Sunshine/Lollipops
Yet, in the fine print, the agency also effectively empowered a handful of select banks to continue controlling the $700 trillion derivatives market. … Just five banks hold more than 90 percent of all derivatives contracts.
Regulators Overhaul Derivatives Market, but With a Caveat | NYTimes.com
“$700 trillion derivatives market”
More: Deja Vu on the Hill: Wall Street Lobbyists Roll Back Finance Reform, Again by Matt Taibbi
› Foreclosed Homeowners Arrested At DoJ While Demanding Banker Prosecution | Occupy America
On Tuesday morning, homeowners facing foreclosure and housing rights activists from across the country — including the Home Defender’s League and Occupy Our Homes (an off-shoot of Occupy Wall Street) — rallied outside the U.S. Department of Justice to demand Attorney General Holder hold the Wall Street Banks that ravaged America’s economy accountable. Dozens of struggling homeowners are prepared to risk arrest in non-violent civil disobedience or set up an ongoing occupation outside the Department of Justice until demands for Wall Street accountability and relief for their communities are addressed.
The action at the DOJ began on Monday, and although they were supported by over 500 allies, the DOJ decided they would rather jail these everyday Americans than step up to help resolve the ongoing foreclosure crisis. Some of those arrested were even tasered — 17 arrests in all, with two being tasered by police.
[…] The breaking point came for these foreclosure victims who are willing to face arrest if necessary when after agreeing to various settlements since 2008 requiring a total of $5.7 billion in payments to homeowners, “banks have paid less than half” that amount to date, according to the Washington Post:
Critics point to the 2011 agreement the Office of the Comptroller of the Currency (OCC) and the Fed struck with more than a dozen mortgage servicers as a prime example of the dysfunction. […]
After 12 months, no homeowners had received a dime. But the eight consultants managing the process on behalf of the banks were paid nearly $2 billion. …
[++]
JPMorgan ‘flooded California’s courts with collection lawsuits against defaulted credit card borrowers based on patently insufficient evidence,’ according to the lawsuit, filed in Los Angeles Superior Court. … The company ‘bet that borrowers would lack the resources or legal sophistication to call its bluff,’ the lawsuit said.
Reuters: JPMorgan sued by California over ‘illegal’ debt collections (via andrewgraham)
› From Detroit to Cyprus, Banksters in Search of Prey | Glen Ford
From Nicosia, Cyprus, to Detroit, Michigan, the global financial octopus is squeezing the life out of society, stripping away public and individual assets in a vain attempt to fend off its own, inevitable collapse. The bankers “troika” that effectively rules Europe prepares to reach into the individual accounts of ordinary depositors on the island nation of Cyprus to fund the bailout of their local banking brethren. Across the Atlantic, a corporate henchman makes arrangements to seize the assets and abolish the political rights of a Black metropolis. The local colorations may vary, but the crisis is the same: massed capital is devouring its social and natural environment. Either we liquidate the banksters, or Wall Street will liquidate us.
The proposed seizure of a big chunk of every ordinary Cypriot depositors’ accounts, in the guise of a one-time “tax,” was shocking even by the standards of the Euro Zone’s overlords: the International Monetary Fund, European Central Bank and European Commission. The original diktat to finance new lines of credit for Cyprus’s over-extended banks called for snatching 6.75 percent of the cash of customers with balances below 100,000 euros ($129,500), and 9.9 percent above that threshold. When the public went berserk, it was proposed that depositors with 20,000 euros or less be spared – but Cypriot lawmakers balked. The banks are now closed, to prevent people from withdrawing their money. But Europe’s ruling triumvirate at the bankers’ lair in Brussels continues to demand that the public-at-large pay to keep the global criminal financial enterprise humming, or be starved out. “In the absence of this measure, Cyprus would have faced scenarios that would have left deposit-holders significantly worse off,” they said – disaster banksterism.
A rapscallion Black lawyer for the notorious corporate law firm Jones Day delivered the bankers’ ultimatum to Detroit. Emergency financial manager Kevyn Orr, anointed by Michigan’s Republican governor, is a bankruptcy specialist whose mission is to liquidate the assets of the 82 percent Black city, especially the revenue-producing Water and Sewerage Department. Orr’s firm’s clients – which, according to their website, include “more than half of the Fortune 500 companies” – have plenty of experience at liquidating in Detroit. Butch Hollowell, general counsel for the local NAACP, says Wells Fargo has “done more foreclosures in Detroit and the state of Michigan than any other firm,” and is Detroit’s number one property tax scofflaw. Jones Day also represents Bank of America, JP Morgan Chase and CitiGroup.
“These are firms that not only got billions in TARP bailouts, but they’re also the same ones that defrauded people into signing these predatory leases which cause the crash of the housing market,” said Hollowell. “Detroit has been hit harder than anyplace in the country on that score” – hugely aggravating the city’s money problems. Financial manager Kevyn Orr’s job is to extract more booty from Detroit for the bankers’ vaults.
To facilitate the theft of the city’s property, its citizens must first be stripped of their political and civil rights, through the neutering of their elected officials. Orr looks forward to the project. “While I understand there’s a lot of concern and emotion behind the concept that I’m depriving people of certain rights,” he said, “actually it’s very consistent with both the history of this country and specifically in this state.” What he’s about to do “is democracy in action.”
This corporate concept of democracy has already devalued the franchise of the 49 percent of Michigan’s Black population that live in municipalities and school districts under the thumb of outside financial managers, a violation of both the Voting Rights Act and the one man-one vote rule embodied in the 14th Amendment, says the NAACP’s Hollowell.
Black Baptist pastors and the AFSCME and UAW unions will join the NAACP’s planned legal action against the “hostile takeover” of Detroit – which is fine, as a civil rights response. But this is a much bigger battle.
Detroit and the people of Cyprus share the same enemy, a class that is beyond the reach of simple civil rights suits. The Lords of Capital on Wall Street and the City of London and the Federal Reserve in Washington and in the “troika” at Brussels confront their own existential crisis, which compels them to liquidate the public sector so that it can eventually be transferred to their own balance sheets. There are many ways to accomplish this, through privatization of existing public institutions, or by simply blowing a hole in public services and allowing privateers to fill the void, subsidized by public funds. However, nothing can save the banksters from inevitable, and increasingly imminent, collapse. Ever-increasing profit margins must be achieved, somehow, or the system implodes. Hundreds of trillions of notional dollars in derivatives must be serviced and fed by a class that makes nothing and can only survive by chicanery and coercion by governments under their control.
In Cyprus, they are prepared to brazenly snatch euros directly from working and retired people’s accounts to fund a bank bailout, without even bothering to construct a convoluted pathway from the victims’ accounts to their own. They have reached the point of outright confiscation, and will not stop until they have stripped society of the potential to save itself from the ruins.
We have no choice but to confiscate them – to destroy them utterly as a class.
› Freddie Mac Sues More Than A Dozen Banks Over Libor Losses
Mortgage finance company Freddie Mac is suing more than a dozen banks for losses from the alleged manipulation of the benchmark interest rate known as Libor.
Bank of America Corp, JPMorgan Chase & Co, UBS AG and Credit Suisse Group AG are among the banks named as defendants in the lawsuit.
Freddie Mac, which invested in mortgage bonds and swaps tied to U.S. dollar Libor, claims the banks colluded to rig the benchmark from 2007 to 2010, according to the complaint, which was filed March 14 in U.S. District Court for the Eastern District of Virginia.
Freddie Mac sued for undetermined damages.
The inspector general of the Federal Housing Finance Authority, which oversees Freddie Mac and Fannie Mae, said the two government-controlled mortgage companies may have suffered more than $3 billion in losses as a result of Libor manipulation, according to an internal memo obtained by Reuters in December.
In the memo, the watchdog urged the companies’ regulator to consider legal action.
Bank of America, JPMorgan Chase, UBS, Credit Suisse and other banks did not immediately respond to calls for comment or declined to comment.
More than a dozen banks have been under scrutiny by authorities in the United States, Japan and Europe over claims they altered the Libor to hide financial problems and boost profits.
Freddie Mac said it discovered the fraud and collusion when Britain’s Barclays admitted in June it submitted false Libor submissions, according to the complaint. The bank agreed to pay $453 million that month to settle with British and U.S. authorities.
UBS was fined $1.5 billion in December for fiddling with interest rates, and Royal Bank of Scotland Group settled with authorities for $612 million in February.
The case is The Federal Home Loan Mortgage Corporation v Bank of America, U.S. District Court for the Eastern District of Virginia 13-cv-00342.
Holder’s comments don’t come as a total surprise. His underlings had already made similar confessions to The New York Times last year, after they declined to prosecute HSBC for flagrant, years-long violations of money-laundering laws, out of fear that doing so would hurt the global economy. Lanny Breuer, formerly in charge of doling out the Justice Department’s wrist slaps to banks, told Frontline as much in the documentary “The Untouchables,” which aired in January. Some observers have defended the Justice Department, suggesting that prosecuting law-breaking banks would amount to a death penalty that could upset the financial system and trigger another recession — although nobody really knows if it would do any such thing. But by not prosecuting law-breaking banks, and confessing to its terror of prosecuting those banks, the Justice Department has waved a big checkered flag to the biggest banks to go ahead and break all of the laws they want.
Eric Holder Admits Some Banks Are Just Too Big To Prosecute (via gonzodave)
(via gonzodave)
› DOJ Urges Federal Court to Approve Sweetheart Deal with Drug-Tainted HSBC | Dissident Voice
In late January, Bloomberg News reported that US prosecutors have “asked a federal judge to sign off on HSBC Holdings Plc (HSBA)’s $1.9 billion [£1.2bn] settlement of charges it enabled drug cartels to launder millions of dollars in trafficking proceeds.”
Prosecutors justified the settlement on grounds that “it includes the largest-ever forfeiture in the prosecution of a bank and provides for monitoring to prevent future violations,” arguing that “strict conditions, and the unprecedented forfeiture and penalties imposed, serve as a significant deterrent against future similar conduct.”
Let’s get this sick joke straight: here’s a bank that laundered billions of dollars for Colombian and Mexican drug lords, admittedly amongst the most violent gangsters on earth (120,000 dead Mexicans and counting since 2006) and we’re supposed to take this deal seriously. Seriously? Remember, this an institution whose pretax 2012 profits will exceed $23.5 billion (£15.63bn) when earnings are reported next week and the best the US government can do is extract a promise to “do better”–next time.
That deal, a deferred prosecution agreement (DPA) was cobbled together between the outgoing head of the Justice Department’s Criminal Division, Lanny A. Breuer and HSBC, Europe’s largest bank. At the urging of former Treasury Secretary Timothy Geithner, no criminal charges were sought–or brought–against senior bank executives. [more]
Many people became rightfully upset about bailouts given to big banks during the mortgage crisis. But it turns out that they are still going on, if more quietly, through the back door. The existence of one such secret deal, struck in July between the Federal Reserve Bank of New York and Bank of America, came to light just last week in court filings. That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements. Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.
Don’t Blink, or You’ll Miss Another Bank Bailout | Gretchen Morgenson
Borrowers with good credit who can meet the standard down payment requirement (usually 10 percent) can secure financing without too much trouble. The problem is that the banks don’t want to be limited to creditworthy applicants alone, because there aren’t enough creditworthy applicants interested in buying a house. That’s why they want Obama to loosen regulations on ‘government insured’ mortgages so they can lend money to anyone they want knowing that Uncle Sam will pay the bill when the loans go belly-up. That is what this is all about; Obama wants congress to slap their seal of approval on a new regime of crappy loans that will eventually be dumped on US taxpayers.
Obama, Housing and the Next Big Heist (via azspot)
(via azspot)
› Lanny Breuer Now Blames 94 US Attorneys for Immunizing Banksters | Marcy Wheeler
Lanny [Breuer has] adopted a new excuse to deny responsibility for letting the most destructive criminals in the country walk free (note, Lanny appears to be ignorant of SarBox regulations that wouldn’t even require this kind of intent):
“I understand why people are upset,” Breuer said. “But we have 94 U.S. attorneys and they don’t report to me. Not one of them determined that there was a criminal case to be had. These are very complicated cases and they were just simply, on the merits, not cases that could be brought criminally.”
Breuer said Wall Street executives would have been prosecuted if the investigators could have proved criminal intent. “I have the same DNA in all of these cases,” Breuer said. “It’s just not plausible that in one area we would be overly scared and in all the other areas we would be aggressive.”
Well okay then. In this article, Lanny takes or is given credit for the BP pleas, two Medicare cases, 40 corporate cases (by Robert Khuzami, almost all of which resulted in settlements), the La Cosa Nostra take down, and LIBOR “prosecutions” (reportedly DOJ will charge UBS shortly). Of those, I’m only aware of the BP investigation being led by a task force rather than a traditional US Attorney structure. Yet Lanny wants to claim credit for all these prosecutions and settlements, but blame his US Attorneys–all 94 US Attorneys (!) when we’re really talking maybe 4 or 5 who would face a complex bankster case, and really just New York’s Preet Bharara, whom Lanny himself gave jurisdiction over some of the highest profile cases–for not prosecuting the banksters.
It’s not Lanny’s fault the banksters have gone free, you see, it’s the fault of people like John Leonardo, Arizona’s US Attorney, Alicia Limtiaco, Guam’s US Attorney, or Felicia Adams, Northern Mississippi’s US Attorney, all of whom had no hint of jurisdiction in these cases.
This, in spite of the fact that Lanny has repeatedly admitted being personally involved in the bankster cases.
This, in spite of the fact that Lanny did play a leadership role in one of the few cases that had a similar task force structure as BP–the mortgage fraud settlement. In that case, Lanny under-resourced the investigative team, ensuring it would be unable to do adequate investigation to reach adequate settlement. And he didn’t even show up for the big announcement that–basically–the settlement was immunizing the banksters for stealing millions of people’s homes. Somehow, now that it’s time to claim credit, Lanny has forgotten about that willful attempt to help banks bury their crimes.
Lanny has, in the past, clearly admitted to actions that led directly to amnesty for banksters. But in his effort to shore up his reputation as he heads out the door (though not until March 1, unfortunately), he’s gonna blame everyone else for the fact that, on his watch, the most destructive criminals in the country got a pass.
How Big Banks Are Making Jobless Americans Pay Millions To Access Their Benefits
from Think Progress by Pat Garofalo
According to a new report from the National Consumer Law Center, jobless Americans are being forced to pay millions of dollars in unnecessary fees to big banks in order to access their unemployment insurance benefits. Several states do not give beneficiaries the option of having their benefits deposited directly into their bank accounts, forcing them to instead use prepaid debt cards, which come along with a host of fees and surcharges.
As the Associated press noted, the nation’s biggest banks make a killing under this system:
Banks including JPMorgan Chase & Co., U.S. Bancorp and Bank of America Corp. seized on government payments as a business opportunity.They pitched card programs to states as a win-win: States would save millions in overhead costs because the cards would be issued for free. And people without bank accounts would avoid the big fees charged by storefront check cashers.
However, most of the people being hit with fees already have bank accounts.The bank-state partnerships effectively shifted the cost of distributing payments from governments to individuals. The money needed to cover those costs is deducted from people’s unemployment benefits in the form of fees.
Big banks have also racked up huge profits administering food stamp programs. As the NCLC noted, “Even well-designed prepaid cards impose costs on workers, though the price is likely lower than the cost of cashing paper checks. In California, which continues to have the best card in our survey, workers paid nearly $1.8 million in fees in the past year, not including ATM surcharges. Thus, offering workers the choice of direct deposit remains important even for prepaid cards with the fewest fees.”
Look, banks already have a monopoly on lending money at interest and creating adequate supplies of money through the fractional reserve system. Their entire business model is created by government mandate, and they shouldn’t be allowed to “dip their beaks” as the government disburses benefits. This is patently unfair and siphons off benefits that would otherwise flow into the real economy, helping to create jobs.
(Source: wateringgoodseeds)
If Dimon means what he says, he shouldn’t be complaining about how society at large is obliged to fix the problem. JPMorgan should be doing something about JPMorgan to make sure it’s not too-big-to-fail — like break itself up. That’s a pipe dream. JPMorgan isn’t going to voluntarily give up the reduced cost of capital and other competitive advantages that come with the federal government’s backing of systemically important financial institutions. Jamie Dimon complaining that the world must end too-big-to-fail is like Darth Vader bemoaning the intergalactic dominance of the Death Star.
Jonathan Weil, Jamie Dimon Laments Too-Big-to-Fail? Give Me a Break
… [The FRONTLINE report] recalls that both in Washington and the country generally, “there was broad support for prosecuting Wall Street.” Nonetheless: “four years later, there have been no arrests of any senior Wall Street executives.”
In response to the DOJ’s excuse-making that these criminal cases are too hard to win, numerous experts - Senators, top Hill staffers, former DOJ prosecutors - emphasized the key point: Obama officials never even tried. One of the heroes of “The Untouchables”, former Democratic Sen. Ted Kaufman, worked tirelessly to provide the DOJ with all the funds it needed to ensure probing criminal investigations and even to pressure and compel them to do so. Yet when he and his staff would meet with Breuer and other top DOJ officials, they would proudly tout the small mortgage brokers they were pursuing, in response to which Kafuman and his staff said: “No. Don’t show me small-time mortgage guys in California. This is totally about what went on in Wall Street… . We are talking about investigating senior level Wall Street executives, even at the Board level”. (The same Lanny Breuer was recently seen announcing that the banking giant HSBC would face no criminal prosecution for its money laundering of funds for designated terrorist groups and drug networks on the ground that the bank was too big to risk prosecuting).
As Kaufman and his staffers make clear, Obama officials were plainly uninterested in pursuing criminal accountability for Wall Street. One former staffer to both Biden and Kaufman, Jeff Connaughton, wrote a book in 2011 - “The Payoff: Why Wall Street Always Wins” - devoted to alerting the nation that the Obama DOJ refused even to try to find criminal culprits on Wall Street. In the book, this career-Democratic-aide-turned-whistleblower details how the levers of Washington power are used to shield and protect high-level Wall Street executives, many of whom have close ties to the leaders of both parties and themselves are former high-level government officials. This is a system, he makes clear, that is constituted to ensure that those executives never face real accountability even for their most egregious and destructive crimes.
The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers in 2009 that “Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong.” In the documentary “Inside Job”, the economist Nouriel Roubini, when asked why there have been no such investigations, replied: “Because then you’d find the culprits.” Underlying all of that is what the Senate’s second-highest ranking Democrat, Dick Durbin, admitted in 2009: the banks “frankly own the place”. [++]
A lot of people are wondering what to think about the news that the board of AIG is considering joining the lawsuit filed by former AIG head Maurice “Hank” Greenberg against the Fed and the U.S. government – a suit that one news outlet describes as charging the state with handing out an “insufficiently generous bailout.”
The editorial in today’s Daily News captures the public feeling over this confusing news story quite well, I think:
If chutzpah were a crime, Hank Greenberg, American International Group’s former chief, would be going away for a long, long time.
Long since driven out of AIG, Greenberg is waging a lawsuit claiming the U.S. hurt the firm’s shareholders — including him — when the government rescued the insurance giant with the most humongous bailout of all time.
If you just read the headlines, the story that AIG is considering suing the government for bailing it out makes no sense at all. What could even be the basis for such a suit? One reader asked the question this way: “If a cop bursts into a motel room and stops you just as you’re about to blow your head off with a shotgun, can you sue him? If the answer is yes, should I try it?”
Former bailout inspector Neil Barofsky put it this way, in an interview with Bloomberg: “The idea that AIG would have been better off by going bankrupt, for the shareholders is a very, very hard thing to sell, I think.”
But here’s the funny thing about the lawsuit filed against the government: It isn’t all wrong. In fact, parts of it are quite on the mark.
The only problem is, the suit is being filed by maybe the biggest douchebag of all time, Hank Greenberg (and his company, Starr International), a man who has not only been proven to be corrupt and a fraud, but who perhaps more than anyone else was responsible for the galactic balance-sheet goat-fuck that caused AIG’s implosion in the first place. If there is such a person as an innocent AIG shareholder who was harmed by the government’s conduct, it sure as hell isn’t Hank Greenberg.
In fact, since the collapse of AIG was perhaps the most important event in causing the financial crisis of 2008 to spiral out of control, you can put Hank Greenberg on the very short list of individuals who are most responsible for the economic catastrophe. A few weeks ago I put former Countrywide chief Angelo Mozilo, former Lehman head Dick Fuld and Greenberg’s former subordinate Joe Cassano (the former head of AIG’s Financial Products unit) on that list, but Greenberg should be right there riding the bus of shame with all of those excellent folks.
It’s this fact, not the merits of the actual lawsuit, that make this news story so outrageous. [continue]
› Wall Street’s Untouchables | Glen Ford
The federal government and the nation’s biggest banks have reached yet another settlement in the Crime Of The Century – or, one of those crimes that are supposed to come around only once a century but seem to pop up every year or so nowadays, as finance capitalism rushes towards its final collapse. The $8.5 billion deal is the second settlement in what was called the robo-signing scandal, in which banksters took possession of homes whose mortgages they could not prove they actually owned.
If ever there were a capital corporate crime, this was it – a mega-theft so monstrously destructive it merited French Revolution-style justice, with hundreds of one-way trips to the guillotine. Instead, what we got was presidential intervention, during Obama’s last State of the Union address, when he announced that there would be a settlement with the states to avoid state prosecutions of the banks. The robo-signing investigation would pass into the gentle hands of U.S. Attorney General Eric Holder, whom the bankers had no reason to fear, and the states would divide up $25 billion, much of which would never reach victimized homeowners.
This week’s second settlement of the same scandal is a bizarre derivative of the first deal. The banks had agreed to hire outside consultants to pour through their books to determine how many homes had been unlawfully seized, loan modifications wrongfully denied, and fees improperly charged. By late last year, the consultants were nowhere near finished, when federal regulators called off the exercise, calling it hopeless and too expensive. So, the feds did what the government always does with Wall Street criminals. They settled, this time for $8.5 billion – while consumer advocates say the actual damage to homeowners was many times that.
It’s an educated guess that the independent auditors took so long sifting through the records because the banks’ books are vast crime scenes, covered in the life’s-blood of millions of consumers. Not the kind of treasure trove of criminal evidence that one should rush through, if one is seeking justice. However, what this administration seeks is not justice, but settlements that allow the banksters to pay a fine, stay out of jail, and get on with crime as usual.
Eric Holder is the Settler-in-Chief. That’s his job. Remember that other Crime Of The Century, the LIBOR interest rate-fixing scandal, the one that reached into every crease and crevice of the world economy. Attorney General Holder vowed to build criminal cases against the perpetrators, which included virtually the entire U.S. and European banking cartel. What he did was give out so many immunities from prosecution he looked like Abraham Lincoln on Emancipation Day. In this way, lots of evidence is gathered, but nobody goes to jail.
Eric Holder is actually the Get Out of Jail Attorney General. Not Get Out of Jail Free – the banks do have to pay a fine, which is called a settlement, and is viewed as a cost of doing business. And since the only business Wall Street knows how to do is crime, it’s back on the roller coaster for another screaming ride – until, finally, the whole contraption goes off the rails. How long? Not long.
