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.
The JPMorgan debacle
15 May 2012
The economic and political fallout from JPMorgan Chase’s sudden announcement last Thursday night that it lost more than $2 billion from speculative bets on credit derivatives continued to grow on Monday. The biggest US bank announced the forced retirement of Ina Drew, who headed up the bank’s London-based Chief Investment Office, which placed huge bets on the creditworthiness of a collection of US corporations. Other top executives and traders are expected to be sacked or demoted.
Lou Dobbs Tonight
Thursday, July 9, 2009
And Harvard economics professor JEFFREY MIRON will weigh in on the state of the U.S. economy—and why the only plausible argument for bailing out banks crumbles on close examination.
"There
is a populist and conservative revolt against Wall Street and financial elites,
Congress and government," Democratic pollster Stanley Greenberg warned in
an analysis this week. "Democrats and President Obama are seen as more
interested in bailing out Wall Street than helping Main Street."
*
*
August 21, 2010
Janet Tavakoli.President, Tavakoli Structured
Finance
August 15, 2010
How to Thwart the Assassins of the American Dream OBAMA'S ASSAULT ON THE AMERICAN PEOPLE FOR BANKSTERS and ILLEGALS!
"Every day, Americans, faced with
layoffs and tough economic times, are forced to use their credit cards to pay
for essentials such as food, housing, and medical care -- the costs of which
continue to escalate. But, as their debt rises, they find it harder to keep up
with their payments. When they don't, banks, trying to offset losses in other
areas, turn around, hike interest rates, and impose all manner of fees and
penalties..."
Third World America, (P. 77)
Our mediocre grammar school and high school educational system continues its downward slide. The Great Recession is squeezing school budgets. We are failing our children, our most important resource of all.
In 2009, the American Society of Civil Engineers
gave the nation's infrastructure a near failing D rating:
"Flip on a light switch, and you are tapping into a seriously overtaxed electrical grid. Go to the sink, and your tap water may be coming to you through pipes built during the Civil War. Take a drive, and pass over pothole-filled roads and cross-if-you-dare bridges. The evidence of decay is all around us." (P. 95)
The over-hyped American Recovery and Reinvestment Act of 2009 earmarked only $72 billion of the $787 billion appropriation of taxpayer dollars to projects to improve the country's infrastructure.
Meanwhile, multi-national corporations avoid taxes, sheltering $700 billion in foreign earnings to end up with a measly $16 billion (2.3%) tax bill. GM is among those companies, yet it took almost a half billion dollars in bailout loans. Boeing and KBR Halliburton are among the defense contractors that avoid taxes, while enjoying government contracts worth tens of billions.
Banks (not Fannie and Freddie) Crippled the Housing Market
Fannie and Freddie do not make loans. They purchase mortgage loans and earn fees for guaranteeing payments on the loans. According to the Mortgage Bankers Association, in 2006, Fannie and Freddie accounted for 33% of total mortgage backed securities issuance. In the first half of 2010, they accounted for around 64% of new issuance. They were forced to pick up the slack and buy more when Wall Street's private label securitization Ponzi scheme blew up.
Fannie and Freddie are Wall Street's dumping ground. They would have had problems on their own, but their problems would not have been close to their current scale, and they did not create the housing bubble.
Congress twisted arms to make Fannie and Freddie buy more than $300 billion of phony "AAA" rated mortgage-backed securities from banks, not counting loans that didn't meet their stated requirements. Today Fannie and Freddie want banks to repurchase tens of billions of these loans, since they fail to meet representations and warranties, and the banks are fighting this obligation.
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WHAT DID THE BANKSTERS KNOW ABOUT OUR ACTOR OBAMA THAT WE DIDN’T KNOW?
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).
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OBAMA’S PAYMASTERS!
Top subprime lenders included Wells Fargo; Countrywide,
purchased by Bank of America; Washington Mutual, now part of JPMorgan Chase;
CitiMortgage, part of Citigroup; First Franklin (now closed), purchased by
Merrill Lynch, which was purchased by Bank of America; ChaseHome Finance,
JPMorgan Chase; Ownit, partly owned by Merrill Lynch, which was later purchased
by Bank of America; and EMC, part of Bear Stearns, which was purchased by
JPMorgan Chase. Most of the rest depended on massive loans from Wall Street. Many of these lenders were sued by
states for fraud and paid billions in settlements.
According to Inside Mortgage Finance, the top
mortgage backed securities underwriters during 2005-2006, only two of the
subprime abuse years, included now defunct Lehman Brothers ($106 billion); RBS
Greenwich Capital ($99 billion); Countrywide Securities, which is now part of
Bank of America ($74 billion); Morgan Stanley ($74 billion);Credit Suisse First
Boston ($73 billion); Merrill Lynch ($67 billion); Bear Stearns, which is now
part of JPMorgan Chase ($61 billion); and Goldman Sachs ($53 billion).
The above doesn't even include the credit
derivatives, collateralized debt obligations (CDOs), and structured investment
vehicles (SIVs) that amplified losses. Yet, Arianna notes how America imploded
while bankers soared:
"Someone like [Robert] Rubin is able to wreak destruction, collect an ungodly profit, then go along his merry way, pontificating about how 'markets have an inherent and inevitable tendency -- probably rooted in human nature -- to go to excess, both on the upside and the downside.' This from the man who, as Bill Clinton's Treasury secretary, was vociferous in opposing the regulation of derivatives -- a key factor in the current economic crisis -- and who lobbied the Treasury during the Bush years to prevent the downgrading of the credit rating of Enron -- a debtor of Citigroup." (P. 150)
Robert Rubin operated an economic wrecking-ball
from prestigious positions of influence including former co-chairman of Goldman
Sachs, director of the National Economic Council, former Treasury Secretary
under President Bill Clinton, board member and senior "risk wizard"
counselor at Citigroup, member of the President's Advisory Committee for Trade
Negotiations, member of the SEC's Oversight and Financial Services Advisory Committee,
unofficial econmic adviser to President Obama, and co-chairman of the Council
on Foreign Relations.
Rubin is just one example of the many bankers, who helped destroy the economy while creating a connected financial oligarchy.
Hide Billions of Losses, Take Bailouts, Collect Billions, Skip Jail
Instead of apologizing for screwing up, the banks demanded the Great Bailout. At the start of the meltdown, the IMF and the U.S. administration estimated losses of $2 to $2.5 trillion. Unemployment and the losses are now shockingly worse. What was merely a recession escalated into the Great Recession.
How big are the actual losses? No one knows.
After destroying the value of major banks, culprits
used their enormous political influence -- funded with taxpayer dollars -- to
get Congress to force the accounting board to change accounting rules (as of
April 2009) so banks don't have to recognize losses until they sell the assets.
According to William K. Black, after the much tinier S&L crisis, there were over 1,000 successful felony prosecutions, several thousand successful enforcement actions, and roughly 1,000 successful civil actions.
This time Congress gave us the Great Cover-up. Bank officers dodged jail time and collected billions in bonuses. As one of my South American friends observes, he's witnessed this third-world corruption before, and this time it's in English.
Banks Stall the Recovery and Prolong the Great Recession
Unemployment marched upward, delinquencies soared, and banks stalled foreclosures. The longer banks delay foreclosures and sales, the longer they can avoid acknowledging losses. Phony accounting and zero cost funding from taxpayers created an illusion of recovery.
Stalling helps banks while they pressure Congress to bail out failed mortgages with taxpayer dollars. Instead of working out mortgages with homeowners, they can wait for a government program to buyout or subsidize their failing loans. The markets aren't recovering, because banks own colossal chunks of mystery-meat assets.
It's a black hole of debt. If banks were forced to
price these assets at market values and sell them, the market would clear, and
the market would make a faster recovery. When Japan did this, it stalled its
economy for twenty years, and it still hasn't recovered.
Voters Must Demand the Solution
Voters must demand that Congress uncovers and publicizes facts and prosecutes the financial system's massive multi-year frauds. This will mean thousands of felony prosecutions, enforcement actions, and civil actions.
Congress completely failed in genuine regulation and enforcement. It must start over on financial reform, regulate derivatives, commodities trading, update Glass-Steagall, and more. It will have to break-up the Too Big to Fail financial institutions.
CEOs of our Systemically Dangerous Institutions
(SDI's) fail to manage them, because no one is capable of doing it. Like a
morbidly obese junk food addict, banks won't even get on a scale. Our banks
refuse to properly measure (account for) the problem.
Third World America elegantly summarizes the way forward. Arianna Huffington names the culprits and gives a roadmap for solutions. The rest is up to us. We deserve better than a third world economy divided by ultra-rich on one side and debt-ridden middle class and dirt poor citizens on the other. Citizens must demand a clean-up of corruption and a foundation for healthy growth.
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HUFF POST
IS THERE A GLOBAL WAR BETWEEN FINANCIAL THEOCRACY AND DEMOCRACY?
BY LES LEOPOLD
Senate and House conferees are about to reconcile a financial reform bill that is virtually designed to institutionalize "too big to fail." And when they do we'll lose another battle in the ongoing war between global financial markets and democratic nation-states.
This war has been going on for decades -- but democracy hasn't always been in full retreat.
The New Deal Conquest: During the Great Depression democratic forces gained the upper hand in the war. We realized that financial markets, which are driven by the largest banks and financiers, had to be tightly controlled. We knew that global speculation on currencies only deepened the Depression and had to be strictly limited. We knew that an iron curtain was needed between commercial and investment banking to protect Main Street depositors from market madness (that was the Glass-Steagall Act). And most importantly we knew that the key to preventing economic upheaval was to limit the wealth of the super-rich and to increase the wealth of working people through progressive taxes, Social Security, wage and hour laws, and the promotion of unionization. The Bretton Woods agreements forged by the Allies during WWII set up strict rules for global finance, rules that kept financiers in check for more than a quarter century.
And it worked pretty damn well. As economist Joseph
Stiglitz points out, this era saw only one financial crisis (Brazil, 1964), and
working people in western democracies made huge gains. Since the era of
deregulation took hold in the late 1970s, the world has suffered over a hundred
financial crises and middle-class incomes have stagnated.
The Deregulatory Counter-Offensive:
By the late 1970s, bankers regained the advantage through the spread of a new
faith in self-regulated markets. The economic apostles of unfettered markets
lobbied against progressive taxes, unions, and social welfare programs. The new
orthodoxy was: Let the elites collect the money--they'll invest wisely (instead
of consuming), and all boats will rise. This near-religious revolution rapidly
spread through the economic and policy establishment. Regulations were
dismantled right and left, and the revolving door between government and Wall
Street started spinning. The American financial catechism ruled the world. And
on Wall Street, the money tap was open. It did not trickle down.
Then, suddenly, in 2008, the market gods destroyed
themselves as the unregulated financial casinos crashed and burned, just like
they did in 1929. For a few months, it seemed like the deregulatory theology
become a global heresy. It was obvious that Wall Street's reckless speculation
and its bold new wave of financial engineering had caused the Great Recession.
(See The Looting of America for an accessible account.).
It was also clear that if government didn't come to the rescue, Wall Street
would lay in ruins, along with the rest of the economy. This was the perfect
moment for democracy reassert democratic control on financial markets, just as
we did during the New Deal. We blew it.
The Victory at Too Big to Fail: At
the moment when Wall Street was on its knees, we decided to bypass serious
reform. Instead, we rebuilt Wall Street, using taxpayer money and guarantees -
more than $10 trillion worth. We let bankers use our bailout money to pay
themselves $150 billion in bonuses -- at a moment when over 29 million
Americans were jobless or forced into part-time jobs. We allowed the top hedge
fund managers to walk off with over $900,000 an hour (not a typo) in 2009. Windfall profits
taxes? No. In fact we let hedge fund honchos pay an extra-low tax rate by
calling their income "capital gains." We didn't restore
Glass-Steagall, we didn't break up "too big to fail" financial
institutions. In fact the biggest banks became even bigger, courtesy of the
U.S. government.
The Invasion against Democracy: The
war is escalating. Right now, financial elites aren't just fighting a defensive
battle against new regulations. They're playing offense: They're whipping up
deficit hysteria around the globe and calling for drastic cuts in middle class
programs. Why? They want to ensure that their loans to governments aren't
threatened by rising public debt. Ironically, the public debt they're so
worried about was created in large part by them -- the result of huge bailouts
and other expenses stemming from the crash they caused. Although the bankers
want us to dismantle what remains of our worker-oriented policies, welfare for
the financial elites is still fine and dandy.
This is the most dangerous counter attack in the
history of finance. We had better know a great deal more about the attackers.
Who makes up this shadowy force called "global markets"? Who fights
their battles? Do they have a high command?
Not really. There is no executive committee of
financial elites. There's no international conspiracy, no Elders of Zion.
Instead these markets are pulled and pushed by about 50 very large banks and
financial institutions. This is where much of the nation's $2 trillion in hedge
fund money roams. This is where the top six US banks frolic. They don't have to
sit around a table strategizing. They instantly sense threats to their power.
They instantly smell profitable openings and they're poised to grab what they
can, whenever they can. They thrive on turmoil, which gives them new
"proprietary" trading opportunities to exploit. Volatility means big
bucks, especially now that the largest players know that the government will
back up even their wildest gambles. History has just proven that they are way
too big to fail.
Of course they still have to lobby government
officials--many of whom either were bankers, or will be once they leave office.
But their most powerful lever on government is through the market itself: Here,
by moving vast quantities of money around, they can instantly veto policies they
don't like. If the EU talks seriously about financial transaction taxes, the
markets go down the Euro grows weaker, and interest rates rise--making it more
expensive for governments to borrow the money they need to operate. Politicians
have learned to "listen" to the markets and are conditioned to
placate them.
Should a nation state get out of line (Greece,
Italy, Spain, Portugal, etc), the markets slap them silly. Politicians rush to
the scene and start slicing social spending. If instead they demand new taxes
on financial elites to reduce public debt, the markets respond with even more
fury. Money flees.
All the external machinery of democracy still
clanks along. We still pull the levers in the voting booth. But the decisions
that affect us the most are made in a profoundly undemocratic way. Faceless
financial markets exercise far more control over politicians than the voters
who elected them.
So the problem isn't just the corporate campaign
contributions, or corporate media control or the academic consensus supporting
our financial theocracy. It's the raw power of the markets. They've been
roaming free and virtually unregulated for more than a generation, and now
their power is unparalleled. Just months after they brought our economy
crashing down, they're right back to their old tricks, setting the stage for
the next crash and the next bailout while getting filthy rich along the way.
Bill Clinton nailed it on the head when he
reportedly said:
"You mean to tell me that the success of the
economic program and my reelection hinges on the Federal Reserve and a bunch of
fxxxing bond traders?" (See Agenda by Bob Woodward)
No Retreat, No Surrender? There's no
room for pacifists in this war. Clearly, Wall Street and its global minions are
not seeking a truce. Instead, they're coming after our Social Security, Medicare
and Medicaid programs. They want us to work longer before we retire and get
less when we do. They want us to pay more for health care and get less of it.
They want less public money to go to schools, teachers and public
infrastructures. And they want us to get used to a jobless recovery with double
digit unemployment rates. (And when millions and millions of people are
unemployed, we can't maintain high labor standards, and our wages and benefits
erode.) In short, they want to undermine all the policies and programs that
have built and sustained middle class life.
Already government officials in the UK, Germany and
here are telling us we must endure austerity for "decades to come."
As Fed Chair Ben Bernanke candidly put it:
"We can see what problems can arise in a
country if investors lose confidence in the fiscal position of that country, so
it is very important that we address this problem."
Of course, he's not going to point out that this
austerity is only for the masses, definitely not for the financial elites. Or
that the underlying cause of the debt investors are so worried about is the
giant economic crater caused by the very same financial elites who now might
"lose confidence" in financing a middle class society.
We shouldn't kid ourselves about the
pitched battles ahead. Fighting back won't be easy, and winning will be even
harder. People in country after country will have to mobilize themselves in
defense of real democracy, in defense of each nation's right to provide its
people with a decent quality of life. In my opinion, that includes sustainable
jobs with decent benefits and a solid public infrastructure that promotes
equity, protects the vulnerable and enriches the environment.
Unfortunately, no one can guarantee that democracy
will prevail in the war against financial theocracy -- just recall the
totalitarian chaos in Europe during the Great Depression. But don't count it
out, either. It's true that many of us regular folks have been diverted by the
media, distracted by the Internet or lulled into a stupor by pharmaceuticals.
But when we realize that we've been shoved into a corner with no way out, we'll
act. A popular struggle will begin. And when it does, we'll at least have a
fighting chance to recapture our democratic souls.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About ItChelsea Green Publishing, June 2009.
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US
bank profits soar while lending drops
By
Patrick Martin
26 May 2012
26 May 2012
US
bank profits rose sharply during the first quarter of 2012, according to
figures compiled by the Federal Deposit Insurance Corporation (FDIC), the
eleventh consecutive quarter in which net earnings were higher than the
previous year.
Aggregate
profits of all the banks and savings institutions insured by the FDIC rose to
$35.3 billion in the January-March period, up from $28.7 billion in the fourth
quarter of 2011 and the highest quarterly profit figure since 2007.
The five-year record profits come on
top of bumper earnings in 2011, the most profitable year for banking since
2006. While jobs and wages for working people remain deeply depressed, the
financial sector, which caused the economic slump, is doing better than ever.
This applies particularly to the
financial giants. Two-thirds of all US financial institutions reported
increased profits, but the vast bulk of these profits were concentrated in the
largest banks, those with assets over $10 billion. While they make up only 1.4
percent of all banks, these institutions raked in 81 percent of the net
earnings.
While
profits rose 23 percent compared to a year earlier, net operating income
revenue was up only five percent. This means most banks boosted their profits
not from lending activities, but through bookkeeping operations, like reducing
the amount they set aside to cover loan losses (down $6.6 billion compared to
the same quarter in 2011).
Overall,
banks cut their total lending by about one percent in the first quarter of 2012
compared to the previous quarter. This once again disproves the rationale for
the Bush-Obama bank bailout: the claim that rescuing the banks would enable
them to resume lending on a wider scale and thus fuel an economic recovery in
the United States.
Consumer
lending fell in most categories, with the biggest drop in credit card debt,
$38.2 billion, a 5.6 percent decline typical of the post-Christmas quarter.
Home mortgages fell by $19.2 billion and home equity lines of credit by $13.1
billion. Auto loans rose by $4.5 billion.
Loans
to businesses were mixed, with construction and real estate development loans
declining by $11.7 billion, offset by an increase in loans to commercial and
industrial borrowers, which rose $27.3 billion, or 14 percent.
Combining
both consumer and business lending, bank credit fell by $56.3 billion compared
to the fourth quarter of 2012, reversing the previous nine months in which
aggregate lending increased.
Acting
FDIC Chairman Martin Gruenberg said in a statement, “The overall decline in
loan balances is disappointing after we saw three quarters of growth last
year.”
There
were some signs of distress. More than 10 percent of banks reported net losses
in the first quarter, while the proportion of loans and leases not up-to-date
on payments remained high.
The
FDIC report comes just over two weeks after Federal Reserve Board Chairman Ben
Bernanke told a banking conference in Chicago that big banks and corporations
now faced credit conditions that “have improved significantly in a number of
areas.”
Bernanke
said that large companies and wealthy individuals could find credit easily, but
admitted that for small business owners the conditions were “challenging,” a
word that should be translated into ordinary English as “desperate.”
Bank
loans to small businesses were still 15 percent below their 2008 peak at the
end of last year, he said.
With
the slowdown in the US economic “recovery” that has been reflected in stagnant
job figures for the last two months, the credit situation facing working
people, students and small businesses is likely to worsen.
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