Tag Archives: Wall Street

Still Waiting for the Wall Street Perp Walks

01 Thursday Apr 2010

Posted by in bailout, Financial Crisis, Justice Department, Politics, Wall Street

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From Bankster USA, Will Anyone Bunk With Bernie?

“Bernie Madoff is lonely. Eighteen months after the collapse of the financial system, not one Wall Street Titan has joined the [Ponzi] King in the federal pen…Apparently no one at the Department of Justice (DOJ) or the FBI really cares about the greatest white-collar crime wave in the history of the world — even if it did rob average American of some $14 trillion dollars in lost wages, savings, and housing wealth. After eighteen months, it is difficult to point to one CEO from a major Wall Street bank, hedge fund, or fraudulent mortgage company who is behind bars.”

Compare that with the Savings and Loan crisis of the late 1980’s:

“In the wake of the S&L crisis, Congress pushed regulators to investigate and prosecute. Congress also provided them with the resources to do the job. A series of strike forces based in 27 cities were staffed with 1,000 FBI agents and dozens of federal prosecutors.

The result? According to government statistics, no less than 1,852 S&L officials were prosecuted and 1,072 were jailed. Over 500 of these were top officers.

Bernie is lonely. I am sure the federal penitentiary can squeeze in hundreds of more bunk beds to accommodate his friends and colleagues from Wall Street. But it’s not going to happen until the FBI and the DOJ are given the resources they need, and a kick in the pants by Congress.”

Too Big To Jail?

28 Sunday Mar 2010

Posted by in bailout, Financial Crisis, financial reform, financial regulation, Justice Department, Politics, Wall Street

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Only in the bizarro world of high finance can one be named as a co-conspirator and not subject to criminal charges:

“March 26 (Bloomberg) — JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.

…None of the firms or individuals named on the list has been charged with wrongdoing.”

A government list of previously unidentified “co- conspirators” contains more than two dozen bankers at firms also including Bank of America Corp., Bear Stearns Cos., Societe Generale, two of General Electric Co.’s financial businesses and Salomon Smith Barney, the former unit of Citigroup Inc., according to documents filed in U.S. District Court in Manhattan on March 24.

Apparently “too big to fail” is also “too big to jail.”

Let’s Move On From Health Care. Please.

24 Wednesday Mar 2010

Posted by in bailout, Congress, Financial Crisis, financial reform, financial regulation, health care, Obama, Politics, Wall Street

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Now that health care reform, such as it is, has been signed, sealed, and set to be delivered in varying stages between now and 2014, can we please move on to other things. Believe it or not there are some significant storm clouds on the horizon which have the potential to come on shore sooner than 4 years from now, and which might merit some attention from policymakers in Washington, D.C. Such as:

The next wave of the housing crisis:

“This month, the Fed confirmed that it will no longer make open market purchases of mortgage backed securities after March 31st…As the Fed begins to unwind its historic intervention, it faces a second wave of toxic mortgage maturities that could be even more damaging than the last wave of subprime mortgages. These are the 3 and 5 year Option ARM mortgages, and they were the credit bubble’s absolute creme de la creme…these loans will reset at rates that are far higher than the initial “teaser” rate. Sadly, this may spell doom for borrowers who used these loans to fund overpriced home purchases in 2006-2007, especially in high-priced markets along the coasts.”

Add to that the lack of success of the foreclosure prevention program which has fallen far short of its original goals of helping 4 million homeowners. The number so far is less than 170,000.

“The program risks helping few, and for the rest, merely spreading out the foreclosure crisis over the course of several years” at significant expense for taxpayers and borrowers, the inspector general’s office wrote. If too many participants re- default, the modification plan “will have done little to achieve the goal of assisting homeowners who would still find themselves losing their homes.”

Then there’s the commercial real estate “ticking time bomb”:

“Estimates published last November by the Urban Land Institute and PricewaterhouseCoopers suggest that commercial real estate vacancies will continue to increase in 2010, while prices could tumble further during the year. Prices could fall as low as half their peak levels from 2007.

If that happens, that would only darken borrowers’ hopes that banks will refinance their outstanding loans. And some $1.4 trillion is commercial real estate debt is expected to come due over the next three years.”

Existing home sales have fallen for the third straight month, to their lowest level since last July:

“Resales of U.S. homes and condominiums fell 0.6% in February to a seasonally adjusted annual rate of 5.02 million, the lowest level in eight months, raising doubts about the durability of the housing recovery, the National Association of Realtors reported Tuesday.

…”We need to have a second surge,” said Lawrence Yun, chief economist for the real estate lobbying group. However, the jury’s still out, he said…A double-dip recession is a “possibility” if a second surge of buying doesn’t occur, he said.”

And last but not least, the economic “recovery” which is being felt in few places outside of big business and Wall Street:

“The earnings of companies in the Standard & Poor’s 500 stock index tripled in the fourth quarter, but this does not mean the rest of the US economy is doing well. Much of their sales were into fast-growing markets in places like India, China and Brazil. Meanwhile, they continued to slash jobs and cut costs at home.”

Large corporations are flush with cash, but:

“…Much is being used to buy other companies, which usually leads to more job losses. Much of the rest is being used to buy back their own stock in order to boost their share prices…The major beneficiaries are shareholders, including top executives, whose pay is linked to share prices. But the buy-backs do nothing for most Americans.

…The economy shows signs of improvement largely because the government is spending huge sums and the Fed is essentially printing even more money. But where will demand come from when the stimulus is over and the Fed tightens? That question hangs over the economy like a dense cloud. Until there is an answer, a sustainable recovery for any other than America’s largest corporations, Wall Street and the wealthy is a mirage.”

Just a few things for our elected representatives to consider. You’ve done your touchdown dance, now it’s time to get ready for the kickoff—the game is far from over.

Treasury Department “Vigorously Opposed” To Fed Audit

09 Tuesday Mar 2010

Posted by in bailout, economy, Financial Crisis, Obama, Politics, Wall Street

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What is this man hiding?

“The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday.”

And how’s this for openness, transparency, and accountability?

“Secretary Tim Geithner, Assistant Treasury Secretary Alan Krueger and Gene Sperling, a counselor to the secretary, held a briefing Monday with new media reporters and financial bloggers during which they discussed the Fed audit and other topics. Under the briefing’s ground rules, the officials could be paraphrased but not quoted, and the paraphrase could not be connected to a specific official.”

Alan Grayson isn’t buying it:

“Rep. Grayson said he finds Treasury’s opposition to the audit troubling. “There is a growing feeling on the part of real Democrats that the president is getting bad advice from people who have sold out to Wall Street,” said Grayson.”

I’ll go one step further. The president is among those who have sold out to Wall Street, in my opinion.

Happy Days Are Here Again…on Wall Street Anyway

03 Wednesday Mar 2010

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Wall Street’s return on their Washington investment:

“In fall 2008, after Lehman Brothers collapsed and other Wall Street firms seemed ready to topple, New York appeared to be headed for a brutal recession, one that would rival the worst downturns in the city’s history.

Now city officials and private economists are revising their forecasts with a drastic change in tone. The gathering consensus is that the recession is nearly over in the city and, largely because of the enormous amount of federal aid poured into the big banks, the toll on New York will be much less severe than most had feared.”

You’re welcome, banksters.

Those Who Profit from Foreclosures In Charge of Anti-Foreclosure Program

27 Saturday Feb 2010

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From the Washington Independent (emphasis added):

“One year after the Obama administration launched its $75 billion anti-foreclosure program the housing market remains volatile, loan modifications have been scant, foreclosures are still sky-high — and more and more lawmakers are wondering why the White House hasn’t been more aggressive in tackling the crisis.”

White House? Aggressive? Surely you jest.

“Administration efforts to stabilize the troubled housing market have prioritized lenders above struggling homeowners, a number of House Democrats charged Thursday, leading to thousands of foreclosures that might otherwise have been prevented — and threatening thousands more in the months to come.

Although the Obama White House has offered billions of dollars to banks that successfully alter loans to make them more affordable, only 116,00 of those modifications have been made permanent, the Treasury Department reported The reason for the discrepancy, some Democrats contend, is clear: The decision to modify loans, under Obama’s programs, has been left in the hands of the same mortgage servicing companies that often stand to profit more from foreclosures. That conflict of interest, critics say, all but ensures that the administration’s voluntary modification program will fail.”

But why would the administration want to see the program fail?

“Despite the fact that the free-falling housing market was at the root of the global economic collapse, Washington policymakers have dedicated more attention — not to mention dollars — to the bankers of Wall Street than the homeowners of Main Street.”

Yep, that explains it. The Golden Rule: Those who have the gold buy those who make the rules.

“It’s a Great Time To Be a Banker”

09 Tuesday Feb 2010

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The latest scheme to make the Wall Street fat cats even fatter (with our money, of course), courtesy of their friends at the Federal Reserve:

“During the financial crisis, it [the Fed]  bought hundreds of billions of dollars of real-estate loans and securities from banks to reduce mortgage rates and ease the pressure on bank balance sheets.  This, in turn, pumped hundreds of billions of new dollars into the economy, which has helped the banks–and bankers–to make a killing over the past year.

The banks are, however, lending to the federal government [the current 30-year T-bill rate is about 4.5%] which needs to fund record deficits by borrowing more than $1 trillion a year.  Banks are also collecting interest–currently 0.25% a year–on the $1 trillion or so of “excess reserves” that they aren’t lending to anyone.”

…The idea behind giving the banks cheap money was that the banks would lend it to consumers and businesses.  Unfortunately, that hasn’t happened: Since the start of the crisis, bank lending has fallen off a cliff.

(“Excess reserves” are the amount above the percentage of their assets that banks are required to keep at the Federal Reserve.)

“The Fed’s exit plan will call for increasing this interest rate, to encourage the banks to keep more money in excess reserves instead of lending it into the economy and thus expanding the money supply.

It’s a great time to be a banker.”

…Of course, in the process of increasing interest paid on reserves, the Fed will be paying banks even more not to lend.  In the process, it will be giving banks yet another way to take nearly free money from the taxpayer and give it back to the government at a higher rate–and then pocket the difference.

Kudos to the Senate for confirming Ben Bernanke to another 4-year term as chairman of the Fed. Wall Street is very appreciative, as I’m sure will be reflected in future (ahem) “campaign contributions.”

Wall Street Warns Democrats: Regulation = No Campaign Contributions

08 Monday Feb 2010

Posted by in Democrats, Financial Crisis, lobbyists, special interests, Wall Street

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It seems that the arrogant, greedy, Wall Street fat cats who receive obscene bonuses in spite of being responsible for the financial crisis, don’t like being told they are arrogant, greedy, Wall Street fat cats who receive obscene bonuses in spite of being responsible for the financial crisis. And if it doesn’t stop, they’re going to take their bribes campaign contributions to the nearest Republican:

“…this year [JPMorgan] Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts.

Republicans are rushing to capitalize on what they call Wall Street’s “buyer’s remorse” with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street “fat cats,” they may fight back by withholding their cash.”

The shift reflects the hard political edge to the industry’s campaign to thwart Mr. Obama’s proposals for tighter financial regulations.

Just two years after Mr. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters, like [Chase CEO Jamie] Dimon, have become the industry’s chief lobbyists against his regulatory agenda.

Take a deep breath and calm down, banksters. Your corporate brothers in the insurance and pharmaceutical industries can confirm for you that the regulation rhetoric from the Democrats is just that, rhetoric. As William Shakespeare put it, “Sound and fury, signifying nothing.”

Who’s In Charge Here? Follow the Money

06 Saturday Feb 2010

Posted by in Congress, Democrats, Financial Crisis, lobbyists, Politics, Wall Street

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The Washington D.C. game of finger-pointing, blame-shifting, and buck-passing rolls on. Robert Reich in Thursday’s Salon:

“Senator Chris Dodd, the chairman of the Senate Banking Committee, scolded Wall Street representatives at a hearing Thursday for sending “an army of lobbyists whose only mission is to kill the common-sense financial reforms” needed by the public. “The fact is,” Dodd said, “I am frustrated, and so are the American people.” He charged that Wall Street’s intransigence was the reason for Congress’s failure to pass any bill to regulate the Street.

Dodd left out the most telling detail, of course. Wall Street is where the campaign money is. Dodd of all people knows that. He’s been on the receiving end of lots of it over the years.

…In other words, it isn’t Congress’s fault. It isn’t the Senate Banking Committee’s fault. It certainly isn’t Dodd’s fault. The reason more than a year has passed since the biggest bailout in the history of the world and nothing has been done to prevent a repeat performance…is what, exactly, Senator? Because the Street has sent an army of lobbyists to Capitol Hill?

Call me old-fashioned, but I thought Congress was in charge of passing legislation, not Wall Street.

A little over $6 million, that’s all. Which leads to the REAL reason for the lack of Congressional action:

“Congress isn’t doing a thing about Wall Street because it’s in the pocket of Wall Street. Dodd’s outburst at the Street is like the alcoholic who screams at a bartender “how dare you give me another drink when all I’ve done is pleaded with you for one!”

Who’s In Charge Here, Washington or Wall Street?

06 Monday Apr 2009

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There are both encouraging and discouraging signs today in the battle over who’s in charge, Wall Street or Washington. First the good news. Finally, somebody in D.C. gets it.

“Elizabeth Warren, chief watchdog of America’s $700 billion bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration’s approach to saving the financial system from collapse.

She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173 billion in bailout money, and banking giant Citigroup, which has had $45 billion in funds and more than $316 billion of loan guarantees.”

With one simple sentence Warren summed up what, in my opinion, should be the consensus among those in the Obama administration.

“The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous.”

That’s the good news, now for the bad. There are some “administration officials”( I smell Larry Summers) who are busy looking for loopholes in congressional restrictions placed on financial institutions who receive bailout money.

“The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefitting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.”

“Persuading”, aka bribing.

“The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.”

“Special entities” acting as “middlemen”, aka money launderers.

Speaking of limiting executive pay, Rep. Alan Grayson’s Pay for Performance Act, which does exactly that, passed the House 247-171, with 10 Republicans voting yes.

But there’s rain on that parade, too. Rep. Melissa Bean of Illinois, one of the so-called Blue Dog Democrats, sponsored an amendment which would “allow institutions that enter into a payment schedule with Treasury on terms set by Treasury to no longer be subject to the bonus and compensation restrictions created by the Act.“

It passed 228-198 with the support of 63 Democrats, most of whom also voted for Grayson’s bill. Go figure.