Archive for category Banking
Wall Street’s Likely Strategy for Financial Reform
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Congress, Economics, Financial Crisis, Financial Terrorists, How and Why We Get Screwed, Wall Street, financial industry on June 21st, 2010
Citigroup – another Wall Street financial behemoth – has just released estimates regarding how hard financial reform might negatively effect Wall Street banks’ earnings.
I have news for Citigroup. One of your own – a Wall Street investment banker – seems to think differently.
If you recall back in January of this year, Goldman Sachs CEO, Lloyd Blankfein, and several of his fellow Wall Street CEO’s testified before the Financial Crisis Inquiry Commission regarding their complicity in the global financial crisis. First, Lloyd “Doing God’s Work” Blankfein had the audacity to claim that these events “will not happen again in my lifetime.”
So Lloyd, we can disregard the Long Term Capital Management hedge fund financial collapse in 1998 that almost resulted in a global economic meltdown – click here, here, here, or here. Or how about the dot.com bubble of 2000 – click here or here. And now this more recent Global Financial Crisis? Even though they all three occurred over the course of a mere 10 years?
Lloyd, are you saying you only have a couple of years to live? Has Hell been put on notice to reserve a room?
After that self-serving testimony, the closest any one of them came to admitting that they completely screwed-up the financial system was the statement of Morgan Stanley CEO, John Mack: “We did our own cooking and we choked on it.” Well not exactly John; you did your own cooking, the American public choked on it, all while you and Blankfein continue to dine on caviar, Oysters Rockefeller, Fillet Mignon and lobster.
So while doing the usual “deep research” into that day’s Congressional hearing, I stumbled upon an investment banker’s blog, and referenced some of his brash and flippant statements in this post - Inside the Mind of an Unapologetic Wall Street Investment Banker. Let’s revisit some of his comments:
Investment bankers “have absolutely no interest whatsoever in the whys and wherefores of the financial crisis, the proper size and role of banks and investment banks in the domestic economy, or the moral imperatives inherent in stewarding the financial plumbing under-girding the daily lives and livelihoods of six billion people . . . [i]nvestment bankers have almost no interest in why things are the way they are. Rather, they spend all their considerable intellectual and psychological resources on understanding how they can take advantage of the way things are.”
Moreover, “their obvious lack of intellectual curiosity about the sources of the crisis . . . [explains] their resistance to any major change in the way the industry or the markets are regulated . . . changing regulations will [not]necessarily make the industry less profitable . . . [since they] have well-justified confidence in their ability to turn new regulations to their advantage.”
He goes on to conclude, “Don’t look to investment bankers for answers on how we got here. We don’t know and we don’t care [emphasis added]. We take the world as we find it and try to make money.”
After reading that, you should know beyond a shadow of a doubt that nothing will change after financial reform. Absolutely nothing. Except Wall Street investment bankers will become even richer, while they unapologetically watch the rest of us slowly go to Hell in a hand-basket.
If that is ”doing God’s work”, Hell is fine with me.
Massive Document Spill in Washington by Goldman Sachs
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Congress, Financial Crisis, Financial Terrorists, Government, House of Representatives, How and Why We Get Screwed, Show Them the $$$, Wall Street, financial industry on June 17th, 2010
WHERE’S WALDO?
Lost in the news cycle that has been inundated with stories regarding the Gulf oil spill, there was another giant “spill” that is overwhelming Congressional and SEC watchdogs.
Goldman Sachs is playing a classic legal game of “Where’s Waldo” with the Congressional Financial Crisis Inquiry Commission by first refusing requests for documents related to the commission’s inquiry, and then suddenly dumping (delivering) hundreds of millions of documents all at one time - a legal maneuver intended to obfuscate and hide the proverbial “smoking gun” documents that may be lurking beneath that mountain of paper.
You can be certain most of those documents that were delivered have nothing to do with the Congressional inquiry. Moreover, it will take years to scour through them to find the one’s that really matter - assuming they haven’t already been quietly deleted and/or shredded. By the time this thing is over – years from now - Goldman Sachs will have likely have made enough money to pay a “small fine”, and then buy the remaining portion of Congress that they and the rest of Corporate America don’t already own.
The message from Goldman Sachs: we worked diligently at providing the documentation that you have requested, and we can ensure you that we left nothing out (except maybe the sh!t that really matters). Oh, and good luck finding what you are looking for,
If this was the Pecora Commission, you could bet that Lloyd Blankfein and Company – you know, those guys on Wall Street that are doing “God’s work”- would be a lot more cooperative. Yet, Lloyd’s betting this dog ain’t got no teeth. I hate to admit it, but Blankfein is probably right.
So the question should not be ”Where’s Waldo”?
Americans should all be asking “Where’s Percora“?
JP Morgan Apologizes for Saying What They Think, So You Don’t Think About What They Said
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Economics, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Senate, Show Them the $$$, Wall Street, economy, financial industry on May 5th, 2010
YOU CAN’T UNRING THE BELL . . .
A top executive and economic analyst at mega-bank JP Morgan Chase trashed U.S. senators in a company memo to the bank’s clients - stating that they showed “an unnerving ignorance of fundamental principles of market economics” regarding the Goldman Sachs hearings, and said “it’s time for the grownups to step in” regarding financial reform.
Interesting . . .
These same banks showed an unnerving ignorance of fundamental principles of market economics when coming to the taxpayers for bailouts; which suggests that it’s time for the grownups to step in, and teach them a lesson about what happens when you demonstrate an unnerving ignorance of fundamental principles of market economics – you lose the privilege to have such a powerful influence over OUR economy.
The grownups need to make TBTF (Too Big To Fail) = TSTM (Too Small To Matter) – break up these childish Big Banks.
P.S. After a spokesperson for JP Morgan Chase issued an apology for the memorandum – stating that it “does not reflect the views of our firm” – you could here the collective chant from JP Morgan headquarters as they covered their ears . . . “THE BELLS, THE BELLS, THE BELLS.”
Republicans Suddenly “Get Religion” On Financial Reform?
Posted by Lance Haley in 2010 Election, Bailouts, Banking, Business and Money, Campaign Finance Reform, Campaigns, Capitalism, Congress, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Politics, Republicans, Senate, Show Them the $$$, Wall Street, White House, financial industry on April 26th, 2010
Several weeks ago Senate Minority leader Mitch McConnell and Senator John Cornyn, leader of the National Republican Senatorial Committee – a principle Republican campaign fund-raising organization – flew to New York City to meet with Wall Street. Looming on the “dark horizon” was another long and bitter battle with President Obama and the Democrats over the proposed financial reform bill. It was safe to assume that Republicans would drag this one out like they did health care reform so as to impact the coming Fall mid-term elections.
True to form, McConnell and Cornyn made their pitch to the money-changers sitting in the temple – which was 25 Wall Street executives and hedge fund managers. The two powerful Senators made it very clear that in order for the Republicans to have any chance to take back control of the Senate and the House, they would need Wall Street’s assistance. As one anonymous Wall Street executive in attendance so eloquently put it, “There was no arm twisting, but they did say that we should feel uncomfortable living in any country where one party has unfettered ability to pass anything [legislation] . . . President Obama dreams up.”
I hope I don’t have to spell out what the Republicans quid pro quo was? $$$$$$$$$$$$$$$$$ . . . and lots of it.
So upon the Senator’s return to Washington, McConnell immediately announces that the Republicans are united in their oppostion to the Democrats’ financial reform bill, and they will utilize every procedural move to block the proposed regulatory-laden legislation because it will risk future tax-payer bailouts. That was just two weeks ago.
Fast forward one week, with one big freakin’ revelation about Goldman Sachs’ “gaming the system” to the $1 Billion detriment of several of their institutional clients, as well as proposals for much stronger derivatives regulation coming out of another Senate committee – and the Republicans are caught in a trap that they set for themselves.
Yet, in spite of the fact that the Republicans suddenly reversed course and were quickly backing away from supporting their Wall Street financiers, appearing more conciliatory towards President Obama and the Democrats than they have in more than 14 months, Mitch McConnell would have you believe that he has the Democrats on the ropes.
McConnell seems to think he should get credit for forcing the Democrats to negotiate. Senator Chris Dodd, Chairman of the Senate Banking Committee and author of the pending legislation, responded to McConnell’s baseless bragging, saying this:
“That is like a rooster taking credit for the sunrise.”
YEP!
UPDATE: Now after two days of filbustering and holding up floor debate on financial reform, McConnell got those Democrats to negotiate again – or was it get the voters to forget about the GOP’s siding with Wall Street by November?
SEC Diddles While Rome Burns
Posted by Lance Haley in Banking, Business and Money, Capitalism, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Legal & Justice, Politics, Republicans, Senate, Show Them the $$$, U.S. District Courts, Wall Street, financial industry on April 26th, 2010
DID WATCHING PORN CAUSE THE FINANCIAL CRISIS?
This author was highly critical of the Securities and Exchange Commission’s (SEC) limp-dicked response to the Bank of America bailout scandal – here, here, here, and especially HERE - which was finally settled several months ago.
Federal Judge Jed Rakoff was incensed at the SEC’s handling of that case – and he publicly admonished SEC lawyers and regulators in a series of blistering critiques at their apparently cozy relationship with BoA executives and lawyers in trying to reach a settlement in that matter. Click on the link above to read the judges comments.
At least Judge Rakoff demonstrated that he has balls, and he vicariously told the SEC in no uncertain terms that they need to grow some testicles. I guess they got the message, in light of their recent case filed against Goldman Sachs.
And speaking of SEC testicles . . .
While Bernie Madoff was screwing his investors out of $50 Billion, and Goldman Sachs was screwing the rest of the world out of whatever money remained, SEC lawyers and high-ranking officials were watching porn stars screw one another.
And then we all got screwed – up the A$$!
Responding to the scandal, SEC spokesman John Nester released a statement that said, “each of the offending employees has been disciplined or is in the process of being disciplined.”
WAIT A MINUTE!?!
Doesn’t SEC Chairman Mary Shapiro realize that is exactly what these naughty boys want - punishment? Wonder if she used her bare hand, or a whip?
“Oooh, Mary baby . . . I’m a such bad boy. Pleezzze, spank me real hard. Pleeezzze?!?”
What a bunch of jack-offs – both literally and figuratively speaking.
On a final note: one of the SEC porn-watchers was a female staff accountant . An chance someone from the SEC can send me her email address and phone number? :)
P.S. To Senator Chuck Grassley and all of you other Republicans trying to use this as political fodder for undermining financial reform - this porn scandal happened on former SEC Chairman Christopher Cox’s watch. He was a Bush Republican appointee, confirmed by a Republican-controlled Senate!
Goldman Sachs’ “Fabulous Fab’s” Fabulous Fraud
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Economics, Financial Crisis, Show Them the $$$, Wealth Disparity & the Ultra Rich, financial industry on April 20th, 2010
“THERE IS A SUCKER BORN EVERY MINUTE”
- David Hannum [no, it was not P.T. Barnum]
Confidence is the single most important element of any fraud.
That is why fraud schemes are called confidence games or confidence tricks.
Ever heard of a “Three Card Monte“? It is the most classic con game run on the streets. This is a card game that initially inspires confidence in the “mark” – the person who is the target of the fraud - by showing them how easy it is to make money by making the correct bet. Both the dealer and another person pretending to play the game conspire together in order to make the “mark” feel confident that he will win game. In other words, the game is already rigged before the “mark” even plays.
Moreover, it preys on several elemental human flaws: greed and ego. That is why it works. We always think we can do better than other people – that we are smarter than them; and, once we start we cannot stand to lose money, so we keep upping the bet to make up for our rising losses. That’s why Vegas makes so much money. They rely on our greed and ego to lead us to the tables. As does Goldman Sachs (GS) down on Wall Street.
Except in Goldman Sachs’ case – just like a “3 Card Monte” - they create a fraud. At least that’s what the SEC is now alleging. And the allegations are not looking too good on paper. Nor in the national business media, as numerous business journalists - here, here and here - weigh in on the matter, gleefully watching as GS twists in the firestorm of their own creation that appears to be developing.
The best response came from Dylan Ratigan, former business journalist for CNBC and current host of The Dylan Ratigan Show on MSNBC. After GS posted its press release authored by company spokesman Lucas van Praag, Ratigan fired-off a serious of questions for Goldman Sachs to answer. If you want a preview of the cross-examination in this case, this will be as good a template as you will see.
What’s even worse are the emails that the young Goldman executive who was setting up these deals was sending when the parties were deep in the midst of putting this together; deals designed to benefit his company – resulting in a very large bonus for him – and virtually ensuring that many of Goldman’s own clients were going to be left holding the bag, while one client profited handsomely . Fabrice Tourre, the self-proclaimed “Fabulous Fab”, sent the following message to someone:
“Only potential survivor, the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrousities!!!”
So Goldman is circling the wagons, and denying any wrong-doing. However, what Goldman is conveniently omitting – not ironically, given their business practices at issue - is that they failed to disclose to clients investing on one side of the “confidence game”, that Goldman was actively working for another client on the other side of the confidence game whose interests were diametrically opposed to the first parties’. And they said nothing, while making huge fees off both clients. It’s a classic conflict of interest scenario – which is tantamount to fraud if they breached a duty to disclose that fact – and the fact was a material issue central to the transaction.
Moreover, Goldman Sachs’ claim that they “lost money” on this deal may be tenuous, at best. The fact that the value of the investment may have dropped over time does not account for the fact that GS had purchased huge insurance policies to mitigate those losses, as well as buying “shorts” in order to make money as the value dropped – which could actually result in a hefty profit.
Nevertheless, Goldman Sachs insinuates that it will never admit they have done anything wrong; that “it will be a cold day in Hell. After all, it was Goldman Sachs’ CEO, Lloyd Blankfein, who was quoted in The Times :
“I’M DOING GOD’S WORK.”
Frankly, Lloyd, I think it was Satan’s work.
And maybe Hell will freeze over . . .
UPDATE: Here is a guide to the Goldman Sachs issue from U.S. News and World Report.
Federal Judge Jed S. Rakoff: A Lonely Soldier in the War Against Wall Street’s Financial Terrorists?
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Legal & Justice, U.S. District Courts, Wall Street, financial industry on February 26th, 2010
THE ONE MAN WITH BIG ENOUGH BALLS TO TAKE ON WALL STREET
Calling the Security and Exchange Commission’s legal settlement with Bank of America (BoA) “half-baked justice at best“, U.S. District Court Judge Jed S. Rakoff reluctantly signed-off on the agreement between the two parties on Monday, writing in his order that “[t]his court, while shaking its head, grants the S.E.C.’s motion and approves the proposed consent judgment.”
Judge Rakoff is a true American Maverick, and a champion for American public shareholders.
I am not talking about some half-baked Sarah “Pretender” Palin maverick. This man is the real deal – and you can take that to the bank. Just don’t deposit it with Bank of America. Because when it comes to the truth, BoA – like the rest of the Wall Street Financial Terrorists – has proven beyond a shadow of a doubt that it simply cannot be trusted.
On several occasions this author has commented, here and here regarding the ongoing feud between that limp-dicked, impotent icon of American investor protection - the U.S. Securities and Exchange Commission (S.E.C.) - and Judge Rakoff, over this settlement of Bank of America’s failure to disclose critical information in it’s SEC stock disclosure filings regarding the Merrill Lynch merger.
BoA shareholders were entitled to know the scale of Merrill Lynch’s liabilities, as well as the size of the bonuses that were to be paid to Merrill’s top executives, before approving the merger. However, none of that was disclosed in the filing, and BoA is blaming it’s former top legal counsel for it’s ostensibly innocent error in judgment.
During one of those previous court hearings, the Judge voiced his utter contempt for claims by both BoA and the SEC that none of the BoA executives were culpable for the material non-disclosure. He was further incensed over the irony that it would be BoA’s shareholders who would ultimately be the ones who were financially punished because the bank would have to pay the fines out of it’s profits, thus further diminishing the value of the shareholders stock. The judge lamented this fact, having preferred that BoA’s top executives pay the fines. Nonetheless, he begrudgingly approved the settlement.
Judge Rakoff is also currently presiding over a pending civil matter against J.P. Morgan Chase. In the order he issued on January 28, 2010 in that case, the Judge wrote that “JP Morgan thereby violated, at a minimum, the covenant of good faith and fair dealing” when it obviously attempted to structure a deal with one client in an effort to position itself so as to benefit another client in the same industry – a clear conflict of interest. The judge noted that “such an end run, if not a down right sham , is not permissable . . .”, insinuating J.P. Morgan committed fraud.
Felix Salmon, a well respected business writer and blogger, wrote a good analysis of Morgan’s corrupt business dealings in the matter titled How J.P. Morgan treats its clients: scandalously and in bad faith. As another writer so eloquently put it, “[w]e have entered a period of grotesque decadence in the financial and business dealings of those who brought us the great financial calamities.”
In the final irony in the BoA case, both the S.E.C. and Bank of America expressed just how pleased they were with the settlement. I’ll bet they were. Now the question becomes, when will the S.E.C. lawyers who worked on this case retire from “government service”, and take jobs with BoA or one of the other of the Wall Street Terrorist Organizations ? Anyone want to take a bet that this doesn’t happen?
I welcome any and all takers. And I will be laughing all the way to the bank when I win that bet. Just hope you were smart enough to hedge that wager Goldman Sachs-style by betting that I won’t be depositing my winnings in BoA. Because I won’t. Judge Rakoff would be disgusted with me, and rightfully so.
Thank Goodness We Have At Least One Man With Balls On Our Side!
Now the rest of you government weenies and politicians - grow some freakin’ testicles.
Thank Goodness Obama Healthcare Reform is Dead? Caveat Emptor . . .
Posted by Lance Haley in 2010 Election, 2012 Election, Bailouts, Banking, Budget, Budget & Deficit, Budget Deficit, Business and Money, Campaigns, Capitalism, Conservatives, Economics, Financial Crisis, Financial Terrorists, Government, Healthcare Reform, How and Why We Get Screwed, Medicare, Sarah Palin, Show Them the $$$, Wall Street, Wealth Disparity & the Ultra Rich, economy, financial industry on February 12th, 2010
This is the face of the future for Republican Health Care and Social Security Reform – memorize it!
Now remember all of those terrifying Town Hall meetings in the Summer of 2009, where all you heard about on a daily basis were “Death Panels” and Medicare cuts, and Big Brother’s government bureaucrats making decisions about both the quality and quantity of health care you were going to receive?
You have nothing to worry about. Obama’s Health Care Reform is likely all but dead, and many of you will try to vote the Republicans back into power in this Fall’s mid-term elections so that they can protect you from Obama’s scary Socialist Big Government. Hip, Hip, Hooray (or is that Horror?) for their brand of Capitalism and individual freedom.
Except for one thing. The Republicans do not intend to protect you from anything (remember, that’s the point of shrinking government support). Including going broke in your retirement years from either rising health care costs, or diminishing retirement income. Think I am kidding? This is not hyperbole!
Ignore what follows at your own peril . . .
At the 2009 CPAC (Conservative Political Action Conference) - this is the Superbowl of Conservative power-brokers, with Glenn Beck as their 2010 Keynote Speaker - Republican Congressman Paul Ryan (R-WI) proposed that Medicare be completely dismantled, and replaced by a system of vouchers for seniors to purchase health insurance in the private sector.
Make no mistake about it: this will be the platform for the Republicans’ answer on how to reform health care once they are back in power. Do you doubt that? Well, Fox News reported that Ryan has been annointed as “the leader of future of the conservative movement.” That’s code for Republican Presidential nominee. He is their visionary, and here is his vision for American retirees’ Medicare and social security safety nets.
According to The Economist magazine, and an analysis from the Congressional Budget Office (CBO), Ryan’s “daring plan” will stimulate both the health insurance industry, as well as the health care industry, while slowing the growth of government health care spending; which is great if you are a Republican rising star like Ryan, who receives almost 40% of his political campaign contributions from health-related industries and their beneficiaries.
What’s not so great for retirees is that the CBO analysis shows why this is so great for the government and those industries: the dollar value of those vouchers you are going to get under Ryan’s plan will not rise as quickly as the projected costs of health care. Which means retirees will have higher out-of-pocket expenses as time goes on. And you can be certain that if those costs are going up, your private health insurance will also be going up at an equally rising rate – after all, they have to make a profit. That’s Capitalism. Right?
Another great thing about this plan – but not so great for retirees – is that the cost to the government will continue to grow more slowly because, as the CBO projections show, people will use less health care when they have to increasingly pay more and more out of their own pockets. Remember last summer when Sarah Palin and the Teabaggers scared you about the government rationing health care? Now you can do it to yourself!
In essence, Ryan’s Republican plan would make the government go broke more slowly than American retirees will, while temporarily keeping this growing health care crisis at bay another decade or two, and increase the profits of health-related industries along the way, forcing you to resort to receiving less and less health care as you grow older.
Don’t believe me? Do the math. It’s really that simple.
And Remember: Under the Republican Healthcare Reform Plan you will NOT even have Medicare supplemental insurance to fall back on. You wanted government out of your life . . . you got it!
So be happy you are not going to get Health Care Reform from Obama. I don’t mean to alarm you – especially after the Republicans scared you sufficiently enough to ensure health care reform would not get passed. After all, now they are free to begin selling you their notion of a “free market” alternative. Caveat emptor (“buyer beware”).
And recall the proverbial admonishment: “Be careful what you wish for . . . you just might get it.”
Happy retirement, America. 
P.S. Ryan’s “free market plan” also calls for Social Security to be completely dismantled, and privatized. Surely the impact of that policy is not lost on anyone after the global financial markets collapsed for the second time in a decade – losing almost 40% of their value in both downturns, with average investment returns for the past ten (10) years of about 1%. What if your social security safety net was invested there? Hint: it’s not a “free market” proposal - the government will limit your choices on how you can invest your social security retirement. Are you really so naive as to think Wall Street won’t have their greedy fingers in that enormous financial pie? They own Washington, D.C.!
Obama Does Not Begrudge Wall Street Terrorists’ Robbing the National Treasury to make a Profit?
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Economics, Financial Crisis, Financial Terrorists, How and Why We Get Screwed, Politics, Show Them the $$$, Wall Street, Wealth Disparity & the Ultra Rich, economy, financial industry on February 10th, 2010
President Obama – you cannot be serious?!?
These Titans of Socialist Capitalism take the money we bailed them out with – including “rigging” the system with the help of Paulson and Geithner so that AIG’s TARP money was re-directed to them – go on to make an enormous profit by trading with that money (which was not the purpose of the bailouts), and you call them savvy businessmen?
Now almost a year ago to the day, you gave the following remarks at the White House:
“This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we believe that success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.”
So are they failures? Or savvy businessmen? Or both?
This author recently pondered your failure to immediately regulate and reign-in Wall Street after your election when they were still on the ropes. Here is the bottom line: They screwed up, then they screwed us, and then you screwed up?
Do you see the problem here, Mr. President. The cognitive dissonance regarding your words and deeds towards Wall Street is deeply disturbing to those who supported you in 2008, especially when you had the perfect combination of opportunity, power, and the political capital to reign in these financial terrorists right after you took an oath to protect the American people. You did nothing, and now it is too late. Was it intentional? Or are you being obtuse?
When political rhetoric collides with inaction, people become dismayed. Maybe the young voters who are stepping to the sidelines are correct?
Disillusionment is too mild a word for such a betrayal if it was just the “same old wine in a brand new bottle“, President Obama.
“Meet the new Boss . . . Same as the Old Boss . . .We Won’t Get Fooled Again!”
Shame on us for ever having the audacity to hope? I hope not.
Bank of America’s CEO Ken Lewis Will Play the “But We Made Lots of Money” Card in his Criminal Case?
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Crime & Punishment, Economics, Financial Crisis, Financial Terrorists, How and Why We Get Screwed, Legal & Justice, Politics, Show Them the $$$, Wall Street, financial industry on February 5th, 2010
There is plenty of blame to go around in Washington and New York for the financial meltdown and subsequent bailout debacle. These Wall Street financial terrorists – Wizards of Mass Derivatives (WMD’s) – with the assistance of their Washington lackeys, Paulson, Geithner, Bernanke, et al., robbed the national treasury to pay the piper for their incompetence and then left us standing alone on the dance floor. And do not even go there about the fact that they “paid the money back” in their defense.
That dog won’t hunt!
Since our federal prosecutors would not grow some testicles and bring criminal indictments against any of these guys – with President Obama’s U.S. Attorney General Eric Holder leading the “Charge of the Lightweight Brigade” – New York AG Andrew Cuomo has demonstrated that he has big enough balls to make at least a couple of them pay for screwing us.
Ken Lewis, former CEO of Bank of America (BoA), was charged with committing fraud yesterday in a New York state court for his failure to divulge to BoA shareholders the extent of Merrill’s losses, as well as an undisclosed agreement to pay former Lynch executives massive bonuses, and that he intentionally misled the government by threatening to scuttle the deal in order to get another $20 billion in bailouts from the Treasury.
Sources from Lewis’ criminal defense team have indicated that they may subpoena Henry Paulson, former Bush Treasury Secretary, as well as Ben Bernanke, Chairman of the FederalReserve, to testify at Lewis’ trial in an attempt to persuade the jury that Lewis did not mislead the government about the severity of BoA’s financial condition subsequent to the banks merger with Merrill Lynch. They will further argue that the bank made money after the deal, and repaid all of the TARP money it received from the federal government, so the government and shareholders were not harmed – and in fact benefited from his actions (or inactions, as the case may be).
What is so unnerving is the audacity of Lewis to claim that “they made the company lot’s of money” as a defense. Worse yet, the Wall Street Journal comes to their defense, claming among other things that “TARP was a gilded straitjacket that every bank, including BofA, wanted to flee as quickly as possible”.
Really? Let’ review this twisted and misleading logic.
We made some really, really bad bets, and the financial system will collapse if you do not give us unprecedented bailouts to fix the system. Of course we understand that the government is giving us this money to restore the necessary liquidity - a continuous flow of money to keep the economy running – so that businesses can continue to borrow money, and keep people working. Now we are not going to making any promises to that effect, but we will do what we think is right for the financial system . Also, we accept that we have to purchase/merge with some of the other failed financial institutions as a condition of getting our asses saved. But we will not be obligated to deal honestly, nor follow financial regulations, in these business dealings, and if we see an opportunity to squeeze more money out of this mess, we will. Moreover, we will probably accept this unreasonable condition that you may limit our pay structure while we are under the obligation to pay the government back, but once we retire that debt to the government, you have to get off our ass and we can transact business however we like.
How dare them now have the arrogance to say they made money as a result of some uncanny business acumen. As I have stated previously in this blog – give me $15 or $20 Billion, I can make a Billion or so investing in some very conservative financial instruments over the course of a year, pay you back, give myself an obscene bonus – and then tell you to go FxxK youself!!
Moreover, REMEMBER THIS: they did NOT have to accept the money. Furthermore, they were supposed to lend the money, not hold it in reserve while waiting for the markets to turn North, and then invest it in order to make a quick killing so they could line their fat pockets, all the while leaving many Americans and businesses hung out to swing in the cold, harsh winds of their utter malfeasance. How utterly disingenuous of both Wall Street and the Wall Street Journal.
This author has previously commented several times about the criminal malfeasance of BoA in this blog – in this entry and in this entry - and questioned the refusal of federal prosecutors to bring charges in this matter. A Federal District Court Judge was appalled by BoA’s behavior, and was obviously disgusted that the U.S. government – specifically the Securities and Exchange Commission (SEC) – was not doing more. If we have to wait for a New York Attorney General to act, this begs the question as to how deep in bed people at the top of this government are with Wall Street?
President Obama – you took money from Wall Street, and now you say you want them to be accountable? Prove it!
P.S. This same picture was used in a previous entry – it is the finest representative illustration of the BoA bailout I have seen on the Internet. Illustration by graphic artist David Dees of DeesIllustration.com