Enron in committing its frauds.
So, July 2012 really isn't abnormal at all. The
reason for this is very simple. Over the past two decades, the financial services
industry has become a pervasively unethical and highly criminal industry, with
massive fraud tolerated or even encouraged by senior management. But how did
that happen?
Well, deregulation helped, of course. But something
else was far more important. It is the one critical factor that unites all of
the episodes cited above, including those of this month. This critical unifying
factor is the total number of criminal prosecutions of major firms and senior
executives as a result of all of these crimes combined.
And what is that number?
Zero.
Literally zero. A number that neither President
Obama nor Mitt Romney shows the slightest interest in changing.
Consider
the Obama administration's choices for the four most important positions in
financial sector law enforcement. The attorney general (Eric Holder) and the
head of the Justice Department's criminal division (Lanny Breuer) both come to
us from Covington & Burling, a law firm that represents and lobbies for most of the
major banks and their industry associations; indeed Breuer was co-head of its
white collar criminal defense practice, and represented the Moody's rating
agency in the Enron case. Mary Schapiro, the head of the SEC, spent the housing
bubble in charge of FINRA, the investment banking industry's
"self-regulator," which gave her a $9 million severance for a job well done. And her head of enforcement, perhaps most
stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American business during the
entire bubble. So zero prosecutions isn't much of a surprise, really.
In contrast, what do you think would happen to you
if, as a lone individual, you were caught supporting Iran's nuclear program? Do
you think that you would get off with a "deferred prosecution
agreement" and a fine equal to a few percent of your annual salary? No?
But that's because you don't live right. You
probably haven't been to the White House a dozen times since President Obama
took office, or attended White House state dinners, like Lloyd Blankfein has.
Nor have you probably overseen millions of dollars in lobbying and campaign
donations, or hired senior administration officials, or sent your executives
into the government in senior regulatory positions, or paid $135,000 for a
speech by someone who later became chairman of the National Economic Council.
And, well, you get the law enforcement that you pay for.
Charles Ferguson is the author of Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.
*
*
NO PRESIDENT IN HISTORY HAS TAKEN MORE MONEY FROM BANKSTERS THAN BARACK OBAMA!
“The response of the White House was
to do absolutely nothing. Not a single senior bank executive has been
criminally charged, let alone imprisoned, for crimes that have devastated the
lives of countless millions of people in the US and around the world. Instead,
the White House has shielded the corporate criminals.”
An insider’s
view of Wall Street criminality
15 March 2012
Greg Smith, an executive director at Goldman Sachs,
announced his resignation Wednesday in an op-ed piece in the New York Times,
denouncing the bank's “toxic” culture of avarice and fraud.
Smith headed the firm’s United States equity
derivatives business in Europe, the Middle East and Africa. In his column,
entitled “Why I Am Leaving Goldman Sachs,” he describes a corporate environment
that encourages and rewards big short-term returns gained through the bilking
of clients and the general public. “It makes me ill how callously people talk
about ripping their clients off,” he writes.
Speaking of one’s clients as “muppets” and
describing deal-making as “ripping eyeballs out” are commonplace at Goldman,
according to Smith. The way to advance at the Wall Street giant, he writes, is
to persuade your clients “to invest in the stocks or other products that we are
trying to get rid of,” get your clients “to trade whatever will bring the
biggest profit to Goldman,” and trade “any illiquid, opaque product with a
three-letter acronym.”
The column describes an operation in which laws and
regulations requiring financial institutions to deal honestly with their
clients and protect their interests are routinely violated. The insider’s
indictment of Goldman Sachs highlights a broader process—the criminalization of
American capitalism as a whole.
It
confirms from the inside that three-and-a-half years after Wall Street’s manic
pursuit of super-profits triggered a global financial meltdown and the deepest
slump since the Great Depression, nothing has changed in the boardrooms of
corporate America. The same fraudulent and often illegal practices that
enriched the financial aristocracy and plundered the rest of society continue
unabated. The criminals at the top, having been bailed out with trillions of
taxpayer funds, are making more money than ever, while millions of ordinary
people are being driven into poverty and homelessness.
Education, health care,
pensions are being gutted, wages are being slashed and more austerity is on the
agenda because there is supposedly “no money.” Corporate profits and CEO pay,
meanwhile, are setting new records.
This is an
indictment not simply of Goldman Sachs, or even Wall Street alone, but rather
the entire economic and political system. Every official institution—the White
House, Congress, the courts, the media, the Democratic and Republican
parties—is complicit.
Smith’s column was widely reported in the media.
NBC Nightly News led its report Wednesday night with the story, interviewing a
former chairman of the Securities and Exchange Commission who was brought on to
deplore the type of practices described by the former Goldman executive. The
ruling class is well aware that popular anger against Wall Street is rising and
capitalism itself is becoming increasingly discredited in the eyes of millions
of Americans—a process that found an initial expression in the Occupy Wall
Street protests. It is concerned that Smith’s piece will further fuel this
sentiment.
The practices to which Smith points—and worse—are
well known to the Obama administration and the financial regulatory agencies.
In April of last year, the Senate Permanent Subcommittee on Investigations
published a 640-page report outlining in detail the fraudulent and illegal
practices of major banks that contributed to the September 2008 crash. Fully
260 pages of that report were devoted to Goldman Sachs. They explained chapter
and verse, giving dates and naming names, how the bank defrauded its clients by
selling them mortgage securities while betting against the same investments,
without telling them it was doing so.
The
committee also documented the complicity of the credit rating firms and federal
regulators in the colossal mortgage Ponzi scheme that collapsed in 2007-2008,
setting off a new world depression. It cited securities laws that had been
violated by Goldman and two other banks it examined, Washington Mutual and Deutsche
Bank, and referred this information to the Obama administration’s Justice
Department.
The response
of the White House was to do absolutely nothing. Not a single senior bank
executive has been criminally charged, let alone imprisoned, for crimes that have
devastated the lives of countless millions of people in the US and around the
world. Instead, the White House has shielded the corporate criminals.
One Wall Street firm after another—Goldman
Sachs, Bank of America, Citigroup, Countrywide Financial—has been allowed to
settle charges filed by the Securities and Exchange Commission out of court,
paying token fines while admitting no wrongdoing. That this continues is
seen in the filing Monday in federal court of the sweetheart settlement between
five major banks and the state and federal governments of charges arising from
the banks’ illegal processing of foreclosures. The banks have merely to pay a
combined fine of $5 billion for illegally throwing thousands of families out of
their homes, with no admission of wrongdoing. In return, they get the quashing
of state investigations that threatened to result in tens of billions in
damages and fines.
Not
only does the Obama administration protect the Wall Street criminals, it
includes their representatives among its top personnel. To cite some examples:
*
Mark Patterson, a former Goldman Sachs lobbyist, is the chief of staff to
Treasury Secretary Timothy Geithner.
*
Dianna Farrell, former financial analyst at Goldman Sachs, is deputy director
of the National Economic Council.
*
Jacob Lew, Obama’s chief of staff, was a top executive at Citigroup. He follows
two other bankers chosen by Obama to head his White House operations—former
JPMorgan executive William Daley and former Chicago investment banker Rahm
Emanuel.
The criminalization of the American
corporate-financial elite cannot be separated from the capitalist system
itself. It is the product of a decades-long process of crisis and decay, in
which the ruling elite has increasingly separated its wealth-making from the
production of real value.
Manufacturing and the productive infrastructure
have been decimated, while financial manipulation and speculation have come to
dominate economic life. The working
class has suffered a catastrophic decline in its social position at the same
time that a parasitic financial aristocracy has come to exercise a de facto
dictatorship over the political system.
Like all aristocracies, the American financial
elite will not accept any infringement of its wealth and power. The working
class must break its grip by mobilizing its strength in opposition to both
parties of Wall Street and fighting for the establishment of a workers’
government and socialist policies, beginning with the nationalization of the
banks and corporations and their transformation into public enterprises under
the democratic control of the working people.
Andre Damon and Barry Grey
The authors also recommend:
The foreclosure fraud settlement: An amnesty for Wall Street criminals
[13 February 2012]
Senate report on Wall Street crash: The criminalization of the American ruling class
[18 April 2011]
THE
BANKSTER-OWNED PRESIDENT PROMISED HIS CRIMINAL BANKSTER DONORS NO real
REGULATION, NO PRISON TIME, AND UNLIMITED PILLAGING OF THE NATION’S ECONOMY!
DESPITE THE
DEVASTATION THESE BANKSTERS HAVE CAUSED AMERICANS, THEIR PROFITS SOARED GREATER
DURING OBAMA’S FIRST TWO YEARS, THAN ALL EIGHT UNDER BUSH. SO HAVE FORECLOSURES!
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
*
“Barack Obama's favorite banker faces losses of $2 billion and possibly more -- all because of the complex, now-you-see-it-now-you-don't trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate.”
Is JPMorgan's Loss a Canary in a Coal Mine?
Posted: 05/16/2012 4:49 pm
That sound of shattered glass you've been hearing
is the iconic portrait of Jamie Dimon splintering as it hits the floor of
JPMorgan Chase. As the Good Book says, "Pride goeth before a fall,"
and the sleek, silver-haired, too-smart-for-his-own-good CEO of America's
largest bank has been turning every television show within reach into a
confessional booth. Barack Obama's favorite
banker faces losses of $2
billion and possibly more -- all because of the complex,
now-you-see-it-now-you-don't trading in exotic financial instruments that he
has so ardently lobbied Congress not to regulate.
Once again, doing God's work -- that is, betting
huge sums of money with depositor funds knowing that you are too big to fail and
can count on taxpayers riding to your rescue if your avarice threatens to take
the country down -- has lost some of its luster. The jewels in Dimon's crown
sparkle with a little less grandiosity than a few days ago, when he ridiculed
Paul Volcker's ideas for keeping Wall Street honest as "infantile."
To find out more about what this all means, I
turned to Simon Johnson, once chief economist of the International Monetary
Fund and now a professor at MIT's Sloan School of Management and senior fellow
at the Peterson Institute for International Economics. He and his colleague
James Kwak founded the now-indispensable website baselinescenario.com. They co-authored
the bestselling book 13 Bankers and
a most recent book, White House
Burning, an account every citizen should read to understand how the
national deficit affects our future.
Bill Moyers: If Chase began to collapse
because of risky betting, would the government be forced to step in again?
Simon Johnson: Absolutely, Bill. JPMorgan
Chase is too big to fail. Hopefully in the future we can move away from this
system, but right now it is too big. It's about a $2.5 trillion dollar bank in
terms of total assets. That's roughly 20 percent of the U.S. economy, comparing
their assets to our GDP. That's huge. If that bank were to collapse -- I'm not
saying it will -- but if it were to collapse, it would be a shock to the
economy bigger than that of the collapse of Lehman Brothers, and as a result,
they would be protected by the Federal Reserve. They are exactly what's known as
too big to fail.
Moyers: I was just looking at an interview
I did with you in February of 2009, soon after the collapse of 2008 and you
said, and I'm quoting, "The signs that I see... the body language, the
words, the op-eds, the testimony, the way these bankers are treated by certain
congressional committees, it makes me feel very worried. I have a feeling in my
stomach that is what I had in other countries, much poorer countries, countries
that were headed into really difficult economic situations. When there's a
small group of people who got you into a disaster and who are still powerful,
you know you need to come in and break that power and you can't. You're
stuck." How do you feel about that insight now?
Johnson: I'm still nervous, and I think that
the losses that JPMorgan reported -- that CEO Jamie Dimon reported -- and the
way in which they're presented, the fact that they're surprised by it and the
fact that they didn't know they were taking these kinds of risks, the fact that
they lost so much money in a relatively benign moment compared to what we've
seen in the past and what we're likely to see in the future -- all of this
suggests that we are absolutely on the path towards another financial crisis of
the same order of magnitude as the last one.
Moyers: Should Jamie Dimon resign? I ask
that because as you know and as we've discussed, Chase and other huge banks
have been using their enormous wealth for years to, in effect, buy off our
politicians and regulators. Chase just had to pay up almost three quarters
of a billion dollars in settlements and surrendered fees to settle one case
alone, that of bribery and corruption in Jefferson County, Alabama. It's also
paid out billions of dollars to settle other cases of perjury, forgery, fraud and
sale of unregistered securities. And these charges were for actions that took
place while Mr. Dimon was the CEO. Should he resign?
Johnson: I think, Bill, there should be an
independent investigation into how JPMorgan operates both with regard to these
losses and with regard to all of the problems that you just identified. This
investigation should be conducted separate from the board of directors.
Remember that the shareholders and the board of directors absolutely have an
incentive to keep JPMorgan Chase as a too-big-to-fail bank. But because it is
that kind of bank, its downside risk is taken by the Federal Reserve, by the
taxpayer, by the broader economy and all citizens. We need to have an
independent, detailed, specific investigation to establish who knew what when
and what kind of wrongdoing management was engaged in. On the basis of that,
we'll see what we'll see and who should have to resign.
Moyers: Dimon is also on the board of the
Federal Reserve Bank of New York, which, as everyone knows is supposed to
regulate JPMorgan. What in the world are bankers doing on the Fed board,
regulating themselves?
Johnson: This is a terrible situation, Bill.
It goes back to the origins, the political compromise at the very beginning of
the Federal Reserve system about a hundred years ago. The bankers were very
powerful back then, also, and they got a Federal Reserve system in which they
had a lot of representation. Some of that has eroded over time because of
previous abuses, but you're absolutely right, the prominent bankers, including
most notably, Jamie Dimon, are members of the board of the New York Federal
Reserve, a key element in the Federal Reserve system. And he should, under
these circumstances, absolutely step down from that role. It's completely
inappropriate to have such a big bank represented in this fashion. The New York
Fed claims there's no impropriety, there's no wrong doing and he doesn't
involve himself in supervision and so on and so forth. Perhaps, but why does
Mr. Dimon, a very busy man, take time out of his day to be on the board of the
New York fed? He is getting something from this. It's a trade, just like
everything else on Wall Street.
Moyers: He dismissed criticism of his dual
role yesterday by downplaying the role of the Fed board. He said it's more like an "advisory
group than anything else." I had to check my hearing aid to see if I'd
heard that correctly.
Johnson: Well, I think he is advising them
on lots of things. He also, of course, meets with some regularity with top
Treasury officials, and some reports say that he meets with President Obama
with some regularity. The political access and connections of Mr. Dimon are
second to none. One of his senior executives was until recently chief of staff
in the White House, if you can believe that. I really think this has gone far
enough. Under these kinds of circumstances with this amount of loss of control
over risk management, what we need to have is Mr. Dimon step down from the New
York Federal Reserve Board.
Moyers: He told shareholders at their annual
meeting Tuesday -- they were meeting in Tampa, Florida -- that these were "self-inflicted
mistakes" that "should never have happened." Does that seem
reasonable to you?
Johnson: Well, it's all very odd, Bill, and
I've talked to as many experts as I can find who are at all informed about what
JPMorgan was doing and how they were doing it and nobody really understands the
true picture. That's why we need an independent investigation to establish --
was this an isolated incident or, more likely, the breakdown of a system of
controlling and managing risks. Keep in mind that JPMorgan is widely regarded
to be the best in the business at risk management, as it is called on Wall
Street. And if they can't do this in a relatively benign moment when things are
not so very bad around the world, what is going to happen to them and to other
banks when something really dramatic happens, for example, in Europe in the
eurozone?
Moyers: Some of his supporters are claiming
that only the bank has lost on this and that there's absolutely no chance that
the loss could have threatened the stability of the banking system as happened
in 2008. What do you say again to that?
Johnson: I say this is the canary in the
coal mine. This tells you that something is fundamentally wrong with the way
banks measure, manage and control their risks. They don't have enough equity
funding in their business. They like to have a little bit of equity and a lot
of debt. They get paid based on return on equity, unadjusted for risk. If
things go well, they get the upside. If things go badly, the downside is
someone else's problem. And that someone else is you and me, Bill. It goes to
the Federal Reserve, but not only, it goes to the Treasury, it goes to the debt.
The Congressional Budget Office estimates that the
increase in debt relative to GDP due to the last crisis will end up being 50 percent of GDP, call
that $7 trillion dollars, $7.5 trillion dollars in today's money. That's
extraordinary. It's an enormous shock to our fiscal accounts and to our ability
to pay pensions and keep the healthcare system running in the future. For what?
What did we get from that? Absolutely nothing. The bankers got some billions in
extra pay, we get trillions in extra debt. It's unfair, it's inefficient, it's
unconscionable, and it needs to stop.
Moyers: Wasn't part of the risk that Dimon
took with taxpayer guaranteed deposits? I mean, if I had money at JPMorgan
Chase, wouldn't some of my money have been used to take this risk?
Johnson: Again, we don't know the exact
details, but news reports do suggest that yes, they were gambling with
federally insured deposits, which just really puts the icing on the cake here.
Moyers: Do we know yet what is Dimon's
culpability? Is it conceivable to you that a risk this big would have been
incurred without his approval?
Johnson: It seems very strange and quite a
stretch. And he did tell investors, when he reported on first quarter earnings
in April, that he was aware of the situation, aware of the trade -- he called it a "tempest in a
teacup," and, therefore, not something to worry about.
Moyers: He's been Wall Street's point man in
their campaign against tighter regulation of derivatives and proprietary
trading. Were derivatives at the heart of this gamble?
Johnson: Yes, according to reliable reports,
this was a so-called "hedging" strategy that turned out to be no more
than a gamble, but the people involved perhaps didn't understand that or maybe
they understood it and covered it up. It was absolutely about a bet on
extremely complex derivatives and the interesting question is who failed to
understand exactly what they were getting into. And how did Jamie Dimon, who
has a reputation that he burnishes more than anybody else for being the number
one expert risk manager in the world -- how did he miss this one?
Moyers:I've been reading a lot of stories
today about members of the House, Republicans in particular, saying this
doesn't change their opinion at all that we've got to still diminish
regulation. What do you think about that?
Johnson: I think that it is a recipe for
disaster. Look, deregulating or not regulating during the boom is exactly how
you get into bailouts in the bust. The goal should be to make all the banks
small enough and simple enough to fail. End the government subsidies here. And
when I talk to people on the intellectual right, Bill, they get this, as do
people on the intellectual left. The problem is, the political right largely
doesn't want to go there because of the donations. I'm afraid some people, not
all, but some people on the political left don't want to go there either.
Moyers: The Washington Post reported
that the Justice Department has launched a criminal investigation
into JPMorgan's trading loss. Have you spotted -- and I know this is sensitive
-- but have you spotted anything in the story so far that suggests the
possibility of criminality? Dodd-Frank is not in existence yet, so where would
any possibility of criminality come from?
Johnson: Well Dodd-Frank is in existence but
the rules have not been written and therefore not implemented. So yes, it is
hard to violate those rules in their current state. And many of those rules, by
the way, violation would be a civil penalty, not a criminal penalty. If you
violate a securities law -- if you've mislead investors, if there was material
adverse information that was not disclosed in an appropriate and timely manner
-- that's a very serious offence traditionally.
I have to say that the Department of Justice and
the Securities and Exchange Commission have not been very good at enforcing
securities law in recent years, including and specifically since the financial
crisis. I am skeptical that this will change. But if they have an investigation
that reveals all of the details of what happened and how it happened, that would
be extremely informative and show us, I believe, that the risk management
approach and attitudes on Wall Street are deeply flawed and leading us towards
a big crisis.
Moyers: So what are people to do, Simon?
What can people do now in response to this?
Johnson: Well, I think you have to look for
politicians who are proposing solutions, and look on the right and on the left.
I see Elizabeth Warren, running for the Senate in Massachusetts, who is saying
we should bring back Glass-Steagall to separate commercial banking from
investment banking. I see Tom Hoenig, who is not a politician, he's a
regulator, he's the former president of the Kansas City Fed, and he's now one
of the top two people at the Federal Deposit Insurance Corporation, the FDIC.
He is saying that big banks should no longer have trading desks. That's the
same sort of idea that Elizabeth Warren is expressing. We need a lot more
people to focus on this and to make this an issue for the elections.
And I would say in this context, Bill, it's very
important not to be distracted. I understand for example, Speaker Boehner, the
Republican Speaker of the House of Representatives, is proposing to have
another conflict over the debt ceiling in the near future. This is the politics
of distraction. This is refusing to recognize that a huge part of our fiscal
problems today and in the future are due to these risks within the financial
system that are allowed because the people running the biggest banks hand out
massive campaign contributions across the political spectrum.
Moyers: Are you saying that this financial
crisis, so-called, is at heart a political crisis?
Johnson: Yes, exactly. I think that a few
people, particularly in and around the financial system, have become too
powerful. They were allowed to take a lot of risk, and they did massive damage
to the economy -- more than eight million jobs lost. We're still struggling to
get back anywhere close to employment levels where we were before 2008. And
they've done massive damage to the budget. This damage to the budget is long
lasting; it undermines the budget when we need it to be stronger because the
society is aging. We need to support Social Security and support Medicare on a
fair basis. We need to restore and rebuild revenue, revenue that was absolutely
devastated by the financial crisis. People need to understand the link between
what the banks did and the budget. And too many people fail to do that.
"Oh, it's too complicated. I don't want to understand the details, I don't
want to spend time with it." That's a mistake, a very big mistake. You're
playing into the hands of a few powerful people in the society who want private
benefit and social loss.
Watch Moyers & Company weekly on public television. See more web-only features like this at BillMoyers.com
*
http://mexicanoccupation.blogspot.com/2012/05/case-of-incest-barack-obama-and.html
Why hasn’t Obama been impeached? His violations of our borders laws, inducing illegals to vote, sabotage of jobs for Americans, connections to criminal banksters…. WHAT DOES IT TAKE?
NO WORKS IN THE CORRUPT OBAMA WHITE HOUSE THAT IS NOT CONNECTED TO THE BANKSTERS THAT OWN OBAMA, OR THE MEXICAN FASCIST PARTY of LA RAZA!
THE REASON OBAMA BROUGHT IN DALEY WAS BECAUSE WAS FROM JPMORGAN, AND AN ADVOCATE FOR OPEN BORDERS.
For much of Obama’s tenure, Jamie Dimon was known as the White House’s “favorite banker.” According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.
OBAMA PROMISED HIS CRIMINAL BANKSTER DONORS NO PRISON TIME AND NO REAL REGULATION. DID HE DELIVER?
The JPMorgan scandal also throws into relief the government’s failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
The settlement, reported to be worth $25 billion, was announced February 9 and hailed by President Obama as a serious rebuke to the banks and boon to distressed homeowners. (See: “Obama administration brokers pro-bank mortgage fraud settlement”).
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