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Category Archives: financial reform

Obama Makes Nice-Nice With the Banksters

13 Monday Jun 2011

Posted by Craig in economy, financial reform, Obama, special interests, too big to fail, Wall Street

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1936, banksters, Barack Obama, campaign contributions, FDR, financial industry, financial regulation, I welcome their hatred, Mitt Romney, too big to fail, Wall Street

FDR, 1936:

“We had to struggle with the old enemies of peace–business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.

I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.”

Barack Obama, 2011:

Can’t we all just get along?

“A few weeks before announcing his re-election campaign, President Obama convened two dozen Wall Street executives, many of them longtime donors, in the White House’s Blue Room.

 The guests were asked for their thoughts on how to speed the economic recovery, then the president opened the floor for over an hour on hot issues like hedge fund regulation and the deficit.

Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend.

The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.

[…]

 The president’s top financial industry supporters say they are confident that the support Mr. Obama needs will ultimately be there, despite the financial industry’s unhappiness over his efforts to tighten regulation of their businesses. But it is clear that those supporters will have to work much harder to win over the financial services industry than they did in 2008, before Wall Street’s bust, the subsequent clashes over policy and the sometimes bitter personal differences that lingered afterward.”

Just what in the Sam freaking Hill does the financial industry have to be unhappy about? “Too big to fail” is bigger than ever, no meaningful reform of the industry was passed, their salaries and bonuses are back at or above what they were before these greedy bastards nearly wrecked the world’s economy, none of them has gone to jail, and one of their lackeys is still the Treasury Secretary. Yeah, the big banks are back to good health alright. Nobody else is, but they are.

 “And as Mr. Obama seeks to rebuild, Mitt Romney, a former Massachusetts governor who is seeking the Republican presidential nomination, is using his background as a venture capital executive and his policy proposals to woo financial-industry donors.

Last week, Mr. Romney held three fund-raisers in Greenwich, Conn., and New York, including a reception hosted by Anthony Scaramucci, a hedge fund manager who donated to Mr. Obama in 2008. Mr. Scaramucci said he wanted a president who embodied pragmatism and middle-of-the-road solutions. In 2008, that candidate was Mr. Obama, he said; today, it is Mr. Romney.”

So if next year’s presidential election comes down to Obama vs. Romney it’s just a question of whose lips best fit on the bankster’s backsides as to who gets the biggest campaign contributions, not to mention the attached strings that come with said contributions. No matter who wins, Wall Street can’t lose.

And the beat goes on.

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Foreclosure Fraud Just the Tip of the Iceberg

12 Tuesday Oct 2010

Posted by Craig in bailout, Congress, economy, Financial Crisis, financial reform, financial regulation, Foreclosures, Justice Department, Obama administration, special interests, too big to fail, Wall Street

≈ 2 Comments

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40 states, attorneys general, bailout, BofA, Chase, Congress, David Axelrod, Dylan Ratigan, financial reform, foreclosure, fraud, insolvent, Karl Denninger, Market Ticker, mortgages, national moratorium, resolution authority, securities, Wall Street, White House

Dylan Ratigan, Ohio Secretary of State Jennifer Brunner, and Karl Denninger of The Market Ticker unravel foreclosure fraud:

To reiterate, the fraud in foreclosures that we’re seeing now is just the tip of the iceberg. The purpose is to try and cover up, and cover for, the fraud in the mortgage process all the way back to the origination of the mortgages, which were then packaged into securities and fraudulently sold to investors as AAA quality, a rating gained by paying off the ratings agencies. As our parents always told us, one lie requires another one to cover up the first one, which requires another lie to cover up the second one, and so on, and so on, and…….

In my opinion, that’s why the Senate tried to sneak through the legislation that President Obama vetoed—it would have given the big banks protection from liability in this entire mess. As an aside–again just my opinion– but the only reason the president vetoed the bill was because of the attention it received and the light that was shone on its alleged “unintended consequences” (and if you’ll buy that….) My cynical nature when it comes to politicians tells me that “sending the bill back for modifications” translates into, ‘We’ll try again when the heat’s off.’

It’s also why, according to David Axelrod, the hope in the White House is that “this moves rapidly and that this gets unwound very, very quickly.” And why the White House opposes a national moratorium on foreclosures. A moratorium would give investigators and especially some 40 states’ attorneys general time to delve back into fraud and deceit at every level of the process

As Mr. Denninger explained, the only remedy is to force the big banks to buy back the toxic securities that they sold to investors under false pretenses. They can’t do that, which means Chase, BofA, et al, are insolvent. Actually, they’re insolvent now but for the phony profits from peddling this garbage to unsuspecting investors.

There is a provision in the financial reform legislation for resolution authority, that is breaking up large financial institutions that pose a “systemic risk” to the entire economy. Will Congress use it or will they do what they have done in the past and bail out their Wall Street cronies and contributors—again. If Republicans take control of Congress will they hold true to their campaign rhetoric of “no more bailouts” or will they dance to the tune of their big donors on Wall Street?

We may soon find out.

Axelrod in Wonderland

24 Friday Sep 2010

Posted by Craig in financial reform, health care, Obama administration, Politics, special interests, too big to fail, Wall Street

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big banks, David Axelrod, financial reform, health care reform, military-industrial complex, oligarchy, too big to fail, Washington Post

David Axelrod in yesterday’s Washington Post:

“Pundits will spend a lot of time predicting who will win in November. But more is at stake than the fate of Democrats or Republicans. What’s at stake is whether the powerful corporate special interests will go back to writing our laws or whether our democracy will remain where it belongs — in the hands of the American people.”

What color is the sky in the land where unicorns run free, Dave? “Go back?” They never left. Former insurance company lobbyists and executives wrote the lion’s share of health care “reform.” Your boss cut a backroom deal with the pharmaceutical industry to ensure their monopoly remained intact. Did the big banks get broken up by so-called financial reform? Hell no. Is too big to fail still around? Hell yes. Does the military-industrial complex still get the same blank check that they’ve always had? Absolutely.

FYI, Mr. Axelrod, we no longer have a democracy in America. The correct term is oligarchy.

Why Tim Geithner Opposes Elizabeth Warren as Head of the CFPB

20 Tuesday Jul 2010

Posted by Craig in bailout, economy, financial reform, financial regulation, Obama administration, Politics, too big to fail, Wall Street

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bankers, CFPB, Consumer Financial Protection Bureau, Elizabeth Warren, Hank Paulson, Huffington Post, John Ralston, Larry Summers, President Obama, scheme, TARP, Timothy Geithner, Wall Street

Elizabeth Warren should be a no-brainer as President Obama’s choice to head the newly-created Consumer Financial Protection Bureau (CFPB). She is a long-time advocate for the rights of consumers, the person most responsible for the Bureau’s inclusion in the recently-passed financial reform legislation, and its most notable and vocal supporter. She has this crazy notion that a consumer protection agency should actually…you know…protect consumers against the abusive practices of the big banks.

As chair of the TARP oversight committee Warren regularly clashed with what those banks consider to be in their best interests, as well as those in the administration who make a habit of carrying the banker’s water, namely Treasury Secretary Timothy Geithner. Which is why it wasn’t surprising when Huffington Post reported last week that Geithner opposed Warren’s nomination.

Then came this, a piece by John Talbott (also in the Huffington Post) on Sunday. The reason for the treasury secretary’s opposition:

“The [financial reform] bill has been written to put a great deal of power as to how strongly it is implemented in the hands of its regulators, some of which remain to be chosen. The bank lobby will work incredibly hard to see that Warren, the person most responsible for initiating and fighting for the idea of a consumer financial protection group, is denied the opportunity to head it.

But this is not the only reason that Geithner is opposed to Warren’s nomination. I believe Geithner sees the appointment of Elizabeth Warren as a threat to the very scheme he has utilized to date to hide bank losses, thus keeping the banks solvent and out of bankruptcy court and their existing management teams employed and well-paid.”

The “scheme” to which Talbott refers began with Geithner’s predecessor as Treasury Secretary, Hank Paulson, and is being continued by Geithner and his partner in crime in the Obama administration, Larry Summers. In short it goes like this:

The $700 billion in TARP money was originally supposed to go to get bad loans, the so-called toxic assets, of the bank’s books. Immediately after TARP was passed, Paulson did a 180 and decided to use it as a direct cash infusion into the big banks rather than buying bad loans. (Nothing to do with him being a former Goldman CEO, I’m sure).

That left the banks with trillions of dollars of toxic assets still on the books, where they remain today. Geithner’s plan is for the banks to:

“…earn their way out of their solvency problems over time so the banks are continuing to slowly write off their problem loans but at a rate that will take years, if not decades, to clean up the problem.

And this is where defeat of the nomination of Elizabeth Warren becomes critical for Geithner. For Geithner’s strategy to work, the banks have to find increasing sources of profitability in their business segments to balance out their annual loan loss recognition from their existing bad loans in an environment in which they continue to recognize new losses in prime residential mortgages, commercial real estate lending, sovereign debt investments, bridge loans to private equity groups, leverage buyout lending and credit card defaults.

The banks have made no secret as to where they will find this increase in cash flow. They intend to soak their small retail customers, their consumer and small business borrowers, their credit card holders and their small depositors with increased costs and fees and are continuing many of the bad mortgage practices that led to the crisis

[…]

It is exactly these types of unwarranted fees on small consumers and poorly designed products that Elizabeth Warren will fight against as head of the new consumer finance protection group. And it is why Geithner sees her as so threatening. Unless the banks are allowed to raise fees and charges on their smaller consumer customers, Geithner’s and Summers’ scheme for dealing with the banking crisis by hiding problem loans permanently on the banks’ balance sheets will be exposed for what it is, an attempt at preserving the jobs of current bank executives at the cost of dragging out this recovery needlessly for years in the future.”

After much thought and careful consideration (which took about 1.5 seconds) I have a suggestion for how President Obama can resolve this conflict. Warren’s in, Geithner’s out. Problem solved.

GOP Agenda: Meaningless Generalities and “Going Back”

19 Monday Jul 2010

Posted by Craig in budget, Congress, Conservatives, economy, financial reform, Obama administration, Politics, Republicans

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David Gregory, Debt Commission, free enterprise system, generalities, Hanes, John Cornyn, Meet The Press, Pete Sessions, Peter King, Republican agenda, ship jobs overseas, specifics

It appears that Republicans are following the advice of Rep. Peter King (R-NY) about laying out their agenda for what they would do should they regain control of the House in the November mid-term elections. On Bill Bennett’s radio program last Thursday, Rep. King said this:

“I don’t think we have to lay out a complete agenda, from top to bottom, because then we would have the national mainstream media jumping on every point trying to make that a campaign issue.”

Yesterday on Meet the Press Rep. Pete Sessions and Sen. John Cornyn, both of  Texas (sigh) continued with that theme. When David Gregory asked Sessions to explain what the GOP would do to cut the deficit, Sessions replied with meaningless generalities like these:

“We need to live within our own means.”

“We need to make that sure we read the bills.”

“We are going to balance the budget.”

“We need to make sure that…we look at all that we are spending in Washington D.C.”

Sessions added something which stood out to me when Gregory pressed him for specifics. “He [Rep. Chris Van Hollen D-MD who remarked earlier about removing tax incentives for employers who ship jobs overseas] wants to diminish employers’ ability to be able to be competitive across the world…We need to go back to the exact same agenda that is empowering the free enterprise system rather than diminishing it.”

“Employers’ ability to be competitive across the world.” For instance Hanes:

“As recently as 2006 when Hanes was spun off from its parent Sara Lee Corporation, the company had 19 plants in the US and Puerto Rico. It currently has seven with one (Forsyth, NC) more scheduled to close by year-end 2010. Hanes now manufactures its wares across 17 plants and production facilities scattered across the Caribbean and Central America (Haiti, El Salvador and Honduras) to South East Asia (Bangladesh, Thailand, Vietnam), Micronesia (Saipan, Marshall Islands), a China manufacturing hub and one plant in Mount Airy, North Carolina.

…two thirds of the growth in earnings for Hanes came as a result of moving its production offshore and from financing activities.

Who benefits? Well management certainly does as do the shareholders. Its stock closed today at $25.97 up 78.3 percent year-over-year. Its CEO, Richard Noll, was paid $5.7 million in 2009. Not bad for a manufacturer of underwear and hosiery. Meanwhile, the company’s average wage in Bangladesh is $0.33 cents an hour. Of its 50,000 employees worldwide, less than ten percent work in the US.”

This is the “free enterprise system” that Sessions and his fellow Republicans want to “empower rather than diminish.” Great for creating jobs in Bangladesh, not so much in America. Not to mention the “go back” remark. There’s the GOP agenda in a nutshell.

Cornyn’s answer to the question was much the same, adding that he wants to wait and see what the debt commission has to say. Way to face up to those tough choices, Sen. Cornyn. Watch:

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Ed Schultz Fired Up Over Corporations Sitting on Stacks of Cash

16 Friday Jul 2010

Posted by Craig in Congress, economy, financial reform, Politics, Republicans, Unemployment, Wall Street

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corporations profits, Ed Schultz, Fired Up, hiring, Washington Post

Ed Schultz commenting on this Washington Post report that corporations are sitting on nearly $2 trillion in profits but still not hiring:

Vodpod videos no longer available.

Hammer. Nail. Bam.

It’s True Harry, and You Have Only Yourself to Blame

15 Thursday Jul 2010

Posted by Craig in Congress, Democrats, economy, financial reform, Politics, Unemployment, Wall Street

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bonuses, filibuster rule, financial reform, Harry Reid, health care reform, hiring, obstructing, Republicans, Senate, stimulus, unemployment, Wall Street

Welcome to the party, Harry. You’re a little late, but glad you finally got here:

“Republicans hope unemployment rates jump higher to give them a better shot at retaking Congress, Majority Leader Harry Reid said Wednesday.

At a press conference announcing a package of proposals to help small business, the Nevada Democrat said Republicans were obstructing legislation to help the economy for political reasons.

“They think the worse the economy is come November, the better they’re going to do election-wise,” Reid said.

Reid cited an extension of unemployment benefits as an example of legislation that would help the economy but was being blocked by Republicans.”

They don’t care about extending unemployment benefits. That money goes mostly to the vanishing middle-class that Republicans have been trying to kill off since 1980 anyway. This will just accelerate the process in the direction of their goal of a two-class society—the very rich and the poor. The fat cats on Wall Street are hiring and doling out the big bonuses again, and that’s all that matters to the GOP.

BTW, Harry. If you’re looking for someone to blame, find a mirror. If you and the other Dems would have had the balls to change that stupid-ass 60 vote rule in the Senate 18 months ago, none of this would have been possible. We could have had a REAL stimulus package, REAL health care reform, and REAL financial reform.

Democrats didn’t want to change it because they were anticipating some time in the future when they were in the minority and could use the filibuster to their advantage.

That time will be here a lot sooner than they thought.

Obstructionist Republicans and Gullible Democrats

30 Wednesday Jun 2010

Posted by Craig in Congress, Democrats, economy, financial reform, financial regulation, Obama administration, Politics, Republicans, special interests, Wall Street

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$19 billion fee, Barney Frank, financial institutions, financial reform, loophole, Massachusetta banks, Olympia Snowe, Scott Brown, Susan Collins, Treasury Department, Volcker Rule

Scott Brown is a quick learner. In his short time in the Senate he’s become a master at the game of ‘How To String Along The Gullible Democrat’ aka Lucy and the Football.

Here’s how it goes: Obstructionist Republican says, “I would vote for this particular piece of legislation except for X.” Gullible Democrat believes Obstructionist Republican (although for the life of me I can’t figure out why) and changes or takes out X. Obstructionist Republican then says, “That’s all well and good, but I also don’t like Y. If you take that out too, I may vote for said legislation.” Gullible Democrat removes Y, and the process repeat itself over and over until said legislation is either dead or too weak to do anything remotely resembling its original intention.

The latest example is the so-called financial reform bill. Brown wanted a loophole in the Volcker Rule to exempt banks in Massachusetts from being subject to limits on risky investments. With the help of Barney Frank and (surprise!)  the Treasury Department, the loophole was inserted into the legislation. (BTW, also at the insistence of Senator Brown, another loophole was added to the Volcker Rule which may delay its implementation until 2022.)

Brown’s objection to the bill then shifted to a $19 billion fee to be collected from large financial institutions, calling it a “tax.” I’m sure Brown’s opposition has absolutely nothing to do with the $450,000 he received from executives at financial institutions in the six days before the election in Massachusetts. Strictly coincidence..

Guess what? The bank fee is out now, too

“Top Democratic House and Senate negotiators who worked out a deal on a sweeping overhaul of financial regulations regrouped Tuesday to eliminate a $19 billion fee on banks that had threatened to derail the legislation.”

Brown wasn’t alone. He had two other Lucies standing with him:

“Besides Brown, Republican Sens. Olympia Snowe and Susan Collins of Maine, both of whom also voted for the Senate bill last month, said they, too, had qualms about the bank assessment that negotiators inserted into the bill last week.”

I guess the only alternative to the Democrats being gullible and naive is that they are complicit and corrupt. That they don’t really want actual reform and are just using the guise of compromising with the Republicans to play their favorite game—giving the appearance of doing something while in reality doing nothing which might upset the goose that lays the golden eggs of campaign contributions.

Gullible and naive or complicit and corrupt? Either way it doesn’t bode well for the future of the Republic.

Would the GOP Deliberately Sabotage the Economy? Is There Any Doubt?

24 Thursday Jun 2010

Posted by Craig in Congress, Conservatives, economy, financial reform, financial regulation, Politics, Republicans

≈ 1 Comment

Tags

Ben Nelson, depression, Dick Cheney, economy. deficit, Happy Days Are Here Again, Huffington Post, Medicare Part D, Michael Steele, power, recession, Republicans, sabotage, Senate, tax extenders, unemployment, wars. tax cuts, Washington Monthly

Commenting on a Huffington Post piece about how Republicans, and Ben Nelson (excuse my redundancy), appear poised to kill the tax-extenders bill in the Senate, Steve Benen at Washington Monthly writes:

“In the real world, this means millions of jobless Americans will lose their already-modest benefits, and hundreds of thousands of workers will be laid off over the next year, including teachers, police officers, and firefighters. All of this will happen because Republicans are more concerned about the deficit — a deficit they created under Bush/Cheney — than the economy.

It’s unpleasant to think about, and I really hope it’s not true, but it may be time for a discussion about whether GOP lawmakers are trying to deliberately sabotage the economy to help their midterm election strategy.”

What’s to discuss? It’s true. Of course Republicans are trying to deliberately sabotage the economy to help their mid-term election strategy, as well as their 2012 presidential election strategy. Republicans in Congress don’t care about deficits (see Dick Cheney) or the debt, except when they’re out of power. When they were in control of everything in D.C. from 2001-2007 what happened? Were there even any cursory attempts to rein in the deficit and pay down the debt?

Quite the contrary. With 2 wars and tax cuts and Medicare Part D, all on the credit card, the debt exploded.

You bet your ass the GOP wants the economy in the tank, as far in as possible. If unemployment is double what it is now and we go into a double-dip recession, or in their wettest dreams a depression, the champagne corks will be popping and ‘Happy Days Are Here Again’ will be blaring from the speakers in Michael Steele’s office. Do you think they care about the pain and suffering it would cause the American people? They care about one thing and one thing only—power. That’s it. If the “small people” have to bear the brunt of that quest, so be it.

Of course once they get it, their faux concern about the deficit and excessive spending will go out the door as they come in. Just like it did before.

Frank and Dodd Set to Serve Their Corporate Masters

10 Thursday Jun 2010

Posted by Craig in Congress, Democrats, economy, financial reform, financial regulation, Obama administration, Politics, special interests, Wall Street

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Barney Frank, Blanche Lincoln, change you can believe in, Chris Dodd, conference committee, derivatives, Finance Industry PACs, financial reform legislation, whores

With the conference committee set to start meeting today to come up with a final version of financial reform legislation, the finance industry whores on the committee (aka Barney Frank and Chris Dodd) are doing their best to backpedal on Blanche Lincoln’s provision to force the big banks to spin off their derivatives operations.

“Senate Banking Committee Chairman Chris Dodd [$3.1 million from Finance Industry PACs], a skeptic on the Lincoln plan, called it a “strong provision” and said she “was on the right track.” He did not, however, agree with his Democratic colleagues Wednesday who said Lincoln’s election win would make it harder to eliminate the provision.

And Frank [$2.3 million], who is chairing the conference committee, gave no indication Wednesday of where he intended to steer the House-Senate conference on the issue.”

No big surprise here either:

“The plan faces opposition from the administration, the Treasury Department and the Federal Reserve.”

Change you can believe in.

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