Tag: Washington Mutual

Mar 13 2013

We’re not dead, we’re just resting

I’ve often said the left is essentially dead–or moribund (I love the word). Certainly the old left looks dead very much like Polly Parrot in the Dead Parrot sketch.

But there’s something simmering below the surface that those of us who are veterans of the old left can take heart in–massive numbers of people are unhappy and disillusioned. They lack any framework for their disillusion other than things like buying guns but I think we have a chance to step into an opening.

There are two issues only a new revivified left can work with: 1) massive criminality of all the major actors in the political economy; and 2) the lying mainstream media. That’s the only issues we need. We don’t need to talk about the debt or the deficit or “entitlements” or imperialism or any of that. Yes those are issues that are important, more or less, but not as important as the fact our society is run, at the top, by criminals. And it is not that this is hard to determine. The evidence is overwhelming and we don’t even have to go to the assassinations of the sixties or 9/11 or anything like that. No just the simple facts as they are The government and the media allowed massive fraud to occur in both Democratic and Republican administrations.

In 2006 one third of all lending were “liar’s loans” meaning that these loans were deliberately created out of falsified income statements and property appraisals. Washington Mutual, Andrew Cuomo (when he was AG of NY) found out, had created a blacklist of honest appraisers that were never to be used. Regulators, the FBI and many others consistently warned that there would be a financial crisis because of massive fraud going on. I knew it, though I’m hardly that well-connected I just happened to know a Wall Street guy who tole me in 2005 that the whole thing was going to blow in the next few years because Wall Street was creating fraudulent instruments.

In the S & L crisis there were 1000 FBI agents investigating criminals at the top and there were over 1000 convictions even though many particularly high profile suspects got away due to political influence. But in the more recent crisis that was 70 times greater only 120 agents were assigned to mortgage fraud!!!! On the surface this looks like massive criminality and I can assure you that a clear case with loads of evidence beyond anything that I’m indicating here can prove that the basis of our current political economy is naked criminality in almost every sphere, to be sure, but particularly prevalent in the financial industry. I’m also confident that there is no possible counter-argument.

The fact this is so obvious has to automatically indict the mainstream media from Fox News to PBS for covering up and refusing to cover the truth about the financial crisis which, as I said, is stunningly obvious. It will then quickly be seen how corrupt the media is. Not the reporters who do what they can but who have editors that continually and systematically discourage them to pursue stories that might make powerful people look bad (other than celebs, but they are toys of powerful people so they don’t count). When people understand that, for the most part, they are being fed a pile of turds everyday that they then have to pretend to eat–man, no wonder people are stressed and the U.S. leads the world in mental illness.

All we have to do is hammer away at those two issues ONLY and then the unassailable wall around the imperial court will break. We don’t have to talk about income inequality just criminality–not about class-struggle just criminality–not about the environment just criminality. We don’t have to argue with Tea Baggers about anything–just say that crime is a bad thing dontcha think? No argument. Sure a few will say, but it was Acorn that caused the crash, gov’t bureaucrats who wanted to put people in homes–you say sure AND those banks made a lot of money falsifying information, corrupting appraisers, originators. There’s no absence of proof and no possible counter-argument to the central fact that our problem is not Republicans or Democrats or private enterprise of the government our problem is criminal gangs have taken over–over and out.

Apr 15 2010

Mortgage Fraud — just another Scheme of the Shadow Bankers

Bill Gross, head of PIMCO, is credited with coining the term “Shadow Banking System”. A few years ago he warned about its reckless behavior and how they could wreck the Economy.

Bill Gross Calls it “Shadow Banking System”

Bill Bonner, The Daily Reckoning Australia — Jan 22, 2008

Banks recognize that not all their loans will be repaid. They operate on margins of safety, with reserves set aside for when things go wrong. But in the worlds of swaps, hedge funds and derivatives…slick operators can invest billions with no margins of safety…and no reserves. The result, Gross says, could be catastrophic.

Turns out this blunt-speaking Mutual Fund Manager — WAS Right!

Sep 15 2008

Another Financial Storm May Be Brewing

Buried in the sound and fury of the current financial storm, including the bankruptcy of Lehman Brothers, sale of Merrill Lynch to Bank of America, and the rumored imminent meltdown of insurance giant A.I.G. is something which I consider far more dangerous:

The alert have taken note that the failure of Washington Mutual, which looks increasingly likely, would consume the FDICs reserves and, as in the savings and loan crisis, force the agency to go hat in hand to Congress for more money.

But this is comparatively early in our burgeoning banking crisis for the bulwark of commercial banks to be tested. Worse, the concern is that uninsured depositors will flee weak banks, and in process, push more over the edge.

The scale of the problem?

Washington Mutual – the sixth largest bank in the US – has lost more than a third of its market value recently as investors fear it lacks liquidity and capital to survive the credit crisis…

The FDIC is respected for its operational effectiveness. But its $45bn deposit insurance fund is underfunded according to its own guidelines, at 1.01 per cent of insured deposits…

…analysts fear it may have to draw on its $70bn Treasury credit lines. Alan Avery, a partner at Arnold and Porter, said a single failure – if big enough – “would cause the FDIC to immediately draw on the Treasury credit”.

Washington Mutual had $143bn in insured deposits on June 30 – about three times the size of the deposit insurance fund, but less than half of its $307bn assets.

Emphasis added.

Sep 15 2008

Too Failed To Bail

I don’t have time to even begin giving this a real analysis right now, but you need to be aware of what is happening today:

In one the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.

The moves came after a weekend of frantic negotiations between federal officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like A.I.G., the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.

Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.

This is simply staggering.  In less than one year, Bear Stearns, Merrill Lynch, and Lehman Brothers will have simply disappeared.  To put that in some perspective, all three of these banks were founded before and survived the Great Depression.  The GSE nationalization is the largest nationalization since at least the Depression, and possibly in all of American history.  Another of Wall Street’s most venerable partnerships, Arthur Andersen, one of the five largest accounting firms in America also disappeared during the last eight years.

Someone ought to be making an attack ad right now – if this is how Republicans have governed with regards to the fortunes of Americas biggest financial firms, how can anyone in any small town or city in America believe that they will be able to make a living if they continue to govern in the future?