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Banking Is a Criminal Industry Because Its Crimes Go Unpunished
Charles Ferguson
Huffington Post| Jul 16, 2012 08:23 AM EDT
Consider just (July's) news in financial services.
First, Barclay's has been manipulating the Libor, the main interest rate upon which most other interest rates and financial transactions are based, since 2005. Moreover, Barclay's traders were colluding with traders in many other banks to assist them in manipulating the Libor too, so that they could all profit from their bets on it.
Second, JP Morgan Chase is having a really great month. Recent reports describe how it is resisting Federal subpoenas related to price-fixing in U.S. electricity markets. It is also accused (by former employees among others) of deliberately inflating the performance of its investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has now cost over $5 billion, is being investigated to determine whether the loss was initially concealed from regulators and the public.
Third, HSBC is paying a fine because it allowed hundreds of millions, perhaps billions, of dollars of money laundering by rogue states and sanctioned firms, including some related to terrorist activities and Iran's nuclear efforts. But HSBC is only one of at least 12 banks now known to have tolerated, and in some cases aggressively courted, money laundering by rogue states, terrorist organizations, corrupt dictators, and major drug cartels over the last decade. Others include Barclay's, Lloyds, Credit Suisse, and Wachovia (now part of Wells Fargo). Several of the banks created special handbooks on how to evade surveillance, created special business units to handle money laundering, and actively suppressed whistleblowers who warned of drug cartel activities.
SNIP...
Just another month in financial services. Is it unusual? No, it's not. If we go back just a little further, we have UBS, HSBC, Julius Baer, and other banks actively marketing tax evasion services to wealthy U.S. and European citizens. We have senior executives of several banks (including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was running a Ponzi scheme, but deciding to make money from him rather than turn him in. And then, of course, we have the financial crisis and everything that led to it. As I show in great detail in my book Predator Nation, we now possess overwhelming evidence of massive securities fraud, accounting fraud, perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment banks, and credit insurers (including senior executives of Countrywide, Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman Brothers) during the housing bubble that caused the financial crisis. If we go back to the late 1990s, we have the massively fraudulent hyping of Internet stocks, and several banks (including Merrill Lynch and Citigroup) actively aiding Enron in committing its frauds.
CONTINUED...
http://www.huffingtonpost.com/mobileweb/charles-ferguson/bank-crimes_b_1675714.html
xchrom
(108,903 posts)Octafish
(55,745 posts)Robin Sidel
Wall Street Journal Nov. 11, 2012
The banks run by executives now in prison for crimes related to the financial crisis had a combined $30 billion in assets. That is just one-tenth the size of the largest bank failure in U.S. history, the 2008 seizure of Washington Mutual Inc.'s WMIH +4.35% banking operations.
The gap is a sign of prosecutorial ineffectiveness to critics such as William Black, a regulator during the savings-and-loan crisis who now teaches economics and law at the University of Missouri-Kansas City.
"We have now the greatest epidemic of elite white-collar crime in the history of the world, and we have absolutely not a single individual who was actually elite and large in causing this crisis in prison or even credibly threatened with imprisonment," said Mr. Black.
U.S. officials say convictions tell only part of the story. The Federal Deposit Insurance Corp. has 244 open criminal investigations of financial-institution fraud, according to Fred Gibson, the agency's deputy inspector general. Of the continuing probes, 139 involve a bank officer or director.
CONTINUED...
http://online.wsj.com/article/SB10001424127887324073504578109451053220428.html?mod=WSJ_WSJ_US_News_5
randome
(34,845 posts)It's never a black-and-white issue.
Octafish
(55,745 posts)Elite level walk free. We the People pick up the tab.
randome
(34,845 posts)With the GOP losing its grip on power -and sanity?- this is our chance to put more common-sense regulations in place to make things better.
rudycantfail
(300 posts)to try to regulate the banking industry, until this moment.
randome
(34,845 posts)The Democrats sure as hell could have stood up more for better regulations when they didn't have power. They better do so now when they HAVE power.
Of course the GOP-controlled House is still a problem.
rudycantfail
(300 posts)Sorry to be a dick about it. The Democrats have had a lot of power for the past four years and that rise to power coincided with the near collapse of the world economy due mainly to vast banking malfeasance. Everybody who wasn't watching fox news knew who was to blame. If ever there was an inclination by our party leaders to investigate and regulate that out of control industry, it would have happened in 2008, '09 and '10. When I see posts on a left leaning web site like DU, blaming the GOP as the sole bad actor and obstructor of all good Democratic actions, it sounds like convenient excuse making. I see it way too often here.
Sorry to be hostile, randome - I'm a frustrated lefty.
randome
(34,845 posts)ret5hd
(20,518 posts)Your home loan was the bankers pizza.
randome
(34,845 posts)But that's just me.
ret5hd
(20,518 posts)byeya
(2,842 posts)S&Ls(if they exist anymore) and credit unions. The state of North Dakota has a state owned and run bank and they came through the bank-caused crash just fine.
When the investment banks were allowed to merge with community banks and use the latter's capital, is when the beginnings of the meltdown began.
Traditional banks and S&Ls, mortgage and auto loan lenders, have not been a problem. They lent money to buy a house and pretty much held on to the mortgage. They weren't the ones who bundled the notes and made them into financial toxins.
Go back to Glass Steagal and most financial problems would disappear.
Octafish
(55,745 posts)Neil Bush was forgiven with a also on the wrist.
http://www.dissidentvoice.org/Nov2004/Pringle1129.htm
The Dark Age of Money: Milton Friedman and the Rise of Monetary Fascism
http://www.democraticunderground.com/10021622813
You may enjoy video interviews with Prof. Brewton:
http://starkravingviking.blogspot.com/2009/11/mafia-cia-and-george-bush.html?m=1
byeya
(2,842 posts)saving per individual went from $20,000 to $100,000 which meant to the fraudsters that they could get the federal government to pony up $100 thou instead of a measly $20 thou making it worthwhile to engage in the looting of a heretofore benign industry.
Neil Bush was a player as was Nixon's AZ anti-pornagraphy panelist whose name escapes me.
Mainly though, it was organized capital who looted the system, broke it, and caused you and me and the rest of the taxpayers plenty of money.
Thanks for the links,
Octafish
(55,745 posts)Instead of loaning money for homes and local businesses, S&Ls were free to use taxpayer-backed money on anything they wanted. The happy crooks got all they wanted and took the money offshore. The S&L was made whole, courtesy of the taxpayer.
Here's how I know:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2922138
PS: Sorry about all the links...phone typing is nuts.
burnsei sensei
(1,820 posts)I was very disgusted with the "s&l crisis."
I knew it was a set-up designed to compel the movement of more money toward the investments of the rich and away from the modest aspirations of the middle-class and poor.
The S&L is designed with respect to the reality that a poor man's money doesn't do the kind of things a rich man's money does, and that those who do not wish to be subject to market forces should be protected.
think
(11,641 posts)Octafish
(55,745 posts)The fight between the financial industry and Senator-elect Elizabeth Warren heats up again over her possible nomination to the Senate banking committee.
By Andy Kroll on Mon. November 19, 2012 3:00 AM
MotherJones
Not even two weeks have passed since Democrat Elizabeth Warren rode a wave of grassroots support to victory in the US Senate race in Massachusetts, ousting Republican incumbent Scott Brown. Senator-elect Warren has not yet hired her staff. She has not yet moved into her Senate office. But the banking industry is already taking aim at her, scurrying to curb her future clout on Capitol Hill.
Lobbyists and trade groups for Wall Street and other major banking players are pressuring lawmakers to deny Warren a seat on the powerful Senate banking committee. With the impending departures of Sens. Herb Kohl (D-Wis.) and Daniel Akaka (D-Hawaii), Democrats have two spots to fill on the committee before the 113th Congress gavels in next year. Warren has not yet said whether she wants to serve on the committee. But she would be a natural: She's a bankruptcy law expert, she served as Congress' lead watchdog overseeing the $700 billion bank bailout from 2008 to 2010, and she conceived of and helped launch the Consumer Financial Protection Bureau (CFPB).
But the big banks are not fans of Warren, and their representatives in Washington have her in their crosshairs. Aides to two senators on the banking committee tell Mother Jones the industry has already moved to block Warren from joining the committee, which is charged with drafting legislation regulating much of the financial industry. "Downtown"shorthand for Washington's lobbying corridor"has been going nuts" to keep her off the committee, another Senate aide says.
CONTINUED...
http://m.motherjones.com/politics/2012/11/elizabeth-warren-senate-banking-committee#update
byeya
(2,842 posts)her interests and expertise lie.
banned from Kos
(4,017 posts)I never can get a straight answer from the bank griefers on that.
Response to banned from Kos (Reply #9)
AnotherMcIntosh This message was self-deleted by its author.
leftstreet
(36,112 posts)LOL you don't even try to hide it anymore, do you
banned from Kos
(4,017 posts)What pisses off some people is that Blankfein and Dimon are free when in reality they committed no crime at all.
This is a witch hunt.
People "manipulate" prices all the time - legally. It is called dumping a position or buying into strength.
People have hated bankers since the Medici. Before then actually - the moneylenders in the Bible.
Soros is hated for "breaking the Bank of England" - legally. Just by shorting the pound - legally.
Octafish
(55,745 posts)I call it bank fraud, but William K. Black is qualified to explain things and answer your interesting question:
Back in 2008 when the financial crisis hit us hard, a host of large institutions were destroyed. AIG, Merrill Lynch, Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac, Washington Mutual and Wachovia all suffered massive losses on their toxic derivatives, particularly collateralized debt obligations (CDO) and credit default swaps (CDS), better known as green slime. One would think everyone has learned a lesson. Jamie Dimon, JPMorgans CEO, now agrees that banks should not invest in derivatives. But government subsidies have a way of encouraging fraud and speculation.
JPMorgan, the nations largest bank, receives an explicit federal subsidy (deposit insurance) and a much larger implicit federal subsidy. Its improper for the megabank to use these subsidies to speculate in derivatives. And yet it can do so with hardly any serious regulatory consequences.
http://www.silverbearcafe.com/private/05.12/iceberg.html
banned from Kos
(4,017 posts)Banks PAY deposit insurance to the FDIC (too little in my view). They don't get an explicit federal subsidy so Black is wrong.
What Black is referring to may be the safety they might feel knowing their depositors are insured should they lose everything. That in no way helps the bank executives though. The bank will be seized (like Wachovia was) if they cannot maintain adequate capital.
rudycantfail
(300 posts)the money they've loaned to a bank won't just disappear and that all banks are regulated in that respect by the federal government instills public faith in banking institutions. This leads to more deposits, more liquidity, better solvency etc...and bigger salaries to bank executives and a lot more money to play with than if something other than the treasury was backing them up.
banned from Kos
(4,017 posts)After all, he presents himself as an expert on banking.
He is wrong again in the same article concerning a potential $2 billion loss by Morgan ruining the bank. Morgan lost $5 billion in the spring and recovered easily.
rudycantfail
(300 posts)explicit guarantee and a subsidy from the federal government.
What Black is referring to may be the safety they might feel knowing their depositors are insured should they lose everything. That in no way helps the bank executives though.
Of course it helps executives. They like making more money, less liability, fewer angry mobs, easier jobs and working in a field that was until recently, respected.
banned from Kos
(4,017 posts)Black called it an "explicit federal subsidy" for Morgan.
It is not explicit nor a subsidy. He is wrong.
rudycantfail
(300 posts)and it's been explicit since Glass Steagall in 1933, for every commercial bank.
dkf
(37,305 posts)And they are still allowed to "hedge".
dkf
(37,305 posts)Octafish
(55,745 posts)Nice background plus William K. Black at about the 6:20 mark...
It doesn't matter if the crook has a D or an R or nothing after the name, corruption is buy-partisan.
Baitball Blogger
(46,757 posts)Octafish
(55,745 posts)Prosecuting government officials risks a cycle of criminalizing public service, (Sunstein) argued, and Democrats should avoid replicating retributive efforts like the impeachment of President Clinton or even the slight appearance of it.
http://georgewashington2.blogspot.com/2010/10/main-obama-adviser-blocking-prosecution.html?m=1
Response to Octafish (Original post)
AnotherMcIntosh This message was self-deleted by its author.
redqueen
(115,103 posts)that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson." FDR
This is bigger than the government. The MIC, the banking industry, and now the prison-industrial complex are threats to democracy.
Response to redqueen (Reply #15)
AnotherMcIntosh This message was self-deleted by its author.
Octafish
(55,745 posts)Is great phrase:
Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, has published a new book, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. It presents a damning indictment of the Obama administrations execution of the TARP program generally, and of HAMP in particular.
By delaying millions of foreclosures, HAMP gave bailed-out banks more time to absorb housing-related losses while other parts of Obamas bailout plan repaired holes in the banks balance sheets. According to Barofsky, Treasury Secretary Tim Geithner even had a term for it. HAMP borrowers would foam the runway for the distressed banks looking for a safe landing. It is nice to know what Geithner really thinks of those Americans who were busy losing their homes in hard times.
CONTINUED w VIDEO and links and more letters...
http://washingtonexaminer.com/video-geithner-sacrificed-homeowners-to-foam-the-runway-for-the-banks/article/2502982
Response to Octafish (Reply #43)
AnotherMcIntosh This message was self-deleted by its author.
redqueen
(115,103 posts)Octafish
(55,745 posts)leftstreet
(36,112 posts)Octafish
(55,745 posts)Banksters Take Us to the Brink
by BILL MOYERS and MICHAEL WINSHIP
CounterPunch
Weekend Edition July 13-15, 2012
EXCERPT...
And what a business! Youve most likely been hearing about the newest scandal in banking, centering on Barclays Bank in Great Britain and something called Libor. That stands for London Interbank Offered Rate and involves a group of bankers who set a daily interest rate affecting trillions of dollars of transactions around the world. Your home mortgage, your college debt, your credit card fees; all of these could have been affected by Libor.
Now you would think the rates would be set by market forces, right? Arent they what makes the world go round? But it turns out some of those insiders were manipulating the index for their own gain, to make their banks look better off during the financial crisis, lower their borrowing costs, and raise their profits by cheating. Picking our pockets and lining theirs.
SNIP...
In testimony last week before the British Parliament, former Barclays chief executive Robert E. Diamond said the bank had repeatedly brought to the attention of U.S. regulators as well as U.K. regulators the problems that the bank was experiencing in the Libor market.
He said the banks warnings to regulators that Libor was artificially low did not lead to action. Barclays regulator in the United States is the Federal Reserve Bank of New York, which was run at the time by current Treasury Secretary Timothy F. Geithner.
CONTINUED...
http://www.counterpunch.org/2012/07/13/banksters-take-us-to-the-brink/
For some reason, this story seems to have droped off the Corporate McPravda radar.
nashville_brook
(20,958 posts)Octafish
(55,745 posts)By Eliot Spitzer
Slate.com
Posted Monday, July 16, 2012, at 10:39 PM ET
EXCERPT...
The New York Federal Reserve knew about Libor games being played by the banks years ago and seems to have done precious little about itexcept perhaps send a memo parroting the so-called reform ideas proposed by the banks themselves. Then nothing more. No prosecutions, no inquiries of the banks to see if the illegal behavior had stoppedjust a live-and-let-live attitude.
Of course, this was the New York Fed led by Tim Geithnerwho testified at his confirmation hearings to be treasury secretary that he had never been a regulator. Huh? As president of the N.Y. Fed, he was the most important regulator out there, and he didn't even know it?
SNIP...
Meanwhile, Hank Greenberg of AIG and John Whitehead of Goldman Sachs--these companies that got bailed outwere on the NY Fed committee that made Tim Geithner their president.
Was there a similar conflict of interest when the New York Fed apparently did nothing adequate about the Libor games? Well, look who was on the board: Dick Fuld of Lehman fame; Sandy Weill of Citibank; Jeff Immelt of GEthe largest beneficiary of the Fed's commercial paper guarantees; and, of course, Jamie Dimon of JPMorgan Chase, whose bank's London derivative trades and Libor involvement make his role on the board even more absurd.
CONTINUED...
http://www.slate.com/blogs/spitzer/2012/07/16/libor_scandal_why_the_new_york_fed_must_be_investigated_.html
RKP5637
(67,112 posts)being both caught and punished. All they get is a slap on the hand and good capitalists will think their greed is great and cleverness outstanding. That's what happens when in a society the chief mark of success and rewards is who gathers the most $$$$$.
Octafish
(55,745 posts)Herman K. Beebe and the Dark Side
http://www.businesscycles.biz/docs/herman.htm
RKP5637
(67,112 posts)riverbendviewgal
(4,253 posts)I think they are the only country to have the guts to do this. Their economy is now doing better than the USA's.
Nye Bevan
(25,406 posts)You don't need "due process of law".
You just need "guts".
Octafish
(55,745 posts)"You can play ball and good things can happen to you get a big pot of gold at the end of the Wall Street rainbow or you can do your job be aggressive and face personal ruin...We really need to rethink how we govern and how regulate," Barofsky said.
http://www.democraticunderground.com/10021057835
Zorra
(27,670 posts)Octafish
(55,745 posts)BILL MOYERS: You mean, the people who could have prevented the dam from breaking were too busy fishing above it, and reaping big rewards to want to fix the crack in it?
JAMES GALBRAITH: Sure. The Federal Reserve, in particular, knew that the dam was cracking. Alan Greenspan, I think, almost surely knew this, and chose to wait until it had washed away.
BILL MOYERS: Why?
JAMES GALBRAITH: They let all of this run, because they were getting a superficially stronger economy out of it. The ownership society, all that was a scam, basically, designed to lure people who could never afford these mortgages into accepting them. And yes, I think they, any rational person, certainly people in the industry, knew that this was not going to last. There was a little industry code, I've learned, IBGYBG. "I'll be gone. You'll be gone."
SOURCE: http://www.pbs.org/moyers/journal/10302009/transcript1.html
Tierra_y_Libertad
(50,414 posts)Octafish
(55,745 posts)Dr. Black is to forensic economics what Woody Guthrie is to authentic music.
What I've found is that people who should know better have forgotten both:
NEW
Know your BFEE: Goldmine Sacked or The Best Way to Rob a Bank Is to Own One
Same ideas as from Woody's day: The rich get richer and the poor make them that way.
Ichingcarpenter
(36,988 posts)economic rapist get less attention than the ones that RAPE US ALL,
You just need more austerity
and that will prevent rape.
lonestarnot
(77,097 posts)damn thing to stop them.