Archive for Big Banks

When You Can't Beat Them, Defund Them

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going broke

You got to hand it to the cagey tenacity of the Republicans. When they don't like a bill. They vote against it. If somehow it still passes, the vote to defund it. Use the Affordable Care Act as a prime example.

This isn't the first time they've gone to this method of killing a law -- using funding as their weapon.

Over the past few years, new and improved regulations have been instituted on Wall Street and banking. The Republicans and their Tea Party faction don't like it, but these rules and regulations did get passed. These are protections for the consumer from fraud, speculation and undue fees charged everyone of who uses a bank or credit card.

Now to prosecute a banking institution you need to catch the banks red-handed. To do that you need the Commodity Futures Trading Commission (CFTC) to press charges. They're our watchdogs. They, by statute, have the authority to bring about legal actions on the public's behalf.

So last year we learn of a multi-billion dollar international banking speculation scandal, referred to as the London Whale case. In that one, JPMorgan/Chase is said to  have lost about 4 Billion dollars in bogus speculation. And who's left holding the bag? You and me. Unless... this money is recovered in actions brought about by the CFTC.

Thank God we have them. Well, we have them, but we don't fund them.

Thanks to the GOP, they voted down the necessary funding required to run the CFTC. Add to that the other cuts forced by sequestration and now we, the public, are going to be stuck with no one to recover the lost money for us, as well as prosecute the guilty. So they receive a get out of jail free card and we get $4 billion in losses. Sounds about right for the Republicans.

HUFFPO:

The Commodity Futures Trading Commission has decided not to press charges against two traders in the "London Whale" case partly because it is so strapped for cash, its former chief enforcement officer, David Meister, told the Wall Street Journal.

House Republicans, as you may know, have made it pretty hard for the CFTC to do its job lately. They've repeatedly rejected requests for more CFTC funding and most recently turned down a raise for the agency to $315 million from $195 million. Of course, the agency's budget was already squeezed by the automatic spending cuts of the sequestration.

Republicans seem to think that the CFTC's budget, up from just $111 million five years ago, is more than enough. But as Bloomberg Businessweek pointed out on Friday, the markets under the CFTC's jurisdiction have gotten more than ten times bigger. (And as the WSJ notes, CFTC fines have paid for the agency's $195 million annual budget many times over.)

So the GOP wants to cut funding of a program that protects us from fraud AND more than pays for itself, if funded.

Yes, that's our Republicans at work. Shut down the government which costs us $24 Billion and yet refuse to pay for a division that can do good and make money. Isn't that what the Republicans are known for -- making money?

I think it's time for the Democrats to step forward and force the issues to the public's attention. Remind them Congress is responsible for all the banking fees we're paying to cover the Wall Street gambling by not voting in the funding necessary to protect us. It's the Republican's plot to destroy America. It's the Democrats' destiny to save it.

The Republicans have just rolled back provisions of Dodd-Frank which offers us protections from the financial shenanigans of big banks. Now they defund their donor's watchdogs (our guardians) so they can reap political contributions.

This has got to stop.

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Financing the Destruction of Planet Earth Are the Same Banks That Cratered Our Economy

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climate change if were bank would have been saved

Your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

[T]he same banks that nearly turned America into an economic dust bowl in 2008 are the ones financing the earth-destroying companies that promote toxic climate change like heroin to junkies. [...]

[Rev. Billy] Talen is hopeful that awareness is spreading that the banks too big to fail are failing our planet:

Everyone in the precinct house wanted an explanation of our action. When we said that Chase was financing climate disruption  --  the cops agreed! The thing is... we believe that employees inside the big banks also know this. Most Americans know that the biosphere is dying by human violence, whether it is chemicals, bulldozer blades, or outright population growth. We are all behind this great structure that we cannot surmount; this corporate wall. But we know that the Earth crisis is a kind of cry. The Earth cries out to us -- or through us....We are The Earth's cry as we shout in the banks that finance all that death.

The good reverend of the "church of stop shopping" has a distinct point: "shouting inside a bank about its climate-killing investments is a good thing."

Please read the entire post here.

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VIDEO: David Gregory changes subject to save guest from Barney Frank's question on wealthy bankers' huge salaries

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tick tick tick bugs bunny

Happy fifth anniversary of the Wall Street Meltdown! Weeee! Could a financial crisis happen again? You bet.

Visit NBCNews.com for breaking news, world news, and news about the economy

Meet the Press host David Gregory came to the rescue of his own personal NBC damsel in distress, CNBC host Maria Bartiromo, who thinks Americans need to come down with collective amnesia and get past all the silly little antics of Wall Street.

Never mind the pain and suffering, the poverty, the GOP cutting programs that would keep people alive who can barely make ends meet and who were cut off at the wallet by those poor, put-upon Big Banks.

Instead, Gregory's priority was to swoop in and end the awkward silence and nervous giggling that followed Barney Frank's question, "Why are bankers paying themselves so much money?" The panelists who are oh so into Wall Street were suddenly oh so silent:

Maria Bartiromo: We need to get beyond the conversation of, Is Wall Street evil?" Are the bankers evil and causing pain? And toward the conversation of, how do you create sustainable economic growth? That will answer the issue of inequality. Because with growth comes jobs. [...]

Barney Frank: I do want to add one thing, though, to your question about those poor beleaguered bankers who have been forced to do so much to keep from not being able to pay their debts they can’t lend money. If they really are running businesses that are so stressed that they can’t do their basic work, why are they paying themselves so much money? Where did these enormous salaries come from if they were in fact in such serious trouble?

pregnant pause

Maria Bartiromo: (laughing) Thank you for giving me that one. Okay.

David Gregory: But your point is to get beyond — to get beyond some of the resentment of the bankers and get to a place where we actually have more hiring going on, more investment going on and Washington plays a more constructive role beyond whether it was the bailout of the banks which changed our politics.

Think Progress:

(Nevermind that the deregulation of the financial sector is a primary driver of inequality in the U.S.) [...]

It would have been interesting to hear Bartiromo’s response had Gregory not intervened to prevent anyone answering Frank’s question. Wall Street executive pay seems difficult to defend five years on from the crisis. It isn’t just that banker bonuses and bank profits have returned to or even surpassed pre-crisis highs. It’s that a third of the highest-paid executives of the past 20 years have been failures or frauds. It’s that companies routinely manipulate performance-based compensation schemes to effectively guarantee executive payouts. It’s that taxpayers subsidize payments in the form of stock, which also give executives incentive to the sorts of fraud and risk-taking that created the financial crisis.

Here is the entire segment:

Visit NBCNews.com for breaking news, world news, and news about the economy

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Could a financial crisis happen again? You bet.

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banghead gif

Michael Hiltzik has yet another splendid column in today's Los Angeles Times. This one asks the question, "Could a financial crisis happen again?" His answer: "You bet."

Hiltzik, as he is wont to do, goes into some detail to support his case, so it's well worth reading the entire piece, but a few key points stood out. One is his reminder that no high-level executive of any major bank has faced trial, and most of them are still filthy rich. To rub salt into that wound, "no top executive of Bank of America, Bear Stearns, Lehman Bros., Goldman Sachs, Wells Fargo or JPMorgan has even been sued personally by the Securities and Exchange Commission."

Depressed yet? Angry yet? Banging your head against that nearby wall yet? Allow me to exacerbate your pain. Hiltzik recaps the Barclays tale of how that British-based bank paid a $450,000,000 price for manipulating interest rates for borrowers and is looking at a similar fine for rigging California's electricity market. However:

[Barclays] seems to have no trouble getting in the door of the Fed. How would you feel if your local D.A. took meetings with convicted felons to get their thoughts on how our tough criminal laws should be eased up? That's not far from what the Fed and Barclays are up to.

Feeling more secure? Me neither. Think things have changed? Me neither. Think Big Banks have watered down what should have been strict rules and are taking advantage of loopholes that benefit their bottom line at our expense? Hey, me too!

The banks today still fight regulation by claiming that tying their hands will hobble economic growth. This is one of those balancing tests where all the weights seem to have been piled on one side. What's left off is the cost of inaction.

[Per economists], the Great Recession cost the U.S. as much as $14 trillion in economic output, or up to $120,000 for every household in the country. That comes to a lot more than the cost of keeping a few bankers from collecting their bonuses through risky, manipulative financial deals.

The targets of regulation always squeal that trampling on their freedom of action will have economic costs. But the reality is that the cost of lax regulation is always higher than the cost of making a system safe. The U.S. understood that reality in the Thirties. What keeps us from understanding it now?

That wall you head is looking for is to your left. Bang away.

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