“Today, the nation’s four largest banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — are nearly $2 trillion larger than they were before the crisis, with a greater market share than ever. And the federal help continues — not as direct bailouts, but in the form of an implicit government guarantee. The market knows that the government won’t allow these institutions to fail. It’s the ultimate insurance policy — one with no coverage limits or premiums.”
Joining ranks across the partisan divide, Senators Sherrod Brown and David Vitter introduce legislation aimed at ending Too Big To Fail: “The senators want the major banks to increase their own tangible equity so that shareholders, and not just taxpayers, take responsibility for their risky actions. They want the banks to have greater liquidity by holding more assets they can immediately turn into cash in a financial crisis. They say they want to keep Wall Street banks that enjoy government backing from gaming the financial system with credit derivatives and other risk-inflated schemes, which even JP Morgan Chase’s own employees failed to catch until too late.”
Naturally, the banks will be fighting this with everything they have, and Goliath usually wins these fights in Washington. They’re already leaning on one of their favorite Senators, Chuck Schumer, to block Brown from ascending to Chair of the Senate Banking Committee. Nonetheless, the progressive-conservative alliance here suggests, at the very least, a new wrinkle in the game.
In related news, companies are also wheeling out the Big Guns to threaten the Securities and Exchange Commission over potential new corporate disclosure rules for political spending — namely, making businesses disclose their campaign donations to their shareholders. Seems innocuous enough, but of course, “[t]he trade associations lining up in opposition to the rule amount to a roll call of the most politically influential — and highly regulated — industries in the country.”
“[I]n establishing OFA and through it extending an open palm to Washington’s corps of lobbyists and their masters, Obama is in danger of hitting the history books as a president who gamed, exploited, and ultimately joined a corrupt system rather than cleaning it up…Millions of Americans voted for Barack Obama thinking he understood what’s happening and would do something about it. Instead, he’s making things worse.“
Update: “There’s a certain conventional wisdom that President Obama wants stronger campaign finance laws, and to protect our democracy from the corrupting effects of money in politics. It’s a story that you should no longer believe.” The Sunlight Foundation weighs in against Obama as well. “The arc of the Obama presidency may be long, but so far, it has bent away from transparency for influence and campaign finance, and toward big funders.”
“People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching sort-of crime, committed by geeks in ties, normally associated with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.”
In Rolling Stone, Matt Taibbi explains how and why the Justice Department refused to prosecute HSBC for sundry violations of the law. In short, they were Too Big to Jail. “An arrestable class and an unarrestable class. We always suspected it, now it’s admitted. So what do we do?”
In related news, Wall Street bankers throw one of their customary hissyfits over a gaggle of fully complicit, bought-and-paid-for regulators finally being asked a hard question or two by the Senate Banking Committee — thanks to its and our new champion, Senator Elizabeth Warren. “The anonymous banker followed up [with Politico, naturally]: ‘Elizabeth Warren and Ted Cruz are dueling for the title of ‘most extreme fringe freshman senator.”
Anonymous Banker, let me choose my words carefully: Go fuck yourself. If this administration’s promises of change-we-can-believe-in were worth a dime, you and so many others would be doing hard time right about now.
Hey all. Apologies yet again for the lack of updates around here. As I said a couple oftimes last year, I’m still figuring out where the old Ghost fits in the scheme of life these days. There’s a negative feedback loop happening where I don’t post at GitM that often, so fewer people swing by here, so there are no comments or feedback on the posts that I do spend some time on, which makes me even less inclined to post, so thus even fewer people swing by here…you get the point.
I was thinking of starting up the movie reviews around here again for 2013, but having just spent a looong time on another giant project that few if any will ever peruse, I’m not really seeing the point of dedicating myself to spending even more hours of my day writing long-winded reviews that nobody ever reads. It’s just a lot of work with very little gain. I’ve been writing this blog for over 13 years and the reviews for over ten — If either were ever going to gain an audience, they would have done so by now.
I hate on the hipster Twitter kids, but establishment journalism is even worse. We live in a world where the totally inane Politicorules the roost and “wins the day”. Where our papers of record will keep warrantless wiretaps and drone bases quiet for years because the powers-that-be asked them to. Where idiot right-leaning “centrists” like David Brooks, David Gergen, Gloria Borger, and Cokie Roberts are queried for their inane views constantly, even though they don’t know anything and have never done anything with their lives but constantly mouth Beltway platitudes as if they were Holy Scripture. Where “journalists” like Chuck Todd, John King, and Jake Tapper — the latter of whom, let’s remember, made it big by kissing-and-telling on his Big Date with Monica Lewinsky — are taken seriously because they tsk-tsk about deficits like Serious People™ and passively nod along whenever obvious liars are lying. This isn’t journalism. It’s Court Stenography, Versailles-on-the-Potomac.
Ain’t no use jiving. Ain’t no use joking. Everything is broken. So, no, I don’t feel particularly inclined to talk about politics these days either, because there’s only so many times you can bellow in rage about it all, especially when nobody swings by this little corner of the Internet anyway. I’m not officially quitting GitM or anything, but let’s be honest. I’m not really what sure when, if ever, it’ll get its groove back. I’m not sure I see the point. And besides, as Richard said, a withdrawal in disgust is not the same as apathy.
“This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail.“
Continues Smith: “The FDIC is understandably ripshit…Bill Black said that the Bloomberg editors toned down his remarks considerably. He said, ‘Any competent regulator would respond: ‘No, Hell NO!’ It’s time that the public also say no, and loudly, to yet another route for running a drip feed from taxpayers to banksters.‘” (Cartoon via here.)
“The contrast in fortunes between those on top of the economic heap and those buried in the rubble couldn’t be starker. The 10 biggest banks now control more than three-quarters of the country’s banking assets. Profits have bounced back, while compensation at publicly traded Wall Street firms hit a record $135 billion in 2010. Meanwhile, more than 24 million Americans are out of work or can’t find full-time work, and nearly $9 trillion in household wealth has vanished. There seems to be no correlation between who drove the crisis and who is paying the price.“
“The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents. Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources.“
As the alleged perps try to get off by paying the (to-them) meager sum of $5 billion, a confidential audit conducted by HUD finds (surprise, surprise) compelling evidence of rampant foreclosure fraud at the big banks. “The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government…The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October.“
“Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn’t make a massive short bet and didn’t bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a ‘big short’ and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?“
“To recap: Goldman, to get $1.2 billion in crap off its books, dumps a huge lot of deadly mortgages on its clients, lies about where that crap came from and claims it believes in the product even as it’s betting $2 billion against it. When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried.”
“Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals — whether born of incompetence, timidity in the face of a crisis or a mindset too closely aligned with the banks it was supposed to rein in — may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy.” On his last day on the job, outgoing special inspector general for TARP Neil Barofsky laments the failures of the program he oversaw.
In very related news, see also NYT columnist William Cohan on the same subject yesterday: “Not only did the government’s theory fail in practice — unemployment remains relentlessly and historically high and American businesses seem intent on hoarding, rather than spending, the $2 trillion in cash on their collective balance sheets — but it also lost a once-in-a-century opportunity to change the mores of a momentarily chastened Wall Street, which remains badly in need of substantive reform. This is more than a shame; it is prima facie evidence of how deep Wall Street’s hooks have been — and continue to be — into the powers that be in Washington (and vice versa).“
“‘There can be no conceivable justification for requiring a soldier to surrender all his clothing, remain naked in his cell for seven hours, and then stand at attention the subsequent morning,’ he wrote. ‘This treatment is even more degrading considering that Pfc. Manning is being monitored — both by direct observation and by video — at all times.‘”
The president, meanwhile, assures us everything is ok because the Pentagon said so: “I have actually asked the Pentagon whether or not the procedures that have been taken in terms of his confinement are appropriate and are meeting our basic standards. They assure me that they are.” This, as Glenn Greenwald (who’s been on top of this all the way) points out, is exactly the same rationale Dubya used to use: “‘When [Bush] asked ‘the most senior legal officers in the U.S. government’ to review interrogation methods, ‘they assured me they did not constitute torture.’” Well, ok then.
Should Manning be in U.S. custody right now? Yes. He took an oath to the United States military and, knowing full well the consequences, broke it in an act of civil disobedience. If you can’t do the time, don’t do the crime — I get that. But should Manning be abused and tortured in U.S. custody? Of course not — Nobody should be. In fact, I thought we elected Barack Obama as president to make sure this never happened again.
Update: “Based on 30 years of government experience, if you have to explain why a guy is standing naked in the middle of a jail cell, you have a policy in need of urgent review.” P.J. Crowley reflects on his recent firing. “I stand by what I said. The United States should set the global standard for treatment of its citizens – and then exceed it. It is what the world expects of us. It is what we should expect of ourselves.“
