Jun 302014
 

Almost six years after the financial crisis, JPMorgan, Citigroup, and Bank of America face fines of around $12 billion each for their role in mortgage malfeasance. In the context of the damage done and the bailout money poured into banks; the fines are miniscule and won’t even cover reparations in one or two blighted areas.

This is after a series of post-crisis banking scandals revealing the fragility of the banking system and after JPMorgan Chase was the only bank to receive an SEC fine combined with an admission of wrongdoing for its well-publicized London Whale incident. Officers of JPMorgan Chase have not been held accountable. Moreover, banks harbor massive balance sheet risk against which they hold insufficient capital.

Timothy Geithner’s Ministry of Truth Tour

Timothy Geithner, former president of the Federal Reserve Bank of New York, a bank regulator during the run up to the financial crises, and later the Secretary of the Treasury, claims that no one knew housing prices could fall. He sounded like a very silly man when he said over and over on his recent book tour that sophisticated financiers didn’t understand the dynamics of a housing bubble. I never once heard him mention well-documented fraud, despite the massive fraud uncovered by Congressional investigations.

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May 052014
 

The monster in America’s closet

We’ve been hearing a lot about the so-called Deep State lately. What to make of this shadowy monster? Some observers link it to the paranoid fantasy called the New World Order, a staple of political talk radio (and a hobgoblin I don’t believe in). In popular movies such as the Jason Bourne epics and Mission Impossible, the Deep State launches hyper-complex schemes that work flawlessly and never fail. That is exactly why they have such high entertainment appeal. Viewers are thrilled by the precision, by the conceit of seeming infallibility. The Deep State definitely exists; it just doesn’t work the way it is depicted in the movies. 

I like to say that I’m allergic to conspiracy theories because human beings are generally too inept to carry out schemes at the grand scale, as well as being poor secret-keepers. Insider knowledge is almost always swapped around, even in secretive organizations, often recklessly so, because doling it out confers status, tactical advantage, and sometimes money for the doler-outer. But the Deep State isn’t a secret. It operates in plain sight.

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Sep 162013
 

In the first three parts (Part 1, Part 2, Part 3) of this disheartening look back at a century of central banking, income taxing, military warring, energy depleting and political corrupting, I made a case for why we are in the midst of a financial, commercial, political, social and cultural collapse. In this final installment I’ll give my best estimate as to what happens next and it has a 100% probability of being wrong. There are so many variables involved that it is impossible to predict the exact path to our world’s end. Many people don’t want to hear about the intractable issues or the true reasons for our predicament. They want easy button solutions. They want someone or something to fix their problems. They pray for a technological miracle to save them from decades of irrational myopic decisions. As the domino-like collapse worsens, the feeble minded populace becomes more susceptible to the false promises of tyrants and psychopaths. There are a myriad of thugs, criminals, and autocrats in positions of power who are willing to exploit any means necessary to retain their wealth, power and control. The revelations of governmental malfeasance, un-Constitutional mass espionage of all citizens, and expansion of the Orwellian welfare/warfare surveillance state, from patriots like Julian Assange, Bradley Manning and Edward Snowden has proven beyond a doubt the corrupt establishment are zealously anxious to discard and stomp on the U.S. Constitution in their desire for authoritarian control over our society.

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Aug 272012
 

After a long summer of high-profile scandals – HSBC money-laundering and more – the debate about the financial sector is becoming livelier.

Why has it has become so excessively dominated by relatively few very large companies? What damage can it do to the rest of us? What reasonable policy changes could bring global megabanks more nearly under control? And why is this unlikely to happen?

If any of these questions interest you – or keep you awake at night – you should take another look at the last time we had this debate at the national level, and reflect on the work of Ted Kaufman, the former Democratic senator from Delaware, who was far ahead of almost everyone in recognizing the problem and thinking about what to do.

Senator Kaufman represented Delaware in 2009 and 2010, and Jeff Connaughton – his chief of staff – has a new book that puts you in the room. In “The Payoff: Why Wall Street Always Wins,” we see Senator Kaufman as chairman of oversight hearings on the Justice Department and the F.B.I.’s pursuit of financial fraud, pushing the Securities and Exchange Commission on the dangerous rise of computerized trading and working with Senator Sherrod Brown, Democratic of Ohio, on the legislative fight to impose a hard cap on the size and debts of our largest banks. (I wrote many pieces supporting the work of Senator Kaufman at the time, including in this space, but I never worked for him.)

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Aug 262012
 

Economists are often preoccupied with incentives. The Global Financial Crisis and the ensuing policy response can be analyzed from the perspective of the incentives that produced behavior to bring on the crisis, as well as the incentives created by the bail-out that rescued the miscreants.

Where are we today?

Stoking the fires that created the GFC, of course. We’ve set up the perfect storm of what my colleague Bill Black calls a criminogenic environment—that is, one that promotes, rewards, and sustains fraud. While President Obama’s administration certainly cannot be blamed for all the fraud that led up to the GFC, the policy response on his watch has rewarded the fraudsters.

Many years ago on my first visit to Italy two Italian friends told me of their experience in London. They had stopped on a street and were engaged in a deep and long-winded discussion. After a spell they paused the argument long enough to notice they were standing in the rain near a bus stop. Queued behind them, also in the rain, was a line of polite British folk waiting for the bus. None would dare to move around the Italians to get under the shelter. The Italians, not known for waiting on line in an orderly fashion, recounted this as a hilarious example of British irrationality. Sure enough, when I was leaving the Rome airport some months later, the gate attendants had to halt the boarding process three times as they pleaded with passengers to back off the gate sufficiently to allow boarding to proceed. Passengers had pressed so tightly against the ropes that no one could pass through, and a great roar of laughter emerged from the crowd each time the attendants harangued them to please line up.

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May 282012
 


 The government beast to the people: sleep now, little child. Everything is going to be alright. Mommy and I are not going to let anyone hurt you.

1. The Western media is keeping mainstream Western consciousness in a state of sleep. It is doing this in order to suppress public awareness of massive crimes against humanity by financial, media, and political leaders in the U.S., England, and Israel.

2. Time is speeding up, and leaving little time for reflection and thinking. The world is changing at a pace that exceeds our ability to grasp what the changes mean for us as individuals and for our collective destiny as a species. The overwhelming sense of lost time is too much to bear for a lot of people, so they get depressed, disengage from the real world, and escape into their fantasy worlds.

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May 252012
 

The economic crisis is an issue Barack Obama and Mitt Romney are too scared to touch.

The economic crisis is an issue Barack Obama and Mitt Romney are too scared to touch.

“I supposed you’d all feel better if someone else was in charge.” — Donald Moffat as Garry in “The Thing”

Few things have scared the wits out of me more than seeing the movie “The Thing” 30 years ago. With just six months to go until the election, both President Barack Obama and Republican front-runner Mitt Romney seem to have their own “Thing” that scares them: the economy. Neither candidate has said how he would deal with what could be the hardest challenge America has faced since World War II.

One of these two men will have to lead the Nation for the upcoming four years. We know where they stand on gay marriage, gays in the military or, in Obama’s case, having a gay old time with Hollywood friends.

Supporters of both candidates have weighed in on other issues such as extending low interest rates on student loans, who bullied whom in high school and who had a tougher time growing up.

Is gay marriage important? That depends. For some people it must be, because so many people have weighed in on it. But I have a hunch that those same people won’t really give a rat’s behind about gay marriage if the economy implodes.

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May 142012
 

Iceland, Ireland pushing back against neo-feudalism.

Editor’s Note: For more information, please read “Farmers group wants Ireland to follow Iceland and burn the bondholders.” 

Across the dominion of the corporate-financiers on Wall Street and in the city of London, the reckless Ponzi schemes destroying the West’s economy and plunging it into an economic depression have left politicians, the bought and paid for servants of corporate-financier hegemony, wringing the public dry to cover losses. In reality, when an enterprise fails because of criminality, incompetence or both, citizens are not demanded to pass the hat around to “bail them out.” They are declared bankrupt, their assets (if they have any) are stripped, often if fraud is involved, executives and board members go to jail, and society attempts to fill the void with sounder enterprises run by more reputable people.

However, when the fraud and failure unfolds amongst the highest levels of corporate-financier power, amongst men who have organized wars that have sent millions to their deaths, overseen social “projects” that have left hundreds of thousands of women forcibly sterilized, and instead of going to jail, are showered with self-aggrandizing awards from institutions of their own creation. This faux-authority, faux-legitimacy has left the people subjected to their machinations with the illusion that they must pay for, heed, follow whatever solutions are then prescribed by the very elite who created the problem in the first place.

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May 092012
 

“The appearance of conflict is as dangerous to public confidence in the administration of justice as true conflict itself.  Justice must not only be done; justice must also be seen to be done.”   Lloyd Cutler, 1981

Over the past three years,  the Department of Justice has filed criminal charges against hundreds of ordinary Americans for financial fraud.  But no one from the largest banks and firms on Wall Street have been similarly charged for events leading up to the financial crisis.  Could that be because those banks are clients of the firms from which top DOJ officials hail?

In November 2009,  President Obama established the Financial Fraud Enforcement Task Force to deal with financial crimes related to the 2008 financial crisis.  As Attorney General Eric Holder,  chairman of the Task Force, explained at the time:  “This Task Force’s mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening.  We will be relentless in our investigation of corporate and financial wrongdoing,  and will not hesitate to bring charges,  where appropriate,  for criminal misconduct on the part of businesses and business executives.”

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Apr 182012
 

This past Thursday, a Modesto, California, man whose house was in foreclosure shot and killed the Sheriff’s deputy and the locksmith who came to evict him from his condominium unit. Modesto authorities responded by sending 100 police and SWAT snipers to counter-attack, and it ended Waco-style, with the fourplex structure burning to the ground with the shooter inside.

It’s not surprising that this should happen in Modesto: Last year the Central California city’s foreclosure rate was the third worst in the country, with one in every 19 properties filing for foreclosure. The entire region is ravaged by unemployment, budget cuts, and blight — the only handouts that Modesto is seeing are the surplus military equipment stocks being dumped into the Modesto police department’s growing arsenal.

The shooter who died was 45 years old and he appears to have lost his condominium over a $15,000 home equity loan he took out almost a decade ago, owed to Bank of America. The condo was sold at an auction for just $12,988 to a shady firm, R&T Financial, that doesn’t even have a listed contact number. Too much for the former security guard, who barricaded himself in the condo which had been in the family for decades. He refused to walk out alive.

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