Archive for wall street bailout

AIG CEO compares public anger over Wall St. bonuses to Deep South lynching African-Americans

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really bad analogies

wtf moment

Just when you thought you couldn't resent greedy, ultra-wealthy Wall Street executives more, along comes AIG CEO Bob Benmosche making jaw-droppingly tasteless analogies.

True to form, the recipients of gigantic bonuses just can't get enough, despite the fact that they nearly destroyed our financial system trying. Of course, they didn't mind accepting bailout money either. *Yawn, stretch*... millions and billions in bailouts and bonuses, it's all in an hour's work.

All this while the rest of us have been struggling to make ends meet. It may be time for Occupy Wall Street to re-occupy.

Benmosche was interviewed by the Wall Street Journal and popped out with this gem, via Think Progress:

“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.

The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.

He then sworetogod that he really didn't intend to offend anyone. Honest!

Why, who would possibly be offended by the suggestion that lynching African-Americans in the Deep South and being criticized for maintaining the lifestyle of the rich and infamous are analogous?  I mean besides anyone with an ounce of self-awareness and decency.

That concludes today's WTF Moment, and thank you for playing "Really Bad Analogies."

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Elizabeth Warren Reads Riot Act to Holder for Not Prosecuting Big Bank Mortgage Fraud

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Elizabeth Warren gobsmacked

Today the Justice Department filed a lawsuit against the Texas voter ID law. That is welcome news, and it's great to see Attorney General Holder step up like that. However, he needs to be equally aggressive with prosecuting bank mortgage fraud.

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

Okay, so Senator Warren actually wrote a polite, detailed letter to Attorney General Holder. There was no shouting or acrimony. [...]

It may be professional in tone, but Warren's letter is a direct challenge to the criminal impunity and limited fines that the DOJ has provided to Wall Street and their multiple schemes to defraud both mortgage borrowers and investors.

The Huffington Post featured the letter, which bluntly states:

I am concerned that this might be yet another example of the federal government's timid enforcement strategy against the nation's largest financial institutions. I believe that if DOJ and our banking regulatory agencies prove unwilling over time to take the big banks to trial or even require admission of guilt when they cheat consumers and break the law -- either out of timidity or because of a lack of resources -- then the agencies lose enormous leverage in settlement negotiations.

There are a number of federal agencies involved in the lax regulation and minimal punishment (no jail time) of the financial industry for its role, particularly in the creation of a toxic subprime mortgage scam that played a key role in the economic collapse that burst open in the autumn of 2007.  [...]

However, some readers have written e-mails blaming mortgage borrowers for their own plights.  This may be accurate in some cases, but the massive defaults that have occurred have come from so many different kinds of lending fraud that it is difficult for the average consumer of news to keep up with them.  And it is proven that minority communities were targeted for fraud and manipulation by lenders.

To name just a few, banks targeted minority communities for second "balloon" mortgages without fully disclosing the terms or expanding mortgage payments.  Banks re-possessed homes through robo-signing of foreclosure notices without examining if the houses were actually behind in payments or the details of the chain of ownership.  Bank employees were told not to speak publicly about the deceptive practices employed to push usurious lending.   Banks would make "adjustment" agreements with some under the water homeowners only to sell blocks of mortgages to secondary lenders who wouldn't honor the agreements and, instead, sold the foreclosed homes and properties to investors such as the Blackstone Group. Even investors were not fully informed of the risks of bundled mortgages. [...]

One key factor that Warren alludes to is that by not appropriately applying legal sanctions against those who abused the mortgage system, citizens are left to think that the mortgage holders are solely at fault, because the DOJ is protecting the mortgage lenders rather than those struggling to save their houses, families and dreams from predatory and deceptive practices.

Please read the entire post here.

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VIDEO: Bernie Sanders Writes Law to Break Them Up: 10 Largest Banks Bigger Now Than Before Taxpayer Bailout

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banks too big to prosecute sanders v holder

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

As Sen. Bernie Sanders (I-Vermont)  charges in a news release issued from his Senate office:

The 10 largest banks in the United States are bigger now than before a taxpayer bailout following the 2008 financial crisis when the Federal Reserve propped up financial institutions with $16 trillion in near zero-interest loans and Congress approved a $700 billion rescue for banks that some considered “too big to fail.” Attorney General Eric H. Holder Jr. now says the Justice Department may not pursue criminal cases against big banks because filing charges could “have a negative impact on the national economy, perhaps even the world economy.”

“We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail,” Sanders said. “That is unacceptable and that has got to change because America is based on a system of law and justice.”

[...]

As a result of this Obama administration economic injustice and the threat that letting the same rip-off artists who caused the American economy to collapse continue to run even bigger banks and financial entities, Sanders and his staff penned a bill. It's a short piece of legislation that gets right to the point in Section 3:

Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities include on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.

[...]

If you want your dose of restoring economic accountability and justice to America, watch the Sanders/Sherman news conference on the law that would break up the too big to fail banks, [in the video above].

Please read the entire post here.

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When US Doesn't Prosecute Wall Street Fraudsters, Taxpayers Get the Blowback

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greed

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

What happens when the government gives a get out of jail free pass to executives who run financial entities "too big to fail"?  The US taxpayers get the blowback.

The stockholders of A.I.G. -- the company which most came to symbolize egregious arrogance and double standards of banks and hedge funds ("no government financial regulation, but the taxpayers should bail us out when we gamble and lose") -- are in the process of suing the federal government.  [...]

But the "taxpayer assumes responsibility for our gambling, but we get all the profits from being bailed out" attitude doesn't sit well with some lawmakers, such as newly elected Sen. Elizabeth Warren (D-MA), according to The NYT. Warren issued a statement that included a stern rebuke to A.I.G. and its shareholders [...]

Meanwhile, the honchos at Goldman Sachs just executed a scheme to avoid higher tax rates on their multi-million dollar bonuses, as reported by journalist Susan Antilla [...]

As Antilla, who regularly writes for the Bloomberg View, opines:

Goldman and its too-big-to-fail brethren are banks that accepted welfare and are in debt to U.S. taxpayers for averting disaster. This hasn't been about hard-nosed capitalism since those first TARP wire transfers made their way into Goldman Sachs' coffers.

While the DOJ and SEC should have been regarding the 2007 economic crash as a crime scene, they treated it like something deserving a parking ticket for the financial elite.

As a result, the same people who were responsible for so much economic misery have been emboldened to once again let greed trump accountability.

Please read the whole post here.

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When the Financially Corrupt Were Tortured, Hanged and Beheaded

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

But we are a civilized society for those of the top 1% who defraud customers, the nation, and engage in risk taking for profit that undermines the world economy. Perish the thought of capital punishment, we don't even put those who oversee Wall Street financial malfeasance in jail; heck, we don't even charge them.

Yes, a few underlings, "guppies," are arrested now and then, but that is because their fraud was not large enough and was strictly personal (such as embezzlement). But if it is illegal activity on a massive firm-wide scale, then no one is held accountable. The financial giants just get a fine (if that even happens) that is less than the amount that they profited from their violation of regulations and the law, so they end up with a net revenue gain as a reward for their felonious behavior.

Zweig concludes, "Wall Street offers its risk-takers the potential to earn tens of millions, even hundreds of millions of dollars, when bets pay off, with no real penalties when bets go bad. Until – or unless – that culture changes, nothing fundamental will change." But he remains skeptical that holding individuals responsible for "too big to fail" illegal behavior will work.

That's his opinion.

In our book, it's still worth a try. Enabling the current double standard of putting a person in jail for kiting a few checks, but not even charging anybody for pre-meditated actions that lead to billions of dollars in fraudulent activity, well that's not only unfair; it results in a nation committing financial suicide.

Please read the rest here. I left out a lot.

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The federal bailout "provided taxpayers with higher returns than they could have made buying 30-year Treasury bonds"

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Via Taegan:

The federal government's bailout of financial firms "provided taxpayers with higher returns than they could have made buying 30-year Treasury bonds -- enough money to fund the Securities and Exchange Commission for the next two decades," Bloomberg reports.

"The government has earned $25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, according to data compiled by Bloomberg. That beat U.S. Treasuries, high-yield savings accounts, money-market funds and certificates of deposit. Investing in the stock market or gold would have paid off better."

Another talking point down the drain.

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Sen. Sherrod Brown seeks 50% tax on Wall Street bonuses

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By GottaLaff

Shorter Sherrod Brown: You owe Main Street:

[Sen. Sherrod Brown (D-Ohio)] Brown wants to impose a 50 percent tax on executive bonuses at firms that received aid under the $700 billion financial bailout package. Brown's legislation would use the revenue to support loans from the Small Business Administration (SBA).

Shorter Laffy:

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