The system was built on lobbyists constantly pushing for whatever would allow them to get away with the most. I think it would be fascinating to ask the question "How much of what these institutions are doing would have been legal immediately following the last round of reform after the great depression?". We see The President and Congress talking up all sorts of reform that will insure this never happens again. We may even get it. But how much of it will remain intact over the years with constant nibbling away by the lobbyists?

A Paper You MUST Read

http://tinyurl.com/ybpo65e

The Subsidy That Won't Die

The big banks claim the government isn't helping them anymore. Not exactly. Check out this little-known subsidy.

But the big American banks aren't nearly so independent as they would have us believe. JPMorgan Chase, Goldman Sachs, and their peers are still benefitting hugely from significant post-crisis subsidy programs that boost their profits. I'm talking mostly about the Temporary Liquidity Guarantee Program (TLGP). This was a program started in the wake of the Lehman Bros. collapse to deal with the fact that banks were having a tough time raising short-term capital on decent terms. Under the TLGP, the Federal Deposit Insurance Corp., which is ultimately backed by the taxpayers, would guarantee debt in exchange for fees paid by the banks issuing debt.

The TGLP was ended to new entrants in June 2009 and thus far has gone without a loss. But the fact remains: Private companies were allowed to borrow massive amounts of money—$345 billion at the peak in May 2009—on the public's credit. At the end of the third quarter, there was still $313 billion outstanding.

http://tinyurl.com/ygk9zwm

The reasons for this crisis will become clear in the years ahead and are listed below:

1. Concentrate power to the few by eliminating many Wall Street Firms. Merrill Lynch, Bear Stearns, Lehman Brothers fail. Goldman Sachs gains further control over finance and government.

2. Engineer a second stock market selloff in order to create a further sense of fear and insecurity for the general public with associated dependency on government.

3. This event will encourage the $3.6 Trillion in privately held 401k and IRA accounts to be shifted into government US Treasuries. In doing so the public will be double funding the US debt thru taxes as well as personal savings. This will serve to keep interest rates fairly low for a time.

4. The $3.6 Trillion will be funneled back to the financial elite on Wall Street, Goldman Sachs, JP Morgan and Morgan Stanley. A new bubble will emerge in commodities, alternative energy as well as carbon credits exchanges. Wall Street will profit.

Key players and beneficiaries in this banking scheme seem to be Ben Bernanke, Hank Paulson, Tim Geithner, Lloyd Blankfein, Robert Rubin, Chris Dodd.

Financial Crisis Inquiry Commission video update:
Click here

http://tinyurl.com/cd4gnl

It was the repeal of the GLass Steagal Act

Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.

Here is an example of what I am talking about:
Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)

Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
"Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM."

The Center for Responsible Lending says YSP "steals equity from struggling families."
1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.

http://merkley.senate.gov/newsroom/press/release/?id=A09C6A80-537A-4EB1-83C5-31925F046B6F

Never heard of YSP...how would you go about proving that a mortgage broker put his interest over yours due to his compensenation from these secret bonus payments?

How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps

http://tinyurl.com/ygltckn

An Uncontrite Geithner Says It Was "Right Thing" To Pay Off AIG Counterparties At Par, Says His Job Is In Obama's Hands

http://tinyurl.com/ylmgnu5

To all the anti-corporate posters above, how about the 10 Million home buyers in the last decade who claimed more income than they really earned on their mortgage apps. to get mortgages they eventually couldn't afford? No mention? They're just naive victims? Lol

Hey Phil...how about this?

10 mil? seems awefully high...how about people who once had decent jobs and now need 2 jobs that can't makeup lost income?

See...these guys are so honest..lol...on you

Record Bank Bonuses Based On Record Bank Fraud

This is based on two factors: Zero % money from the Fed, and a massive accounting — and legal — fraud.

http://tinyurl.com/yfwu2v7

I think this conversation applies to all of our problems...there are and were too many games going on........

Joe Saluzzi Refuses To Drink The Economic Kool-Aid

Some more macro observations from Joe Saluzzi: Last "Friday's stock market was the biggest tell: when you saw an unemployment number come out like that, that tells you what an absolute joke the stock market is, and how it's a lagging indicator, not a leading indicator of what's going on... When you're in the basement you can't stay in the basement, you have to walk up the stairs to get out. We aren't walking up the stairs, we just stopped walking down the stairs... a $77 Estimate on the S&P, you are looking at a 15x forward multiple on that earnings, yet you are in an economy which is closer to the 80's which deserves a 10x P/E. Why do you give it a 15x P/E?... If California was a public corporation they would be the next Lehman Brothers: that's how bad this thing is. The government is saying 'We're not going to bail you out California.' We're they going to come out with the $9 billion that they owe?"

Yet nothing deters the Bloomberg Kool-Aid brigade.

http://tinyurl.com/y9tl65f

Wall Street Thinks You Are a Jealous Little Malcontent

The recurrent theme on Bloomberg television today, from the guests that are brought on and questioned by the news anchors, is that the public wants to limit the bonuses paid by Wall Street because they are just jealous and stupid.
I would not call it jealousy or a need for retribution. I would say that the people as a whole have a sense of right and wrong, a sense of fairness and balance, a sense of outrage that is being held in check by patience, but wishes to see justice done for themselves and their children, because it is the right thing to do.
http://tinyurl.com/ycggyfp

Interesting commentary..I would take the time to listen to....

Dylan Ratigan On FCIC Hearings

http://tinyurl.com/ycjacfh

Interesting commentary..I would take the time to listen to....

Dylan Ratigan On FCIC Hearings

http://tinyurl.com/ycjacfh

What is this all about?

Why isn't anyone screaming about this?

The SEC, working hand in glove with AIG, agreed to keep bailout terms sealed, including information on the pass thru to counter parties such as Goldman Sachs at 100 cents on the dollar. This SEC granted “confidential treatment” was agreed to last May, and a “secrecy order” is that?) will stay in place until November 2018.

http://tinyurl.com/yjemthg

What is this all about?

Why isn't anyone screaming about this?

The SEC, working hand in glove with AIG, agreed to keep bailout terms sealed, including information on the pass thru to counter parties such as Goldman Sachs at 100 cents on the dollar. This SEC granted “confidential treatment” was agreed to last May, and a “secrecy order” is that?) will stay in place until November 2018.

http://tinyurl.com/yjemthg

SEC Helped AIG Hide PassThru Bailouts to GS, others

The SEC, working hand in glove with AIG, agreed to keep bailout terms
sealed, including information on the pass thru to counter parties such
as Goldman Sachs at 100 cents on the dollar. This SEC granted
“confidential treatment” was agreed to last May, and a “secrecy order”
will stay in place until November 2018.

http://tinyurl.com/yjemthg

Watch

Elizabeth Warren: Behind the TARP Bailout

http://tinyurl.com/ybgonte

Our impeccable leaders...

Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?

At the heart of the new system of power, says Janine Wedel, is "a decline in loyalty to institutions" and "the proliferation of players who swoop in and out of organizations with which they are affiliated." There is no more vivid example of this phenomenon than Harvard University, which for centuries was held together by institutional loyalty. Today, that loyalty has eroded, and those at the top act much more flexibly. Yet they still enjoy almost unlimited power. Like all forms of mismanagement, Harvard's woes call for transparency and accountability. The story resonates to Washington, where Harvard's power elite is deeply entangled.

Harvard lost $11 billion from its endowment last year, plus another $2 billion by gambling with operating cash and $1 billion in bad bets on interest rate fluctuations. Harvard had been borrowing vast sums to leverage its assets and to expand its physical plant; its president, Lawrence Summers, had described as "extraordinary investments" what ordinary people would call crushing debt. The only way to balance the looming deficits was through huge investment returns. The speculating worked for a while, but when the bubble burst, Harvard was left almost insolvent.

The Corporation is stunningly secretive. The members are listed on a Harvard web page--but with no contact information. Their meetings and agendas are unannounced, their decisions unreported. The Fellows, scattered across the country, are isolated from the institution they govern. Even the university's statutes--the closest thing to a constitution limiting the Corporation's discretionary power--are almost impossible to locate. The colonial-era board structure is failing the modern university.

In September, 2000, the government sued Harvard, Shleifer, and others, claiming that Shleifer was lining his own pockets and those of his wife, hedge fund manager Nancy Zimmerman--formerly a vice president at Goldman Sachs under Rubin.

http://tinyurl.com/yc9yf4s

Why the Fed Likes Independence

Geithner claims that they had to take politically unpopular actions to save the economy from collapse. Half of that is right - it was politically unpopular, but it is extremely premature at best, to claim the economy has been saved. It was just reported that the economy shed 85,000 more jobs in December. Unemployment stands at 10 percent officially, and 22 percent according to more traditional calculations. It is hard to argue that this sort of government waste has done anything but harm to our economy. Raiding Main Street to bail out Wall Street is a foolish idea. Main Street productivity and the strength of the dollar is the bedrock of the economy. You cannot gut this foundation without eventually toppling everything else. This is what too many policy makers either don't understand or refuse to face. Or even worse, perhaps they do understand, but don't care!

In any case, this revelation makes precisely my point about the need for Fed transparency. This claim that the Fed should have "independence" is a canard. They very much enjoy their comfortable pattern of bailing out friends and devaluing the currency with no oversight and no accountability. Geithner specifically asked officials at AIG not to disclose to the SEC or to the public particulars about this special deal for his friends. We only know these details now because AIG was eventually forthcoming when Congress demanded some answers.

http://tinyurl.com/y8d96tc

Do you really think its over?

US Commercial Real Estate a Multi-Trillion Dollar Bloodbath in Progress
Some of you are probably not aware that the commercial real estate market has crossed a dreaded line in the sand. Commercial real estate (CRE) that includes apartments, industrial, office, and retail space is now performing worse than residential real estate. Not just by a little but by a good amount. While the CRE bust took about a year longer than the residential housing bust, once problems started hitting in this market prices have been steadily collapsing. At the peak, it was estimated that CRE values hit $6.5 trillion in the country. With $3.5 trillion in CRE debt outstanding, this seemed to provide a nice equity buffer. That buffer is now erased.
http://tinyurl.com/yebujt6

Op-Ed Columnist
Bankers Without a Clue

But there was nothing accidental about the crisis. From the late 1970s on, the American financial system, freed by deregulation and a political climate in which greed was presumed to be good, spun ever further out of control. There were ever-greater rewards — bonuses beyond the dreams of avarice — for bankers who could generate big short-term profits. And the way to raise those profits was to pile up ever more debt, both by pushing loans on the public and by taking on ever-higher leverage within the financial industry.

Sooner or later, this runaway system was bound to crash. And if we don’t make fundamental changes, it will happen all over again.

http://tinyurl.com/yfutmab

No teeth investigations will yield bumpkis

Editorial
The Show Must Not Go On

Published: January 16, 2010

The commission must uncover what bankers, investors, government officials and other people in positions of power, past and present, would prefer not to say — or perhaps do not know or understand — about the crash and the bailouts. The primary aim is not to air issues and foster debate, but to test views, resolve contradictions and arrive at evidence-based conclusions.

Yet the commission — which is supposed to file a final report by Dec. 15 — has not issued a single subpoena for documents. Instead, investigators have apparently been relying on voluntary cooperation, public records and information-sharing agreements that have been negotiated with federal agencies. A thorough investigation requires source documents that reveal what people were thinking and doing at the time of the events and that illuminate, buttress or contradict testimony.

http://tinyurl.com/yass8t6

The Big Lies Just Keep Coming
Obama's Latest Ruse: the Bank Tax

None of Obama’s faux outrage has been as disingenuous as his Wednesday announcement that he will finally respond sympathetically to the public’s deep resentment of the administration’s tolerance -and therefore encouragement- of the bad guys’ looting of the public treasury.

Obama assured his constituents that he would “recoup every last penny for American taxpayers” by taking back, in the form of taxes on the banks, the wealth that households have been forced to transfer to the coffers of the instigators of the financial crisis.

The announcement was timed to offset what will surely be another surge of public anger at the expected announcement this week of the banks’ year-end bonus payments.

http://tinyurl.com/yj82879

Obama’s “Get Tough on Banks” Again Tries to Play the Public for Fools

But more is that FDR from the very outset set himself up as an opponent of rule by the banking classes. He depicts them as failures and calls them unscrupulous and selfish. By contrast, have were ever heard Obama even hint that bankers were less than ethical? Let’s see, last December, he called them “fat cats“! Ah yes, of course, everyone knows a cat will steal a sardine if you aren’t watching. Yeah, that Obama sure knows how to dress those bankers down!

As we discussed at greater length earlier this week, this new “get our money back” idea is pure three card Monte. Put the spotlight on the TARP so everyone will ignore all the other massive subsidies that the banks have gotten, continue to receive, and are abusing. Those who claim many banks have “paid back the TARP” are missing (more likely choosing to obfuscate) the point: the TARP calculus grossly understates of the gives and the gets here (although as we have said before and will say again, Obama’s focus on the TARP is pure political expediency).

But this time, the Fed supports are far less covert (kinda hard to miss the ballooning of its balance sheet) and the banks are being pigs and undermining the purpose of this operation by skimming way too much off in employee pay. But it certainly appears no one has called the bankers into a private meeting and threatened them (and the regulators do hold the whip hand, even if they have been brainwashed into not recognizing that). Bernanke seems unable to see how his whole market manipulation program has been repurposed by the industry into welfare for the rich.

More important, despite the firms’ claims otherwise, >they are now effectively backstopped by the government, and they know it. They should be paying insurance premiums, NOW, hefty ones, for being beneficiaries of the “No more Lehmans” policy. But there is no desire for anything remotely resembling a full accounting from the crew in the Administration.

http://tinyurl.com/yegwbpb

Bill Black: We Must Solve the Wall St. Bonus Problem

http://tinyurl.com/yaja7of

Eliot Spitzer Talks To Fareed Zakaria About Wall Street Bonuses (VIDEO)

Spitzer made the point that when it comes to holding banks accountable, the political divisions of left versus right are disappearing:

http://tinyurl.com/ybgckzw

Failure of Corporate Boards Is Ruining America

IT sounds like good work if you can get it, and thousands of people in corporate America do. On average, they attend 8 to 12 meetings annually. Although they are supposed to have fiduciary obligations, they often appear simply to warm their assigned seats, and to raise their hands when their leader calls for a vote. For that, they can receive as much as $640,000 a year . . .

http://tinyurl.com/yblundb

If everythings on the up and up why all the obfuscation?

New York Fed Told AIG To "Stand Down" On All Counterparty Discussions

And while they are at it, and have both a Goldman and a New York Fed employee in tow, maybe they can ask why NY Fed Senior Vice President on AIG Relationship Monitoring Steven Manzari told former AIG Financial Services CFO Elias Habayeb to "stand down on all discussions with counterparties on tearing up/unwinding CDS trades on the CDO portfolio."

http://tinyurl.com/yj6ovb2

10 reasons Obama is failing 95 million investors
Commentary: Why his fat-cat bankers are destroying capitalism and democracy
8. Failing to protect 95 million investors, letting Wall Street loot America

Wall Street bankers are stealing trillions: In "Not So Radical Reform," BusinessWeek says the "top five U.S. commercial banks ... were on track" earning at the rate of $70 billion "in 2009 trading unregulated derivative contracts." The Journal connects the dots: The same banks "allocated about $90 billion for overall compensation," with average bonuses of $500,000, ten times the income of most Americans. Yes, Wall Street looted that money from taxpayers as you turned a blind eye, Mr. President. One Journal commentator says "the government should make it clear that it will allow these institutions to fail." Except no one believes you have the guts or the will to do that, Mr. President. You are a Wall Street banker's dream. But you have failed America's 95 million investors and the consequences will be disastrous in the near future.

http://www.marketwatch.com/story/10-reasons-why-obama-is-failing-investors-2010-01-19

What Wall Street Really Fears

The hearings into the roots of the recession aren’t scaring Wall Street. What’s really frightening is public anger at the industry shows no signs of abating, and Lloyd Blankfein, the man leading the charge to turn that around, is only making matters worse—and possibly putting his job at risk.

The least appealing CEO on Wall Street is leading the effort to change the public perception that the system is rigged against the little guy suffering through 10 percent unemployment while the big banks party on.

If the hearings proved one thing, it’s just how much of a liability Goldman and Blankfein are to Wall Street’s attempt to massage its rotten image as an organization that feasts off government subsidies while Main Street suffers. Goldman is making bundles of money, which will make its shareholders happy. But it’s also emerged as a lightning rod because of its obvious manifold ties to government (former Treasury Secretary Hank Paulson, also a former Goldman CEO, gave his old firm $10 billion during the height of the meltdown, but let Lehman Brothers fry) and because Blankfein has spent most of the past six months on a high-profile charm offensive, clumsily trying to explain how his firm deserves to hand out the $20 billion in bonus money it accumulated since the 2008 bailout.
But when pressed, Blankfein conceded that the same firm that hoarded all this cash, that had all these hedges and guarantees to protect itself from AIG failing, didn’t think twice about taking its full share of the money AIG owed it—100 cents on the dollar—once Paulson & Co. decided to bail out the insurer on the U.S. taxpayer’s dime.

http://www.thedailybeast.com/blogs-and-stories/2010-01-18/what-wall-street-really-fears/

Darrell Issa Accuses FRBNY Of Contempt For Selective Document Disclosure

Rep. Darrell Issa comes out guns blazing once again, alleging that the Fed provided a selective response to the subpoena to provide all documents relating to the AIG bailout, and asks Edolphus Towns, Chairman of the House Committee on Oversight and Government Reform, to hold Fed officials responsible for this act, in contempt.

http://tinyurl.com/y8erbr6

Theft! Were the US & UK central banks complicit in robbing the middle classes?

by Albert Edwards, Societe Generale

Mr Bernanke’s in-house Fed economists have found that the Fed wasn’t responsible for the boom which subsequently turned into the biggest bust since the 1930s. Are those the same Fed staffers whose research led Mr Bernanke to assert in Oct. 2005 that “there was no housing bubble to go bust”? The reasons for the US and the UK central banks inflating the bubble range from incompetence and negligence to just plain spinelessness. Let me propose an alternative thesis. Did the US and UK central banks collude with the politicians to ‘steal’ their nations’ income growth from the middle classes and hand it to the very rich?

Ben Bernanke?s recent speech at the American Economic Association made me feel sick. Like Alan Greenspan, he is still in denial. The pigmies that populate the political and monetary elites prefer to genuflect to the court of public opinion in a pathetic attempt to deflect blame from their own gross and unforgivable incompetence

It is well worth visiting the website of Emmanuel Saez of the University of California who has written extensively on this subject and now has updated his charts up until the end of 2008 (data available in Excel Format ? link). The New York Times reported on the recently released Census Bureau data and showed not only that median income had declined over the last 10 years in real terms, but that this is the first full decade that real median household income has failed to rise in the US - link. What is also so interesting from Professor Saez?s cross-sectional research is how inequality has clearly risen fastest in the Anglosaxon, freemarket economies of the US and the UK (also note that France, with much higher levels of equality, saw much more subdued growth in household leverage).

http://tinyurl.com/y9s2cbv

Are you tired of banks loading you up with fees while taking taxpayer money and giving executives huge bonuses? Send a final notice -- payment is past due and it's time for the government to rein in the banks.

Wall Street banks threw our economy into crisis. Bailing them out cost taxpayers hundreds of billions of dollars. Now, with unemployment at 10 percent, those same Wall Street banks are planning to give six- and even seven-figure bonuses to the executives who created this mess.

Join our Partners at Working America and send the banks a final notice. Payment is past due on the harm they've done to the economy. Payment is past due on all the ways they've mistreated their customers -- from excessive credit card fees to risky mortgages.

We're letting the bankers know: Since they won't rein themselves in, the government is going to have to do it. And we're letting our Senators know we want the banks to face consequences for their actions.

President Obama's proposed financial crisis responsibility fee on the largest banks will help get back the taxpayer money that bailed out those same banks, without penalizing community banks and small firms.
We need a consumer financial protection agency to provide strong oversight so banks can't play Russian roulette with our economy again, and to protect customers from being bled dry.
Click here to let the bankers know this is their final notice. Your message also will go to your Senators, to urge them to rein in the banks.

http://tinyurl.com/ycuhspd

off topic but important...

Rep Alan Grayson ~ If this Decision Stands, You Can Kiss this Country Goodbye

http://inpoints.blogspot.com/2010/01/rep-alan-grayson-if-this-decision.html

Taxing Wall Street Down to Size

Make no mistake. The banking system has become an agent of destruction for the gross domestic product and of impoverishment for the middle class. To be sure, it was lured into these unsavory missions by a truly insane monetary policy under which, most recently, the Federal Reserve purchased $1.5 trillion of longer-dated Treasury bonds and housing agency securities in less than a year. It was an unprecedented exercise in market-rigging with printing-press money, and it gave a sharp boost to the price of bonds and other securities held by banks, permitting them to book huge revenues from trading and bookkeeping gains.

Meanwhile, by fixing short-term interest rates at near zero, the Fed planted its heavy boot squarely in the face of depositors, as it shrank the banks’ cost of production — their interest expense on depositor funds — to the vanishing point.

The resulting ultrasteep yield curve for banks is heralded, by a certain breed of Wall Street tout, as a financial miracle cure. Soon, it is claimed, a prodigious upwelling of profitability will repair bank balance sheets and bury toxic waste from the last bubble’s collapse. But will it?

The baleful reality is that the big banks, the freakish offspring of the Fed’s easy money, are dangerous institutions, deeply embedded in a bull market culture of entitlement and greed. This is why the Obama tax is welcome: its underlying policy message is that big banking must get smaller because it does too little that is useful, productive or efficient.

http://tinyurl.com/yezfxb3

Long read but worth it....

AIG: Collusion Of Epic Proportions Between Goldman's US Treasury Branch And Goldman Sachs Proper

http://tinyurl.com/y9uhrmn

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