We must stop this corporate takeover of American democracy
2012-01-20, The Guardian (One of the UK's leading newspapers)
Posted: 2012-01-31 15:36:36
http://www.guardian.co.uk/commentisfree/cifamerica/2012/jan/20/us-constitutio...

The corporate barbarians are through the gate of American democracy. Not satisfied with their all-pervasive influence on our culture, economy and legislative processes, they want more. They want it all. Two years ago, the United States supreme court betrayed our Constitution. In its now infamous decision in the Citizens United case, five justices declared that corporations must be treated as if they are actual people under the Constitution when it comes to spending money to influence our elections, allowing them for the first time to draw on the corporate checkbook – in any amount and at any time – to run ads explicitly for or against specific candidates. What's next … a corporate right to vote? When the supreme court says ... that corporations are people, that writing checks from the company's bank account is constitutionally-protected speech and that attempts by the federal government and states to impose reasonable restrictions on campaign ads are unconstitutional, our democracy is in grave danger. Corporations are not people with constitutional rights equal to flesh-and-blood human beings. Corporations are subject to regulation by the people.

Note: For key reports on the overpowering influence of corporate money on the US political system, click here and here.

Stock market time bomb?
2010-05-10, Washington Times
Posted: 2012-01-27 10:35:44
http://www.washingtontimes.com/news/2010/may/10/stock-market-time-bomb/?page=all

Even the world’s most savvy stock-market giants (e.g., Warren E. Buffett) have warned over the past decade that derivatives are the fiscal equivalent of a weapon of mass destruction. And the consequences of such an explosion would make the recent global financial and economic crisis seem like penny ante. But generously lubricated lobbyists for the unrestricted, unsupervised derivatives markets tell congressional committees and government regulators to butt out. While banks all over the world were imploding and some $50 trillion vanished in global stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements. BIS convenes the world’s 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings. Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months’ time. The derivatives market is now estimated at $700 trillion. What’s so difficult to understand about derivatives? Essentially, they are bets for or against the house - red or black at the roulette wheel. Or betting for or against the weather in situations in which the weather is critical (e.g., vineyards). Forwards, futures, options and swaps form the panoply of derivatives. Credit derivatives are based on loans, bonds or other forms of credit. Over-the-counter (OTC) derivatives are contracts that are traded and privately negotiated directly between two parties, outside of a regular exchange. All of this is unregulated.

Note: Though not from one of the top U.S. newspapers, this incisive article lays bare severe market manipulations that greatly endanger our world. The entire article is highly recommended. $700 trillion is equivalent to $100,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis describing just how crazy things have gotten and giving some rays of hope by researcher David Wilcock, click here.

Derivatives the new 'ticking bomb'
2008-03-10, MarketWatch (Part of the Wall Street Journal's digital network)
Posted: 2012-01-27 10:18:21
http://www.marketwatch.com/story/derivatives-are-the-new-ticking-time-bomb

"In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." That warning was in [Warren] Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. Despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession. Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. Keep in mind that while the $516 trillion "notional" value (maximum in case of a meltdown) of the deals is a good measure of the market's size, the 2007 BIS study notes that the $11 trillion "gross market values provides a more accurate measure of the scale of financial risk transfer taking place in derivatives markets." The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today's slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.

Note: $516 trillion is equivalent to $75,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis describing just how crazy things have gotten and giving some rays of hope by researcher David Wilcock, click here.

Global Derivatives Market Expands to $516 Trillion
2007-11-22, Bloomberg News
Posted: 2012-01-27 10:15:20
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a58EF32GpHeg

The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the Bank for International Settlements said. Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, led the increase, expanding 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, the BIS said in a report published late yesterday. Derivatives of debt, currencies, commodities, stocks and interest rates rose 25 percent from the previous six months, the biggest jump since the Basel, Switzerland-based bank began compiling the data. Investors have been turning to credit derivatives as a way to speculate on a growing risk of defaults amid record U.S. mortgage foreclosures. The money at risk through credit-default swaps increased 145 percent from last year to $721 billion, the report said. The amount at stake in the entire derivatives market is $11.1 trillion, according to the BIS, which was formed in 1930 to monitor financial markets and regulate banks. Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or the weather. The report is based on contracts traded outside of exchanges in over-the- counter market.

Note: Like most reporting in the major media, this article trivializes the massive size of the derivatives market. $516 trillion is equivalent to $75,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis describing just how crazy things have gotten and giving some rays of hope by researcher David Wilcock, click here.

Derivatives industry eyes UK Lehman appeal ruling
2011-12-14, Reuters News Agency
Posted: 2012-01-17 15:32:30
http://www.reuters.com/article/2011/12/14/britain-derivatives-idUSL6E7NE1YQ20...

Regulators and the world's $700 trillion derivatives industry are closely watching a legal battle that began in Britain ... and which will fuel a sea change in swaps payouts. Four cases, including one involving a unit of collapsed U.S. bank Lehman Brothers, are being presented in a five-day hearing at the UK Court of Appeal. All revolve around payouts under the derivatives industry's "master agreement", a framework contract. A bank that trades swaps with another bank typically has one master agreement which sets the terms for millions of transactions between them. The master agreement ... covers around 90 percent of off-exchange derivatives transactions. Under the agreement, Lehman's bankruptcy is considered a default. However, in the four cases before the court this week, the other party in the contracts elected not to terminate them because they would have had to pay out to the defunct bank.

Note: Like most reporting in the major media, this article trivializes the massive size of the derivatives market. $700 trillion is equivalent to $100,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis of just how crazy things have gotten and with some rays of hope by researcher David Wilcock, click here.

A medieval oligarchy - America's real occupiers
2012-01-13, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2012-01-17 15:25:51
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/12/EDUT1MOLI4.DTL

[The US is now] a country whose patrician overlords are regularly conjuring the feudalism of Europe circa the Middle Ages. Today, our mayors deploy police against homeless people and protesters; our governors demand crushing budget cuts from the confines of their taxpayer-funded mansions; our Congress exempts itself from insider-trading laws and requires the government to offer lawmakers the good health benefits so many Americans have no access to ; and our nation's capital has become one of the world's wealthiest cities, despite the recession. Taken together, we see that there really are "Two Americas," as the saying goes - and that's no accident. It's the result of a permanent elite that is removing itself from the rest of the nation. Nowhere is this more obvious than in education - a realm in which this elite physically separates itself from us mere serfs. The Washington Post, for instance, notes that it has become an unquestioned "tradition among Washington's power elite" - read: elected officials - to send their kids to the ultra-expensive private school Sidwell Friends. At the same time, many of these officials have backed budget policies that weaken public education. In many cases, these aristocrats aren't even required to publicly explain themselves. Worse, on the rare occasions that questions are posed, privacy is the oft-used excuse to not answer. This might be a convincing argument about ordinary citizens' personal education choices, but it's an insult coming from public officials.

Note: For a treasure trove of reliable reports on social inequality in the US, click here and here.

Wall Street - a raw deal for the 100 percent
2011-12-29, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2012-01-03 18:11:22
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/28/EDQN1MHHJI.DTL

The stunning reality is that five years into the financial meltdown, it's business as usual on Wall Street - outlandish rewards for insiders with downside for almost everyone else. Occupy Wall Street protesters are right - something is wrong - but they're not sure what. Let's revisit the latest debacle - the implosion of yet another Wall Street darling, MF Global. The fallout of its bad bets on European bonds is hitting home hard, even in rural America, where many of its agricultural customers work. As the eighth-largest bankruptcy filing in U.S. history, MF Global represents just about everything that is wrong on Wall Street. 1. The cult of a Wall Street superstar. 2. Gambling disguised as investing. 3. The bail-me-out syndrome. 4. Enormous conflicts of interest. 5. Leverage on a grand scale. 6. Failure of regulators and the reform law. 7. Misappropriation of client funds. 8. Worthless rating agencies. 9. Golden parachutes soaring high. 10. Breakdown of morality. Wall Street will keep sucking huge sums out of our economy and putting 100 percent of us at risk unless the rules change. Most important, we must stop gambling and start investing again to build valuable companies. The next crisis will make 2008 look like a warm-up. Imagine how big the Occupy camps will be if that happens.

Note: For a treasure trove of reports from reliable sources which provide detailed information on all the problematic dimensions of Wall Street's operations described in the article above, click here.

Wall Street shenanigans fuel public distrust
2011-12-18, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-12-27 11:17:41
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/17/IN5N1MBT60.DTL

Wall Street is its own worst enemy. It's busily shredding new regulations and making the public more distrustful than ever. The Street's biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading in food, oil and other commodities. The Street makes bundles from these bets, but they have raised costs for consumers. In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. Just another redistribution from the middle class and the poor to the top. The Street argues that the commission's cost-benefit analysis wasn't adequate. Putting the question into the laps of federal judges gives the Street a huge tactical advantage because the Street has almost an infinite amount of money to hire so-called "experts" who will say benefits have been exaggerated and costs underestimated. But when it comes to regulating Wall Street, one big cost doesn't make it into any individual weighing: the public's mounting distrust of the entire economic system, generated by the Street's repeated abuse of the public's trust. Wall Street's shenanigans have convinced a large portion of America that the economic game is rigged. Wall Street has blanketed America in a miasma of cynicism.

Note: The author of this analysis, Robert Reich, is a former U.S. secretary of labor, is professor of public policy at UC Berkeley and the author of Aftershock: The Next Economy and America's Future. He blogs at www.robertreich.org.

Person of the Year Introduction
2011-12-14, Time Magazine
Posted: 2011-12-20 17:48:57
http://www.time.com/time/specials/packages/article/0,28804,2101745_2102139_21...

No one could have known that when a Tunisian fruit vendor set himself on fire in a public square in a town barely on a map, he would spark protests that would bring down dictators in Tunisia, Egypt and Libya and rattle regimes in Syria, Yemen and Bahrain. Or that that spirit of dissent would spur Mexicans to rise up against the terror of drug cartels, Greeks to march against unaccountable leaders, Americans to occupy public spaces to protest income inequality, and Russians to marshal themselves against a corrupt autocracy. Protests have now occurred in countries whose populations total at least 3 billion people, and the word protest has appeared in newspapers and online exponentially more this past year than at any other time in history. Everywhere, it seems, people said they'd had enough. They dissented; they demanded; they did not despair, even when the answers came back in a cloud of tear gas or a hail of bullets. The root of the word democracy is demos, "the people," and the meaning of democracy is "the people rule." And they did, if not at the ballot box, then in the streets. Protest is in some ways the source code for democracy — and evidence of the lack of it. For steering the planet on a more democratic though sometimes more dangerous path for the 21st century, the Protester is TIME's 2011 Person of the Year.

Note: For a treasure trove of reports from major media sources that explain why protestors worldwide have been occupying their cities, click here.

Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress
2011-11-27, Bloomberg/Businessweek
Posted: 2011-12-06 11:49:09
http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-cong...

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates. Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse. Details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger. “When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street.”

Note: For a treasure trove of reports from reliable sources on corruption and collusion between government officials and the largest financial firms, click here.

How Paulson Gave Hedge Funds Advance Word of Fannie Rescue
2011-11-29, Bloomberg/Businessweek
Posted: 2011-12-06 11:47:53
http://news.businessweek.com/article.asp?documentKey=1376-LVDZC507SXKX01-21E0...

Treasury Secretary Henry Paulson stepped off the elevator into the Third Avenue offices of hedge fund Eton Park Capital Management LP in Manhattan. It was July 21, 2008, and market fears were mounting. Amid tumbling home prices and near-record foreclosures, attention was focused on a new source of contagion: Fannie Mae and Freddie Mac, which together had more than $5 trillion in mortgage-backed securities and other debt outstanding. Around the conference room table were a dozen or so hedge-fund managers and other Wall Street executives -- at least five of them alumni of Goldman Sachs Group Inc., of which Paulson was chief executive officer and chairman from 1999 to 2006. After a perfunctory discussion of the market turmoil ... the discussion turned to Fannie Mae and Freddie Mac. The secretary [desribed] a possible scenario for placing Fannie and Freddie into “conservatorship” -- a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets. Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said ... leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.

Note: For a treasure trove of reports from reliable sources on corruption and collusion between government officials and the largest financial firms, click here.

The Fed Audit
2011-07-21, Official Government Website of U.S. Senator Bernie Sanders
Posted: 2011-11-29 11:17:37
http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. Among the [Government Accountability Office] investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. The [report] also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans. For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

Note: We don't normally use the website of a member of the U.S. Senate as a source, but as amazingly none of the media covered this vitally important story other than one blog on Forbes, we are publishing this here. The GAO report to back up these claims is available for all to see at this link. For how the media is so controlled, don't miss the powerful two-page summary with reports by many award-winning journalists at this link. For another good article on the Fed's manipulations, click here.

Passive Occupy protesters take pepper spray blast
2011-11-20, Boston Globe/Associated Press
Posted: 2011-11-22 10:24:27
http://www.boston.com/news/education/higher/articles/2011/11/20/passive_occup...

As video spread of an officer in riot gear blasting pepper spray into the faces of seated protesters at a northern California university, outrage came quickly -- followed almost as quickly by defense from police and calls for the chancellor's resignation. In the video, an officer dispassionately pepper-sprays a line of several sitting protesters who flinch and cover their faces but remain passive with their arms interlocked as onlookers shriek and scream out for the officer to stop. As the images were circulated widely on YouTube, Facebook and Twitter on Saturday, the university's faculty association called on [UC Davis Chancellor Linda] Katehi to resign, saying in a letter there had been a "gross failure of leadership." The protest was held in support of the overall Occupy Wall Street movement and in solidarity with protesters at the University of California, Berkeley. Images of police actions have served to galvanize support during the Occupy Wall Street movement, from the clash between protesters and police in Oakland last month that left an Iraq War veteran with serious injuries to more recent skirmishes in New York City, San Diego, Denver and Portland, Ore. Some of the most notorious instances went viral online, including the use of pepper spray on an 84-year-old activist in Seattle and a group of women in New York.

Note: For a one-minute video of this disturbing action, click here. For an eight-minute video showing how students eventually drive the police out after this, click here.

Retired Supreme Court Judge shoved up against a wall and threatened by NYPD at Occupy Wall Street clashes
2011-11-20, Daily Mail (One of the UK's largest-circulation newspapers)
Posted: 2011-11-22 10:22:48
http://www.dailymail.co.uk/news/article-2063716/You-want-arrested-lady-The-re...

A retired New York Supreme Court judge has claimed she was manhandled by a policeman after watching him beat a woman at the Zuccotti Park raids. Karen Smith was working as a legal observer when she saw a distressed woman pushed to the ground and beaten by an officer, she said. When she demanded he [stop], the unidentified cop pushed her against a wall and threatened her with arrest. Ms Smith had attended the raids ... to note down the names of people arrested as the Occupy Wall Street camp was cleared. She was wearing a fluorescent green baseball cap bearing the words 'National Lawyers Guild Legal Observer' to show she was not taking part in the protests. Ms Smith, who was also carrying a pad and pen, said the incident happened at around 1.30am on Tuesday at Dey Street and Broadway Street in New York City. Speaking to Democracy Now, she described the scene as ‘a paramilitary operation if there ever was one’. It was ‘what we call a stealth eviction’, she added. Ms Smith explained her son had participated in Occupy Wall Street and she had been ‘very concerned’ about his safety.

Note: We don't normally use the UK's Daily Mail as a reliable source, but as no other major media are reporting this story, we felt it warranted inclusion. The judge gives her own testimony in a video near the bottom of the article.

Retired Police Captain Arrested At OWS
2011-11-17, Fox News (Philadelphia Fox affiliate)
Posted: 2011-11-22 10:19:50
http://www.myfoxphilly.com/dpp/news/local_news/Retired_Police_Captain_Ray_Lew...

A retired Philadelphia police captain has been arrested in New York at an Occupy Wall Street demonstration. Ray Lewis retired from the Philadelphia Police Department in 2004. It was Philadelphia police who confirmed Lewis' arrest in New York on Thursday morning. Any additional details, they said, would have to come from NYPD. First news of the arrest was broadcast over Twitter around 9:15 a.m. by the protest group ... stating, "Philly Police Captain (Retired) has just been ARRESTED!" The group then tweeted, "The arrested retired police captain's name is Captain Ray Lewis. Immense cheers and music as he is taken away." Video posted to YouTube by RT America and linked to by Occupy Wall Street appears to show Lewis' arrest. There were messages online stating that Lewis had joined the protesters, including a photo of him holding a sign that read "NYPD Don't Be Wall Street Mercenaries," and talking with a helmeted New York police officer at Zuccotti Park.

Note: For a four-minute video interview with Officer Lewis, click here. For a treasure trove of reports from reliable sources on the reasons why protestors worldwide are occupying their city centers to protest against the "1 percent", click here.

JPMorgan Joins Goldman Keeping Italy Derivatives Risk in Dark
2011-11-16, Bloomberg/Businessweek
Posted: 2011-11-22 10:05:38
http://news.businessweek.com/article.asp?documentKey=1376-LURLN51A1I4K01-4BQL...

JPMorgan Chase & Co. and Goldman Sachs Group Inc., among the world's biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Just don't ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS. As concerns mount that those countries may not be creditworthy, investors are being kept in the dark about how much risk U.S. banks face from a default. Firms including Goldman Sachs and JPMorgan don't provide a full picture of potential losses and gains in such a scenario, giving only net numbers or excluding some derivatives altogether. Goldman Sachs discloses only what it calls “funded” exposure to GIIPS debt -- $4.16 billion before hedges and $2.46 billion after, as of Sept. 30. Those amounts exclude commitments or contingent payments, such as credit-default swaps. JPMorgan said ... its net exposure was no more than $1.5 billion, with a portion coming from debt and equity securities. The company didn't disclose gross numbers or how much of the $1.5 billion came from swaps, leaving investors wondering whether the notional value of CDS sold could be as high as $150 billion.

Note: For a treasure trove of reports from reliable sources on the reasons why protestors worldwide are occupying their city centers to protest against the "1 percent", click here.

Should You Join the Credit Union Boom?
2011-11-08, ABC News
Posted: 2011-11-15 14:03:38
http://abcnews.go.com/Business/WorldNews/credit-unions-54-percent-increase-me...

As a result of Bank Transfer Day, in which consumers were encouraged to switch to credit unions, 54 percent of credit unions reported an increase in share growth, according to a survey from the National Association of Federal Credit Unions sent to 10,000 respondents. At least 650,000 people have switched to credit unions since Sept. 29, according to the Credit Union National Association. About 80 percent of credit unions offer at least one free checking account with no minimum balance requirement and no monthly or activity fee, according to Moebs Services. About 64 percent of the largest U.S. banks offer the same. Credit unions can help consumers save money because they are non-profit, and can pay higher interest rates on savings accounts, and offer lower loan and credit card rates. The National Association of Federal Credit Unions ... has a web tool that allows people to search by address, credit union name or company/affiliation. The site had the highest traffic ever on Saturday, Bank Transfer Day. In October visits to the website were more than five times its monthly average. Visitors to the website last month increased by more than 700 percent compared to October 2010.

Note: To find a good credit union near you, click here. For key reports from reliable sources showing that the biggest banks have too much power, click here and here.

The medieval, unaccountable Corporation of London is ripe for protest
2011-10-31, The Guardian (One of the UK's leading newspapers)
Posted: 2011-11-08 16:15:35
http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-m...

It's the dark heart of Britain, the place where democracy goes to die, immensely powerful, equally unaccountable. But I doubt that one in 10 British people has any idea of what the Corporation of the City of London is and how it works. As Nicholas Shaxson explains in his fascinating book Treasure Islands, the Corporation exists outside many of the laws and democratic controls which govern the rest of the United Kingdom. The City of London is the only part of Britain over which parliament has no authority. This is ... an official old boys' network. In one respect at least the Corporation acts as the superior body: it imposes on the House of Commons a figure called the remembrancer: an official lobbyist who sits behind the Speaker's chair and ensures that, whatever our elected representatives might think, the City's rights and privileges are protected. The mayor of London's mandate stops at the boundaries of the Square Mile. The City has exploited this remarkable position to establish itself as a kind of offshore state, a secrecy jurisdiction which controls the network of tax havens housed in the UK's crown dependencies and overseas territories. This autonomous state within our borders is in a position to launder the ill-gotten cash of oligarchs, kleptocrats, gangsters and drug barons. It has also made the effective regulation of global finance almost impossible.

Note: To understand how democracy is easily circumvented, read this full article. For lots more from reliable sources on the hidden background to the control over governments held by financial powers, click here.

Did You Hear the One About the Bankers?
2011-10-30, New York Times
Posted: 2011-11-08 16:05:06
http://www.nytimes.com/2011/10/30/opinion/sunday/friedman-did-you-hear-the-on...

Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust. It doesn’t get any more immoral than this. James Stewart, a business columnist for The [New York] Times, noted that Citigroup’s flimflam made “Goldman Sachs mortgage traders look like Boy Scouts.” This gets to the core of why all the anti-Wall Street groups around the globe are resonating. Our financial industry has grown so large and rich it has corrupted our real institutions through political donations. Our Congress today is a forum for legalized bribery. One consumer group using information from Opensecrets.org calculates that the financial services industry, including real estate, spent $2.3 billion on federal campaign contributions from 1990 to 2010, which was more than the health care, energy, defense, agriculture and transportation industries combined. Why are there 61 members on the House Committee on Financial Services? So many congressmen want to be in a position to sell votes to Wall Street.

Note: For lots more from major media sources on the collusion between financial interests and government, click here.

Banking on the people
2011-11-02, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-11-08 16:03:23
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/02/ED3B1LP64K.DTL

Why give our money to Bank of America, only to have it lend us our own money at high interest rates or with ridiculous fees? We could hold onto our money, save quite a bit in fees, and lend it back to ourselves and to the businesses and people ... at more affordable rates. In 2008, Ellen Brown authored The Web of Debt, an analysis of the U.S. banking system that now is even more pertinent in light of the Occupy Wall Street movement. The thesis is that the power to create money has been usurped by a private international banking cartel [the Federal Reserve], which issues our money as debt and lends it back to us at interest. The cartel makes it appear that governments are creating our money, and governments get blamed when things go wrong; but they are just pawns of the cartel. We ... can regain our government and our republic only by reclaiming the power to create our own money. We can use the same credit system that private banks use, but administer it as a public utility - that is, monitored and overseen by public servants on the model of libraries and courts. To be a sustainable system, profits need to be returned to the community rather than siphoned off into private coffers.

Note: Few people realize that money in the U.S. is created by an entity privately owned by the largest banks – the Federal Reserve. For lots more important information on this, click here. For lots more from major media sources on the collusion between financial interests and government, click here.

Teddy Roosevelt Was Snubbed By His Rich Harvard Classmates For Being Anti-Wall Street
2011-10-29, Forbes Magazine
Posted: 2011-11-08 16:01:57
http://www.forbes.com/sites/robertlenzner/2011/10/29/teddy-roosevelt-was-snub...

Former President Teddy Roosevelt returned to Harvard for his 30th reunion and graduation in 1910, and as he entered the proceedings all his classmates ... turned their backs on him in unison. TR’s latest biographer Edmund Morris believes this shocking snub in public of a former President was due to TR’s strong belief in regulating Wall Street, breaking up monopolies and not allowing a few wealthy men run the nation. Think of that extraordinary event; some 22 years before TR’s 5th cousin Franklin Delano Roosevelt was called “a traitor to his class,” Teddy was getting the same treatment. The Gilded Age was followed by the Progressive Era of tough laws and court actions against Robber Barons who controlled state legislatures and Congress with their anti-trust legislation. Then came the Roaring Twenties and the Crash, followed by the Great Depression – and then the New Deal – which created the blessed Glass-Steagall Act – which separated investment banking from commercial banking, plus the WPA and other ... work programs that gave the unemployed a reason for living and put food in their mouths. Both Roosevelts ... stabilized the financial industry to help finance American industry. Once again, the wealthy ... want to cut social programs to the retired and the middle class, while holding onto all their gains, even in death if the estate tax is deep sixed.

Note: For lots more from major media sources on the collusion between financial interests and government, click here.

Banking Run Amok Is Less Likely a Year After Dodd-Frank
2011-07-17, Bloomberg News
Posted: 2011-11-01 10:59:15
http://www.bloomberg.com/news/2011-07-17/banking-run-amok-is-less-likely-a-ye...

With the first anniversary of the Dodd-Frank financial reform law on July 21, ... what has it accomplished? Consumer advocates, many congressional Democrats and some economists say banks are still too big, the derivatives market remains untamed and opaque, and regulators have been slow to write hundreds of rules. Rules forcing most derivatives trades to be processed through clearinghouses, and backed by collateral, should ... be accepted globally to avoid regulatory arbitrage, in which trading firms move to countries with the least intrusive, and lowest cost, oversight. Less than three years ago, the financial system almost buckled under the weight of worthless mortgages, and the country narrowly avoided another Great Depression. Regulators had been blind to the credit boom and bust; banks took huge risks that exploited regulatory gaps. Today, the economy remains weak ... because of the lingering fallout of the financial crisis. Dodd-Frank isn’t perfect, but already its influence on the financial system has been positive, in ways big and small. Accounting is more transparent; off-balance-sheet assets are largely a thing of the past. [Yet] with the top 10 U.S. banks holding 77 percent of the industry’s domestic assets, compared with 55 percent in 2002, too-big-to-fail is an even bigger worry today. Thomas M. Hoenig, the Kansas City Federal Reserve president, has said that the incentives for risk-taking that existed before the crisis all remain in place.

Note: For many of the most informative reports from major media sources on the financial meltdown and government bailout of the biggest banks, click here.

Buffett warns on investment 'time bomb'
2003-03-04, BBC News
Posted: 2011-11-01 10:57:05
http://news.bbc.co.uk/2/hi/2817995.stm

The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", ... investor Warren Buffett has warned. The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk. But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system. Derivatives are financial instruments that allow investors to speculate on the future price of, for example, commodities or shares - without buying the underlying investment. Outstanding derivatives contracts - excluding those traded on exchanges such as the International Petroleum Exchange - are worth close to $85 trillion, according to the International Swaps and Derivatives Association. Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen". He warns that derivatives can push companies onto a "spiral that can lead to a corporate meltdown", like the demise of the notorious hedge fund Long-Term Capital Management in 1998.

Note: Though written in 2003, this excellent article reveals the incredible risk of creating derivatives that have more value than the entire GDP of the world. The risk has increased tremendously since then.

Can Liberals and Libertarians Find Common Ground?
2011-10-12, Forbes.com
Posted: 2011-10-25 17:19:28
http://www.forbes.com/sites/benzingainsights/2011/10/12/can-liberals-and-libe...

The Occupy Wall Street movement has the potential to turn into a political firestorm. We have become so divided as a nation that it is very difficult to prognosticate if anything good will come out of these protests from a political perspective. Let’s examine a number of issues that have been raised by Occupy Wall Street, the Tea Party and liberals and libertarians and see where there is agreement. Get Corporate Money Out Of Politics – This is the issue that really kick started Occupy Wall Street. Americans are sick and tired of mega-corporations and Wall Street banks being in bed with our politicians in Washington D.C. End the Federal Reserve – The Federal Reserve is directly responsible for the Too Big To Fail banking cartel, the U.S. debt, the perpetual deficits, and ... the Fed has also robbed the poor and working class blind as a result of their inflationary policies. End The Wars – The American people are fed up with these conflicts, and even large percentages of the military believe that the wars in both Iraq and Afghanistan were not worth fighting in the first place. It is time for our troops to come home. End The Drug War - The drug war is an absolute failed policy. The U.S. incarcerates a higher percentage of its population than any country on Earth, yet we call ourselves “The Home of the Free.” Repeal The Patriot Act – The assault on our civil liberties in the wake of 9/11 has been swift and draconian. These are the types of things that go on in totalitarian states, and now, apparently the United States as well.

Note: For lots more from major media sources on the reasons why people worldwide are occupying the financial centers of their cities, check out our "Banking Bailout" news articles.

Faith in the 99 percent: What drives Occupy Wall Street?
2011-10-20, Washington Post
Posted: 2011-10-25 17:18:12
http://www.washingtonpost.com/blogs/on-faith/post/faith-in-the-99-percent-wha...

“We are the 99 percent!” The chant thunders through the streets, from Wall Street in New York City, where the Occupy movement began, to K Street in Washington, where high-paid lobbyists influence government, to streets in cities and small towns all across the nation. In hundreds of Occupations, ordinary people have been moved to fill parks and streets and squares with signs, tents, impromptu soup kitchens, intense conversations and lengthy meetings. What’s going on? All share a common heart, a revulsion against an economy and a politics that increasingly say, “You don’t count, except as something to exploit. Your voice is drowned out by money, your labor is expendable, your needs must be sacrificed to the gods of profit.” The Occupy movement demonstrates a very different model of organizing: emergent, decentralized, without a command and control structure. At its essence, the message of the Occupations is simply this: “Here in the face of power we will sit and create a new society, in which you do count. Your voice carries weight, your contributions have value, whoever you may be. We say that love and care are the true foundations for the society we want to live in. We’ll stand with the poor and sleep with the homeless if that’s what it takes to get justice. We’ll build a new world.”

Note: Find your nearest occupation at: http://www.occupytogether.org/ . For lots more from major media sources on the reasons why people worldwide are occupying the financial centers of their cities, check out our "Banking Bailout" news articles.

Citigroup to Pay $285 Million to Settle Fraud Charges
2011-10-20, Wall Street Journal
Posted: 2011-10-25 17:13:47
http://online.wsj.com/article/SB10001424052970204618704576640873051858568.html

Wall Street's total price tag on settlements with U.S. securities regulators for allegedly misleading investors about mortgage bonds churned out ahead of the financial crisis surged past $1 billion with a deal by Citigroup Inc. to pay $285 million ... to end civil-fraud charges by the Securities and Exchange Commission. The SEC claimed Citigroup sold slices of the $1 billion mortgage-bond deal without disclosing to investors that the bank was shorting $500 million of the deal, or betting its assets would lose value. Several Wall Street firms have settled similar claims by the SEC, which has generally stuck to the strategy used by the agency to get a $550 million settlement last year with Goldman Sachs Group Inc.. And the SEC's investigation of the Wall Street mortgage machine isn't over yet. Lorin Reisner, deputy enforcement director at the SEC, said civil mortgage-related cases against Goldman, J.P. Morgan Chase & Co., Countrywide Financial Corp., New Century Financial Corp. and other companies "read like an index to unlawful conduct in connection with the financial crisis." The SEC has collected a total of $1.03 billion through mortgage-bond-deal settlements. In addition to Citigroup, the total includes Goldman, J.P. Morgan, Royal Bank of Canada, Wells Fargo & Co. and Credit Suisse Group AG.

Note: For lots more from major media sources on the illegal profiteering of major financial corporations, click here.

BofA Said to Split Regulators Over Moving Merrill Contracts
2011-10-18, Bloomberg/Businessweek
Posted: 2011-10-25 17:11:57
http://www.businessweek.com/news/2011-10-18/bofa-said-to-split-regulators-ove...

Bank of America Corp., hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits. Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates. Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation. Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC-insured bank accounts from risks generated by investment-banking operations. “The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.” Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives.

Note: Remember that the GDP of the entire world is estimated at around $60 trillion, less than JPMorgan or BofA own in derivatives. For an excellent article laying out the incredible risk this creates of a major economic collapse, click here. For more on the high risk and cost to taxpayers of BofA moving its massive amount of derivatives to its subsidiary, click here. For lots more from major media sources on the illegal profiteering of major financial corporations enabled by lax government regulation, click here.

Wall Street Protests Spread Globally as Rome Turns Violent
2011-10-15, Bloomberg/Businessweek
Posted: 2011-10-18 17:30:48
http://news.businessweek.com/article.asp?documentKey=1376-LT1FUB1A1I4H01-651L...

The Occupy Wall Street protest against income disparity spread across Western Europe, Asia, the U.S. and Canada today. Rome's demonstration turned violent, contrasting with peaceful events elsewhere. The rallies started last month in New York's financial district, where people have been staying in lower Manhattan's Zuccotti Park. They widened to 1,500 cities today, including Sydney and Toronto, the organizers said, in a “global day of action against Wall Street greed.” Protesters say they represent “the 99 percent,” a nod to a study by Nobel Prize-winning economist Joseph Stiglitz showing the top 1 percent of Americans control 40 percent of U.S. wealth. In Berlin, 6,000 took to the streets and 1,500 gathered in Cologne, ZDF television said. In Frankfurt, 5,000 marched by the European Central Bank headquarters. In New York, demonstrators marched past a JPMorgan Chase & Co. branch urging clients to transfer accounts to “a financial institution that supports the 99 percent.” They distributed fliers with a list of community banks and credit unions. New York police arrested 24 at a Citigroup Inc. bank branch and 6,000 gathered in Times Square. About 1,000 people gathered in Toronto's financial district carrying signs saying “Nationalize the Banks.” Demonstrations turned violent in Italy, where the unemployment rate for 15-to-24-year-olds was 27.6 percent in August.

Note: For lots more on the reasons why people all over the world are occupying their city centers, check out our "Banking Bailout" news articles.

'Occupy Wall Street' -- It's Not What They're for, But What They're Against
2011-10-14, Fox News
Posted: 2011-10-18 17:29:27
http://www.foxnews.com/opinion/2011/10/14/understanding-occupy-wall-street/

Critics of the growing Occupy Wall Street movement complain that the protesters don’t have a policy agenda and, therefore, don’t stand for anything. They're wrong. The key isn’t what protesters are for but rather what they’re against -- the gaping inequality that has poisoned our economy, our politics and our nation. In America today, 400 people have more wealth than the bottom 150 million combined. That’s not because 150 million Americans are pathetically lazy or even unlucky. In fact, Americans have been working harder than ever -- productivity has risen in the last several decades. Big business profits and CEO bonuses have also gone up. Worker salaries, however, have declined. Most of the Occupy Wall Street protesters [want] an end to the crony capitalist system now in place, that makes it easier for the rich and powerful to get even more rich and powerful while making it increasingly hard for the rest of us to get by. The question is not how Occupy Wall Street protesters can find that gross discrepancy immoral. The question is why every one of us isn’t protesting with them. According to polls, most Americans support the 99% movement, even if they’re not taking to the streets.

Note: For lots more on the reasons why people all over the world are occupying their city centers, check out our "Banking Bailout" news articles.

‘Occupy Wall Street,’ a primer
2011-10-03, Washington Post blog
Posted: 2011-10-18 17:28:14
http://www.washingtonpost.com/blogs/ezra-klein/post/occupy-wall-street-a-prim...

‘Occupy Wall Street,’ the growing, decentralized protest movement that’s clashing with police in New York City, spreading across the country, and grabbing headlines across the world ... is also, somewhat unusually, a protest movement without clear demands, an identifiable leadership, or an evident organizational structure. Decisions are made by the NYC General Assembly, which Nathan Schneider describes as “a horizontal, autonomous, leaderless, modified-consensus-based system with roots in anarchist thought,” and thus far, the General Assembly has decided against yoking the movement to a particular set of goals, or even a particular ideology. Which is all to say that it’s important to try and understand the movement on its own terms, rather than the terms most of us are used to. Here are five places to start: - The ... ‘Occupy Wall Street blog’, and in particular, the blog’s forums. Here, for instance, is the movement’s ‘Declaration of the Occupation of New York City.’ - Nathan Schneider’s ‘Occupy Wall Street FAQ’. I’d perhaps recommend this as the single best place to start. - ‘Understanding the theory behind Occupy Wall Street’s approach,’ by Mike Konczal. Also see his post, ‘15 definitions of freedom from Occupy Wall Street.’

Note: For lots more on the reasons why people all over the world are occupying their city centers, check out our "Banking Bailout" news articles.

Protesters Granted 4-Month Extension to Stay on Freedom Plaza
2011-10-13, NBC Washington (Washington DC's NBC affiliate)
Posted: 2011-10-18 17:26:41
http://www.nbcwashington.com/news/local/Protesters-Continue-to-Occupy-DC-on-C...

Authorities granted protesters a four-month extension to continue occupying Freedom Plaza in D.C.. A deadline for protesters with the October 2011/Stop the Machine demonstration to pack up and leave Freedom Plaza came and went Monday afternoon. The protesters were given until 2 p.m. to break down their stage and other equipment after their original four-day permit expired Sunday. While the protesters cleaned the space and took down the stage where they led rallies, made speeches and played music, they didn't leave. At about 2 p.m. Monday, Park Police went to Freedom Plaza and requested a private meeting with protest organizers. They met at National Park Service headquarters about 4 pm. Before leaving Freedom Plaza, the organizers told the crowd they'd stay until they're ready to leave. The organizers returned to a round of applause when they told demonstrators that authorities offered the four-month extension. Park Police realized it was not in their best interests to shut the demonstrators down or make arrests, organizers said, and asked if demonstrators needed to be arrested to make their point. The organizers replied that they don’t need to be arrested over a permit issue and want their issues addressed.

Note: For lots more on the reasons why people all over the world are occupying their city centers, check out our "Banking Bailout" news articles.

World facing worst financial crisis in history, Bank of England Governor says
2011-10-06, The Telegraph (One of the UK's leading newspapers)
Posted: 2011-10-18 17:22:21
http://www.telegraph.co.uk/finance/financialcrisis/8812260/World-facing-worst...

The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night. Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession. Economists said the Bank’s decision to resume its quantitative easing [QE] showed it was increasingly fearful for the economy, and predicted more such moves ahead. Sir Mervyn said the Bank had been driven by growing signs of a global economic disaster. “This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.” Announcing its decision, the Bank said that the eurozone debt crisis was creating “severe strains in bank funding markets and financial markets”. Financial experts said the committee’s actions would be a “Titanic” disaster for pensioners, savers and workers approaching retirement. Under QE, the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling.

Note: For lots more on the global financial crisis from reliable sources, click here.

Goldman Sachs let off paying £10m interest on failed tax avoidance scheme
2011-10-11, The Guardian (One of the UK's leading newspapers)
Posted: 2011-10-18 17:19:23
http://www.guardian.co.uk/business/2011/oct/11/goldman-sachs-interest-tax-avo...

Britain's tax authorities have given Goldman Sachs an unusual and generous Christmas present, leaked documents reveal. In a secret London meeting last December with the head of Revenue, the wealthy Wall Street banking firm was forgiven £10m interest on a failed tax avoidance scheme. HM Revenue and Customs sources admit privately that the interest-free deal is "a cock-up" by officials, but refuse to say who was responsible. Documents leaked to Private Eye magazine and published in full by the Guardian record that Britain's top tax official, HMRC's permanent secretary Dave Hartnett, personally shook hands on a secret settlement last December. Hartnett also refused to give the facts about Goldman Sachs to MP Jesse Norman on the Treasury committee last month, claiming disclosure would be illegal. He also refuses to brief ministers on the details. The £10m Christmas gift for Goldman was the culmination of a prolonged attempt by the US firm to avoid paying national insurance on huge bonuses for its bankers working in London. The sum was pocket change to Goldman, whose employees received $15.3bn (£9.5bn) in pay and bonuses last year.

Note: For lots more from reliable sources on corporate and government corruption, click here and here.

JPMorgan's Dangerous Derivatives
2009-05-07, Bloomberg/Businessweek
Posted: 2011-10-18 17:05:03
http://www.businessweek.com/magazine/content/09_20/b4131069034013.htm

Gillian Tett [is the author of] Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe. Tett is a respected business journalist at the Financial Times. Tett successfully pieces together the colorful backstory of the bank's work to win acceptance in the market for its brainchild, turning credit derivatives "from a cottage industry into a mass-production business." With the benefit of hindsight, we know that while these inventions were intended to control risk, they amplified it instead. This novel idea turned noxious when applied broadly to residential mortgages, a game that the rest of Wall Street later entered into with gusto. We learn in deep detail about not only how collateralized debt obligations are assembled but also their many iterations. Perhaps it's noteworthy that Tett's book begins when JPMorgan had the face-value equivalent of $1.7 trillion in derivatives on its books. Today that number has jumped to a mind-boggling $87 trillion. Part of that portfolio includes almost $8.4 trillion in credit derivatives, more than Bank of America's (BAC), Citi's, and Goldman Sachs' (GS) holdings combined.

Note: So JP Morgan has $87 trillion in derivates, a mass market it helped to create. That is greater than the GDP for the entire world! To verify this, click here. For a New York Times review of this revealing book, click here.

Confronting the Malefactors
2011-10-07, New York Times
Posted: 2011-10-11 10:38:44
http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors...

When the Occupy Wall Street protests began three weeks ago, most news organizations were derisive if they deigned to mention the events at all. For example, nine days into the protests, National Public Radio had provided no coverage whatsoever. It is, therefore, a testament to the passion of those involved that the protests not only continued but grew, eventually becoming too big to ignore. Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point. The protesters’ indictment of Wall Street as a destructive force, economically and politically, is completely right. Bankers took advantage of deregulation to run wild (and pay themselves princely sums), inflating huge bubbles through reckless lending. The bubbles burst — but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers’ sins. Bankers showed their gratitude by turning on the people who had saved them, throwing their support — and the wealth they still possessed thanks to the bailouts — behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis. Given this history, how can you not applaud the protesters for finally taking a stand?

Note: For insights into the reasons why people have decided they must occupy their cities in protest of the predations of financial corporations, check out our extensive "Banking Bailout" news articles.

Think Occupy Wall St. is a phase? You don't get it
2011-10-05, CNN
Posted: 2011-10-11 10:37:00
http://edition.cnn.com/2011/10/05/opinion/rushkoff-occupy-wall-street/index.html

Yes, there are a wide array of complaints, demands, and goals from the Wall Street protesters: the collapsing environment, labor standards, housing policy, government corruption, ... and so on. Different people have been affected by different aspects of the same system -- and they believe they are symptoms of the same core problem. I witnessed [many cogent conversations] as I strolled by Occupy Wall Street's many teach-ins this morning. There were young people teaching one another about, among other things, how the economy works, ... the history of centralized interest-bearing currency, the creation and growth of the derivatives industry, and about the Obama administration deciding to settle with, rather than investigate and prosecute the investment banking industry for housing fraud. Anyone who says he has no idea what these folks are protesting is not being truthful. We all know that there are investment bankers working on Wall Street getting richer while things for most of the rest of us are getting tougher. Occupy Wall Street is meant more as a way of life that spreads through contagion, creates as many questions as it answers, aims to force a reconsideration of the way the nation does business and offers hope to those of us who previously felt alone in our belief that the current economic system is broken.

Note: For insights into the reasons why people have decided they must occupy their cities in protest of the predations of financial corporations, check out our extensive "Banking Bailout" news articles.

Wall Street protest movement spreads to cities across US, Canada and Europe
2011-10-04, The Guardian (One of the UK's leading newspapers)
Posted: 2011-10-11 10:35:24
http://www.guardian.co.uk/world/2011/oct/04/wall-street-protest-movement-spreads

It began as the brainchild of activists across the border in Canada when an anti-consumerism magazine put out a call in July for supporters to occupy Wall Street. Now, three weeks after a few hundred people heeded that initial call and rolled out their sleeping bags in a park in New York's financial district, they are being joined by supporters in cities across the US and beyond. Protesters against corporate greed, unemployment and the political corruption that they say Wall Street represents have taken to the streets in Boston, Los Angeles, St Louis and Kansas City. The core group, Occupy Wall Street, claims people will take part in demonstrations in as many as 147 US cities this month, while the website occupytogether.org lists 47 US states as being involved. Around the world, protests in Canada, the UK, Germany and Sweden are also planned, they say. The speed of the leaderless movement's growth has taken many by surprise. The movement, which organisers say has its roots in the Arab spring and in Madrid's Puerta del Sol protests, has been galvanised by recent media attention. Last week, the Guardian reported that a NYPD police officer had been filmed spraying four women protesters with pepper spray. On Saturday, a peaceful march on Brooklyn bridge intended as a call to the other four boroughs of New York to join in resulted in 700 arrests. Some protesters claim the police trapped them.

Note: For insights into the reasons why people have decided they must occupy their cities in protest of the predations of financial corporations, check out our extensive "Banking Bailout" news articles.

As Scorn for Vote Grows, Protests Surge Around Globe
2011-09-28, New York Times
Posted: 2011-10-04 09:57:47
http://www.nytimes.com/2011/09/28/world/as-scorn-for-vote-grows-protests-surg...

Their complaints range from corruption to lack of affordable housing and joblessness, common grievances the world over. But from South Asia to the heartland of Europe and now even to Wall Street, these protesters share something else: wariness, even contempt, toward traditional politicians and the democratic political process they preside over. They are taking to the streets, in part, because they have little faith in the ballot box. Economics have been one driving force, with growing income inequality, high unemployment and recession-driven cuts in social spending breeding widespread malaise. Alienation runs especially deep in Europe, with boycotts and strikes. The protest movements in democracies are not altogether unlike those that have rocked authoritarian governments this year, toppling longtime leaders in Tunisia, Egypt and Libya. Protesters have created their own political space online that is chilly, sometimes openly hostile, toward traditional institutions of the elite. “You’re looking at a generation of 20- and 30-year-olds who are used to self-organizing,” said Yochai Benkler, a director of the Berkman Center for Internet and Society at Harvard University. “They believe life can be more participatory, more decentralized, less dependent on the traditional models of organization, either in the state or the big company. Those were the dominant ways of doing things in the industrial economy, and they aren’t anymore.”

Note: For key insights from major media sources into the reasons why so many are protesting worldwide, click here.

Occupy Wall Street rediscovers the radical imagination
2011-09-25, The Guardian (One of the UK's leading newspapers)
Posted: 2011-10-04 09:56:16
http://www.guardian.co.uk/commentisfree/cifamerica/2011/sep/25/occupy-wall-st...

Why are people occupying Wall Street? Why has the occupation – despite the latest police crackdown – sent out sparks across America, within days, inspiring hundreds of people to send pizzas, money, equipment and, now, to start their own movements called OccupyChicago, OccupyFlorida, in OccupyDenver or OccupyLA? We are watching the beginnings of the defiant self-assertion of a new generation of Americans, a generation who are looking forward to finishing their education with no jobs, no future, but still saddled with enormous and unforgivable debt. Is it really surprising they would like to have a word with the financial magnates who stole their future? Just as in Europe, we are seeing the results of colossal social failure. The occupiers are the very sort of people, brimming with ideas, whose energies a healthy society would be marshaling to improve life for everyone. Instead, they are using it to envision ways to bring the whole system down. But the ultimate failure here is of imagination. If the occupiers finally manage to break the 30-year stranglehold that has been placed on the human imagination ... everything will once again be on the table – and the occupiers of Wall Street and other cities around the US will have done us the greatest favour anyone possibly can.

Note: A post on the JP Morgan Chase website confirms an unprecedented $4.6 million gift to the New York City Police Foundation. The money was donated ostensibly as a "gift ... to strengthen security in the Big Apple." Now why would this huge bank be donating millions for security in New York City? For key insights from major media sources into the reasons why so many are protesting worldwide, click here.

Trader tells BBC 'millions of people's savings will vanish'
2011-09-26, The Telegraph (One of the UK's leading newspapers)
Posted: 2011-10-04 09:53:18
http://www.telegraph.co.uk/finance/financialcrisis/8790719/Trader-tells-BBC-m...

An independent trader, appearing on BBC News, reveal[ed] that he thinks banks and hedge funds believe the stock market 'is toast'. Alessio Rastani said that Goldman Sachs rules the world, not governments, and that Goldman Sachs “don't care about this rescue package” because they know “the stock market is finished” and they “don't really care” about the Euro. US Treasury Secretary Tim Geithner said over the weekend: "Sovereign and banking stresses in Europe are the most serious risk now confronting the world economy. Decisions cannot wait until the crisis gets more severe." He has proposed the so-called Geithner plan which will leverage the EU's €440bn bail-out fund (EFSF) from €440bn to €2 trillion to cope with Italy and Spain. But according to Mr Rastani it may already be too late as: “In less than twelve months, my prediction is, the savings of millions of people are going to vanish.”

Note: To watch the full BBC video of this most unusual interview, click here. For lots more on the fraudulent practices of major financial firms, click here.

While Wall St. flourishes, Main St. flounders
2011-08-29, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-09-07 10:18:25
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/28/EDKO1KRVJM.DTL

What if we stood up for Main Street? Corporations and elected officials are making decisions that are impacting our lives, and we are at their mercy. Americans, many [of] whose lives have been destroyed by the 2008 subprime mortgage market disaster, resent the lack of accountability on the part of Wall Street for its role in this scandal. Few have been indicted for the market collapse and resulting meltdown of the global economy. After the federal government bailed out the financial institutions, it is back to business as usual. Corporate profits are accumulating and bonuses are raining down on the very players who created the bubble and crash in the first place. On the other hand, the taxpayers who bailed out Wall Street aren't doing so well. Instead of bonuses, we are suffering from unemployment and underemployment of epic proportions. Homeowners continue to lose their homes to foreclosure, and homelessness is on the rise. Public services, public safety and public welfare funding is being cut back or cut out. Public education has been decimated. American corporations have lost all sense of responsibility for U.S. citizens. While the U.S. economy fights to survive, corporations have turned their backs on those whose tax dollars kept our ship of state from sinking. Sending jobs overseas might improve corporate profit margins, but at what expense to the workforce and U.S. economy? These decisions have devastated American workers' lives. So, what needs to be done? What if we begin to stand up for Main Street?

Note: For a treasure trove of reports detailing the criminal collusion between the federal government and Wall Street financial corporations, click here.

Wall Street Aristocracy Got $1.2 Trillion in Secret Loans
2011-08-22, Businessweek/Bloomberg News
Posted: 2011-08-30 11:14:22
http://www.businessweek.com/news/2011-08-22/wall-street-aristocracy-got-1-2-t...

Citigroup Inc. and Bank of America Corp. were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits. By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret. Fed Chairman Ben S. Bernanke’s [actions] included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley, got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. Data gleaned [under the Freedom of Information Act] make clear for the first time how deeply the world’s largest banks depended on the U.S. central bank to stave off cash shortfalls. Even as the firms asserted in news releases or earnings calls that they had ample cash, they drew Fed funding in secret.

Note: For a treasure trove of information from reliable sources on the government transfer of public assets to private banks and financial corporations, click here.

SEC accused of dumping records
2011-08-17, Washington Post
Posted: 2011-08-23 14:52:25
http://www.washingtonpost.com/business/economy/sec-accused-of-dumping-records...

The SEC has violated federal law by destroying the records of thousands of enforcement cases in which it decided not to file charges against or conduct full-blown investigations of Wall Street firms and others initially suspected of wrongdoing, a former agency official has alleged. The purged records involve major firms such as Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and hedge-fund manager SAC Capital. At issue were suspicions of actions such as insider trading, financial fraud and market manipulation. A file closed in 2002 involved Lehman Brothers, the investment bank whose collapse fueled the financial meltdown of 2008, according to the former official. A file closed in 2009 involved suspected insider trading in securities related to American International Group, the insurance giant bailed out by the government at the height of the financial crisis. The allegations were leveled in a July letter to Sen. Charles E. Grassley (R-Iowa) from Gary J. Aguirre, a former SEC enforcement lawyer now representing a current SEC enforcement lawyer, Darcy Flynn. Flynn last year began managing SEC enforcement records and became concerned that records that were supposed to be preserved under federal law were being purged as a matter of SEC policy, Aguirre wrote.

Note: For more on this important news by Rolling Stone's Matt Taibbi, click here. For lots more from reliable sources on the criminal practices of Wall Street corporations which led to global economic recession and massive government bailouts, click here.

AIG sues Bank of America for $10 billion
2011-08-08, The Globe and Mail/Reuters News
Posted: 2011-08-16 10:45:35
http://www.theglobeandmail.com/globe-investor/aig-sues-bank-of-america-for-10...

The insurer AIG is suing Bank of America to recover more than $10 billion of losses from a "massive fraud" on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank. American International Group Inc, still largely owned by taxpayers after $182.3-billion of government bailouts, is the latest of a growing number of investors filing lawsuits to hold banks responsible for losses on soured mortgages that contributed to the financial crisis. The AIG complaint accuses Bank of America and its Countrywide and Merrill Lynch units of misrepresenting the quality of mortgages placed in securities and sold to investors. "Defendants were engaged in a massive scheme to manipulate and deceive investors, like AIG, who had no alternative but to rely on the lies and omissions made," said the complaint, being filed in the New York State Supreme Court in Manhattan. Bank of America bought Countrywide for $2.5 billion in July 2008 and acquired Merrill six months later. The Countrywide acquisition is almost universally considered a disaster because of the costs of litigation and writing down bad loans.

Note: For lots more from reliable sources on the government bailout of major banks and Wall Street corporations, click here.

Don’t Get Caught Holding Dollars When The U.S. Default Arrives
2011-07-23, Forbes.com blog
Posted: 2011-08-02 16:16:52
http://blogs.forbes.com/greatspeculations/2011/07/23/dont-get-caught-holding-...

By some measures, the United States is even more deeply in hock than Greece. Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story. [It] doesn’t count the black box of bailouts. We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul (R.-Tex.) making that audit, however incomplete, the law. What we don’t know is how much of that has been paid back. “We have literally injected about $5.3 trillion,” said Dr. Paul earlier this month during his questioning of Fed chief Ben Bernanke, “and I don’t think we got very much for it. The national debt went up $5.1 trillion.” Bernanke did not challenge those figures. Even now, Americans are turning to their credit cards to pay for groceries and gas. According to First Data Corp., the volume of gasoline purchases put on credit cards jumped 39% over the last 12 months. You don’t want to be the average American in a default scenario, whenever it arrives. Ray Dalio, the head of Bridgewater Associates, the world’s biggest hedge fund, puts that day in “late 2012 or early 2013.”

Note: A careful Internet search reveals that no one in the major media except this Forbes blog even mentioned the astonishing results of the first ever audit of the Federal reserve - $16 trillion in secret loans. To understand how the media is controlled from reporting vitally important information like this, click here. For another revealing article showing what is happening from a historical perspective and its relationship to gold prices, click here. For an article detailing who received these trillions and links to the official GAO report, click here. For critical information on the financial system kept hidden from the public, click here.

Apple has more cash than the U.S. Treasury
2011-07-29, Los Angeles Times
Posted: 2011-08-02 16:04:24
http://www.latimes.com/business/la-fi-apple-cash-20110730,0,6198166.story

As the government struggled to reach an agreement on raising the debt ceiling, the U.S. Treasury's cash balance fell to $74 billion this week. That's less than the $76 billion that Apple now has in cash. To be fair, comparing Apple's cash reserves with the Treasury's is not exactly apples to apples. Apple's billions are essentially the funds in its bank accounts, while the federal number represents the amount of money the government has left before it hits the legal debt limit — a figure that can be changed by Congress. At about $362 billion, Apple is the second-largest company in the world by market value (behind Exxon Mobil Corp. at $395 billion) — big by any standard, but still far smaller than the U.S. government, which will spend close to $3.8 trillion this year, 10 times what Apple is worth. Still, Apple's reasons for keeping such a giant cash stockpile may well be related to worries about the stability of the U.S. government's finances. "One of the reasons U.S. companies have amassed so much cash is that it provides them financial flexibility in times of heightened uncertainty," said Laurie Simon Hodrick, a professor of business economics at Columbia University's business school. "It might seem ironic, but as the risk of a government default grows, bringing with it the specter of higher interest rates, the incentives for firms to finance with internally generated cash grows as well."

Top lobbying banks got biggest bailouts: study
2011-05-26, MSNBC/Reuters News
Posted: 2011-06-08 12:58:16
http://money.msn.com/business-news/article.aspx?feed=OBR&date=20110526&id=136...

The more aggressively a bank lobbied before the financial crisis, the worse its loans performed during the economic downturn -- and the more bailout dollars it received, according to a study published by the National Bureau of Economic Research this week. The report, titled "A Fistful of Dollars: Lobbying and the Financial Crisis," said that banks' lobbying efforts may be motivated by short-term profit gains, which can have devastating effects on the economy. "Overall, our findings suggest that the political influence of the financial industry played a role in the accumulation of risks, and hence, contributed to the financial crisis," said the report, written by three economists from the International Monetary Fund. Data collected by the three authors -- Deniz Igan, Prachi Mishra and Thierry Tressel -- show that the most aggressive lobbiers in the financial industry from 2000 to 2007 also made the most toxic mortgage loans. They securitized a greater portion of debt to pass the home loans onto investors and their stock prices correlated more closely to the downturn and ensuing bailout. The banks' loans also suffered from higher delinquencies during the downturn.

Note: If the above link fails, click here. For lots more from reliable sources on corruption in the government bailouts of the biggest banks, click here.

Unfair investment practices by wives of business bigs
2011-04-12, New York Daily News
Posted: 2011-06-08 12:57:01
http://articles.nydailynews.com/2011-04-12/gossip/29426543_1_matt-taibbi-stud...

Christy Mack, the wife of Morgan Stanley Chairman John Mack, and Susan Karches, the widow of the company's former investment-banking division president, Peter Karches, are among the chief investors in a company that received $220 million in low-interest loans. The funds came from a federal bailout program that "virtually guaranteed them millions in risk-free income," according to the article ... "The Real Housewives of Wall Street," which appears in [Rolling Stone]. In 2009, Christy Mack and Susan Karches launched Waterfall TALF Opportunity, a company with a Cayman Islands address, although the two women did not seem "to have any experience whatsoever in finance." TALF stands for "Term Asset-Backed Securities Loan Facility." The federal aid they received "falls under a broader category of bailout initiatives designed" by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner. With an initial upfront investment of $15 million, Waterfall TALF received $220 million in cash from the Fed, most of which it used to purchase "student loans and commercial mortgages." The loans were set up so that the investors "would keep 100% of any gains on the deal while the Fed and the Treasury (read: the taxpayer) would eat 90% of the losses."

Note: We don't usually quote the New York Daily News, but as they were the only major media to report this important story, we've included it here. Why are the major media silent on this powerful information uncovered by U.S. Senator Bernie Sanders? For the full story on this, click here. For lots more from reliable sources on corruption in the government bailouts of the biggest banks, click here.

U.S. Faulted on Failing to Catch Credit-Crunch ‘Bandits'
2011-05-23, Bloomberg/Businessweek
Posted: 2011-05-31 17:32:57
http://news.businessweek.com/article.asp?documentKey=1376-LKQQ2B0D9L3501-7O8F...

In November 2009, Attorney General Eric Holder vowed before television cameras to prosecute those responsible for the market collapse a year earlier, saying the U.S. would be “relentless” in pursuing corporate criminals. In the 18 months since, no senior Wall Street executive has been criminally charged. Prosecutions of three categories of crime that could be linked to the causes of the crisis -- corporate, securities and bank fraud -- declined last fiscal year by 39 percent from 2003, the period after the accounting scandals at Enron Corp. and WorldCom Inc., Justice Department records show. “You need a massive prosecutorial effort,” said Solomon Wisenberg, a white-collar defense attorney at Barnes & Thornburg LLP in Washington and a former federal prosecutor. “I don't see evidence that it's happening." The seizing up of credit markets led to the collapse of Bear Stearns and Lehman Brothers Holdings Inc. and sparked the worst economic slump in the U.S. since the Great Depression. Much of the blame belongs to banks that profited from selling products that imploded with the housing market.

Note: For undeniable evidence of fraud at the highest levels of Wall Street, click here.

Why Haven't Wall Streeters Gone to Jail?
2011-05-19, Time Magazine blog
Posted: 2011-05-24 12:04:26
http://curiouscapitalist.blogs.time.com/2011/05/19/ny-ag-investigation-why-ha...

The New York Attorney General's office has been requesting information from Bank of America, Goldman Sachs and Morgan Stanley on how they created and structured mortgage bonds at the height of the credit boom. That investigation has reignited questions about why, nearly three years after the financial crisis, no Wall Streeter has yet to face criminal charges directly related to the mortgage bonds and other toxic deals that lead to the financial crisis. No one really knows the answer, but there are a number of theories out there. Here are the best ones: Theory No. 1: Prosecutors have been told to back off. In mid-April, the New York Times did a large investigative piece that found a number of instances where prosecutors were told not to pursue Wall Street. Theory No. 2: Wall Street is innocent. It may seem like the most bizarre answer, but it is getting some traction. No one is really saying that Wall Street didn't do anything wrong. It's clear that setting up risky mortgage bonds to sell to investors and then betting against them yourself is wrong. But is it illegal? It's not quite clear. Theory No. 3: The cases are still in the works. There seems to be some evidence that prosecutors are starting to be more aggressive in pursuing cases. It's not clear what part of the mortgage process, or what potential wrong doing, the NY AG Eric Schneiderman is investigating. The truth is that Wall Streeters rarely go to jail. Yes, other bubbles and financial crises have resulted in numerous convictions, but generally not of Wall Streeters.

Note: Remember that Elliot Spitzer probably got taken down for going after Wall Street. Now his successor, Eric Schneiderman, is doing the same thing. For an excellent article on this brave man, click here.

The Unwisdom of Elites
2011-05-09, New York Times
Posted: 2011-05-17 13:11:27
http://www.nytimes.com/2011/05/09/opinion/09krugman.html

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe’s single currency is coming apart at the seams. How did it all go so wrong? The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess ... were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes. What happened to the budget surplus the federal government had in 2000? First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs. So who was responsible for these budget busters? It wasn’t the man in the street. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

Note: For highly revealing major articles exposing secret gatherings of the global elite and their activities, click here.

Goldman Sachs defends dark pools, short selling
2009-10-27, Wall Street Journal
Posted: 2011-05-17 12:47:20
http://online.wsj.com/article/SB125665689267210559.html

Goldman Sachs defended a range of trading practices currently under regulatory scrutiny, including dark pools and short selling, in a report to the Securities and Exchange Commission and a series of postings on its Web site. In defending dark pools, private venues where large blocks of securities are traded anonymously, Goldman said they are simply the result of technology improving on the kind of non-displayed liquidity that has always existed in the market. Dark pools have been criticized by lawmakers and targeted by regulators seeking a better idea of how much trading takes place away from exchanges. While it reiterated its support for regulation of abusive, or "naked" short selling, Goldman said further regulation isn't necessary and could actually hurt the market. As for high-frequency trading, SEC Chairman Mary Schapiro at a Securities Industry and Financial Markets Association conference ... reiterated that she has asked SEC staff to propose ways the agency can collect more information about high frequency traders, noting that lightning speed trading now represents more than 50% of trading volume.

Note: To read this article without a subscription to the WSJ, click here. Is it a surprise that Goldman Sachs wants to keep its secret deals hidden? Full transparency for the banks would almost certainly reveal major manipulations.

Goldman Sachs faces contentious AGM
2011-05-06, The Guardian (One of the UK's leading newspapers)
Posted: 2011-05-10 11:11:05
http://www.guardian.co.uk/business/2011/may/06/goldman-sachs-set-contentious-agm

Goldman Sachs is bracing itself for what may be the most contentious annual meeting in the embattled investment bank's 142-year history. Angry shareholders, including a coalition of religious groups, are planning to call on Goldman's executives to justify the combined $69.6m (£42.4m) payday its top five executives received in 2010 and to answer questions about allegations that the bank misled clients and lied to Congress. The meeting comes amid mounting pressure on the bank. Earlier this week Eric Holder, the US attorney-general, confirmed that the justice department was investigating Goldman's role in the financial crisis following a withering report on the bank's role led by senators Carl Levin and Tom Coburn. The 650-page report "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," gave Goldman its own section titled "Failing to Manage Conflicts of Interest: A Case Study of Goldman Sachs." In July the bank paid $500m to settle charges brought by financial regulator the Securities and Exchange Commission (SEC) that it misled customers over complex sub-prime mortgage products it sold in 2007. The spotlight on executive pay could not come at a more sensitive moment for the bank. The bank's top five executives received cash and stock last year that was 13 times greater than the year before. Goldman's 2010 net revenues fell 13% and profits fell 37%. Goldman paid Blankfein close to $19m in compensation for 2010, almost double his award for the previous year.

Note: For lots more on the financial chicanery of Goldman Sachs and other major financial corporations that led to the global economic crisis and massive taxpayer bailouts of the firms, click here.

Senate panel concludes Goldman Sachs profited from financial crisis
2011-04-14, Los Angeles Times
Posted: 2011-04-19 10:49:47
http://www.latimes.com/business/la-fi-crisis-probe-20110414,0,6709903.story

A Senate panel has concluded that Goldman Sachs Group Inc. profited from the financial crisis by betting billions against the subprime mortgage market, then deceived investors and Congress about the firm's conduct. Some of the findings in the report by the Senate's Permanent Subcommittee on Investigations will be referred to the Justice Department and the Securities and Exchange Commission for possible criminal or civil action, said Sen. Carl Levin (D-Mich.), the panel's chairman. The giant investment bank was just one focus of the subcommittee's probe into Wall Street's role in the financial crisis. The 639-page report — based on internal memos, emails and interviews with employees of financial firms and regulators — casts broad blame, saying the crisis was caused by "conflicts of interest, heedless risk-taking and failures of federal oversight." Among the culprits cited by the panel are Washington Mutual, a major mortgage lender that failed in 2008, as well as the Office of Thrift Supervision, a federal bank regulator, and credit rating firms. Asked if he was disappointed that no Wall Street figures had gone to jail in connection with the crisis, Levin responded, "There's still time."

Note: For many key reports from major media sources illuminating how major financial corporations knowingly brought about the global financial crisis and profited from it, click here.

Report: Market share drove faulty credit ratings decisions
2011-04-13, Kansas City Star/McClatchy News
Posted: 2011-04-19 10:48:01
http://www.kansascity.com/2011/04/13/2798570/report-market-share-drove-faulty...

Analysts who reviewed complex mortgage bonds that ultimately collapsed and ruined the U.S. housing market were threatened with firing if they lost lucrative business, prompting faulty ratings on trillions of dollars worth of junk mortgage bonds, a Senate report said [on April 13]. The 639-page report by the Senate Permanent Subcommittee on Investigations confirms much of what McClatchy Newspapers first reported about mismanagement by credit ratings agencies in 2009. Credit rating agencies are supposed to provide independent assessments on the quality of debt being issued by companies or governments. Traditionally, investments rated AAA had a probability of failure of less than 1 percent. But in collusion with Wall Street investment banks, the Senate report concludes, the top two ratings agencies - Moody's Investors Service and Standard & Poor's - effectively cashed in on the housing boom by ignoring mounting evidence of problems in the housing market. Profits at both companies soared, with revenues at market leader Moody's more than tripling in five years. Then the bottom fell out of the housing market, and Moody's stock lost 70 percent of its value; it has yet to fully recover. More than 90 percent of AAA ratings given in 2006 and 2007 to pools of mortgage-backed securities were downgraded to junk status.

Note: For many key reports from major media sources illuminating how major financial corporations knowingly brought about the global financial crisis and profited from it, click here.

Mortgage paperwork mess: Next housing shock?
2011-04-01, CBS News 60 Minutes
Posted: 2011-04-19 10:28:40
http://www.cbsnews.com/stories/2011/04/01/60minutes/main20049646.shtml

It's bizarre but, it turns out, Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse. Now that banks want to evict people, they're unwinding these exotic investments to find, that often, the legal documents behind the mortgages aren't there. Caught in a jam of their own making, some companies appear to be resorting to forgery and phony paperwork to throw people - down on their luck - out of their homes. This past January in Los Angeles, 37,000 homeowners facing foreclosure showed up to an event to beg their bank for lower payments on their mortgage. In February in Miami, 12,000 people showed up to a similar event. For many that's when the real surprise comes in: these same banks have fouled up all of their own paperwork to a historic degree. There were a million foreclosures last year. And there will be another million this year - those lawsuits are forcing open those bundled, mortgage-backed securities that Wall Street cooked up in the mid 2000s, and exposing a lack of ownership documents all across the country. Banks are defensive because all 50 state attorneys general want to punish them: the states are seeking about $20 billion in damages for what they say is the irresponsible, perhaps criminal way, that some mortgage companies handled what is, for most folks, the most important investment of their lives.

Note: To watch the amazing 14-minute video of this article, click here. Learn how banks paid a company which hired people off the streets to pretend they were bank vice presidents and sign thousands of documents fraudulently. For lots more from reliable sources on the criminal practices of mortgage lenders, click here.

Mortgage mess: Who really owns your mortgage?
2011-04-03, CBS News 60 Minutes Overtime
Posted: 2011-04-19 10:27:06
http://www.cbsnews.com/8301-504803_162-20049744-10391709.html

Do you know who really owns your mortgage? That question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And they're still causing problems. As it turns out, Wall Street cut corners when it bundled homeowners' mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they're finding that the legal documents behind many mortgages are missing. So, what do the banks do? Some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic. Even if you're not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost.

Note: Don't miss at the link above the most excellent, six-minute CBS video explaining more on this blatant deception and manipulation by many banks. You have to put up with a one-minute commercial shortly after the video starts. For lots more from reliable sources on the criminal practices of mortgage lenders, click here.

Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
2011-04-01, Bloomberg
Posted: 2011-04-12 10:26:03
http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-...

Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion. The biggest borrowers from the ... discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets. Separate data disclosed in December on temporary emergency-lending programs set up by the Fed also showed big foreign banks as borrowers. Six European banks were among the top 11 companies that sold the most debt overall -- a combined $274.1 billion -- to the Commercial Paper Funding Facility. Those programs also loaned hundreds of billions of dollars to the biggest U.S. banks, including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Morgan Stanley.

Note: For a treasure trove of reports from reliable sources on the bailout of banks worldwide by the US taxpayer, click here.

Fed to release bank loan data after Supreme Court rejects appeal
2011-03-21, Los Angeles Times/Bloomberg News
Posted: 2011-04-05 20:42:39
http://articles.latimes.com/2011/mar/21/business/la-fi-fed-banks-20110321

The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view. The justices ... left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News' parent company, Bloomberg. The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. "I can't recall that the Fed was ever sued and forced to release information" in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed's unprecedented $3.5 trillion effort to stem the 2008 financial panic. Under the trial judge's order, the Fed must reveal 231 pages of documents related to borrowers in April and May 2008, along with loan amounts. News Corp.'s Fox News is pressing a bid for 6,186 pages of similar information on loans made from August 2007 to November 2008.

Note: For a treasure trove of reports from major media sources on the hidden activities of the Fed and the biggest Wall Street and international banks, click here.

The Michigan Monarchy Legislates Financial Martial Law -- Nation Yawns
2011-03-18, Forbes blog
Posted: 2011-03-29 11:12:05
http://blogs.forbes.com/rickungar/2011/03/18/the-michigan-monarchy-legislates...

This week, the Michigan legislature passed – and the governor signed into law – a bill that would permit Governor Rick Snyder to push aside elected city officials and replace them with emergency financial managers in any municipality or school district facing financial difficulties. The law would include virtually every town and city in the state as those cities that aren’t bankrupt already soon will be once the governor’s proposed budget – which cuts billions in aid to municipalities and school districts – is approved by the legislature. One of the most shocking, Draconian, democracy-destroying measures in the history of this country has became law – and the nation has seemingly slept through it. The new law, described by one of the GOP legislators sponsoring the bill as “financial martial law”, empowers the governor’s appointees [referred to as ‘Emergency Financial Managers’] to fire duly elected local officials, cancel labor contracts and even dissolve entire communities and school districts. This is about so much more than collective bargaining agreements and unions. This law gives an appointee of the governor – which, by the way, may be a corporation – the authority to dismiss any or all of a municipality’s elected government officials.

Note: For a treasure trove of reports by major media sources on the collusion between government and financial powers against the public interest, click here.

Feds must probe banks further over mortgage crisis
2011-03-21, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-03-29 11:07:09
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/20/EDFL1IEOFE.DTL

Anonymous, an online hacker group, released a string of e-mails last week that purportedly show mortgage document fraud at Bank of America. Many people yawned. After all, there have been well-documented cases of mortgage fraud and illegal foreclosures, and little has been done to punish Bank of America or any of the banks for their behavior. But just because the federal government has been slow to act on the mortgage crisis doesn't mean that these e-mails are any less valuable. The e-mails are a chain showing requests for Balboa Insurance employees to remove document tracking numbers from the system of record. Balboa Insurance became a division of Bank of America after the bank bought the bankrupt home loan company Countrywide Financial. The idea suggested in the e-mails was to misplace individual documents away from matching loans. This would make it harder for federal auditors to investigate individual loans. It would also make it far more difficult for individual homeowners to dispute or question bank action on their loans - and therefore obtain mortgage modifications or a stay on bank foreclosure. The Anonymous e-mails are serious indeed. They're a snapshot into why the mortgage mess spiraled out of control. While they don't tell the whole story, they point to the need for further investigation and possible action on behalf of the federal government. When people are losing their homes, the banks shouldn't be allowed to get away with deception.

Note: For a treasure trove of reports by major media sources on the collusion between government and banks against the public interest, click here.

CalPERS scandal detailed in report
2011-03-20, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-03-29 11:05:50
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/19/BUFR1IELSM.DTL

"The facts in the report speak for themselves, but the principles it describes could apply to funds throughout the United States and overseas." That's attorney Philip Khinda, talking about the 75-page report he delivered last week to the California Public Employees' Retirement System on dealings involving former senior executives and board members with so-called placement agents, and how the latter got tens of millions of dollars in questionable fees for their services. The report is the culmination of a 17-month investigation headed by Khinda, a partner at the Washington law firm Steptoe & Johnson, which was hired by CalPERS for the job. Citing the $800 million a year CalPERS was paying out in fees, the report concludes that "the excessive nature created an environment in which external managers were willing and able to pay fees at a level that bore little or no relationship to the services apparently provided by the placement agents ... Many of the abuses relating to placement agent arrangements were, in a sense, a symptom of a larger problem." That larger problem applies, in part, to funds throughout the United States and overseas, ranging from other public pension funds to sovereign wealth funds investing in the United States. With the amount of money at stake, the fat fees involved, and the various middlemen looking for a piece, events similar to what transpired at CalPERS could just as easily appear elsewhere.

Note: For a treasure trove of reports by major media sources on the collusion between government and financial corporations against the public interest, click here.

Michigan bill would impose "financial martial law"
2011-03-11, CBS News
Posted: 2011-03-22 17:53:49
http://www.cbsnews.com/8301-503544_162-20042299-503544.html

Michigan lawmakers are on the verge of approving a bill that would enable the governor to appoint "emergency managers" -- officials with unilateral power to make sweeping changes to cities facing financial troubles. Under the legislation ... the governor could declare a "financial emergency" in towns or school districts. He could then appoint a manager to fire local elected officials, break contracts, seize and sell assets, eliminate services - and even eliminate whole cities or school districts without any public input. The measure passed in the state Senate this week; the House passed its own version earlier. Republican Gov. Rick Snyder has said he will sign the bill into law. U.S. Rep. John Conyers, a Democrat who represents Detroit, said in a statement that in a given city, the governor's new "financial czar" could "force a municipality into bankruptcy, a power that will surely be used to extract further concessions from hardworking public sector workers." He said the legislation raises "serious constitutional concerns."

Note: The bill was made law. For more, click here. For a treasure trove of reports from major media sources exposing the control exerted by financial powers on government officials, click here.

Financial meltdown culprits seem too big to jail
2011-03-07, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-03-16 12:55:08
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/06/EDPG1I481K.DTL

What's wrong with this picture: Years have passed since Wall Street's financial meltdown. Due to the crisis, the economy tanked, the mortgage market has yet to recover, and millions of jobs were lost. Many of those jobs losses will be permanent. The only person who went to jail for any of this was Bernie Madoff. When he accepted his Academy Award for the documentary "Inside Job," Berkeley filmmaker Charles Ferguson reminded Americans that the lack of criminal prosecutions for the financial crisis is, simply, "wrong." No matter what kinds of logical, legal explanations that the Justice Department has trotted out to explain why all of these senior financial executives are too big to jail, it's outrageous that there has not been and will not be any comeuppance for the men who plunged the American economy into chaos. The fact that some of these executives have or will receive some financial punishment in civil court is of little consequence - if ruining the economy isn't worth a little jail time, then what is? The Obama administration has not made it a priority to prosecute financial executives. Its reticence to punish was prominently on display last month, when the Justice Department decided not to prosecute Angelo Mozilo, the former CEO of Countrywide Financial. Mozilo left an e-mail trail detailing his feelings about Countrywide's "toxic" mortgage products and negotiated a $67.5 million payout in a civil suit that was brought against him by the Securities and Exchange Commission. If the feds don't go after him, it's unlikely that they'll go after anyone else. It's a bitter contrast to the 1980s savings-and-loan crisis, when the federal government threw enormous resources at criminal prosecutions and sent even well-connected executives, like Charles Keating, to jail.

Note: For other highly revealing major media articles showing just how much control big bankers have over government, click here.

Why those from 'Inside Job' aren't inside a prison
2011-03-01, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-03-08 11:33:20
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/28/BURF1HV7AV.DTL

"Forgive me," said Berkeley filmmaker Charles Ferguson upon receiving an Academy Award on Sunday night for his documentary "Inside Job." "I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail - and that's wrong." A number of people would agree, including a majority of Americans, according to opinion polls, who blame U.S. banks and other private institutions for the 2007-08 financial meltdown documented in Ferguson's film. "He raised exactly the right question," said William Black, a senior regulator at the former Federal Savings and Loan Insurance Corp., which helped clean up the far less costly S&L crisis of the late 1980s and early 1990s. More than 1,800 S&L officials were convicted of felonies in its aftermath, with more than 1,000 jailed. But the difference between then and now - and with the 1929 crash, which saw a number of bankers go to jail - is open to much debate. "We had well over 10,000 criminal referrals from regulators in the S&L crisis," said Black, now an associate professor of economics and law at the University of Missouri-Kansas City School of Law. "This time, zero."

Note: For other major media articles revealing the vast extent of unmitigated corruption related to the banking bailouts, click here. For reliable, eye-opening information on how the public is continually deceived about banking, click here. And for an excellent study guide on the facts presented in this revealing film, click here.

On Street, Pay Vaults to Record Altitude
2011-02-02, Wall Street Journal
Posted: 2011-02-28 11:28:44
http://online.wsj.com/article/SB10001424052748704124504576118421859347048-sea...

When it comes to paychecks, Wall Street's law of gravity is back in full force: What goes down must come back up. In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion, according to an analysis by The Wall Street Journal. The total is up 5.7% from $128 billion in combined compensation and benefits by the same companies in 2009. At 25 large financial firms that have reported full-year results, revenue rose to $417 billion, another all-time high. "Things are shifting back to where they were before," said J. Robert Brown, a law professor at the University of Denver who studies compensation and corporate-governance issues. Buried in the numbers, though, are signs of how Wall Street's pay culture is bending in response to pressure from regulators and shareholders. Last year, deferred compensation made up as much as half of total pay, up from about a third previously, estimates Alan Johnson, managing director of Johnson Associates Inc., a New York pay consultant. Banks and securities firms are deferring a larger percentage of compensation than they used to, trying to counter criticism that yearly cash bonuses encourage unwise risk-taking by executives, traders and other employees aiming for a big payday.

Note: For the NY State Comptroller's analysis of Wall Street bonuses in 2010, click here and here.

Bankers jailed, sued as Iceland seeks culprits for crisis
2010-05-13, Daily Telegraph (Australia)/AFP
Posted: 2011-02-28 10:54:44
http://www.dailytelegraph.com.au/business/breaking-news/bankers-jailed-sued-a...

More than a year and a half after Iceland's major banks failed, all but sinking the country's economy, police have begun rounding up a number of top bankers while other former executives and owners face a $US2 billion ($2.24 billion) lawsuit. Since Iceland's three largest banks - Kaupthing, Landsbanki and Glitnir - collapsed in late 2008, their former executives and owners have largely been living untroubled lives abroad. But the publication last month of a parliamentary inquiry into the island nation's profound financial and economic crisis signalled a turning of the tide, laying much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for. Overnight, the administrators of Glitnir's liquidation announced they had filed a $US2 billion lawsuit in a New York court against former large shareholders and executives for alleged fraud. "I think this lawsuit is without precedence in Iceland," Steinunn Gudbjartsdottir, who chairs Glitnir's so-called winding-up board, told reporters in Reykjavik. The bank also said it was "taking action against its former auditors PricewaterhouseCoopers (PwC) for facilitating and helping to conceal the fraudulent transactions engineered by [its principal shareholder] and his associates, which ultimately led to the bank's collapse in October 2008."

Note: Yet American and British bankers who played a major role in the economic collapse are getting record pay. For an incisive article in Rolling Stone titled "Why Isn't Wall Street in Jail?" click here. For key reports on financial fraud from major media sources, click here.

Inside Job: how bankers caused the financial crisis
2011-02-17, The Guardian (One of the UK's leading newspapers)
Posted: 2011-02-21 16:28:41
http://www.guardian.co.uk/film/2011/feb/17/inside-job-financial-crisis-banker...

Charles Ferguson's film Inside Job ... explains why so little has been done to reform the financial world or bring criminal prosecutions against the main protagonists [of the financial crash that began in 2008]. His villainous lineup includes bankers, politicians (many of whom were previously bankers), regulators, the credit ratings agencies and academics. In Inside Job, the name that keeps cropping up is Larry Summers, a friend of President Bill Clinton and more recently Barack Obama. Summers exemplifies the links between cheerleaders in academia, Wall Street, supine regulators and an ignorant Capitol Hill that Ferguson stresses were at the root of the problem. Still, no matter how much it is explained, the general public is not going to understand. How does one go into battle yelling slogans about credit default swaps? The bankers know ignorance is their trump card. Maybe Inside Job will make us more savvy in time for the next crash.

Note: For a treasure trove of reports from reliable souces on the criminality of the major financial firms, regulatory agencies and politicians which led to the global financial crisis and Greater Depression, click here.

Deregulation of derivatives set stage for collapse
2011-01-30, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-02-13 00:21:00
http://articles.sfgate.com/2011-01-30/business/27091349_1_otc-derivatives-otc...

"We certainly applaud the efforts of the commission," said White House press secretary Robert Gibbs, referring to the Financial Crisis Inquiry Report. "Frankly, I'm not sure much has changed," said one of commissioners, Byron Georgiou. "The concentration of assets in the nation's 10 biggest banks is bigger now than it was five years ago, from 58 percent in 2006 to 63 percent now." Referring to executives who remain at the head of those banks that almost ran aground, Georgiou said ... "Either they knew and didn't want to tell us, or they really didn't know. Either way, they put their institutions at risk." And have yet to be held accountable. Commissioner Brooksley Born can enjoy a certain sense of vindication. Not only had "over-the-counter derivatives contributed significantly to this crisis," ... but the enactment of legislation in 2000 to ban their regulation "was a key turning point in the march toward the financial crisis." As head of the Commodity Futures Trading Commission in the 1990s, Born was aware of the damage the largely unregulated instruments had already caused. Born suggested some more regulation. [She] was squashed like a bug by Clinton administration heavyweights, including Lawrence Summers and Robert Rubin, [and] Federal Reserve Chairman Alan Greenspan. One of the results: The Commodity Futures Modernization Act of 2000 eliminated government oversight of the OTC market. As the report documents, the use of such derivatives ... helped bring the entire financial system to its knees. Born hasn't seen much change in terms of accountability. One thing the report makes clear ... is just how preposterous were the "Who knew?" and "Who could have predicted?" statements offered up by chief executives and top government officials.

Note: The powerful movie "Inside Job" lays all of this bare. For lots more revealing news on the banking bailout and financial collapse, click here.

Trustee: J.P. Morgan Abetted Madoff
2011-02-04, Wall Street Journal
Posted: 2011-02-07 15:54:15
http://online.wsj.com/article/SB10001424052748703652104576122300990479090.html

J.P. Morgan Chase & Co. ignored or dismissed warning signs about the Madoff fraud even as it earned hundreds of millions of dollars from its relationship with his firm, according to a lawsuit unsealed [on February 3]. The $6.4 billion lawsuit ... claims that bankers at J.P. Morgan discussed the possibility that Bernard Madoff was operating a Ponzi scheme, worried that a firm of such size was audited by a storefront accountant and called his returns "too good to be true." "While numerous financial institutions enabled Madoff's fraud, JPMC was at the very center of that fraud, and thoroughly complicit in it," according to the 115-page lawsuit, filed under seal in December by Irving Picard, the trustee seeking to recover money for Mr. Madoff's victims. The complaint seeks the return of nearly $1 billion in J.P. Morgan's profits and fees, and $5.4 billion in damages. It goes into great detail about the bank's alleged efforts, starting in about 2006, to make money by offering products tied to Mr. Madoff through investment funds that fed money to him. The lawsuit offers a detailed account of the more than two decade relationship between J.P. Morgan and Mr. Madoff. The lawsuit claims that the bank didn't pay attention to billions of dollars passing through the Madoff firm's main J.P. Morgan account, much of it by hand-written check, or to discrepancies in the account balance and unreported obligations.

Note: For lots more from major media sources on the criminal practices of the biggest financial institutions, click here.

America's favorite bankers have outdone themselves yet again
2011-01-30, CNN
Posted: 2011-02-07 15:52:34
http://finance.fortune.cnn.com/2011/01/30/money-for-nothing-at-goldman/

How might you compensate management for a year in which profits plunged, you spent $550 million of shareholder money to settle a fraud investigation and your stock ended up more or less exactly where it started? You might be tempted to nix raises or withhold bonuses to send a responsible message about linking pay to performance. But if so, you wouldn't be Goldman Sachs. It just had the year described above – and responded by tripling everyone's base salary while boosting bonuses by 40%. Is this a great country or what? Goldman said in a filing [on January 28] that CEO Lloyd Blankfein will make $2 million this year, and his top lieutenants will each make $1.85 million. Top Goldman brass had been making $600,000 annually in salary since the firm's 1999 initial public offering. All 470 of Goldman's partners will get higher salaries. The top five officers will also get $12.6 million each in bonuses. That's up from $9 million each last year. That may seem like a high price to pay for a pretty lousy year – and one that ended with a Fed-inspired reminder that Goldman, just in case anyone forgot, took billions upon billions of dollars in bailout loans in 2008 and 2009.

Note: For key articles from reliable sources detailing the outrageous compensation awarded to the highest officers of Wall Street financial corporations after they were bailed out by the government, click here.

Julian Assange vows to reveal tax details of 2,000 wealthy people
2011-01-17, The Guardian (One of the UK's leading newspapers)
Posted: 2011-01-24 10:19:32
http://www.guardian.co.uk/media/2011/jan/17/julian-assange-tax-wikileaks-swiss

Julian Assange, the WikiLeaks founder, today pledged to make public the confidential tax details of 2,000 wealthy and prominent individuals, after being passed the data by a Swiss banker who claims the information potentially reveals instances of money-laundering and large-scale illegal tax evasion. Rudolf Elmer, formerly a senior executive at the Swiss bank Julius Baer, based in the Cayman islands, said he was handing the data to WikiLeaks as part of an attempt "to educate society" about the amount of potential tax revenues lost thanks to offshore schemes and money-laundering. "As [a] banker, I have the right to stand up if something is wrong," he said. "I am against the system. I know how the system works and I know the day-to-day business. I want to let society know how this system works because it's damaging our society," he said. Elmer will appear in a Swiss court on Wednesday charged with breaking Swiss banking secrecy laws, forging documents and sending threatening messages to two officials at his former employer. He denies the charges. Assange ... said he would pass the information to the Serious Fraud Office(SFO), examine it to ensure sources were protected, and then release it on the WikiLeaks site, potentially within "a couple of weeks".

Note: For lots more from reliable sources on how the rich cheat the rest with help from lax regulations, click here.

US foreclosures in new legal trouble
2011-01-07, BBC
Posted: 2011-01-17 11:21:55
http://www.bbc.co.uk/news/business-12140877

Two of the US's biggest mortgage lenders have had mortgage foreclosures cancelled in a case that could affect other banks. The Supreme Court in Massachusetts ruled against US Bancorp and Wells Fargo in a widely watched case. Backing a lower court ruling made in 2009, it said two foreclosure sales were invalid because the banks did not prove that they owned them at the time. The decision is among the earliest to address the validity of foreclosures done without proper documentation - so-called robo-loans because they were carried out by people who were unqualified and who often did not check a single line in the paperwork. Marty Mosby, an analyst at Guggenheim Securities said: "A ruling like this will slow down the foreclosure process. They're going to have to be really precise and get everything in order. It doesn't leave a lot of wiggle room." The case also applies retrospectively to people who have already been foreclosed. Glenn Russell, a lawyer for one of the couples in the case said: "I'm ecstatic. The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon." Analysts said the decision may also threaten banks' ability to package mortgages into securities, and may raise the spectre that loans transferred improperly will need to be bought back.

Note: For lots more from major media sources on the criminal profiteering by the largest banks and Wall Street financial firms, click here.

$2tn debt crisis threatens to bring down 100 US cities
2010-12-20, The Guardian (One of the UK's leading newspapers)
Posted: 2011-01-10 16:59:32
http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned. Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery. "Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney [said]. "There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults." American cities and states have debts in total of as much as $2tn. US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.

Note: For a treasure trove of reports from major media sources on the dire impacts of the financial crisis and government bailout of financial capitalists at taxpayers' expense, click here.

The little red book that swept France
2011-01-03, The Independent (One of the UK's leading newspapers)
Posted: 2011-01-10 16:54:21
http://www.independent.co.uk/news/world/europe/the-little-red-book-that-swept...

Take a book of just 13 pages, written by a relatively obscure 93-year-old man, which contains no sex, no jokes, no fine writing and no startlingly original message. A publishing disaster? No, a publishing phenomenon. Indignez vous! (Cry out!), a slim pamphlet by a wartime French resistance hero, Stéphane Hessel, is smashing all publishing records in France. The book urges the French, and everyone else, to recapture the wartime spirit of resistance to the Nazis by rejecting the "insolent, selfish" power of money and markets and by defending the social "values of modern democracy". The book, which costs €3, has sold 600,000 copies in three months and another 200,000 have just been printed. Its original print run was 8,000. In the run-up to Christmas, Mr Hessel's call for a "peaceful insurrection" not only topped the French bestsellers list, it sold eight times more copies than the second most popular book. Mr Hessel, who survived Nazi concentration camps to become a French diplomat, said he was "profoundly touched" by the success of his book. Just as he "cried out" against Nazism in the 1940s, he said, young people today should "cry out against the complicity between politicians and economic and financial powers" and "defend our democratic rights acquired over two centuries".

Note: For lots more from major media sources on the "complicity between politicians and economic and financial powers", click here.

While Washington pursues CEOs, they snub U.S.
2010-12-26, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2011-01-03 11:57:10
http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2010%2F12%2F25%2FINJV1...

America's big businesses are less and less American. They're going abroad for sales and employees. That's one reason they've showed record-breaking profits in 2010 while creating almost no American jobs. Consider one of the most popular products for Christmas gifts of all time - Apple's iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone, whose wholesale price is around $179, to determine where the money actually goes. Only about $11 of that iPhone goes to American workers, mostly researchers and designers. Even old-tech American companies made big money abroad in 2010 - and created scads of jobs there. General Motors, for example, is now turning a nice profit, and American investors are bullish about its future. That doesn't mean GM will be creating lots more blue-collar jobs in America, though. 2010 was a banner year for GM's foreign sales - already two-thirds of its total sales, and rising. In October, GM became the first automaker to sell more than 2 million cars a year in China. The company is now making more cars in China than in the United States. Meanwhile, back home in the United States, GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all of GM's U.S. suppliers have also cut their payrolls.

Note: Robert Reich, former U.S. secretary of labor, is professor of public policy at UC Berkeley and the author of the new book Aftershock: The Next Economy and America's Future. He blogs at www.robertreich.org.

State Budgets: The Day of Reckoning
2010-12-19, CBS News
Posted: 2011-01-03 11:53:35
http://www.cbsnews.com/stories/2010/12/19/60minutes/main7166220.shtml

There is [a] financial crisis looming involving state and local governments. In the two years since the "great recession" wrecked their economies and shriveled their income, the states have collectively spent nearly a half a trillion dollars more than they collected in taxes. There is also a trillion-dollar hole in their public pension funds. The states have been getting by on billions of dollars in federal stimulus funds, but the day of reckoning is at hand. The debt crisis [could] cost a million public employees their jobs and require another big bailout package that no one in Washington wants to talk about. "The most alarming thing about the state issue is the level of complacency," Meredith Whitney, one of the most respected financial analysts on Wall Street. "It has tentacles as wide as anything I've seen. I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the U.S. economy," she [said]. California, which faces a $19 billion budget deficit next year, has a credit rating approaching junk status. It now spends more money on public employee pensions than it does on the state university system, which had to increase its tuition by 32 percent. Arizona is so desperate it sold off the state capitol, Supreme Court building and legislative chambers to a group of investors and now leases the buildings from their new owner. The state also eliminated Medicaid funding for most organ transplants.

Note: For key reports from major media sources on the devastating consequences for Main Street of the criminal bailout of Wall Street, click here.

Cuomo lashes out at Ernst & Young
2010-12-21, Reuters blog
Posted: 2010-12-28 18:05:12
http://blogs.reuters.com/felix-salmon/2010/12/21/cuomo-lashes-out-at-ernst-yo...

Excerpts from complaint by New York State Attorney General (and Governor-Elect) Andrew Cuomo: E&Y [Ernst and Young] substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive accounting fraud, involving the surreptitious removal of tens of billions of dollars of securities from Lehman’s balance sheet in order to create a false impression of Lehman’s liquidity, thereby defrauding the investing public. As the financial crisis deepened in 2007 and 2008 and Lehman’s liquidity problems intensified, E&Y ... assisted Lehman in defrauding the public about the Company’s deteriorating financial condition, particularly its leverage. As the public auditor for Lehman, E&Y had the absolute obligation to ensure that Lehman’s financial statements ... did not mislead the public. Instead of fulfilling this obligation ... E&Y sat by silently while Lehman deceived the public by concealing [fraulent] transactions and misrepresenting the Company’s leverage. By doing so, E&Y directly facilitated a major accounting fraud, and helped Lehman mislead the public as to its true financial condition. E&Y, which reaped over $150 million in fees from Lehman, must be held accountable for its role in this fraud.

Note: For key reports from reliable sources detailing the fraud that led to the financial crisis and bailout of Wall Street by taxpayers, click here.

Why Is the UBS Whistle-Blower Headed to Prison?
2009-10-06, Time Magazine
Posted: 2010-12-28 18:03:04
http://www.time.com/time/business/article/0,8599,1928897,00.html

No one, including himself, would argue that Bradley Birkenfeld, 44, is a saint. But at the same time, almost no one in the U.S. government would deny that Birkenfeld was absolutely essential to its landmark tax-evasion case against Swiss banking giant UBS. The former UBS employee turned whistle-blower exposed the previously hidden world of offshore tax shelters, which cheats the Treasury out of about $100 billion a year. Thanks to his insider information, UBS was fined $780 million, and it promised to "exit entirely" from the U.S. tax-shelter business and to provide the names of thousands of American tax dodgers, from which hundreds of millions of dollars still might be collected. It also led to new tax treaties with the Swiss that should provide unprecedented tax information in civil cases and better access to such data in criminal cases. Considering Birkenfeld's help, many observers wonder why the Justice Department decided to arrest and prosecute him. Many critics believe the decision to prosecute Birkenfeld, whom some consider the most important whistle-blower in years, sends the worst possible message to other financial-industry insiders who might be considering coming forward. The Government Accountability Project (GAP), a Washington watchdog organization that has extensive whistle-blower experience, says a chilling effect is already apparent: a senior executive at a European bank that offers similar U.S. tax shelters is having second thoughts about going public because of the Birkenfeld case.

Note: For lots more, including Obama's tight ties with UBS, see the New York Daily News article here.

A Secretive Banking Elite Rules Trading in Derivatives
2010-12-12, New York Times
Posted: 2010-12-20 17:57:28
http://www.nytimes.com/2010/12/12/business/12advantage.html

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential. Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks. The banks in this group ... have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available. Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small. The size and reach of this market has grown rapidly over the past two decades. Pension funds today use derivatives to hedge investments. States and cities use them to try to hold down borrowing costs. Airlines use them to secure steady fuel prices. Food companies use them to lock in prices of commodities like wheat or beef.

Note: For a treasure trove of reports from reliable sources detailing the amazing control of major banks over government and society, click here.

Allied Irish Banks to pay €40m bonuses despite bailout
2010-12-08, The Guardian (One of the UK's leading newspapers)
Posted: 2010-12-20 17:43:10
http://www.guardian.co.uk/business/2010/dec/08/allied-irish-banks-pay-bonuses...

Stricken Allied Irish Banks is preparing to hand out €40m (£34m) of bonuses next week – despite being on the brink of receiving another emergency bailout from the Irish government. As many as 2,400 bankers in its Dublin capital markets division are to receive the payments on 17 December under agreements struck with the bank in 2008. The bank, 19% owned by Ireland's taxpayers but expected to reach 95% state-ownership, had originally been blocked from making the payments under one of the government's bailout programmes. But legal action by a trader, John Foy, over a deferred €161,000 bonus awarded in 2008 has led the bank to conclude it will need to pay bonuses to many of the staff to whom they were awarded for that year. The bonuses are being handed out at a time when the government is instigating four years of tax rises and brutal cuts to benefits. Bankers are receiving much of the blame for forcing Ireland to take international assistance and implement the austerity budgetary measures.

Note: For lots more from reliable sources on the worldwide bailout by taxpayers of failed banks, click here.

Senator Bernie Sanders on the War Between the Shrinking Middle Class and the Wealthy
2010-11-30, U.S. Senate Testimony
Posted: 2010-12-13 21:22:46
http://sanders.senate.gov/newsroom/news/?id=c8f26b05-01e7-429f-a5e0-a9a6bd1a0f40

Mr. SANDERS. Mr. President, there is a war going on in this country, and I am not referring to the wars in Iraq or Afghanistan. I am talking about a war being waged by some of the wealthiest and most powerful people in this country against the working families of the United States of America, against the disappearing and shrinking middle class of our country. The reality is, many of the Nation's billionaires are on the warpath. They want more, more, more. Their greed has no end, and apparently there is very little concern for our country or for the people of this country if it gets in the way of the accumulation of more and more wealth and more and more power. The percentage of income going to the top 1 percent has nearly tripled since the 1970s. In the mid-1970s, the top 1 percent earned about 8 percent of all income. In the 1980s, that figure jumped to 14 percent. In the late 1990s, that 1 percent earned about 19 percent. And today, as the middle class collapses, the top 1 percent earns 23 1/2 percent of all income--more than the bottom 50 percent. Today, if you can believe it, the top one-tenth of 1 percent earns about 12 cents of every dollar earned in America.

Note: To see a video of this amazing speech by courageous Senator Bernie Sanders (Independent), click here.

A Real Jaw Dropper at the Federal Reserve
2010-12-02, Yahoo News/Huffington Post
Posted: 2010-12-13 21:20:11
http://news.yahoo.com/s/huffpost/20101202/cm_huffpost/791091

As a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed. It is unfortunate that it took this long, and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve's website. This is a major victory for the American taxpayer and for transparency in government. After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar bailout of Wall Street and corporate America. What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country.

Note: The author is Senator Bernie Sanders (I-VT). For key reports from reliable sources on the massive federal bailout of the biggest banks and financial firms, click here.

Brooksley Born foresaw disaster but was silenced
2010-12-05, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2010-12-13 21:05:19
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/05/BUHC1GLHFA.DTL

There's a brief scene in "Inside Job," the locally produced documentary on the Great Financial Meltdown, in which a colleague of the head of the Commodity Futures Trading Commission in 1997 describes how "blood drained from her face" after receiving a phoned-in tongue-lashing from deputy Treasury Secretary Larry Summers. The target of Summers' wrath was Brooksley Born, ... the first female president of the Stanford Law Review and a recognized legal expert in the area of complex financial instruments. Her crime: Born had the temerity to push for regulation of the increasingly wild trading in derivatives, which, as we learned a decade later, helped bring the U.S. economy, and much of the world's, to its knees. Summers, with 13 bankers in his office, told Born to get off it "in a very grueling fashion," said the colleague. The story is told in much more detail in All the Devils are Here, the latest, but eminently worthwhile, book on the roots of the crisis, by Bethany McLean and ... Joe Nocera. It makes for dispiriting, even appalling, reading. Responding to growing evidence of manipulation and fraud in unregulated derivatives trading - "the hippopotamus under the rug," as Born and others referred to it - Born suggested the commission should perhaps be given some sort of oversight. She had a 33-page policy paper drawn up, full of questions and suggestions, like, for example, whether establishing a public exchange for derivatives might not be a bad idea. Responding to the policy paper, Summers, "screaming at her," according to the book, told Born the bankers sitting in his office "threatened to move their derivatives business to London," if she didn't stop.

Note: For key reports on financial fraud from reliable sources, click here.

Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms
2010-12-02, The Washington Post
Posted: 2010-12-06 11:51:14
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR20101201068...

New disclosures show the Federal Reserve rushed trillions of dollars in emergency aid not just to Wall Street but also to ... foreign-owned banks in 2008 and 2009. The central bank's aid programs also supported U.S. subsidiaries of banks based in East Asia, Europe and Canada. The biggest users of the Fed lending programs were some of the world's largest banks, including Citigroup, Bank of America, Goldman Sachs, Swiss-based UBS and Britain's Barclays, according to more than 21,000 loan records released [December 1] under new financial regulatory legislation. The data reveal banks turning to the Fed for help almost daily in the fall of 2008 as the central bank lowered lending standards and extended relief to all kinds of institutions it had never assisted before. The extent of the lending to major banks - and the generous terms of some of those deals - heighten the political peril for a central bank that is already under the gun for a wide range of actions, including a recent decision to try to stimulate the economy by buying $600 billion in U.S. bonds. "The American people are finally learning the incredible and jaw-dropping details of the Fed's multitrillion-dollar bailout of Wall Street and corporate America," said Sen. Bernard Sanders (I-Vt.), a longtime Fed critic whose provision in the Wall Street regulatory overhaul required the new disclosures. "Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations." The Fed launched emergency programs totaling $3.3 trillion in aid, a figure reached by adding up the peak amount of lending in each program.

Note: The figure of $3.3 trillion cited in this article was simply the peak amount lent at one moment in time; the total amount lent by the Fed over the years covered by the data exceeded $20 trillion. For analysis of this data release, click here.

Corporate Profits Were the Highest on Record Last Quarter
2010-11-24, The New York Times
Posted: 2010-11-29 21:33:30
http://www.nytimes.com/2010/11/24/business/economy/24econ.html

The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report. That is the highest figure recorded since the government began keeping track over 60 years ago. The next-highest annual corporate profits level on record was in the third quarter of 2006, when they were $1.655 trillion. Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. That is the highest share since the fourth quarter of 2006, when they accounted for 11.7 percent of output.

Note: Long-term unemployment is at a record high, yet corporations are raking in record profits. With record profits, why aren't corporations hiring more new employees? For many reports from reliable souces on corporate profiteering, click here.

Winning the Class War
2010-11-27, The New York Times
Posted: 2010-11-29 21:31:09
http://www.nytimes.com/2010/11/27/opinion/27herbert.html

The class war that no one wants to talk about continues unabated. Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in. Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time. The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about [record corporate] profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.” Anyone who thinks there is something beneficial in this vast disconnect between the fortunes of the American elite and those of the struggling masses is just silly. It’s not even good for the elite. The rich may think that the public won’t ever turn against them. But to hold that belief, you have to ignore the turbulent history of the 1930s.

Note: For many reports from reliable souces on corporate profiteering, click here.

Bernanke's worst nightmare: Ron Paul
2010-11-12, CNN
Posted: 2010-11-22 12:25:00
http://money.cnn.com/2010/11/12/news/economy/Bernanke_Paul/index.htm

Ben Bernanke has had his hands full since his first day on the job as Federal Reserve chairman nearly five years ago. It's about to get even tougher. His harshest critic on Capitol Hill, Rep. Ron Paul of Texas, is about to become one of his overseers. Paul, who would like to abolish the Fed and the nation's current monetary system, will become the chairman of the House Subcommittee on Domestic Monetary Policy. Paul doesn't think he'll be able to move his proposal to eliminate the Fed. But he said he does intend to use his new position as "a mini-bully pulpit" to criticize Fed policy and call more attention to what he sees as its negative consequences. And Paul vows to try again to authorize Congressional audits of the Fed's decisions on the economy, a proposal that passed the House last year but was essentially gutted from the final version of the financial regulatory overhaul legislation. Paul argues the Fed is making a serious mistake by pumping more money into the economy to try to spur more spending and growth. He predicts it will only lead to further declines in value of the dollar, inflation and higher interest rates rather than the lower rates the Fed is shooting for. Paul thinks that will bring about another economic crisis.

Note: To understand why Congressman Ron Paul wants to eliminate the Federal Reserve, click here.

"Inside Job" rigorously shows how financial crisis happened
2010-10-29, Denver Post (Denver's leading newspaper)
Posted: 2010-11-15 16:48:12
http://www.denverpost.com/movies/ci_16451155

Somebody owes us $20 trillion. "Inside Job," a riveting, eye-opening, infuriating documentary about the financial collapse of 2008, coolly presents a prosecutor's brief against the culprits who engineered the greatest economic crisis since the Great Depression. They occupy both sides of the legislative aisle, corporate boardrooms, Ivy League faculty lounges and bank headquarters. They made money – sometimes obscene amounts of it – while rigging a monetary meltdown that left middle-class taxpayers holding the bag, and thousands of less-fortunate former homeowners holding cardboard signs beside freeway on-ramps. This is no dry economics lesson; it is a vital wakeup call. The presentation is articulate and rigorously factual, presented in six chapters, from "How We Got There" to "Accountability." The financial earthquake was not only entirely avoidable, but was utterly predictable given the steady erosion of scrutiny of financial markets here and abroad. Reducing state monitoring under the Reagan administration set the stage for the savings-and-loan crisis and the collapse of the junk-bond market. But that was a luau compared with what lay ahead. Successive administrations, Democratic and Republican alike, heeded advisers pushing for further deregulation, leading to WorldCom, Enron, the dot-com bubble and the 2008 panic. Many of those laissez-faire advocates were prominent academics receiving sizable consulting fees to testify in antitrust cases and in Congress on Wall Street's behalf.

Note: For lots more from reliable sources on the long history of criminal and corrupt practices of major financial powers and regulatory bodies, click here.

Is hard currency on its way out? Introducing the new virtual world currency.
2010-10-28, Christian Science Monitor
Posted: 2010-11-08 09:45:00
http://www.csmonitor.com/Business/The-Daily-Reckoning/2010/1028/Is-hard-curre...

When discussing reserve currency alternatives to the US dollar, conversation almost inevitably returns to the International Monetary Fund’s “synthetic reserve asset,” the Special Drawing Right (SDR). However, the SDR basket of currencies is noticeably antiquated in its design, including only the currencies of industrialized nations. This week, foreign exchange manager Overlay Asset Management [OAM] has announced a currency basket it’s launching in order to offer a more up-to-date “virtual world reserve currency.” According to the Financial Times: “[OAMs] Wealth Preservation Currency Index consists of the currencies of the world’s 15 largest economies, weighted by their gross domestic product, adjusted for purchasing power parity. Overlay’s rationale is that investment portfolios are often heavily exposed to the dollar, but many investors have doubts as to whether the greenback can retain its value and remain the world’s primary reserve currency.” The global “currency war” — as many are calling it — continues to heat up, with no obvious resolution in sight. While it wouldn’t be a simple, quick, or painless process to replace the US dollar as reserve currency, it seems inevitable that calls for just such action are bound to increase, especially if currently loose US monetary policy ... continues unabated.

Note: You can read more details in Financial Times coverage of how a new world currency index has launched.

Documentary 'Inside Job' only tells part of story
2010-10-24, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2010-11-01 10:17:16
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/24/BUAV1G0LEA.DTL

"Inside Job," as the movie title implies, sees the 2008 financial meltdown, its causes and ongoing catastrophic consequences, as the work of crooks. Crooks as in members of the financial services industry. Aided and abetted by ... administrations of both political stripes, ratings agencies and regulators, all of whom were committed to an ideology that enabled larceny on a grand scale. The documentary, written, produced and directed by Bay Area high-tech entrepreneur turned filmmaker Charles Ferguson, opened in Bay Area cinemas [on October 22]. Even if you've read through the growing pile of books, congressional hearings and material generated by the Financial Crisis Inquiry Commission, it has plenty to remind you why you are furious, all over again. If further proof is needed, the film effectively demolishes the "who knew?" argument proffered by Goldman Sachs Group CEO Lloyd Blankfein and his peers. And it makes a convincing case that much of the obscenely compensated financial services industry has been rotten to the core for decades, but is yet to be held truly accountable for activities, both immoral and illegal.

Note: For lots more from reliable sources on the criminal practices of the largest financial corporations and regulatory agencies which led to the current economic crisis, click here.

Speedy New Traders Make Waves Far From Wall Street
2010-05-17, New York Times
Posted: 2010-11-01 10:05:24
http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-fa...

Inside the humdrum offices of a tiny trading firm called Tradeworx, workers ... tend high-speed computers that typically buy and sell 80 million shares a day. But on the afternoon of May 6, as the stock market began to plunge in the “flash crash,” someone here walked up to one of those computers and typed the command HF STOP: sell everything and shutdown. Across the country, several of Tradeworx’s counterparts did the same. In a blink, some of the most powerful players in the stock market — high-frequency traders — went dark. The result sent chills through the financial world. After the brief 1,000-point plunge in the stock market that day, the growing role of high-frequency traders in the nation’s financial markets is drawing new scrutiny. Over the last decade, these high-tech operators have become sort of a shadow Wall Street — from New Jersey to Kansas City, from Texas to Chicago. Depending on whose estimates you believe, high-frequency traders account for 40 to 70 percent of all trading on every stock market in the country. Some of the biggest players trade more than a billion shares a day. These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said.

Note: For key reports on the dubious practices which underlay the financial crisis and the impoverishment of the public treasury, click here.

Commodity Futures Trading Commission judge says colleague biased against complainants
2010-10-19, Washington Post
Posted: 2010-10-24 20:43:31
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/19/AR20101019072...

As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge. [The CFTC oversees trading of the nation's most important commodities, including oil, gold and cotton.] Painter said Judge Bruce Levine ... had a secret agreement with a former Republican chairwoman of the agency to stand in the way of investors filing complaints with the agency. "On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor," Painter wrote. "A review of his rulings will confirm that he fulfilled his vow. Judge Levine ... forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case." Levine was the subject of a story 10 years ago in the Wall Street Journal, which said that except in a handful of cases in which defunct firms failed to defend themselves, Levine had never ruled in favor of an investor. Gramm [wife of former senator Phil Gramm (R-Tex.)], was head of the CFTC just before president Bill Clinton took office. She has been criticized by Democrats for helping firms such as Goldman Sachs and Enron gain influence over the commodity markets. After leaving the CFTC, she joined Enron's board.

Note: For lots more from reliable sources on government corruption, click here.

Wall Street Pay: A Record $144 Billion
2010-10-11, Wall Street Journal
Posted: 2010-10-17 18:32:02
http://online.wsj.com/article/SB10001424052748704518104575546542463746562.html

Compensation on Wall Street is on pace to break a record high for a second consecutive year, as more than three dozen top banks and securities firms will pay $144 billion in salary and benefits ... a 4% increase from the $139 billion paid out in 2009. Compensation was expected to rise at 26 of the 35 firms. Overall, Wall Street is expected to pay 32.1% of its revenue to employees, the same as last year, but below the 36% in 2007. Profits, which were depressed by losses in the past two years, have bounced back from the 2008 crisis. But the estimated 2010 profit of $61.3 billion for the firms surveyed still falls about 20% short from the record $82 billion in 2006. Over that same period, compensation across the firms in the survey increased 23%. "Until focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels," said Charles Elson, director of the Weinberg Center for Corporate Governance.

Note: For many key reports from reliable sources on Wall Street's profiteering, click here.

Congressional Staffers Gain From Trading in Stocks
2010-10-11, Wall Street Journal
Posted: 2010-10-17 18:29:52
http://online.wsj.com/article/SB10001424052748703431604575522434188603198.html

Chris Miller nearly doubled his $3,500 stock investment in a renewable-energy firm in 2008. It was a perfectly legal bet, but he's no ordinary investor. Mr. Miller is the top energy-policy adviser to Nevada Democrat and Senate Majority Leader Harry Reid, who helped pass legislation that wound up benefiting the firm. Mr. Miller isn't the only Congressional staffer making such stock bets. At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009. The Journal analysis showed that an aide to a Republican member of the Senate Banking Committee bought Bank of America Corp. stock before results of last year's government stress tests eased investor concerns about the health of the banking industry. A top aide to the House Speaker profited by trading shares of Freddie Mac and Fannie Mae in a brokerage account with her husband two days before the government authorized emergency funding for the companies. The aides identified by the Journal say they didn't profit by making trades based on any information gathered in the halls of Congress. Even if they had done so, it would be legal, because insider-trading laws don't apply to Congress. Unlike many Executive Branch employees, lawmakers and aides don't have restrictions on their stock holdings and ownership interests in companies they oversee.

Note: Why is Congress exempt from so many of its own laws? Who is willing to start a movement to stop this? For lots more on government corruption from major media sources, click here.

American Companies Wrest Big Earnings From Lower Revenue
2010-10-03, Wall Street Journal
Posted: 2010-10-17 18:25:29
http://online.wsj.com/article/SB10001424052748704523604575511864156149040.html

U.S. companies are rebounding quickly from the recession and posting near-historic profits, the result of aggressively re-tooling their operations to cope with lower revenue and an uncertain outlook. An analysis by The Wall Street Journal found that companies in the Standard & Poor's 500-stock index posted second-quarter profits of $189 billion, up 38% from a year earlier and their sixth-highest quarterly total ever, without adjustment for inflation. For all U.S. companies, the Commerce Department estimates second-quarter after-tax profits rose to an annual rate of $1.208 trillion, up 3.9% from the first quarter and up 26.5% from a year earlier. That annual rate is the highest on record, though it doesn't account for inflation. As a percentage of national income, after-tax profits were the third-highest since 1947, surpassed only by two quarters in 2006, near the peak of the last economic expansion. The data indicate that big companies are recovering from the downturn faster and more strongly than the overall economy, helping send stock prices higher this year. To achieve that performance, companies laid off hundreds of thousands of workers, closed less-profitable units, shifted work to cheaper regions and streamlined processes. Despite the hefty profits, executives aren't expected to boost spending on new employees, products and equipment anytime soon. "We've focused on permanent changes that won't have to be undone as sales improve," said John Riccitiello, chief executive of Electronic Arts.

Note: For highly revealing reports on income inequality, click here.

BofA halts foreclosures in 50 states
2010-10-08, Salt Lake Tribune/Associated Press
Posted: 2010-10-17 18:23:33
http://www.sltrib.com/sltrib/money/50440207-79/bank-foreclosures-documents-fo...

A mushrooming crisis over potential flaws in foreclosure documents is threatening to throw the real estate industry into chaos as Bank of America [today] became the first bank to stop taking back tens of thousands of foreclosed homes in all 50 states. The move ... adds to growing concerns that mortgage lenders have been evicting home­owners using flawed court papers, without verifying the information in them. Bank of America Corp., the nation’s largest bank, said [its decision] applies to homes that the bank takes back itself and those that it transfers to investors such as mortgage giants Fannie Mae and Freddie Mac. The bank did so in reaction to mounting pressure from public officials inquiring about the accuracy of foreclosure documents. A document obtained last week by The Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed thousands of foreclosure documents a month and typically didn’t read them. The official, Renee Hertzler, said in a February deposition that she signed up to 8,000 such documents a month.

Note: For any who might be facing home foreclosure, don't miss the CNN News clip with important advice from a courageous congresswoman available here. For many key reports from reliable sources on the corrupt practices of major banks, click here.

Super-Rich Investors Buy Gold by Ton
2010-10-04, ABC News/Reuters
Posted: 2010-10-17 18:21:44
http://abcnews.go.com/Business/wireStory?id=11793612

The world's wealthiest people have responded to economic worries by buying gold by the bar -- and sometimes by the ton -- and by moving assets out of the financial system, bankers catering to the very rich said [today]. Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit. "They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest. UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce [today], near the record level reached last week. Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

Note: Gold has increased from under $300/oz at the time of 9/11 to over $1,300 in Oct. 2010. Is it a bubble, or a sign that our economy could be collapsing?

U.S. companies buy back stock in droves as they hold record levels of cash
2010-10-07, Washington Post
Posted: 2010-10-11 11:06:35
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR20101006067...

For months, companies have been sitting on the sidelines with record piles of cash. Now they're starting to deploy some of that money - not to hire workers or build factories, but to prop up their share prices. Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies [do not plan to] spend their cash on the job-generating activities that could produce economic growth. "They don't know what they want to do with all the cash they're sitting on," said Zachary Karabell, president of RiverTwice Research. Historically low interest rates are also prompting some companies to borrow to repurchase shares. Microsoft, for instance, borrowed $4.75 billion last month by issuing new bonds at rock-bottom interest rates and announced it would use some of that money to buy back shares. The company already has nearly $37 billion in cash. A share buyback is a quick way to make a stock more attractive to Wall Street. It improves a closely watched metric known as earnings per share, which divides a company's profit by the total number of shares on the market. Such a move can produce a sudden burst of interest in a stock, improving its price.

Note: For lots more from reliable sources on the massive profiteering by corporate recipients of government financial largesse, click here.

Probe Circles Globe to Find Dirty Money
2010-09-03, Wall Street Journal
Posted: 2010-09-13 11:24:26
http://online.wsj.com/article/SB10001424052748703431604575468094090700862.html

An intelligence analyst named Eitan Arusy [at the district attorney's office in Manhattan] began studying a slim lead. Suspicious money was flowing to and from an Iranian nonprofit. Mr. Arusy's probe, later merged with a Justice Department inquiry, ultimately widened to some of Europe's vaunted banks, helping spark a global inquiry that found they actively evaded U.S. law in aiding sanctioned countries, banks or other enterprises move some $2 billion undetected. Nine banks have been caught up in the probe. These weren't rogue operations. The investigators discovered that the banks ran dedicated units to systematically aid the undetected transfer of money through the U.S. banking system. They did that by removing identifying coding on fund transfers so they could evade automated U.S. bank computer systems designed to spot money flowing from a sanctioned state. The far-reaching inquiry started small. Mr. Arusy arrived at the district attorney's office in 2005 to help ferret out illegal financing tied to the Middle East. Though the office prosecutes everyday crime, it carved out a role infiltrating crimes tied to the city's financial markets and institutions. Its expertise dates to the 1990s, when it led the investigation of Bank of Credit & Commerce International, or BCCI, which collapsed in a fraud and money-laundering scandal.

Note: For a treasure trove of articles from reliable sources revealing the criminality of many major financial corporations, click here.

IMF blueprint for a global currency – yes really
2010-08-04, Financial Times
Posted: 2010-08-09 10:15:52
http://ftalphaville.ft.com/blog/2010/08/04/306346/imf-blueprint-for-a-global-...

[An] IMF paper [that] first came out in April, 2010, [a]uthored by Reza Moghadam, director of the IMF’s strategy, policy and review department, ... discusses how the IMF sees the International Monetary System evolving after the financial crisis. In the eyes of the IMF ... the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency. And that, the IMF says, is largely because [sovereign nations] cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves. The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF. All in all, the IMF believes there has simply been too much reserve hoarding going on. A global currency makes the most sense, the paper concludes — especially since the SDR [Special Drawing Rights] is currently just an accounting tool that draws on the freely usable currencies of member states, not an actual currency itself.

Note: For key news articles on the global financial crisis to which this IMF report is responding, click here.

China rating agency condemns rivals
2010-07-21, Financial Times
Posted: 2010-08-09 10:13:00
http://www.ft.com/cms/s/0/5632a0b8-94b7-11df-b90e-00144feab49a.html

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated. “The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times. “China is the biggest creditor nation in the world and with the rise and national rejuvenation of China we should have our say in how the credit risks of states are judged.” On the corporate side, Mr Guan argues Moody’s Investors Service, Standard & Poor’s and Fitch Ratings – the three companies that dominate the global credit rating industry – have become too close to the clients they are supposed to be objectively assessing. He specifically criticised the practice of “rating shopping” by companies who offer their business to the agency that provides the most favourable rating. In the aftermath of the financial crisis “rating shopping” has been one of the key complaints from western regulators , who have heavily criticised the big three agencies for handing top ratings to mortgage-linked securities that turned toxic when the US housing market collapsed in 2007.

Note: For key news articles on the global financial crisis, click here.

Goldman reveals where bailout cash went
2010-07-24, USA Today
Posted: 2010-08-03 08:54:31
http://www.usatoday.com/money/industries/banking/2010-07-24-goldman-bailout-c...

Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public [on July 23]. Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia. Goldman Sachs received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday's report. Overall, Goldman Sachs received a $12.9 billion payout from the government's bailout of AIG, which was at one time the world's largest insurance company. Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG's collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money. Shouldn't Goldman Sachs be expected to collect from those institutions "before they collect the taxpayers' dollars?" Grassley asked. "It's a little bit like a farmer, if you got crop insurance, you shouldn't be getting disaster aid."

Note: For lots more from reliable sources on the Wall Street bailout by taxpayers, click here.

Insider Trading Inside the Beltway
2010-07-02, UCLA School of Law
Posted: 2010-07-12 10:33:21
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1633123

A 2004 study of the results of stock trading by United States Senators during the 1990s found that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade. Under current law, it is unlikely that Members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading. This article analyzes present law to determine whether Members of Congress, Congressional employees, and other federal government employees can be held liable for trading on the basis of material nonpublic information. It argues that there is no public policy rationale for permitting such trading and that doing so creates perverse legislative incentives and opens the door to corruption. The article explains that the Speech or Debate Clause of the U.S. Constitution is no barrier to legislative and regulatory restrictions on Congressional insider trading.

Note: Do you think that these highly successful investors in the US Senate might have a vested interest in protecting the existing financial and legal structure that makes their profits possible and protects them from criminal charges?

How Goldman gambled on starvation
2010-07-02, The Independent (One of the UK's leading newspapers)
Posted: 2010-07-12 10:28:40
http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-how...

This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions." Through the 1990s, Goldman Sachs and others lobbied hard and the regulations [controlling agricultural futures contracts] were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born. The speculators drove the price through the roof.

Note: For an abundance of reports from major media sources detailing the many complex and hidden strategies employed by financial corporations to keep their hyper-profits flowing in, click here.

20 people arrested at the G20 tell of ‘inhumane’ treatment at the hands of police
2010-06-28, Toronto Star (One of Toronto's leading newspapers)
Posted: 2010-07-12 10:10:34
http://www.thestar.com/news/gta/torontog20summit/article/829921--i-will-not-f...

*Lulu Maxwell, 17, Grade 12, Rosedale Heights: Maxwell and a friend were hanging around near Queen and Dufferin Sts. at a convergence centre for protesters on Sunday afternoon when police started making arrests. “My friend was blowing bubbles and I was scribbling peace signs on the sidewalk.” Within minutes, her friend was grabbed and Lulu was put up against a wall. Her backpack was searched and Lulu says an officer said she could be charged with possession of dangerous weapons “because I had eyewash solution in my backpack.” She was taken to the detention centre and almost 12 hours after her arrest was allowed to call her parents. She was released, without charges being laid, at 5 a. m. *Erin Boynton, 24, London, Ont. She was arrested at The Esplanade early Sunday morning after police boxed dozens of protesters in. “I was with a protest marching peacefully down Yonge from Dundas Square,” she said. “When the cops came at us, many people scattered and those who were left in front of the (Novotel) got arrested.” She said police came from all sides and “squished us in. They didn’t give us a warning to leave…. just announced that we are arresting all of you.” She said a lot of people at the detention centre were innocent bystanders. “The police violated all our rights . . . there was police brutality. Quite frankly, it was quite disgusting.” Boynton wasn’t charged.

Note: For lots more from major media sources on mounting threats to civil liberties, click here.

Goldman Sachs exec to advise central bank
2010-06-29, Businessweek/Associated Press
Posted: 2010-07-12 09:59:12
http://www.businessweek.com/ap/financialnews/D9GLB2AO3.htm

The chief executive of Goldman Sachs Canada has been named a special adviser to the head of Canada's central bank. The Bank of Canada said [on June 29] that Timothy Hodgson will advise central bank head Mark Carney, a former Goldman Sachs executive, on financial reform. Carney says Hodgson is one of Canada's top investment bankers. Hodgson is leaving Goldman Sachs. The company has come under sharp criticism over civil fraud charges brought by the U.S. Securities and Exchange Commission and because of the high pay its executives and traders received during the financial crisis. Hodgson joined Goldman Sachs in 1990 and became CEO of its Canadian operations in 2005.

Note: So Canada's central bank head, a former Goldman Sachs exec, will now be advised by the chief executive of Goldman Sachs Canada. Hmmmmm.

Sticking the public with the bill for the bankers’ crisis
2010-06-27, Globe and Mail (One of Toronto's leading newspapers)
Posted: 2010-07-05 10:39:36
http://www.theglobeandmail.com/news/world/g8-g20/opinion/sticking-the-public-...

My city feels like a crime scene and the criminals are all melting into the night, fleeing the scene. No, I’m not talking about the kids in black who smashed windows and burned cop cars on Saturday. I’m talking about the heads of state who, on Sunday night, smashed social safety nets and burned good jobs in the middle of a recession. Faced with the effects of a crisis created by the world’s wealthiest and most privileged strata, they decided to stick the poorest and most vulnerable people in their countries with the bill. How else can we interpret the G20’s final communiqué, which includes not even a measly tax on banks or financial transactions, yet instructs governments to slash their deficits in half by 2013. This is a huge and shocking cut, and we should be very clear who will pay the price: students who will see their public educations further deteriorate as their fees go up; pensioners who will lose hard-earned benefits; public-sector workers whose jobs will be eliminated. And the list goes on. These types of cuts have already begun in many G20 countries including Canada, and they are about to get a lot worse. But there is nothing to say that citizens of G20 countries need to take orders from this hand-picked club. Already, workers, pensioners and students have taken to the streets against austerity measures in Italy, Germany, France, Spain and Greece, often marching under the slogan: “We won’t pay for your crisis.” And they have plenty of suggestions for how to raise revenues to meet their respective budget shortfalls. Many are calling for a financial transaction tax that would slow down hot money and raise new money for social programs.

Note: This report from Toronto is by Naomi Klein, the author of The Shock Doctrine: The Rise of Disaster Capitalism. For powerful evidence that the violence at the recent G20 meeting was largely instigated by undercover police, click here.

U.S. banks' role in Mexican drug trade
2010-06-30, San Francisco Chronicle/Bloomberg News
Posted: 2010-07-05 10:25:35
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/06/29/BU2L1E6LV2.DTL

Wachovia [Bank] ... made a habit of helping move money for Mexican drug smugglers. San Francisco's Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers - including the cash used to buy four planes that shipped a total of 22 tons of cocaine. The admission ... sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years. Wachovia admitted it didn't do enough to spot illicit funds in handling $378.4 billion for Mexican currency exchange houses from 2004 to 2007. That's the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history - a sum equal to one-third of Mexico's current gross domestic product. "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor who handled the case. "It's the banks laundering money for the cartels that finances the tragedy," said Martin Woods, director of Wachovia's anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia's branch network. "If you don't see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you're missing the point," he said.

Note: For abundant reports from reliable sources on the many dubious ways in which major financial firms make their profits, click here.

Police powers expanded for G20
2010-06-25, CBC News
Posted: 2010-06-28 11:08:47
http://www.cbc.ca/canada/toronto/story/2010/06/25/g20-new-powers.html

Police forces in charge of security at the G20 summit in Toronto have been granted special powers for the duration of the summit. The new powers took effect [on June 21] and apply along the border of the G20 security fence that encircles a portion of the downtown core. This area — the so-called red zone — includes the Metro Toronto Convention Centre, where delegates will meet. Under the new regulations, anyone who comes within five metres of the security area is obliged to give police their name and state the purpose of their visit on request. Anyone who fails to provide identification or explain why they are near the security zone can be searched and arrested. The new powers are designed specifically for the G20, CBC's Colin Butler reported Friday. Ontario's cabinet quietly passed the new rules on June 2 without legislature debate. Civil liberties groups are concerned about the new regulations. Anyone who refuses to identify themselves or refuses to provide a reason for their visit can be fined up to $500 and face up to two months in jail. The regulation also says that if someone has a dispute with an officer and it goes to court "the police officer's statement under oath is considered conclusive evidence under the act."

End Is Seen to Free Checking
2010-06-16, Wall Street Journal
Posted: 2010-06-28 09:45:20
http://online.wsj.com/article/SB10001424052748703513604575311093932315142.html

Bank of America Corp. and other banks are preparing new fees on basic banking services as they try to replace revenue lost to regulatory rules, in a push that is expected to spell an end to free checking accounts for many Americans. Free checking accounts, which have been widely available for more than a decade, have been a boon to middle-class consumers and attracted low-income customers to the banking system for the first time. Customers will likely be required to pay new monthly maintenance fees on the most basic accounts that don't generate a lot of activity. To avoid a fee, customers will have to maintain certain account balances or frequently use other banking services, such as credit and debit cards, automated teller machines and online accounts. Some consumer advocates warn the new fees will whack consumers who now manage their bank accounts to avoid such charges. The transformation of checking accounts comes at a time when banks are bouncing back from the steepest financial losses in a generation and are facing new regulations. To accelerate that recovery and recoup losses from new banking rules, financial institutions are increasingly leaning on customers who don't now generate enough revenue for the bank.

Note: Why hasn't the federal government protected consumers from this sort of response by the banking industry to new regulations imposed after the massive taxpayer bailout of these failing corporations?

Fed dodges bullet as House drops audit idea
2010-06-15, Reuters News
Posted: 2010-06-20 18:23:21
http://www.reuters.com/article/idUSN1527338120100615

The Federal Reserve scored a political victory ... as Democrats mulling financial reform backed off measures that would expose monetary policy to audits and make the head of the New York Fed a political appointee. The U.S. House of Representatives had approved a bill in December that included a provision, championed by Texas Representative Ron Paul, that would have opened the Fed's interest rate policy to congressional audits. But in a statement on Tuesday, House Democrats participating in negotiations over a final financial reform bill signaled a willingness to live with a narrower Senate audit provision that does not cover monetary policy. The Fed, which has admitted it was too complacent about regulatory oversight in the run-up to the global financial crisis, has come under heavy fire for being too close to the banks it regulates. The House Democrats also said they would try to defeat a plan contained in the Senate bill under debate that would allow the U.S. president to name the head of the New York Fed, a step that Fed officials have argued would undercut the central bank's political independence. The U.S. central bank appears to be emerging largely unscathed by the regulatory reform efforts. It successfully fought off a Senate push last month that would have stripped it of its oversight of smaller banks, and is poised to emerge as the most powerful financial regulator when reforms are complete.

Note: A news search on both Google and Yahoo revealed that MSNBC was the only media to pick up this Reuters story, yet MSNBC then removed the story. Why might that be?

Lawmakers Negotiating Bank Bill Hold Industry Stocks
2010-06-17, Bloomberg/Businessweek
Posted: 2010-06-20 18:19:57
http://www.businessweek.com/news/2010-06-17/lawmakers-negotiating-bank-bill-h...

Lawmakers writing the biggest overhaul of financial regulations since the Great Depression may have a stake in the outcome. Eight of 11 senators and six of 22 House members on a conference committee writing the final legislation own stocks in financial companies affected by the legislation, disclosure statements released yesterday show. One senator and nine representatives who also sit on the committee got extensions of the filing deadline and haven't yet disclosed their holdings. "It's always a concern that personal interests influence legislation," said Lisa Gilbert, a lobbyist for the U.S. Public Interest Research Group, a Boston-based organization pushing for stronger financial regulations. Senator Judd Gregg of New Hampshire reported Bank of America stock holdings and a savings account valued between $1 million and $5 million. The 43 negotiators are trying to iron out differences between the House and Senate versions of the legislation as they respond to an economic crisis that forced the U.S. to provide $700 billion in bailout funds for New York-based Citigroup Inc. ... Bank of America Corp. and other banks.

Note: For abundant reports from reliable sources on government corruption, click here.

Former Fed chief Volcker backs change in system
2010-05-20, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2010-05-24 20:42:16
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/05/19/BU101DHAMC.DTL

The United States must curb consumption and credit and boost production and savings, but its citizens and leaders so far lack the will to change, economist Paul Volcker said. Volcker, 82, an adviser to the Obama administration, ... said the United States spiraled toward the Great Recession through an excess of debt that subsidized an appetite for consumer goods, many of them imported. The chief bugaboo, in Volcker's view, was a runaway financial sector that ... became a factory to make money by manipulating money. He said under-regulated financiers made big profits and bonuses by swapping derivatives and other exotic instruments that produced few of the widespread benefits - like better jobs and wages - that normally flow from investment. Now that this financial house of cards has collapsed, Volcker said, U.S. and world leaders must figure out how to stop powerful mega-banks and hedge funds from engaging in the same shenanigans that forced taxpayers to bail them out to prevent further catastrophe. "The central issue with which we have been grappling is the doctrine of 'too big to fail,' " Volcker said, alluding to how the United States bailed out institutions like insurer AIG to prevent their collapse from further damaging the economy.

Note: For a great collection of reports from major media sources on the hidden realities of the Wall Street crisis and the government bailout of big finance, click here.

Four Big Banks Score Perfect 61-Day Run
2010-05-12, New York Times
Posted: 2010-05-17 05:34:33
http://www.nytimes.com/2010/05/12/business/12bank.html

It is the Wall Street equivalent of a perfect game of baseball — 27 up, 27 down, the final score measured in millions of dollars a day. Despite the running unease in world markets, four giants of American finance managed to make money from trading every single day during the first three months of the year. Their remarkable 61-day streak is one for the record books. Perfect trading quarters on Wall Street are about as rare as perfect games in Major League Baseball. But Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase & Company produced the equivalent of four perfect games during the first quarter. Each one finished the period without losing money for even one day. Their showing ... underscored the outsize — and controversial — role that trading has assumed at major financial institutions. It also drives home the widening lead that a handful of big banks are enjoying over lesser rivals on post-bailout Wall Street. The four banks ... reaped big rewards without necessarily placing big bets that stocks or bonds would go up or down. “This is not about hitting home runs,” said Jaidev Iyer, who runs his own risk management consulting firm, J-Risk Advisors. “This is just, as we call it, milking the market and your captive client base.”

Note: For an astounding list on the Forbes website of the richest companies in the world by assets, click here. All of the top 10 companies are banks, with collective assets of over $22 trillion! Yet we as taxpayers continue to pay to bail them out when they have problems. Is something wrong with this picture? For a graphic representation of this, click here. And for an abundance of deep reporting in major media articles on the hidden realities of Wall Street's shadowy operations, click here.

Plan for Congressional Audits of Fed Dies in Senate
2010-05-07, Wall Street Journal
Posted: 2010-05-17 05:31:14
http://online.wsj.com/article/SB10001424052748704370704575228164133105390.html

Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors. Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors. Thursday's Senate showdown came after senators on the left and right joined forces to support Mr. Sanders' provision. "At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know." But Fed Chairman Ben Bernanke ... said in a letter to Congress the Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."

Note: For an abundance of deep reporting on the hidden realities of Wall Street's shadowy operations, click here.

The Trades of a Lifetime in 20 Minutes
2010-05-08, New York Times
Posted: 2010-05-10 14:16:28
http://www.nytimes.com/2010/05/08/business/08cancel.html

Someone on Wall Street just made a killing. That was the subject of so much chatter among professional investors once the smoke cleared from the sudden panic and recovery on Thursday [May 6] that briefly knocked some stocks down to a penny or two a share. Who had kept his cool during those terrifying minutes and scooped up some dreamlike bargains? One thing, however, is certain: By luck, savvy, lightning speed or all three, there was money — gobs of it — to be made from the bargains that came and went in an instant. On Friday the blogosphere was alight with conspiracy theories suggesting that perhaps the whole thing had been instigated by a big bank or a hedge fund looking to make a quick profit. Some investment pros surely made a fortune from the trillion-dollar market swing. “Somebody got Accenture at a penny. They’re ready to announce their retirement,” joked Daniel Seiver, a finance professor at San Diego State University. Investors who owned gold or United States Treasuries ... saw big gains as global investors sought havens. But even those gains were small compared with those won by options traders who had placed bets on an index that rises in value when volatility increases. “The guys who probably made the most money in this were options players,” said Larry Tabb, chief executive of the Tabb Group, a financial services consulting firm.

Note: This article refers to the record-breaking 1,000 point intra-day drop in the Dow Jones index on May 7. For an abundance of deep reporting on the hidden realities of Wall Street's shadowy operations, click here.

Origin of Wall Street’s Plunge Continues to Elude Officials
2010-05-08, New York Times
Posted: 2010-05-10 14:14:04
http://www.nytimes.com/2010/05/08/business/08trading.html

A day after a harrowing plunge in the stock market, federal regulators were still unable on Friday [May 7] to answer the one question on every investor’s mind: What caused that near panic on Wall Street? The cause or causes of the market’s wild swing remained elusive, leaving what amounts to a $1 trillion question mark hanging over the world’s largest, and most celebrated, stock market. The initial focus of the investigations appeared to center on the way a growing number of high-speed trading networks interact with one another and with venerable exchanges like the New York Stock Exchange. Most investors are unaware that these competing systems have fractured the traditional marketplace and have displaced exchanges like the Big Board as the dominant force in stock trading. In a joint statement issued after the close of trading, the S.E.C. and the Commodity Futures Trading Commission said they were ... looking particularly closely at how different trading rules on different exchanges, which temporarily halted trading on some markets while activity in the same stocks continued on other markets, might have contributed to the problem. The pressure in the less-liquid markets was amplified by the computer-driven trades, which led still other traders to pull back.

Note: For more information on the impact of the new high-speed computer-driven trading methods, click here.

Stock Traders Find Speed Pays, in Milliseconds
2009-07-24, New York Times
Posted: 2010-05-10 14:12:19
http://www.nytimes.com/2009/07/24/business/24trading.html

It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices. It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets. Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense. These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk. Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer. And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage. Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors.

Note: For a wealth of deep reporting on the hidden realities of Wall Street's shadowy operations, click here.

'Goldman Conspiracy' must kill reforms
2010-05-04, MarketWatch (a Wall Street Journal Digital Network website)
Posted: 2010-05-10 13:54:43
http://www.marketwatch.com/story/goldman-conspiracy-must-kill-bank-reform-201...

Capitalism is dead. The economy has a new Invisible Hand, the Goldman Conspiracy of Wall Street bankers. This transfer of power happened suddenly. As recently as late 2008 the Invisible Hand was on life support, near death. Suddenly, miraculously the Treasury secretary, Goldman's former CEO, transferred the power into a new Invisible Hand of God, the free-market ideology of Reaganomics ... a power absolutely essential to the survival of Wall Street's mega-bonus culture. Yes, that's why the Goldman Conspiracy must kill financial reforms ... why they will kill effective reform with the backroom support of Obama. This was predicted back in late 2008, even before the bailouts, back when we thought Reaganomics dead. Shock Doctrine author Naomi Klein warned: "Free market ideology has always been a servant to the interests of capital ... During boom times it's profitable to preach laissez faire, because an absentee government allows speculative bubbles ... When those bubbles burst, the ideology becomes a hindrance and goes dormant while big government rides to the rescue," then a neo-Reaganomics "ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis," setting up a new bubble, bigger meltdown, and the Great Depression 2 the world narrowly avoided in 2008.

Note: For a wealth of key reporting on the hidden realities of the Wall Street's shadowy operations, click here.

Goldman's White House connections raise eyebrows
2010-04-21, Miami Herald/McClatchy Newspapers
Posted: 2010-05-03 20:51:06
http://www.miamiherald.com/2010/04/21/1591442/goldmans-connections-to-white.html

While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times. White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers. Meanwhile, however, Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal. Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world. Lawrence Jacobs, a University of Minnesota political scientist, said that "almost everything that the White House has done has been haunted by the personnel and the money of Goldman ... as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest."

Note: For lots more from major media sources on the corrupt relationship between the biggest financial firms and government, click here.

GM repays federal loan with government money
2010-04-27, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2010-05-03 20:41:45
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/26/BUS91D55HR.DTL

You'd think that General Motors Co., having been rescued by U.S. taxpayers, would be more up-front with them. In an ad that has been blanketing the airwaves since last week, General Motors Chairman and chief executive Ed Whitacre boasts that "we have repaid our government loan, in full, with interest, five years ahead of the original schedule." In a press release, Whitacre said GM was able to repay the loans "because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse." Neither the ad nor the press release mentioned that GM repaid its government loan with other government money, or that U.S. taxpayers could lose money on the roughly $50 billion they still have invested in General Motors. In a letter to Treasury Secretary Timothy Geithner last week, Sen. Chuck Grassley, R-Iowa, said the repayment "appears to be nothing more than an elaborate TARP money shuffle."

Note: For lots more on the bailout shell game from reliable sources, click here.

Report Says SEC Missed Many Shots at Stanford
2010-04-17, Wall Street Journal
Posted: 2010-05-03 20:40:17
http://online.wsj.com/article/SB10001424052702303491304575188220570802084.html

The Securities and Exchange Commission suspected Texas financier R. Allen Stanford of running a Ponzi scheme as early as 1997 but took more than a decade to pursue him seriously. The report by the SEC's inspector general says SEC examiners concluded four times between 1997 and 2004 that Mr. Stanford's businesses were fraudulent, but each time decided not to go further. It singles out the former head of the SEC's enforcement office in Fort Worth, Texas, accusing him of repeatedly quashing Stanford probes and then trying to represent Mr. Stanford as a lawyer in private practice. The former SEC official, Spencer Barasch, is now a partner at law firm Andrews Kurth LLP. The inspector general referred Mr. Barasch for possible disbarment from practicing law. Mr. Stanford was indicted last June and accused of orchestrating a Ponzi scheme that swindled investors out of $7 billion. SEC Inspector General David Kotz's report suggests the agency's mistakes in the Stanford case were in part the result of a culture that favored easily resolved cases over messier ones. Cases such as the alleged Stanford fraud weren't considered "quick-hit" and "slam-dunk," and examiners were discouraged from pursuing them, Mr. Kotz found.

Note: For many more examples from major media sources of the astonishing performance of the SEC in the runup to the Wall Street crisis, click here.

How did Big Finance grow so powerful that its hijinks nearly brought down the global economy?
2010-04-16, PBS Bill Moyers Journal
Posted: 2010-04-25 23:53:02
http://www.pbs.org/moyers/journal/04162010/watch.html

Why is it so hard to hold Wall Street accountable? Even as we speak the banking industry and corporate America are fighting against financial reform with all the money and influence at their disposal. Their effort is to preserve a system that would enable them to ransack the country once again. What can ordinary Americans do? That's the question I want to put to my guests, Simon Johnson and James Kwak. They have written this new book, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. It's a must read - already a best seller -- and it couldn't have come at a better time. This book could change the debate over financial reform by tipping it in favor of the public. Together James Kwak and Simon Johnson run the indispensable economic website BaselineScenario.com. [Moyers:] Let me get to the blunt conclusion you reach in your book. You say that two years after the devastating financial crisis of '08 our country is still at the mercy of an oligarchy that is bigger, more profitable, and more resistant to regulation than ever. Correct? SIMON JOHNSON: Absolutely correct, Bill. The big banks became stronger as a result of the bailout. That may seem extraordinary, but it's really true. They're turning that increased economic clout into more political power. And they're using that political power to go out and take the same sort of risks that got us into disaster in September 2008.

Note: For a treasure trove of reports from reliable sources on the hidden methods used by financial corporations to manipulate the world economy and gain huge profits at the expense of taxpayers, click here.

The Great Federal Reserve Bank Con Job
2010-04-13, MSNBC
Posted: 2010-04-25 21:43:28
http://www.msnbc.msn.com/id/21134540/vp/36233217#36233217

[video transcript:] In America today we are getting closer to fully exposing the greatest con and cover-up in this [country's] history. It involves our banks, the federal reserve, our congress, and, of course, you and me. Here's how the con went down. The bankers were operating under an implicit guarantee from the godfather [at] the Federal Reserve, in the form of guaranteed interest rates, guaranteed cheap money exclusively for the con men. Then, Chairman Greenspan, the godfather, would agree to hold those rates -- let's say 2% -- for as far as the eye could see. The banks, or bankers, the con men, would borrow that money from the Federal Reserve, let's say 2%, and turn around and lend it back to [you], and let's say 6%. That encouraged the patsies, you and me, to be drawn into the con because 6% looks like a pretty low rate. Low rates for houses, low rates for cars. Heck, you could join a health club, make that into payments, turn that into bonds, and of course promises of a higher-than-average return for those managing teachers and policemen's and judge's pension funds that are buying into the con as well. And here exactly is where the con comes in. As you and I both know, the banks had no money. They were getting it from the Federal Reserve. It's funny money.

Note: For abundant reports from reliable sources on the hidden realities of what may be the greatest con job in financial history, click here.

A Donor Who Had Big Allies
2006-01-08, Los Angeles Times
Posted: 2010-04-25 21:29:59
http://web.archive.org/web/20080228192833/www.latimes.com/news/nationworld/na...

In a case that echoes the Jack Abramoff influence-peddling scandal, two Northern California Republican congressmen used their official positions to try to stop a federal investigation of a wealthy Texas businessman who provided them with political contributions. Reps. John T. Doolittle and Richard W. Pombo joined forces with former House Majority Leader Tom DeLay of Texas to oppose an investigation by federal banking regulators into the affairs of Houston millionaire Charles Hurwitz, documents recently obtained by The Times show. The Federal Deposit Insurance Corp. was seeking $300 million from Hurwitz for his role in the collapse of a Texas savings and loan that cost taxpayers $1.6 billion. The investigation was ultimately dropped. Doolittle and Pombo — both considered protégés of DeLay — used their power as members of the House Resources Committee to subpoena the agency's confidential records on the case, including details of the evidence FDIC investigators had compiled on Hurwitz. Then, in 2001, the two congressmen inserted many of the sensitive documents into the Congressional Record, making them public and accessible to Hurwitz's lawyers, a move that FDIC officials said damaged the government's ability to pursue the banker. The FDIC's chief spokesman characterized what Doolittle and Pombo did as "a seamy abuse of the legislative process."

Goldman Sachs denies 'betting against clients'
2010-04-07, The Guardian (One of the UK's leading newspapers)
Posted: 2010-04-13 20:09:51
http://www.guardian.co.uk/business/2010/apr/07/goldman-sachs-letter-shareholders

Nine months after being labelled "a great vampire squid wrapped around the face of humanity", Goldman Sachs has issued a wide-ranging justification of its conduct before, during and after the financial crisis. In a letter to shareholders issued alongside Goldman's 2009 annual report, the Wall Street bank denied that it "bet against its clients" when it changed its position in the housing market in 2007, shortly before prices began to collapse. The eight-page letter, signed by chief executive Lloyd Blankfein and president Gary Cohn, also contained a detailed defence of the $12.9bn (£8.5bn) payout which Goldman received from AIG after the failed insurance giant was bailed out by the US government. The letter appears to be a detailed response to some of the allegations made nine months ago by Rolling Stone journalist Matt Taibbi. His article, which argued that Goldman had repeatedly profited by inflating unsustainable financial bubbles ... included the claim that the company [is] "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". Goldman ... actually profited from the fiasco by short-selling the market before the credit crunch struck in summer 2007.

Note: Read Matt Taibbi's article on Goldman Sachs here.

Court Orders Fed to Release Bailout Documents
2010-03-19, ABC News/Reuters
Posted: 2010-04-04 23:58:54
http://abcnews.go.com/Business/wireStory?id=10148656

In a significant victory for news media, a federal appeals court said the Federal Reserve must disclose records on emergency lending programs to banks bailed out by the government in the financial crisis. The Second Circuit Court of Appeals on [March 19] ordered the Fed to release details of programs it adopted starting in late 2007 to shore up the financial system and forestall a complete meltdown of global financial markets. Bloomberg ... and News Corp's Fox News Network sought details of the central bank's actions under the federal Freedom of Information Act. The Fed argued against disclosure, citing an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information. Writing for a unanimous three-judge appeals court panel, Chief Judge Dennis Jacobs said, however, that to give the Fed power to deny disclosure because it thinks it best to do so "would undermine the basic policy that disclosure, not secrecy, is the dominant objective." Sen. Byron Dorgan, a North Dakota Democrat, said the rulings will help shed light on the Fed, which he called "the least transparent institution" in government.

Note: Isn't it crazy that the Fed would try to keep secret what it did with nearly $1 trillion of US taxpayer money?

Interview: Brooksley Born
2009-08-28, PBS Frontline
Posted: 2010-04-04 23:49:28
http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

As head of the Commodity Futures Trading Commission [CFTC], Brooksley Born became alarmed by the lack of oversight of the secretive, multitrillion-dollar over-the-counter derivatives market. Her attempts to regulate derivatives ran into fierce resistance from then-Fed Chairman Alan Greenspan, then-Treasury Secretary Robert Rubin and then-Deputy Treasury Secretary Larry Summers, who prevailed upon Congress to stop Born and limit future regulation. PBS: So let's start with September 2008 as we all sat there and watched the economy melting down and heard about things called credit default swaps [CDS]. It wasn't the first time you'd heard of these sophisticated financial instruments. What did you think when you were watching it happen? Born: It was like my worst nightmare coming true. I had had enormous concerns about the over-the-counter derivatives [OTC] market, including credit default swaps, for a number of years. The market was totally opaque; we now call it the dark market. So nobody really knew what was going on in the market. And then it became obvious as Lehman Brothers failed, as AIG [American International Group] suddenly appeared to be on the brink of tremendous defaults and turned out had been a major credit default swap dealer.

Note: Why did Greenspan, Rubin, and Summers fight regulation so fiercely? For a super collection of investigations into the Wall Street activities that brought on the financial collapse and taxpayer bailout of the biggest financial firms, click here.

Lehman debacle: one of greatest crimes ever?
2010-03-15, Christian Science Monitor
Posted: 2010-03-28 20:15:15
http://www.csmonitor.com/Money/The-Daily-Reckoning/2010/0315/Lehman-debacle-o...

After 15 months and 2,200 pages of writing, the Lehman Brothers report has been released. As expected, the details are pretty gruesome. It explains how Repo 105 transactions allowed Lehman to exchange illiquid assets for short-term cash loans in order to disguise the crumbling financial state of the firm in its last days. How bad were the lies? Well, the report shows the transactions were not shown as loans. Instead, they were listed as sales … making Lehman’s accounting essentially fraudulent. According to emails described in the report, CEO Richard Fuld and about three different CFOs were all likely aware of the cover-up. Yet they still approved and signed off on the quarterly and annual reports. Further, it appears that even Lehman’s auditor Ernst & Young … in the not-so-fine tradition of Arthur Andersen — that was brought down in the Enron scandal – knew about the Repo transactions and did nothing to sound an alarm. So much deception … and so many accomplices.

Note: To watch a powerfully revealing, 10-minute MSNBC video on this topic, click here. Transcript available here. Host Dyland Ratigan in the clip describes what happened as "an accounting fraud perpetrated by bank CEOs against the American taxpayer."

Lehman whistleblower lost his job weeks after raising alarm
2010-03-16, The Guardian (One of the UK's leading newspapers)
Posted: 2010-03-28 20:13:02
http://www.guardian.co.uk/business/2010/mar/16/lehman-whistleblower-auditors-...

A worried accounting executive at Lehman Brothers, who raised the alarm about what he saw as dubious number-crunching at the doomed Wall Street bank, lost his job barely a month after alerting the auditor Ernst & Young, his lawyer [has] claimed. Matthew Lee, a senior vice-president in Lehman's finance division, outlined six allegations of unethical accounting in a memo sent on 16 May 2008 to Lehman's senior managers, who asked Ernst & Young to investigate. In discussions with partners at Ernst & Young, he highlighted controversial "repo 105" transactions that artificially boosted Lehman's balance sheet by $50bn. Lee's lawyer, Erwin Shustak, said his client lost his job in late June 2008, officially as part of a broader downsizing. Shustak told the Wall Street Journal: "It was just easier to shut him up and let him go." Lee, 56, has emerged as a crucial figure in Lehman's downfall and in controversy over the conduct of Ernst & Young. The six allegations made by Lee included claims that Lehman's monthly balance sheet listed $5bn of assets above reality, that the bank failed to value its inventory of financial products in a "fully realistic or reasonable" way, that audit-level personnel were inadequately qualified, that systems were ineffective and that there were "tens of billions of dollars" of possibly toxic liabilities.

Note: For a treasure trove of revelations of the hidden realities behind the financial crisis and bailouts, click here.

Money talks, high court rules
2010-01-22, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2010-03-15 22:46:36
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/21/EDIL1BLS5N.DTL

Five robed radicals on the Supreme Court have pushed money-infused politics in the wrong direction by overturning a century's worth of campaign spending laws. Voters should prepare for the worst: cash-drenched elections presided over by free-spending corporations. The 5-to-4 ... majority's thinking is based on absolutist vision of free speech and belief that corporations and unions have the same constitutional protections as individuals when it comes to basic rights. This viewpoint is "a rejection of the common sense of the American people," said Justice John Paul Stevens, who read his angry dissent out loud. Corporations "are not themselves members of 'We the People,' by whom and for whom our Constitution was established." It's hard to overstate the legal sweep of the decision. It rejects two recent court rulings, one that barred corporations and unions from dipping into their treasuries to pay for candidate ads and the second that restricted these so-called independent expenditure efforts. The five-member majority didn't just blaze new ground; it torched the court's own past record. In practical terms, the decision amounts to a political earthquake. Big-money issues such as health care, cap-and-trade pollution controls and Wall Street regulations will drive attack ads against politicians who refuse to do the bidding of particular special interests.

Note: To join the over 40,000 who have already signed a petition to stop corporations from have legal personhood status in elections, click here. For more deep insights into the flaws in the US electoral system, click here. To read about the wonderful defender of elections free from corporate influence, Granny D, who recently passed away at the age of 100, click here.

Banks Bet Greece Defaults on Debt They Helped Hide
2010-02-25, New York Times
Posted: 2010-03-03 22:58:50
http://www.nytimes.com/2010/02/25/business/global/25swaps.html

Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin. Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers. These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit. “It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich. As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.

Note: For lots more from reliable sources on the realities of the global financial crisis, click here.

Troubled banking industry sharply reduced lending in 2009
2010-02-24, Washington Post
Posted: 2010-03-03 22:57:06
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/23/AR20100223021...

Lending by the banking industry fell by $587 billion, or 7.5 percent, in 2009, the largest annual decline since the 1940s, as the number of troubled financial institutions rose sharply, the Federal Deposit Insurance Corp. [has] reported. The FDIC considered 702 banks to be in some danger of failing as of the end of 2009, more than double the number at the beginning of the year. [FDIC Chairman Sheila C.] Bair said that the vast majority of the lending decline was the result of cutbacks by the nation's largest banks, which have tightened qualification standards for borrowers and increased the proportion of money that they hold in reserve against unexpected losses. The decline in lending is a looming issue as the economy begins to recover. But for the recovery to continue, for businesses to expand and employment to grow, lending must begin to expand, too. The decline also has become a major political issue amid broad public anger that the federal rescue of the banking industry has restored profitability but not the flow of loans. The FDIC [said] that the nation's 8,012 banks posted an aggregate profit of $12.5 billion in 2009. The largest banks accounted for most of those profits as a growing number of smaller banks have struggled to survive losses on commercial real estate loans.

Note: Wasn't the main purpose of the huge stimulus packages given to banks to increase lending? Where did those trillions go? For a treasure trove of revealing reports from major media sources on the realities of the banking bailouts that were supposedly intended to increase lending, click here.

Wall St. Helped to Mask Debt Fueling Europe’s Crisis
2010-02-14, New York Times
Posted: 2010-02-23 15:30:44
http://www.nytimes.com/2010/02/14/business/global/14debt.html

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels. As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere. In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

Note: For a treasure trove of investigations from reliable sources into the many tricks by which Wall Street firms enriched themselves at the expense of others, click here.

Battle Over the Bailout
2010-02-14, New York Times
Posted: 2010-02-23 15:20:50
http://www.nytimes.com/2010/02/14/nyregion/14fed.html

Mark Pittman, an investigative reporter for Bloomberg News ... filed a Freedom of Information Act request with the Federal Reserve Board, seeking the details of its unprecedented efforts to funnel money to the collapsing banks of Wall Street. That was in September 2008. Just more than a year later, Mr. Pittman ... died unexpectedly at age 52. But his cause has persevered. It is now known as Bloomberg L.P. v. Board of Governors of the Federal Reserve, an attempt to unlock the vault of the largest Wall Street rescue plan in decades — or, as the legal briefs put it, to “break down a wall of secrecy” that the Fed has kept in place for nearly two years in its “controversial use of public money to prop up financial institutions.” The Federal Reserve has wrapped itself in secrecy since the turn of the 20th century, when a select group of financiers met at the private Jekyll Island Club off the eastern coast of Georgia and, forgoing last names to preserve their anonymity among the staff, drafted legislation to create a central bank. Its secrecy, of course, persists today, with Ben S. Bernanke, the Federal Reserve chairman, refusing to tell even Congress which banks received government money under the bailout. There is also a heated battle to force the Fed to disclose its role in the controversial attempt to save the insurance giant American International Group.

Note: Isn't it interesting that Pittman died at age 52 while trying to expose manipulations of the big bankers? For a one-minute video proving the existence of a secret weapon which can cause an undetectable heart attack, click here. For a concise, excellent background on the hidden role of the Federal Reserve, click here.

More Americans Considering Community Banks
2010-02-17, NPR News
Posted: 2010-02-23 13:27:56
http://www.npr.org/templates/story/story.php?storyId=122945143

Bailouts and bonuses have many Americans frustrated with big banks. Some consumers think these giant institutions have lost touch with customers and basic good business practices. They're so fed up that they're holding these behemoths accountable by moving their money to community banks. Arianna Huffington of the Huffington Post is spearheading a campaign called Move Your Money, which encourages people to move from the banking giants to smaller community banks. "There's a lot of anger about the way banks have acted," says Huffington. "It's a total lack of empathy and concern." The group's Facebook page has more than 27,000 fans. "I think it's already an enormous success," says Huffington. "The fact that people are considering it; the fact that people are doing it; the fact that people are feeling empowered."

Note: Please consider going local and supporting credit unions and community banks. For information on moving your checking and savings accounts from profit oriented banks to membership run credit unions, click here and here.

Federal Reserve Seeks to Protect U.S. Bailout Secrets
2010-01-12, BusinessWeek/Bloomberg News
Posted: 2010-02-15 00:15:54
http://www.businessweek.com/news/2010-01-12/federal-reserve-seeks-to-protect-...

The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history. Bloomberg argued that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. New York-based Bloomberg ... sued in November 2008 after the Fed refused to name the firms it lent to or disclose the amounts or assets used as collateral under its lending programs. “Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Thomas Golden, an attorney for the company with Willkie Farr & Gallagher LLP, wrote in court filings. More than a dozen other groups or companies filed amicus, or friend-of-the-court, briefs, including the American Society of News Editors and individual news organizations. The judge postponed the application of her ruling to allow the appeals court to consider the case.

Note: When doling out trillions of dollars of tax-payers' money, doesn't the public have a right to know who is receiving the money and what it is being used for?

Secret summit of top bankers
2010-02-06, Herald Sun (Australia's largest circulation daily newspaper)
Posted: 2010-02-07 22:44:18
http://www.heraldsun.com.au/business/world-bankers-meet-in-sydney-as-recovery...

The world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets. Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports. Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies. The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt. Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors. "This does feel like '08 and '07 all over again whereby we had these sort of little fires pop up and they are supposedly contained but in reality they are not quite contained,'' said H3 Global Advisors chief executive Andrew Kaleel.

Note: For lots more from reliable sources on the secret deliberations by the highest levels of government and private elites in their attempts to bail out the biggest financial corporations, click here.

Secret Banking Cabal Emerges From AIG Shadows
2010-01-29, Bloomberg News
Posted: 2010-02-07 22:42:01
http://www.bloomberg.com/apps/news?pid=20601039&sid=aaIuE.W8RAuU

The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all. Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials. We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG’s bailout -- deserves further congressional scrutiny. The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks. Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. The hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve. This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.

Note: For lots more from reliable sources on the secret deliberations by the highest levels of government and private elites in their attempts to bail out the biggest financial corporations, click here.

Cleaners 'worth more to society' than bankers - study
2009-12-14, BBC News
Posted: 2010-02-07 22:16:15
http://news.bbc.co.uk/2/hi/8410489.stm

Hospital cleaners are worth more to society than bankers, a study suggests. The research, carried out by think tank the New Economics Foundation, says hospital cleaners create £10 of value for every £1 they are paid. It claims bankers are a drain on the country because of the damage they caused to the global economy. They reportedly destroy £7 of value for every £1 they earn. Meanwhile, senior advertising executives are said to "create stress". The study says they are responsible for campaigns which create dissatisfaction and misery, and encourage over-consumption. By contrast, child minders and waste recyclers are also doing jobs that create net wealth to the country. Eilis Lawlor, spokeswoman for the New Economics Foundation, said: "Pay levels often don't reflect the true value that is being created. As a society, we need a pay structure which rewards those jobs that create most societal benefit rather than those that generate profits at the expense of society and the environment".

SEC mulled national security status for AIG details
2010-01-24, CNN Money/Reuters
Posted: 2010-02-01 19:56:22
http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH21979_2010-01-24_19-...

U.S. securities regulators [at the Securities and Exchange Commission] originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security. The SEC ... agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG's confidentiality request. The SEC had also agreed that if it determined the document should not be made public, it would be stored "in a special area where national security related files are kept." Emails ... that have become public in recent weeks reveal that some at the New York Fed had gone to great lengths to keep the terms of the bailout private and the SEC may have played a role in contributing to some of the secrecy surrounding the AIG rescue package. "The New York Fed was orchestrating what can only be characterized as an extreme effort to ensure that details of the counterparty deal stayed secret," Rep. Darrell Issa ... said. "More and more it looks as if they would've kept the details of the deal secret indefinitely, it they could have."

Note: So now bank transactions are being considered a matter of "national security." What next? It's becoming ever more apparent that "national security" is used as a catch-all phrase for information that those in power don't want us to know about their secret dealings which benefit themselves at the expense of most of the rest of us.

Is the Fed rigging the stock market?
2010-01-05, MSN Money
Posted: 2010-02-01 19:54:25
http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=1528464

It is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures. This type of intervention could explain some of the unusual market action in recent months, with stock prices grinding higher on low volume even as companies sold huge amounts of new shares and retail investors stayed on the sidelines. Some market watchers have charted that virtually all of the market’s upside since mid-September has come from after-hours futures activity. [These claims are] based on an analysis of the possible sources of the $600 billion in net new cash that was needed to boost the U.S. stock market capitalization by $6 billion since March. The usual sources, such as retail investors and pension funds, could muster only about $100 billion. The rest had to come from somewhere. The Fed has been openly buying some $1.7 trillion worth of long-term bonds since last March, which is something it hasn't done since the 1950s. Today, the Fed is making purchases to support housing by keeping mortgages cheap. As these purchases are phased out over the next few months, long-term interest rates will continue to move higher. This will cause long-term bond prices to fall, causing this new "bond bubble" to deflate. Stock investors will benefit, just as they did in the 1950s and 1960s as capital was moved from falling bonds into rising stocks.

Note: For a treasure trove of key reports from reliable sources on the secret manipulations keeping Wall Street afloat, click here.

'Sorry' still seems to be the hardest word on Wall Street
2010-01-14, Washington Post
Posted: 2010-01-25 13:52:16
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/13/AR20100113041...

Goldman Sachs Chairman Lloyd Blankfein still doesn't get it. Unemployment is at 10 percent and Americans are suffering because of the meltdown he and his colleagues helped create. But Blankfein's firm, generously bailed out by taxpayers, has already returned to its ways of greed. Blankfein, called to Washington on Wednesday to testify before the federal Financial Crisis Inquiry Commission, made it plain that he was done apologizing. "Would you look back on some of the financings as negligent or improper?" asked the commission chairman, former California state treasurer Phil Angelides. "I think those were very typical behaviors in the context that we were in," Blankfein replied. Angelides pointed out that others regarded Goldman's behavior -- in which the firm sold mortgage securities to customers and then placed bets against those same securities -- was "the most cynical" of practices. "That's what a market is," the CEO explained. Angelides ... tried again to get Blankfein to acknowledge that "excessive risk was being taken." "Look, how would you look at the risk of a hurricane?" the man from Goldman retorted. "Acts of God we'll exempt," Angelides said. "These were acts of men and women." But Blankfein seems to exempt himself from the rules of man.

Note: For many key reports on the corruption underlying the financial crisis and the government bailout of Wall Street, click here.

Fed paid record $46.1B to Treasury last year
2010-01-12, Houston Chronicle/Associated Press
Posted: 2010-01-16 20:47:32
http://www.chron.com/disp/story.mpl/ap/top/all/6811506.html

The Federal Reserve paid a record $46.1 billion in earnings to the Treasury Department last year, reflecting gains as the central bank bulked up its portfolio of securities to revive the economy and fight the financial crisis. The payment marks an increase of $14.4 billion from what the Treasury was provided in 2008 and is the largest since the Fed began operating in 1914, the central bank announced. The Fed's net income of $52.1 billion in 2009 also was a record, according to preliminary figures. It was up from $35.5 billion in 2008. Such income rose largely because the Fed's holdings of securities mushroomed, though increases in the value of the securities also helped, Fed officials said. Under one program that ended last year, the Fed snapped up $300 billion in government debt. Under another program, the Fed is on track to buy a total of $1.25 trillion in mortgage securities from Fannie Mae and Freddie Mac by the end of March. Those programs have boosted the value of securities held by the Fed.

Note: How interesting that the trillions of dollars of US taxpayer money funneled to the big banks brought record income in 2009, while the average American saw little to no benefit. For key background on the Federal Reserve, click here. For a trove of reports from major media sources that reveal hidden realities of the government bailout of the biggest financial firms, click here.

The Other Plot to Wreck America
2010-01-10, New York Times
Posted: 2010-01-16 20:44:35
http://www.nytimes.com/2010/01/10/opinion/10rich.html

In the 16 months since ... the crash precipitated by the ... failure of Lehman Brothers, most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. What we don’t know will hurt us, and quite possibly on a ... devastating scale. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses. The window for change is rapidly closing. [The] voices of Americans who have lost pay, jobs, homes and savings are either patronized or drowned out entirely by a political system where the banking lobby rules in both parties and the revolving door between finance and government never stops spinning.

Note: For many reports from reliable sources which reveal how the biggest Wall Street firms intentionally created and then cashed out on the financial crisis which destroyed the livelihoods and wealth of millions, click here.

Want to protest bank bailouts? Move your money, a new campaign urges.
2010-01-07, Christian Science Monitor
Posted: 2010-01-16 20:42:03
http://www.csmonitor.com/Money/new-economy/2010/0107/Want-to-protest-bank-bai...

Mad about the bank bailouts? Had enough of huge bonuses and too-big-to-fail apologies? Here's one way to do something about it. Take your money out. That's right. Take your checking and savings account out of that big money-center financial institution and move it to a community bank or credit union. There's even a movement afoot to help consumers make the switch, called Move Your Money. The website offers search tools so consumers thinking about switching can type in their zip codes to find a credit union or a strong community bank nearby. Even in 2008, the latest numbers available, credit unions and community banks have seen an increase in depositors. Now "other people are taking up the call to move their money into a community bank," says Karen Tyson, senior vice president for communications at the Independent Community Bankers of America. "We can't help but be happy with that." Amber Taylor of Arlington, Va., is one of those who's actually switching. "I never thought about what bank I chose before," she says. "I don't know what huge difference this will make in the big world [but] it's one little thing that I discovered I could do."

A Second Mortgage Disaster On The Horizon?
2008-12-14, CBS 60 Minutes
Posted: 2010-01-11 11:51:35
http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml

When it comes to bailouts of American business, Barney Frank and the Congress may be just getting started. It turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. If you thought sub-primes were insanely reckless wait until you hear what's coming. One of the best guides to the danger ahead is [investment fund manager] Whitney Tilson. "We had the greatest asset bubble in history and now that bubble is bursting. The single biggest piece of the bubble is the U.S. mortgage market and we're probably about halfway through the unwinding and bursting of the bubble," Tilson explains. "It may seem like all the carnage out there, we must be almost finished. But there's still a lot of pain to come in terms of write-downs and losses that have yet to be recognized." The trouble now is that the insanity didn't end with sub-primes. There were two other kinds of exotic mortgages that became popular, called "Alt-A" and "option ARM." The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates "reset." They went up. And so did the monthly payment. A mortgage of $800 dollars a month could easily jump to $1,500. Now the Alt-A and option ARM loans made back in the heyday are starting to reset, causing the mortgage payments to go up and homeowners to default.

Note: For a six-minute video of this revealing article, click here. For lots more on the realities of the financial crisis, click here.

With Bigger Bonuses, Another Upside for Banks
2010-01-01, New York Times
Posted: 2010-01-04 14:31:52
http://www.nytimes.com/2010/01/01/business/01bonus.html

Along with Wall Street’s resurgent bonuses will come a jump in an ancillary benefit: tax breaks. For all banks and Wall Street firms, “I’m sure we’re talking $200 billion total compensation, which would create a tax savings for the firms of $80 billion,” said Robert Willens, an accounting and tax analyst in New York. The tax deductions, which will increase the bottom line of the banks, are perfectly legal and not new. They come as compensation for 2009 has roared back after the largest banks paid back billions of dollars in federal aid, an outlay still fresh in the minds of taxpayers. As pay goes up, so do the deductions. Many American banks already pay minuscule federal income taxes. Because of various deductions and clever tax planning the payout-related breaks will reduce their tax bills further in coming years. The biggest tax break will go to Goldman Sachs. It expects to award its employees $23 billion in bonuses — the most in its history. Because most employee compensation is a deductible expense under tax laws, Goldman Sachs ... will save about $9 billion in federal income taxes on the bonuses it pays out for 2009.

Note: For a treasure trove of reliable reports on the government bailout of Wall Street, click here.

Bankers Get $4 Trillion Gift From Barney Frank
2009-12-30, Bloomberg News
Posted: 2010-01-04 14:25:53
http://www.bloomberg.com/apps/news?pid=20601039&sid=a48c8UpUMxKQ

H.R. 4173 [is] the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises. For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy -- there are more bailouts to come.

Note: For a treasure trove of reliable reports on the government bailout of Wall Street, click here.

Banks Bundled Bad Debt, Bet Against It and Won
2009-12-24, New York Times
Posted: 2010-01-04 14:23:48
http://www.nytimes.com/2009/12/24/business/24trading.html

Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments, according to former Goldman employees with direct knowledge of the deals who asked not to be identified because they have confidentiality agreements with the firm. Goldman was not the only firm that peddled these complex securities ... and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail ... include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner. How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority. While the investigations are in the early phases, authorities appear to be looking at whether securities laws or rules of fair dealing were violated by firms that created and sold these mortgage-linked debt instruments and then bet against the clients who purchased them, people briefed on the matter say.

Note: So the banks were betting that their own customers would lose money on their products. Hmmmm. For lots of reliable, eye-opening reports on banking secrecy and corruption, click here.

Fannie, Freddie Can Now Get Unlimited Aid
2009-11-25, CBS News/Associated Press
Posted: 2010-01-04 14:21:25
http://www.cbsnews.com/stories/2009/12/25/politics/main6021668.shtml

The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac. The Treasury Department said [it had] removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair. By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress. "The companies are nowhere close to using the $400 billion they had before, so why do this now?" said Bert Ely, a banking consultant in Alexandria, Va. The news followed an announcement Thursday that the CEOs of Fannie and Freddie could get paid as much as $6 million for 2009, despite the companies' dismal performances this year.

Note: For many reliable reports on the government bailout of Wall Street and the financial industry, click here.

Banks With Political Ties Got Bailouts
2009-12-21, New York Times/Reuters News
Posted: 2009-12-28 14:20:27
http://www.nytimes.com/reuters/2009/12/21/business/business-us-banks-study.html

U.S. banks that spent more money on lobbying were more likely to get government bailout money. Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan's Ross School of Business. Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds. Political influence was most helpful for poorly performing banks, the study found. "Political connections play an important role in a firm's access to capital," Sosyura, a University of Michigan assistant professor of finance, said in a statement. Banks with an executive who sat on the board of a Federal Reserve Bank were 31 percent more likely to get bailouts through TARP's Capital Purchase Program. Banks with ties to a finance committee member were 26 percent more likely to get capital purchase program funds. As of late September, nearly 700 financial institutions had received bailouts of $205 billion under the capital purchase program. The banking industry has long been criticized for using political influence to obtain bailouts.

Note: For lots more from reliable sources on the symbiosis between big finance and big government, click here.

Trillions Of Troubles Ahead
2009-12-18, Forbes magazine
Posted: 2009-12-28 14:17:23
http://www.forbes.com/2009/12/18/government-budget-deficit-personal-finance-f...

If the government stays on the course it's been on for the past forty years without a radical change, the federal government will soon have a $10 trillion budget. In other words, the federal budget deficit will be $1.4 trillion. Just to make the size more visible, that's $1,400 billion. Our colleague Rob Arnott ... wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Note: For many revealing reports from major media sources on the realities of the government-financed bank bailouts, click here.

Société Générale tells clients how to prepare for potential 'global collapse'
2009-11-18, The Telegraph (One of the UK's leading newspapers)
Posted: 2009-12-28 14:14:24
http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-c...

Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems. Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years. "As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast. Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade. "High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt," it said.

Note: For many revealing reports from major media sources on the realities of the government-financed bank bailouts, click here.

Drug money saved banks in global crisis, claims UN advisor
2009-12-13, The Guardian (One of the UK's leading newspapers)
Posted: 2009-12-21 00:09:39
http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-...

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer. Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result. This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said. Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said. "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way."

Note: For many revealing reports from major media sources on the hidden realities behind the global financial crisis, click here.

Goldman Fueled AIG Gambles
2009-12-12, Wall Street Journal
Posted: 2009-12-20 23:42:28
http://online.wsj.com/article/SB10001424052748704201404574590453176996032.html

Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group Inc. Goldman was one of 16 banks paid off when the U.S. government last year spent billions closing out soured trades that AIG made with the financial firms. A Wall Street Journal analysis of AIG's trades, which were on pools of mortgage debt, shows that Goldman was a key player in many of them, even the ones involving other banks. Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman. In Goldman's biggest deal, it acted as a middleman between AIG and banks, taking on the risk of as much as $14 billion of mortgage-related investments. Then Goldman insured that risk with one trading partner – AIG. When the federal government bailed out the insurer, Goldman avoided losses on its trades with AIG covering a total of $22 billion in assets.

Note: For many revealing reports from reliable, verifiable sources on the hidden realities behind the Wall Street bailout, click here.

Are some Wall Street firms too big to punish?
2009-12-10, Miami Herald/McClatchy News
Posted: 2009-12-17 18:43:13
http://www.miamiherald.com/business/story/1374463.html

Forget too big to fail. In the eyes of federal regulators, many Wall Street firms are too big to punish. During the past three years, some of the nation's largest financial firms have been accused by the government of cheating or misleading clients and ripping off tens of thousands of consumers of their investments. Despite these findings, these financial giants got, sometimes repeatedly, special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses. Among the more than a dozen firms that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America, Citigroup and American International Group. SEC rules permit corporate lawbreakers to apply for what are known as Section 9(c) waivers from one of the agency's harshest penalties — effectively shuttering the violator's mutual fund operations — but regulators never rejected any of these firms' applications. In fact, the last time the SEC's staff could recall a waiver being turned down was 1978. The SEC declined to comment in detail.

Note: For lots more from reliable sources on the realities of the Wall Street bailout, click here.

G30, Ripe for Conspiracy Theorists
2009-12-04, Wall Street Journal blog
Posted: 2009-12-09 13:19:12
http://blogs.wsj.com/economics/2009/12/04/g30-ripe-for-conspiracy-theorists

If you want to encourage the kind of conspiracy theories that have prospered in the wake of last year’s financial crisis — those that describe a secret cabal of elites running the world — try doing the following: Have a group of 30 high-powered economists, government officials and bankers meet under the auspices of an international group that shares ideas on how to run the global financial architecture. Have your Board of Trustees led by an influential former Federal Reserve chairman who’s now working as a senior advisor to the president of the United States. Name the former vice chairman of bailout behemoth AIG as the group’s Chairman and CEO (It helps that he [is] former governor of the Bank of Israel). Ensure that membership includes the likes of these: A former Treasury Secretary and president of Harvard who also now works as a top presidential economic advisor; Citigroup’s senior vice chairman; a former IMF deputy managing director and the current governor of the Bank of Israel; and top representatives of the world’s four most important central banks. Hold two days of closed-door meetings at the New York Fed. Do not publicize a list of attendees and leave everyone guessing about the agenda. These were the circumstances surrounding Friday’s start to the 62nd plenary meetings of the Group of 30, whose formal name is “The Consultative Group on International Economic and Monetary Affairs, Inc.”

Note: The article interestingly then goes on to claim that this secret meeting of the world's top bankers is not really anything to worry about, that they are really working for the public good. If so, why not have the meeting open and widely covered by the press? For many other revealing articles from major media reports on secret societies and secret meetings of the most rich and powerful people in our world, click here.

Public servants on $20m a year
2009-12-03, BBC News blog
Posted: 2009-12-09 13:16:04
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/12/public_servants_...

Twice a year, the chairmen and chief executives of Europe's biggest banks gather in secret. They meet under the auspices of a hush-hush club formed after World War II, whose operations are so mysterious that even the grandees who attend it seem unclear what it's really called. One bank supremo told me its name was the Instituts d'Etudes Financieres ... another that it went by the moniker IIEB. Either way, what I can tell you is that it attracts a pretty high calibre of banker - and that its last meeting was just a few weeks ago at the plush London hotel, Claridges, where the main item on the agenda was the topical question of bankers' bonuses. Present were ... Stephen Green of HSBC, Philip Hampton of RBS, Marcus Agius of Barclays and David Mayhew of JP Morgan Cazenove, and their counterparts from Germany, Italy, France and so on. Now, let's be clear: the idea that banks would ever collude to solve a mutual problem would be an outrageous and unwarranted slur. That said, they would dearly love a collective agreement to cease hostilities on bankers' pay, because they know there is a one-to-one correlation between each million pound bonus they pay and damage to their reputations. But although they explored whether they could reach an entente on capping bankers' pay, they abandoned the ambition as a hopeless cause. Why? Because they can't get the Americans into the room. So what is the going rate for RBS's top profit generators? Last year, when the bonus pool was £900m [over $1.3 billion] for the investment bank, several hundred of its executives earned more than a million pounds each. [This year] quite a number of its top traders will be expecting $10m plus.

Note: You can bet that the money for this year's bonuses is coming out of taxpayers' pockets through the huge bailouts. So here is yet another secret meeting of the world's top bankers not being reported in the major media except for this BBC blog. For many other revealing articles from major media reports on secret societies and secret meetings of the most rich and powerful people in our world, click here.

Lending Declines as Bank Jitters Persist
2009-11-25, Wall Street Journal
Posted: 2009-12-09 13:12:07
http://online.wsj.com/article/SB125907631604662501.html

U.S. lenders saw loans fall by the largest amount since the government began tracking such data, suggesting that nervousness among banks continues to hamper economic recovery. Total loan balances fell by $210.4 billion, or 3%, in the third quarter, the biggest decline since data collection began in 1984, according to a report released ... by the Federal Deposit Insurance Corp. The FDIC also said its fund to backstop deposits fell into negative territory for just the second time in its history, pushed down by a wave of bank failures. The decline in total loans showed how banks remain reluctant to lend, despite the hundreds of billions of dollars the government has spent to prop up ailing banks and jump-start lending. The issue has taken on greater urgency with the U.S. unemployment rate hitting 10.2% in October. "There is no question that credit availability is an important issue for the economic recovery," FDIC Chairman Sheila Bair told reporters Tuesday. "We need to see banks making more loans to their business customers." She said large banks -- which account for 56% of industry assets and received a large share of the government's bailout funds -- accounted for 75% of the decline.

Note: The big banks were given trillions in bailout funds with a mandate to increase loans and stimulate the economy. Why are they still giving out so few loans? Where did the huge amounts of our taxpayer money go? Why isn't the government demanding accountability with such huge sums of taxpayer money? For lots more on major manipulations by the big bankers, click here.

Mark Pittman, Reporter Who Challenged Fed Secrecy, Dies at 52
2009-11-30, Bloomberg News
Posted: 2009-12-09 13:08:19
http://www.bloomberg.com/apps/news?pid=20601109&sid=af7QohP8YdRo&pos=12

Mark Pittman, the award-winning reporter whose fight to make the Federal Reserve more accountable to taxpayers led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52. Pittman suffered from heart-related illnesses. “He was one of the great financial journalists of our time,” said Joseph Stiglitz, a professor at Columbia University in New York and the winner of the 2001 Nobel Prize for economics. “His death is shocking.” A former police-beat reporter who joined Bloomberg News in 1997, Pittman wrote stories in 2007 predicting the collapse of the banking system. That year, he won the Gerald Loeb Award from the UCLA Anderson School of Management, the highest accolade in financial journalism, for "Wall Street’s Faustian Bargain," a series of articles on the breakdown of the U.S. mortgage industry. Pittman’s push to open the Fed to more scrutiny resulted in an Aug. 24 victory in Manhattan Federal Court affirming the public’s right to know about the central bank’s more than $2 trillion in assistance to financial firms.

Note: To see a one-minute video of mind-blowing US Congressional testimony on a CIA dart gun which can easily cause a heart attack, click here. The poison from this gun is undetectable on autopsy. Could such a weapon be used by the rich and powerful bankers who might want to silence someone who threatens literally billions of dollars of profits, someone like Mark Pittman?

Wall St. Finds Profits by Reducing Mortgages
2009-11-22, New York Times
Posted: 2009-11-28 23:06:40
http://www.nytimes.com/2009/11/22/business/22loans.html

Wall Street has found a way to make money from the mortgage mess. Investment funds are buying billions of dollars’ worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans. But as part of these deals, the mortgages are being refinanced through lenders that work with government agencies like the Federal Housing Administration. This enables the funds to pocket sizable profits by reselling new, government-insured loans to other federal agencies, which then bundle the mortgages into securities for sale to investors. While homeowners save money, the arrangement shifts nearly all the risk for the loans to the federal government — and, ultimately, taxpayers — at a time when Americans are falling behind on their mortgage payments in record numbers. The trick is to persuade the homeowners to refinance those mortgages, by offering to reduce the amounts the homeowners owe. The profit comes when the refinancings reach more than the [amount] that the fund paid for the block of loans. The strategy has created an unusual alliance between Wall Street funds that specialize in troubled investments — the industry calls them “vulture” funds — and American homeowners. But the transactions also add to the potential burden on government agencies, particularly the F.H.A., which has lately taken on an outsize role in the housing market and, some fear, may eventually need to be bailed out at taxpayer expense.

Note: For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

Goldman Holders Miffed at Bonuses
2009-11-20, Wall Street Journal
Posted: 2009-11-28 23:04:18
http://online.wsj.com/article/SB20001424052748704533904574545981008841004.html

Some of the largest shareholders in Goldman Sachs Group Inc. have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation. Their complaints in private conversations with the company and at analyst meetings show how anger over its big-money culture is spilling into the ranks of investors who typically shy away from debates over Wall Street pay. Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to its 2006 earnings, according to Thomson Financial. The decline is caused by issuing more than 100 million shares in the past year to bolster Goldman's financial position and capital. Some major Goldman shareholders also are concerned about a little-noticed change in the company's financial statements that increased the firm's total head count by adding temporary employees and consultants. The change reduced per-employee compensation, making it look like Goldman employees earn less than they actually do. The figure is a lightning rod for criticism of Goldman because its staff is on pace to earn about $717,000 apiece for 2009. Excluding temporary employees and consultants would increase compensation per employee to about $775,000.

Note: For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

Investors Beware
2009-11-07, New York Times
Posted: 2009-11-28 23:01:18
http://www.nytimes.com/2009/11/07/opinion/07sat2.html

Things turned Orwellian in the House Financial Services Committee this week when members — with the backing of the White House — passed an investor protection bill that would make it all too easy for thousands of publicly traded companies to cook their books. While the bill offers investors important protections ... an amendment was added to permanently exempt smaller public companies (worth less than $75 million) from a post-Enron auditing requirement. It passed with votes from 28 of the committee’s 29 Republicans (one was absent) and 9 Democrats. All clearly were more interested in pleasing corporate constituents than protecting investors who, last time we checked, are also constituents. While President Obama and Democratic leaders say they are committed to more transparency and regulation over derivatives — the complex instruments that were at the heart of the financial crisis — they are supporting a dangerous exemption for big businesses in the derivative reform bill pending in the House. Another House bill to protect consumers of financial products has concessions for big and small banks alike. It appears that the administration will support those concessions, too. Mr. Obama and his aides have said repeatedly that they are committed to closing the regulatory gaps that allowed the financial system to spin so dangerously out of control. They need to do a lot more.

Note: For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

How Goldman secretly bet on the housing crash
2009-11-01, Kansas City Star/McClatchy Newspapers
Posted: 2009-11-19 02:23:30
http://www.kansascity.com/437/story/1542453.html

In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled one of the nation's premier investment banks to pass most of its potential losses to others before a flood of mortgage loan defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman promoted as triple-A investments were closer to junk. Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy Newspapers investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws. "The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's big banks. "This is fraud and should be prosecuted."

Note: For an eye-opening, powerful PBS video which reveals how the economic crisis was conscously allowed to happen, click here. It reveals that Fed chairman Alan Greenspan was against investigating any fraud. For many reports from reliable sources on corruption at the core of the Wall Street collapse and bailout, click here.

Cluster bomb trade funded by world's biggest banks
2009-10-29, The Guardian (One of the UK's leading newspapers)
Posted: 2009-11-19 02:11:25
http://www.guardian.co.uk/business/2009/oct/29/banks-fund-cluster-bomb-trade

The deadly trade in cluster bombs is funded by the world's biggest banks who have loaned or arranged finance worth $20bn (£12.5bn) to firms producing the controversial weapons, despite growing international efforts to ban them. HSBC, led by ordained Anglican priest Stephen Green, has profited more than any other institution from companies that manufacture cluster bombs. The British bank ... has earned a total of £657.3m in fees arranging bonds and share offerings for Textron, which makes cluster munitions described by the US company as "leaving a clean battlefield". HSBC will face protests outside its London headquarters today. Goldman Sachs, Bank of America, JP Morgan and UK-based Barclays Bank are also named among the worst banks in a detailed 126-page report by Dutch and Belgian campaign groups IKV Pax Christi and Netwerk Vlaanderen. Goldman Sachs, the US bank which made £3.19bn proft in just three months, earned $588.82m for bank services and lent $250m to Alliant Techsystems and Textron. Last December 90 countries, including the UK, committed themselves to banning cluster bombs by next year. But the US was not one of them. So far 23 countries have ratified the convention. The UK has yet to do so.

Note: For many verifiable revelations of war profiteering by large corporations, click here.

Foreclosures: 'Worst three months of all time'
2009-10-15, CNN Money
Posted: 2009-11-19 02:07:49
http://money.cnn.com/2009/10/15/real_estate/foreclosure_crisis_deepens/

Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter. 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. There are no firm statistics for it, but many industry watchers claim the percentage of REOs [properties possessed by the mortgage company after an unsuccessful foreclosure auction] caused by borrowers voluntarily walking away from their homes is skyrocketing. The foreclosure crisis may not diminish anytime soon.

Note: For lots more from major media sources on the impacts of the financial crash, click here.

Wall Street's Naked Swindle
2009-10-14, Rolling Stone magazine
Posted: 2009-11-19 02:00:12
http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle

On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history. The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money...) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. Six months after Bear was eaten by predators, virtually the same scenario repeated itself in the case of Lehman Brothers — another top-five investment bank that in September 2008 was vaporized in an obvious case of market manipulation. From there, the financial crisis was on. When Bear and Lehman made their final leap off the cliff of history, both undeniably got a push ... in the form of a flat-out counterfeiting scheme called naked short-selling.

Note: Why isn't this being reported in the major media and aggressively investigated? For many reports from reliable sources on the corruption at the core of the Wall Street collapse and bailout, click here.

Fed Rejects Geithner Request for Study of Governance, Structure
2009-09-21, Bloomberg News
Posted: 2009-11-19 01:57:17
http://www.bloomberg.com/apps/news?pid=20601068&sid=adjvXg1zP.zY

The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central bank’s structure and governance, three people familiar with the matter said. U.S. lawmakers have also called for a review of the Fed’s power and structure, saying Fed Chairman Ben S. Bernanke overstepped his authority as he bailed out creditors of Bear Stearns Cos. and American International Group Inc. while battling a crisis that led to $1.62 trillion in writedowns and losses at financial firms. While the report requested by the Treasury hasn’t been formally scrapped, no work has been done on the project, which was due Oct. 1. Treasury spokesman Andrew Williams declined to comment, as did Fed spokeswoman Michelle Smith. Congressional leaders have balked at the notion of giving the Fed more power and are leaning toward vesting authority over capital, liquidity and risk-management practices of big banks in a council of regulators.

Note: To understand how business corrupts politicians watch the heated MSNBC News clip at this link.

Fed Urges Secrecy on Banks in Bailout Programs
2009-08-27, ABC News/Reuters
Posted: 2009-11-19 01:53:30
http://abcnews.go.com/Business/wireStory?id=8426669

The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy. The central bank filed its request ... two days after Chief Judge Loretta Preska of the U.S. District Court in Manhattan ruled in favor of Bloomberg News, which had sought information under the federal Freedom of Information Act. Preska said the Fed failed to show that revealing the names would stigmatize the banks and result in "imminent competitive harm." Underlying this case and a similar one involving News Corp's Fox News Network is a question of how much the public has a right to know about how the government is bailing out a financial system in a crisis. The case arose when two Bloomberg reporters submitted FOIA requests about actions the Fed took to shore up the financial system in 2007 and early 2008, including an expansion of lending programs and the sale of Bear Stearns Cos to JPMorgan.

Note: Don't tax payers have a right to know to which bankds the trillions of tax dollars are going in the bank bailout? For lots more on government secrecy, click here.

Chrysler drops three electric vehicles despite having touted them to get billions in government bailout cash
2009-11-09, USA Today
Posted: 2009-11-16 22:58:51
http://content.usatoday.com/communities/driveon/post/2009/11/620001133/1

If you believed all the talk from Chrysler about how our tax dollars would help finance its fast-track electric-vehicle future, you're in for a big disappointment. Chrysler has disbanded the engineering team that was trying to bring three electric models to market as a rush job. Chrysler [had] cited its devotion to electric vehicles as one of the key reasons why the Obama administration and Congress needed to give it $12.5 billion in bailout money. The change of heart on electric vehicles has come under Fiat. At a marathon presentation of Chrysler's five-year strategy, CEO Sergio Marchionne talked about just about everything on Chrysler's plate ... except its earlier electric-car plans. With the group's disbanding, Chrysler's electric plans will be melded into Fiat's. Marchionne is apparently no fan of electric power. He says electrics will only make up 1% or 2% of Fiat sales by 2014 and that he doesn't put a lot of faith in the technology until battery developments are pushed forward. As a result, Chrysler won't have an electric car on sale as soon as next year, such as the Dodge Circuit sports car concept it had unveiled. The change has come so fast that Chrysler's website has been still featuring pictures of the electric vehicles. As late as August, Chrysler took $70 million in grants from the U.S. Department of Energy to develop a test fleet of 220 hybrid pickup trucks and minivans, vehicles now scrapped in the sweeping turnaround plan for Chrysler.

Note: For reports from reliable sources on promising new developments in electric automobile technologies, click here.

Goodbye to Reforms of 2002
2009-11-06, New York Times
Posted: 2009-11-16 22:50:44
http://www.nytimes.com/2009/11/06/business/06norris.html

It took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass ... the Sarbanes-Oxley Act. That law required public companies to make sure their internal controls against fraud were not full of holes. Sarbanes-Oxley was passed, almost unanimously, by a Republican-controlled House and a Democratic-controlled Senate. Now a Democratic Congress is gutting it with the apparent approval of the Obama administration. The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well. Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing,” said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under President Bill Clinton. There are other threats to Sarbanes-Oxley as well. The law set up a long-overdue system of regulating the accounting industry, which had proved time and again that it was incapable of effective self-regulation. The Public Company Accounting Oversight Board has done a credible job, but a month from now the Supreme Court will hear a case that could drive it out of existence.

Note: For a treasure trove of revealing reports from reliable sources on the realities behind the Wall Street collapse and bailout, click here.

TARP on steroids
2009-10-30, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2009-10-31 19:03:39
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/30/EDTG1ACEDE.DTL

It was 9/29/08 - a moment when a rare blast of populist democracy briefly singed the economic terrorists who hold the Capitol hostage. It had been a dark and stormy month of financial collapse, culminating in an attempted power grab. Pushed by his fellow Wall Street Ponzi schemers, Treasury Secretary Henry Paulson - a former Goldman Sachs CEO - was threatening Armageddon unless Congress ratified his ... decree for a no-strings-attached bank bailout. Today, the episode seems merely to have set minimum standards for chicanery. As evidenced by two little-noticed sections of the Obama administration's Wall Street "reform" bill, presidents and their bank benefactors are back to thinking they can pilfer whatever they want by burying their demands in the esoterica of lengthier bills. Finding this latest giveaway means digging all the way down to sections 1109 and 1604 of the White House's mammoth proposal. At a recent hearing, Rep. Brad Sherman, D-Sherman Oaks (Los Angeles County), called the language "TARP on steroids," noting the provisions would deliberately let the executive branch enact even bigger, more unregulated bailouts than ever - and by unilateral fiat. TARP on Steroids includes no specific oversight or executive pay constraints. TARP on Steroids allows taxpayer cash to go only to the behemoths (which, not coincidentally, tend to make the biggest campaign contributions). TARP on Steroids would let [the Treasury Secretary] spend as much as he wants.

Note: For many revealing reports from reliable sources on the continuing Wall Street bailout, click here.

N.Y. Fed pushed AIG on contracts
2009-10-28, Washington Post
Posted: 2009-10-31 18:51:06
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR20091027039...

The Federal Reserve Bank of New York said ... that it had no choice but to instruct American International Group last November to reimburse the full amount of what it owed to big banks on derivatives contracts, a move that ended months of effort by the insurance giant to negotiate lower payments. The New York Fed, led at the time by then-President Timothy F. Geithner, directed AIG to make the payments after it received a massive government bailout. The officials said AIG lost its leverage in demanding a better deal once the company had been saved from bankruptcy. Lawmakers and financial analysts critical of the payouts say it amounted to a back-door bailout for big banks. AIG, the recipient of a $180 billion federal rescue package, ended up paying $14 billion to Goldman Sachs over months and $8.5 billion to Deutsche Bank, among others. Before the New York Fed intervened, AIG had been trying to persuade the firms to take discounts. [A Bloomberg] report concluded that the government needlessly overpaid $13 billion. The Federal Reserve has declined to detail the terms of the deals and specifics about negotiations with creditors. The Bloomberg report quoted an unnamed AIG executive who said he was pressured by New York Fed officials to refrain from filing any documents with the Securities and Exchange Commission that would divulge the deals' details.

Note: For many revealing reports from reliable sources on the realities of the Wall Street bailout, click here.

Wall Street Follies: The Next Act
2009-10-25, New York Times
Posted: 2009-10-31 18:48:25
http://www.nytimes.com/2009/10/25/weekinreview/25morgenson.html

Hoping, perhaps, to persuade a dubious public that curbing reckless business practices is indeed a Washington priority, the Obama administration and Congress produced a hat trick of financial reforms last week. For all the apparent action in Washington, some acute observers say that it was much ado about little. Last week’s moves, they say, were tinkering around the edges and did nothing to prevent another disaster like the one that unfolded a year ago. The white-hot focus on pay, for example, looks like a way for the government to reassure an angry public that they are making genuine changes. But compensation is a trifling matter compared to, say, true reform of derivatives trading. “The American public understands the immorality of paying people huge bonuses for failures that damaged the economy,” said Michael Greenberger, a law professor at the University of Maryland and a former commodities regulator. “What they don’t understand is that those payments are only a small fraction of the irregularities that took place and that, in essence, the compensation problems, as bad as they are, are a sideshow to the casino-like nature of the economy as it existed, pre-Lehman Brothers, and as it exists today.” Regulating derivatives is far more important to those interested in eliminating the possibility of future billion-dollar bailouts. But the derivatives bill generated by the House Agriculture Committee contains a sizable loophole. Many derivatives would not trade in the light of day.

Note: For many revealing reports from reliable sources on the realities of the continuing bank bailout, click here.

Bailout Helps Fuel New Era of Wall Street Wealth
2009-10-17, New York Times
Posted: 2009-10-29 20:16:09
http://www.nytimes.com/2009/10/17/business/economy/17wall.html

Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses. Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes? It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth. Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year. So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza. “All of this is facilitated by the Federal Reserve and the government,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”

Note: For lots more on the realities of the Wall Street bailout, click here.

Derivatives: Don’t Let Exceptions Kill the Rule
2009-10-18, New York Times
Posted: 2009-10-29 20:13:47
http://www.nytimes.com/2009/10/18/business/economy/18gret.html

Congress began the work of reforming our troubled financial system last week, and a bill aimed at regulating derivatives passed the House Financial Services Committee on Thursday. Derivatives — contracts that theoretically protect buyers from unforeseen financial calamities but more often are used to fuel raw speculation — were ... at the heart of the banking crisis. Credit default swaps ... propelled the American International Group off the cliff. Those swaps also linked millions of trading partners, creating a web in which one default threatened to produce a chain of corporate and economic failures worldwide. And derivatives aren’t going away. So reforming the $42 trillion market for credit swaps is crucial if taxpayers are to be protected from future rescues of institutions deemed not only too big but also too interconnected to fail. The best aspect of the House bill is that it requires many swaps to be traded on exchanges just like stocks, subjecting them for the first time to the light of day. But elsewhere in the bill, ... exceptions to this exchange-trading rule undermine its regulatory power. Big banks dealing in swaps don’t want exchange trading, where pricing and the identities of participants would be more publicly transparent. Michael Greenberger, a University of Maryland law professor and an expert in derivatives, criticized the House bill. “The plain language of the legislation can only be read as a Christmas tree of decorative gifts to the banking industry,” he said. “And this is being done when people acknowledge the unregulated O.T.C. derivatives market was a principal reason for the meltdown.”

Note: For lots more on the realities of the Wall Street bailout, click here.

Wall Street On Track To Award Record Pay
2009-10-14, Wall Street Journal
Posted: 2009-10-17 20:15:45
http://online.wsj.com/article/SB125547830510183749.html

Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture. [Executives] at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year's $117 billion -- and to top 2007's $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels. The growth in compensation reflects Wall Street firms' rapid return to precrisis revenue levels. Even as the economy is sluggish and unemployment approaches 10%, these firms have been boosted by a stronger stock market, thawing credit market, a resurgence in deal making and the continuing effects of various government aid programs. So far, regulators and lawmakers have focused on making sure pay practices discourage excessive risk-taking, leaving to companies the question of how much is too much.

Note: For lots more on the realities of the Wall Street bailout, click here.

Voices of Power: Elizabeth Warren
2009-10-08, Washington Post
Posted: 2009-10-12 14:45:22
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/08/AR20091008007...

LOIS ROMANO: Welcome, Elizabeth Warren, Chairman of the Congressional Oversight Committee that is tasked with scrutinizing how the Treasury Department has spent $700 billion to shore up our failing financial institutions. There's a wonderful moment [in the movie "Capitalism: a Love Story"] when [Michael Moore] asks you where the $700 billion is, and you look at him and you say, "I don't know." So the question is: why don't you know? WARREN: Well, we don't know where the $700 billion is because the system was initially designed to make sure that we didn't know. When Secretary Paulson first put this money out into the banks, he didn't ask "what are you going to do with it?" He didn't put any restrictions on it. He didn't put any tabs on where it was going to go; in other words, he didn't ask. And if you don't ask, no one tells. And so we have a system that originally put more than $200 billion into the financial institutions basically saying just take it. ROMANO: And that money is gone. You have not been able to track where that money is? WARREN: Well, we don't know where the money went from the financial institutions. The big conversation at the time was that the credit markets are frozen; if we put money into the financial institutions, they will start lending it because that's what they do when they receive money. It was called the "Healthy Banks Program." Secretary Paulson kept saying, over and over, these are investments in healthy financial institutions, no one needs any subsidy, that [the] money was going to be used in lending to small businesses and consumers and kind of get our whole credit market going again. That didn't happen.

Note: To watch a powerfully revealing, five-minute video showing the Inspector General of the Federal Reserve testifying that she doesn't know where trillions of dollars are, click here. For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.

Government Watchdog Says Treasury and Fed Knew Bailed-Out Banks Were Not Healthy
2009-10-05, ABC News
Posted: 2009-10-12 14:42:43
http://abcnews.go.com/Business/lied-watchdog-treasury-fed-knew-bailed-banks-h...

The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today. Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country's economy, federal officials knew otherwise. "Contemporaneous reports and officials' statements to SIGTARP during this audit indicate that there were concerns about the health of several of the nine institutions at that time and, as detailed in this report, that their overall selection was far more a result of the officials' belief in their importance to a system that was viewed as being vulnerable to collapse than concerns about their individual health and viability," Barofsky says. In announcing the initial $125 billion provided to these banks, former Treasury Secretary Hank Paulson on Oct. 14 said, "These are healthy institutions. As these healthy institutions increase their capital base, they will be able to increase their funding to U.S. consumers and businesses." That same day, the Treasury Department, the Federal Reserve and the FDIC also released a joint statement reiterating that "these healthy institutions are taking these steps to ... enhance the overall performance of the US economy." Barofsky finds, however, senior officials at the Treasury and the Fed had serious concerns about the health of some of these banks.

Note: For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.

U.S. FDIC chief: 'too big to fail' must end for all
2009-10-04, International Business Times/Reuters News
Posted: 2009-10-12 14:38:55
http://www.ibtimes.com/articles/20091004/too-big-to-fail-must-end-for-all-fdi...

The head of the U.S. Federal Deposit Insurance Corp. said on Sunday that she wanted to end the "too big to fail" doctrine and shrink the shadow banking system that operates outside the reach of regulators. FDIC Chairman Sheila Bair ... said a U.S. proposal to create the authority to shut down failing systemically important financial firms may need to be extended to insurers and hedge funds. "We need to end 'too big to fail' and this needs to be an overarching policy that applies to everyone," Bair said. Bair said she believed that bank holding companies with subsidiaries that are shut down by regulators also should be made to pay the price of failure by being subject to the same wind-down process. "I believe that the new regime should apply to all bank holding companies that are more than just shells and their affiliates regardless or not whether they are considered to be systemic risks," she said, adding that including only systemically important firms in the shut-down regime could reinforce the 'too big to fail' doctrine. Financial firms subject to systemic risk shutdown authority should likely also be required to publish "living wills" -- details on how an orderly wind-down would play out -- on their websites to provide more clarity to shareholders and customers. And by applying the resolution authority more broadly outside of normal regulated bank holding companies, it would help shrink the shadow banking system by discouraging regulatory arbitrage under which financial firms shop for the most lenient supervisors. "If you tighten regulation of the banks even more without dealing with the shadow sector you could make the problem even worse," she said.

Note: For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.

In Harsh Reports on S.E.C.’s Fraud Failures, a Watchdog Urges Sweeping Changes
2009-09-30, New York Times
Posted: 2009-10-03 22:18:57
http://www.nytimes.com/2009/09/30/business/30sec.html

The Securities and Exchange Commission’s independent watchdog called for a sweeping overhaul of the agency’s investigation and enforcement practices on Tuesday, after a blistering report on the S.E.C.’s failure to detect Bernard L. Madoff’s extensive Ponzi scheme. Two reports, released by the S.E.C.’s inspector general, H. David Kotz, recommended dozens of changes in the way the agency evaluates tips, trains investigators and documents examinations of securities firms. The first report, which covers the S.E.C.’s inspections and examinations office, outlines 37 improvements that would revamp nearly every aspect of the division’s operations, including how investigators follow up on tips and creating step-by-step procedures in identifying potential violations of securities laws. Mr. Kotz also issued 21 recommendations to the S.E.C.’s division of enforcement, including the start of a formal process for handling complaints and improving working relationships within the division. One measure would mandate that tips and complaints be reviewed by at least two individuals experienced in the subject before taking further action. The proposed changes come after Mr. Kotz’s office completed an exhaustive investigation this month of the S.E.C.’s failure to detect the Madoff fraud despite many warnings and a flood of complaints from credible sources. At nearly every turn, the investigation found, the agency had failed to properly examine Mr. Madoff’s firm and had not adequately followed up on tips from as far back as 1992 that could have unearthed the estimated $65 billion scheme.

Note: For a treasure trove of key revelations on the realities behind the Wall Street crash and bailout, click here. Contact your political representatives urging them to support these recommendations.

But Who Is Watching Regulators?
2009-09-13, New York Times
Posted: 2009-09-28 19:45:59
http://www.nytimes.com/2009/09/13/business/13gret.html

Nothing succeeds like failure, as the saying goes. And nowhere is this dismal truth more evident than in our financial regulatory system, one year after the bankruptcy filing of Lehman Brothers. Even though calamitous lending practices laid waste to the nation’s economy, surprisingly little has changed about how the financial arena operates and is supervised. Sure, a couple of venerable brokerage firms have vanished, but many of the same players remain on the scene, in the same positions of power. Senior regulators who stood idly by for years as financial firms built their houses of cards have been rewarded with even bigger jobs or are jockeying for increased responsibilities. The Federal Reserve Board, for example, wants to become the financial system’s uber-regulator, even though its officials did nothing as banks made deadly decisions to lend recklessly and leverage themselves to the max. Awarding increased power to those who failed in their oversight duties flies in the face of all notions of accountability. Yet those in the public sector ask us to believe that regulators who snoozed during the credit bubble will be alert to emerging problems on their beats when the next mania begins. That’s asking a lot, isn’t it? Here’s a novel thought. Instead of creating more regulations to try to prevent this kind of mess from recurring, why not figure out how to hold regulators accountable when they perform as poorly as they did in recent years? Taxpayers must protect themselves against two things: the corrupting influence of bureaucratic self-interest among regulators and the political clout wielded by the large institutions they are supposed to police. [And] taxpayers must demand that the government publicize the costs of efforts taken to save the financial system from itself.

Note: For lots more from reliable sources on the realities of the Wall Street crash and bailout, click here.

Wall Street Pursues Profit in Bundles of Life Insurance
2009-09-06, New York Times
Posted: 2009-09-28 14:58:21
http://www.nytimes.com/2009/09/06/business/06insurance.html

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one. The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die. The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money. Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated. In the aftermath of the financial meltdown, exotic investments dreamed up by Wall Street got much of the blame. It was not just subprime mortgage securities but an array of products ... that proved far riskier than anticipated. The debacle gave financial wizardry a bad name generally, but not on Wall Street. Even as Washington debates increased financial regulation, bankers are scurrying to concoct new products. In addition to securitizing life settlements, for example, some banks are repackaging their money-losing securities into higher-rated ones.

Note: As this article reveals, Wall Street will make a killing on these new securitized investments if American life expectancy should drop. Can you think of any ways in which powerful corporations could bring this about? Say an increase in sugar content or genetically modified components in foods? Perhaps lower standards for chemical toxicity? More time watching TV, or other changes leading to increased obesity? Swine flu vaccinations? For lots more from reliable sources on the realities of the Wall Street crash and bailout, click here.

Michael Moore blames capitalism for meltdown
2009-09-18, San Francisco Chronicle (San Francisco's leading newspaper)
Posted: 2009-09-22 22:05:59
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/18/MN0V19OTKP.DTL

Two weeks before his movie "Capitalism: A Love Story" opens nationwide, filmmaker Michael Moore swept through San Francisco ... with a rally, a Commonwealth Club appearance and an unlikely new antagonist: Democrats. When Moore criticized Sen. Chris Dodd, D-Conn., this week on NBC's "The Jay Leno Show" for getting "sweetheart loans" from a mortgage company he was charged with overseeing, Moore said he got a call from a top Democratic Party official telling him to "back off." But Moore, a longtime supporter of a single-payer health plan, didn't back off. In an interview with The Chronicle, he chided House Speaker Nancy Pelosi for not being aggressive enough in pushing health care reform and ripped President Obama's financial team as "the foxes guarding the henhouse." There is plenty of conservative-bashing in the film, which focuses on capitalism as the "evil" at the root of the financial crisis, but the film also refers to Democratic leaders as the "deliverymen" of the government bailouts for financially troubled Wall Street firms. In his new film, Moore focuses on the investment house Goldman Sachs as a main beneficiary of capitalism's largesse. He notes that Treasury Secretary Timothy Geithner and senior White House economic adviser Lawrence Summers are proteges of Robert Rubin, longtime Goldman executive and President Bill Clinton's Treasury secretary. "The fact that Geithner and Summers are part of this administration makes everything that happens open to question and needs our vigilance," Moore said, "because, literally now, the foxes are guarding the henhouse."

Note: For a review of Michael Moore's new film, "Capitalism: a Love Story," click here.

A Year After a Cataclysm, Little Change on Wall St.
2009-09-12, New York Times
Posted: 2009-09-14 12:59:15
http://www.nytimes.com/2009/09/12/business/12change.html

Wall Street lives on. One year after the collapse of Lehman Brothers, the surprise is not how much has changed in the financial industry, but how little. Backstopped by huge federal guarantees, the biggest banks have restructured only around the edges. Employment in the industry has fallen just 8 percent since last September. Only a handful of big hedge funds have closed. Pay is already returning to precrash levels, topped by the 30,000 employees of Goldman Sachs, who are on track to earn an average of $700,000 this year. Nor are major pay cuts likely, according to a report last week from J.P. Morgan Securities. Executives at most big banks have kept their jobs. Financial stocks have soared since their winter lows. Banks still sell and trade unregulated derivatives, despite their role in last fall’s chaos. Radical changes like pay caps or restrictions on bank size face overwhelming resistance. Even minor changes, like requiring banks to disclose more about the derivatives they own, are far from certain. Regulators and lawmakers have spent most of the last year trying to save the financial industry, rather than transform it. In the short run, their efforts have succeeded. Citigroup and other wounded banks have avoided bankruptcy, and the economy has sidestepped a depression. But the same investors and economists who predicted, and in some cases profited from, the collapse last fall say the rescue has come at an extraordinary cost. They warn that if the industry’s systemic risks are not addressed, they could cause an even bigger crisis — in years, not decades. Next time, they say, the credit of the United States government may be at risk.

Note: For a treasure trove of reports from reliable sources on the realities of the Wall Street bailout, click here.

Banks 'Too Big to Fail' Have Grown Even Bigger
2009-08-28, Washington Post
Posted: 2009-09-05 14:32:57
http://www.washingtonpost.com/wp-dyn/content/story/2009/08/28/ST2009082800437...

When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system. Today, the biggest of those banks are even bigger. The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit. J.P. Morgan Chase ... now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show. Concerns are twofold: that consumers will wind up with fewer choices for services and that big banks will assume they always have the government's backing if things go wrong. That presumed guarantee means large companies could return to the risky behavior that led to the crisis if they figure federal officials will clean up their mess. The worry for consumers is that the bailouts skewed the financial industry in favor of the big and powerful. Fresh data from the FDIC show that big banks have the ability to borrow more cheaply than their peers because creditors assume these large companies are not at risk of failing.

Note: For lots more from reliable sources on the realities of the Wall Street bailout, click here.

A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style
2009-08-31, New York Times
Posted: 2009-09-05 14:07:31
http://www.nytimes.com/2009/08/31/nyregion/31judge.html

Every week, the nation’s mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors. He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even own the mortgage when it began to foreclose on the homeowner. “I’m a little guy in Brooklyn who doesn’t belong to their country clubs, what can I tell you?” he says, adding a shrug for punctuation. “I won’t accept their comedy of errors.” The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. He has tossed out 46 of the 102 foreclosure motions that have come before him in the las