Mar 13 2013
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Mar 13 2013
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.
Mar 13 2013
(h/t Susie Madrak @ Crooks & Liars)
Sheila Bair, FDIC Chair June 2006 – July 2011.
In major policy shift, scores of FDIC settlements go unannounced
By E. Scott Reckard, Los Angeles Times
March 11, 2013, 4:05 a.m.
Three years ago, the Federal Deposit Insurance Corp. collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.
The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion. But the government cut a deal with the bank’s lawyers to keep it quiet: a “no press release” clause that required the FDIC never to mention the deal “except in response to a specific inquiry.”
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Deutsche Bank, now the world’s largest, settled to resolve claims that subsidiary MortgageIT sold shaky loans to Pasadena-based IndyMac Bank, which imploded under the weight of risky mortgages and construction loans. The IndyMac failure – considered one of the early events that helped usher in the 2008 financial meltdown – caused a scene reminiscent of the grim bank failures of the 1930s, with panicked depositors lining up outside branches trying to reclaim their money.Overall, the FDIC collected $787 million in settlements by pressing civil claims related to bank failures from 2007 through 2012 – a fraction of its total losses.
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“In the old days, the regulators made it a point to embarrass everyone, to call attention to their role in bank failures,” said former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle. The goal was simple: “to make other bankers scared.”Newsom said he couldn’t understand the shift, unless the agency doesn’t “want people to know how little they are settling for.”
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(FDIC spokesman David) Barr says attorneys representing the FDIC make clear to the defendants that, although it will not publicize settlements, it also cannot legally keep them secret.The ban on secret settlements was a provision in one of the laws passed after the S&L crisis. Although the measure doesn’t require the FDIC to call attention to settlements, nondisclosure agreements like that with Deutsche Bank violate “the spirit of the law,” said Sausalito, Calif., attorney Bart Dzivi, a former Senate Banking Committee aide who drafted the provision.
FDIC Under Scrutiny For Not Announcing Settlements
By: DSWright, Firedog Lake
Tuesday March 12, 2013 8:06 am
The clause is added to keep the regulator quiet on reputation damaging legal settlements. Typically settlements are announced by regulators in hopes of deterring would be law breakers but the FDIC has changed its previous policy without explicitly stating why.
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What an odd game. During the Savings and Loan Crisis a law was passed banning secret settlements which means no matter how poorly the FDIC is negotiating with criminal bankers they can not agree to keep the settlement secret. Instead the FDIC merely agrees not to announce the deals in hopes that no one looks for the information.
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But why not announce it? Isn’t the point of settling in the first place to punish the guilty but avoid costly trials? Sending a press release is practically free and lets everyone know that certain practices will not be tolerated by regulators. Secret deterrence is a contradiction in terms and an open invitation to continue treating crime as a business expense.
FDIC Hides "Scores" of Bank Settlements Since 2007
Yves Smith, Naked Capitalism
Tuesday, March 12, 2013
The FDIC’s excuse is unpersuasive. It amounts to, “well, we publicize big settlements, why bother with these?”
In fact, this practice is yet another gimmie for banks. First, by not publicizing the settlement, it saves the target embarrassment. But far more important, it also helps them escape private litigation. A claimant has a much more persuasive suit if he can tell a judge or jury, “Look, XYZ bank engaged in this conduct, we have proof in the form of an FDIC settlement.” Mind you, it doesn’t mean for every settlement you have private litigants lurking in the wings, but given how many investors lost money in a big way during the crisis, you’d have to think that in a meaningful percentage of cases, hard evidence that a bank engaged in a particular form of prohibited behavior would be very useful to private parties.
The worst is that these secret settlements look to have become institutionalized. The only rationale I can think of (and it’s not great) is that the FDIC became overly concerned about exposing weak banks to litigation, and once it established the new pattern, it’s been unwilling or unable to roll it back. But in the S&L crisis, when the FDIC had so many dead banks drop in its lap that it had to go to Congress for additional funding, it didn’t hold back.
Which Aspect of the FDIC’s Litigation Failures is the Most Embarrassing and Damaging?
By William K. Black, New Economic Perspectives
Posted on March 12, 2013
The article contains four key facts we did not know about the FDIC’s leadership and its litigation director. The only question is which of these … facts provides the most revealing insight into the disgrace that the FDIC has become. The first fact is that the banks and bank officers can now cut deals with the FDIC designed to keep their settlements secret. What that tells us is that the FDIC’s leaders are indifferent or clueless about deterrence and earning public respect for the integrity of the FDIC’s efforts to hold the officers who drove the crisis accountable.
The second key fact that we learned from the article is that the size of the settlements, for some of the most culpable fraudulent mortgage lenders, is so embarrassingly low that the FDIC’s litigators and investigators have proven to be an embarrassing failure.
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The third fact that emerges is that the FDIC’s real purpose in entering into these settlements crafted to try to keep the public from learning about them is not to secure a higher settlement but to protect the FDIC leadership from embarrassment for their failures of nerve, competence, and any understanding of the overriding need to ensure that no executive walks away making a profit from fraudulent lending.The fourth fact that emerges is that the FDIC does not understand how a banking regulator and its litigators must deal with control fraud. It is fine for the FDIC to lose half its litigated cases against the senior officers who run control frauds where its wins lead to large awards that remove any gains the controlling officers received from the bank. What the “C-suite” defendants need to understand is the moral certainty that the FDIC will, as a matter of principle, never agree to a settlement that leaves a non-judgment proof controlling officer with wealth he gained by leading the bank to make fraudulent liar’s loans. When elite defendants engage in fraud the banking regulators’ paramount task is not to maximize the expected value of the recovery – it is to deter future frauds because control fraud causes catastrophic losses and drives our recurrent, intensifying financial crises. The defendants need to know that the FDIC will be remorseless in litigating against the senior officers running control frauds.
Bank Shots
By Charles P. Pierce, Esquire
March 13, 2013 at 9:00AM
I’m not sure what’s more breathtakingly arrogant — that there are members of the government who look the people straight in the eye and tell them that, no, nothing’s going to be done, despite the fact that you and I and the streetlamp know precisely who the crooks are, and what they did, and what should happen to them, or that there are members of government who insist that doing nothing about any of it is to act in the public good. It is one the little tin drums at this place that, too often, our elected leaders seem to believe that The American People are made of ribbon candy. Don’t prosecute Nixon. The country needs “closure.” Don’t chase Iran-Contra too hard. The country “can’t afford” another failed presidency. Don’t arraign the liars and fantasts who brought on the ruin that is the Iraq war. Look forward. Not back. Self-government gets infantilized and the crooks skate.
Call me crazy, but if some operation gets so big that it renders its crimes untouchable by the civil authorities, when power immunizes the criminals, then something’s too big to be allowed to exist. And if the institutions that are supposed to protect us from those crimes, through the customary mechanism of punishing the criminals in such a sway as to discourage other people from becoming criminals, are so worried that protecting us will do us more harm than good, then we’ve fallen through the looking glass to a place where self-government is rendered subject to a simple protection racket. I’d consider most of these guys more respectable if they threw firebombs or broke people’s kneecaps.
Mar 13 2013
Cross posted from The Stars Hollow Gazette
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past “On This Day in History” here.
March 13 is the 72nd day of the year (73rd in leap years) in the Gregorian calendar. There are 293 days remaining until the end of the year.
On this day in 1881. Czar Alexander II, the ruler of Russia since 1855, is killed in the streets of St. Petersburg by a bomb thrown by a member of the revolutionary “People’s Will” group. The People’s Will, organized in 1879, employed terrorism and assassination in their attempt to overthrow Russia’s czarist autocracy. They murdered officials and made several attempts on the czar’s life before finally assassinating him on March 13, 1881.
Alexander II succeeded to the throne upon the death of his father in 1855. The first year of his reign was devoted to the prosecution of the Crimean War and, after the fall of Sevastopol, to negotiations for peace, led by his trusted counsellor Prince Gorchakov. The country had been exhausted and humiliated by the war. Bribe-taking, theft and corruption were everywhere. Encouraged by public opinion he began a period of radical reforms, including an attempt to not to depend on a landed aristocracy controlling the poor, a move to developing Russia’s natural resources and to thoroughly reform all branches of the administration.
In spite of his obstinacy in playing the Russian autocrat, Alexander II acted willfully for several years, somewhat like a constitutional sovereign of the continental type. Soon after the conclusion of peace, important changes were made in legislation concerning industry and commerce, and the new freedom thus afforded produced a large number of limited liability companies. Plans were formed for building a great network of railways-partly for the purpose of developing the natural resources of the country, and partly for the purpose of increasing its power for defence and attack.
The existence of serfdom was tackled boldly, taking advantage of a petition presented by the Polish landed proprietors of the Lithuanian provinces and, hoping that their relations with the serfs might be regulated in a more satisfactory way (meaning in a way more satisfactory for the proprietors), he authorised the formation of committees “for ameliorating the condition of the peasants”, and laid down the principles on which the amelioration was to be effected.
This step was followed by one still more significant. Without consulting his ordinary advisers, Alexander ordered the Minister of the Interior to send a circular to the provincial governors of European Russia, containing a copy of the instructions forwarded to the governor-general of Lithuania, praising the supposed generous, patriotic intentions of the Lithuanian landed proprietors, and suggesting that perhaps the landed proprietors of other provinces might express a similar desire. The hint was taken: in all provinces where serfdom existed, emancipation committees were formed.
But the emancipation was not merely a humanitarian question capable of being solved instantaneously by imperial ukase. It contained very complicated problems, deeply affecting the economic, social and political future of the nation.
Alexander had to choose between the different measures recommended to him. Should the serfs become agricultural labourers dependent economically and administratively on the landlords, or should they be transformed into a class of independent communal proprietors?
The emperor gave his support to the latter project, and the Russian peasantry became one of the last groups of peasants in Europe to shake off serfdom.
The architects of the emancipation manifesto were Alexander’s brother Konstantin, Yakov Rostovtsev, and Nikolay Milyutin.
On 3 March 1861, 6 years after his accession, the emancipation law was signed and published.
Mar 13 2013
Cross posted from The Stars Hollow Gazette
Democracy Now‘s Amy Goodman wrote in The Guardian that Americans should be ashamed that Rand Paul and the radical Tea Party Republicans were the only ones talking about drone executions.
Members of Congress, tasked with oversight of intelligence and military matters, have repeatedly demanded the memoranda from the White House detailing the legal basis for the drone program, only to be repeatedly denied. The nomination of Brennan has opened up the debate, forcing the Obama administration to make nominal gestures of compliance. The answers so far have not satisfied Senator Paul. [..]
The issue of extrajudicial execution of US citizens, whether on US soil or elsewhere, is clearly vital. But also important is the US government’s now-seemingly routine killing of civilians around the world, whether by drone strikes, night raids conducted by special operations forces or other lethal means. [..]
Barack Obama and John Brennan direct the drone strikes that are killing thousands of civilians. It doesn’t make us safer. It makes whole populations, from Yemen to Pakistan, hate us. Senator Paul’s outrage with the president’s claimed right to kill US citizens is entirely appropriate. That there is not more outrage at the thousands killed around the globe is shameful … and dangerous.
For a thoughtful discussion of the Awlaki assassinations and the president’s claim that he can legally do so, Ms. Goodman was joined by Scott Shane, national security reporter for The New York Times and, in the second video, Jesselyn Radack, National Security & Human Rights director at the Government Accountability Project .
As John Brennan is confirmed to head the CIA, we examine one of the most controversial U.S. targeted killings that occurred during his time as Obama’s counterterrorism adviser: the killing of Anwar al-Awlaki. The U.S.-born cleric died in a U.S. drone strike in September 2011, along with American citizen Samir Khan. Al-Awlaki’s 16-year-old son, Abdulrahman, was also killed in a separate drone strike just weeks later. On Sunday, The New York Times published a major front-page article on the killing of Anwar al-Awlaki called “How a U.S. Citizen Came to Be in America’s Cross Hairs.” The New York Times‘ Scott Shane, one of the reporters on the piece, joins us from Washington, D.C. includes rush transcript
The New York Times’ front-page account of the U.S. assassination of Anwar al-Awlaki has drawn criticism from critics of the Obama administration’s targeted killings overseas. In a joint statement, the American Civil Liberties Union and the Center for Constitutional Rights called the story “the latest in a series of one-sided, selective disclosures that prevent meaningful public debate and legal or even political accountability for the government’s killing program.” We discuss the article and the White House assassination program with two guests: Scott Shane, national security reporter at The New York Times, and Jesselyn Radack, National Security & Human Rights director at the Government Accountability Project and former legal ethics adviser at the Justice Department. includes rush transcript
From Marcy Wheeler at emptywheel in which she shreds the NYT’s article and its authors:
Anwar al-Awlaki Is the New Aluminum Tube
Mark Mazzetti, Charlie Savage, and Scott Shane team up to provide the government’s best case – and at times, an irresponsibly credulous one – for the killing of Anwar al-Awlaki and the collateral deaths of Samir Khan and Abdulrahman al-Awlaki.
Yet even in a 3,600 word story, they don’t present any evidence against the senior Awlaki that was fresher than a year old – the October 2010 toner cartridge plot – at the time the Yemeni-American was killed. (I’m not saying the government didn’t have more recent intelligence; it just doesn’t appear in this very Administration-friendly case.) Not surprisingly, then, the story completely ignores questions about the definition of “imminent threat” used in the OLC memo and whether Awlaki was an “imminent” threat when he was killed. [..]
Moreover, the case they do present has various weaknesses.
The “linked in various ways” standard for killing Americans
The story provides a fair amount of space to Awlaki’s celebration of the Nidal Hasan attack (though it does make it clear Awlaki did not respond enthusiastically to Hasan’s queries before the attack). [..]
It uses far vaguer language to describe Awlaki’s role in the Faisal Shahzad and toner cartridge plots.
NYT doesn’t care about problems with the Abu Tarak explanation
Which leaves the UndieBomb attack as the sole attack in which the NYT presents evidence about Awlaki’s direct role. But there’s a problem with their claims there, too. [..]
NYT finally finds a WikiLeaks cable it doesn’t like!
There’s one other really irresponsible piece to this story. [..]
It is our job, and that of Congress, to ask these questions and hold the president responsible for violations of our civil liberties.
Mar 13 2013
Cross posted from The Stars Hollow Gazette
Once again Sen. Elizabeth Warren demonstrated why the voters of Massachusetts sent her to the Senate when in a Senate Banking Committee hearing about money laundering, she questioned why British bank HSBC is still doing business in the U.S., with no criminal charges filed against it, despite confessing to what one regulator called “egregious” money laundering violations
Her comments came just a day after the attorney general of the United States confessed that some banks are so big and important that they are essentially above the law. His Justice Department’s failure to bring any criminal charges against HSBC or its employees is Exhibit A of that problem.
(..} Warren grilled officials from the Treasury Department, Federal Reserve and Office of the Comptroller of the Currency about why HSBC, which recently paid $1.9 billion to settle money laundering charges, wasn’t criminally prosecuted and shut down in the U.S. Nor were any individuals from HSBC charged with any crimes, despite the bank confessing to laundering billions of dollars for Mexican drug cartels and rogue regimes like Iran and Libya over several years.
Defenders of the Justice Department say that a criminal conviction could have been a death penalty for the bank, causing widespread damage to the economy. Warren wanted to know why the death penalty wasn’t warranted in this case.
“They did it over and over and over again across a period of years. And they were caught doing it, warned not to do it and kept right on doing it, and evidently making profits doing it,”
“How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?”
“You sit in Treasury and you try to enforce these laws, and I’ve read all of your testimony and you tell me how vigorously you want to enforce these laws, but you have no opinion on when it is that a bank should be shut down for money laundering?”
“If you’re caught with an ounce of cocaine, the chances are good you’re gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life,” Warren said. “But evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your bed at night — every single individual associated with this. And I think that’s fundamentally wrong.”
As staunch an opponent of the death penalty as I am, I would have voted for it and watched the “execution” of HSBC with glee.
