Economic recovery non-starter

The most important data for the United States economy right now are the "medical metrics" around the coronavirus pandemic, says Federal Reserve Chairman Jerome Powell.

In an interview with US TV network CBS' 60 Minutes news programme broadcast on Sunday night, Powell outlined the likely need for three to six more months of government financial help for firms and families.

He repeatedly returned to health issues as being central to the success of a US economic reopening, calling on Americans to "help each other through this" by adhering to social-distancing rules as state and local governments begin to lift restrictions on social and economic activities.

  alJazeera

Pie in the sky, Jerome.

"If we are thoughtful and careful about how we reopen the economy so that people take these social distancing measures forward and try to do what we can not to have another outbreak ... then the recovery can begin fairly soon," Powell said.

In other words, forget about it.

"Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year," he said.

Nice try, Jerome. We're all assuming there WILL be a second wave.

As Congress debates possible further economic relief, Powell has stretched the limits of typical central bank commentary, directly calling for more fiscal spending. In Sunday's interview, he even urged people to wash their hands and wear masks to aid the recovery.

Masks are for wimps. Doesn't he know that?

Under the best of circumstances it will be a long road, Powell said, with additional job losses likely through June, a rebound that takes time to "gather steam" and some parts of the economy like the travel and entertainment industries possibly under pressure until there is a vaccine. The economic devastation already has been severe. Powell said unemployment may hit 25 percent before it begins to fall and gross domestic product may contract at an annualised rate of perhaps 20 percent in the April through June period.

[...]

"For the economy to fully recover people will have to be fully confident and that may have to await the arrival of a vaccine."

And not one produced in "warp speed" that "may not be safe and effective."

...but hey, do what you want...you will anyway.

Goldman Sachs is determined to destroy the world

It's still happening.  It's been happening all along.  Why would it have stopped when they were bailed out the last time?

...but hey, do what you want...you will anyway.

In your face, Great Patriot Farmers

Secretary of Agriculture Sonny Perdue went out to Wisconsin and told a whole lot of dairy farmers that they were SOL as regards both their immediate and longterm futures. From the Washington Post:

U.S. Agriculture Secretary Sonny Perdue told reporters following an appearance at the World Dairy Expo in Madison that it’s getting harder for farmers to get by on milking smaller herds. “In America, the big get bigger and the small go out,” Perdue said. “I don’t think in America we, for any small business, we have a guaranteed income or guaranteed profitability.”

It takes a rare fella to say so plainly that America is essentially a monopoly culture, and that the ultimate goal of a free market is to achieve the absolute minimal amount of actual competition—especially to an audience of people whose livelihoods are being destroyed by those very dynamics.

[...]

Wisconsin, which touts itself as America’s Dairyland on its license plates, has lost 551 dairy farms in 2019 after losing 638 in 2018 and 465 in 2017, according to data from the state Department of Agriculture, Trade and Consumer Protection. The Legislature’s finance committee voted unanimously last month to spend an additional $200,000 to help struggling farmers deal with depression and mental health problems.

I'd like to think this will have some effect on the way people in the dairy counties of Wisconsin will vote a year from now, but voter depression is as dangerous to democracy as voter suppression, and some folks simply give up.

  Charles P Pierce

...but hey, do what you want...you will anyway.

UPDATE:

Happy Anniversay, Banksters

Ten years ago, on Saturday, September 13th, 2008, the world was about to end.

The New York Federal Reserve was a zoo. Imagine NASA headquarters on the day a giant asteroid careens into the atmosphere. That was the New York Fed: all hands on deck, peak human panic.

The crowd included future Treasury Secretary Timothy Geithner, then-Treasury Secretary (and former Goldman Sachs CEO) Hank Paulson, the representatives of multiple regulatory offices, and the CEOs of virtually every major bank in New York, each toting armies of bean counters and bankers.

The asteroid metaphor fit. In the twin collapses of top-five investment bank Lehman Brothers and insurance giant AIG, Wall Street saw a civilization-imperiling ball of debt hurtling its way.

The legend of that meeting, as immortalized in hagiographic reconstructions like Andrew Ross Sorkin’s Too Big to Fail, is that the tough-minded bank honchos found a way to scrape up just enough cash to steer the debt-comet off course.

  Matt Taibbi

The reality, however, was different.

Continue reading

...but hey, do what you want...you will anyway.

Darker Still

You know the old joke: How do you make a killing on Wall Street and never risk a loss? Easy—use other people’s money. Jamie Dimon and his underlings at JPMorgan Chase have perfected this dark art at America’s largest bank, which boasts a balance sheet one-eighth the size of the entire US economy.

In the depths of the financial collapse, the bank had unloaded tens of thousands of toxic loans when they were worth next to nothing.

[...]

After JPMorgan’s deceitful activities in the housing market helped trigger the 2008 financial crash that cost millions of Americans their jobs, homes, and life savings, punishment was in order. Among a vast array of misconduct, JPMorgan engaged in the routine use of “robo-signing,” which allowed bank employees to automatically sign hundreds, even thousands, of foreclosure documents per day without verifying their contents. But in the United States, white-collar criminals rarely go to prison; instead, they negotiate settlements. Thus, on February 9, 2012, US Attorney General Eric Holder announced the National Mortgage Settlement, which fined JPMorgan Chase and four other mega-banks a total of $25 billion.

JPMorgan’s share of the settlement was $5.3 billion, but only $1.1 billion had to be paid in cash; the other $4.2 billion was to come in the form of financial relief for homeowners in danger of losing their homes to foreclosure.

[...]

A Nation investigation can now reveal how JPMorgan met part of its $8.2 billion settlement burden: by using other people’s money.

  The Nation

But of course they did.

Here’s how the alleged scam worked. JPMorgan moved to forgive the mortgages of tens of thousands of homeowners; the feds, in turn, credited these canceled loans against the penalties due under the 2012 and 2013 settlements. But here’s the rub: In many instances, JPMorgan was forgiving loans on properties it no longer owned.

[...]

JPMorgan no longer owned the properties because it had sold the mortgages years earlier to 21 third-party investors, including three companies owned by Larry Schneider.

And Schneider's companies have a lawsuit against JP Morgan in court now. Don't hold your breath for justice.

In a bizarre twist, a company associated with the Church of Scientology facilitated the apparent scheme. Nationwide Title Clearing, a document-processing company with close ties to the church, produced and filed the documents that JPMorgan needed to claim ownership and cancel the loans.

[...]

Like every financial CEO in the country, Dimon is obligated by law to sign a document every year attesting to his knowledge of and responsibility for his bank’s operations. The law establishes punishments of $1 million in fines and imprisonment of up to 10 years for knowingly making false certifications.

Like I said, don't hold your breath.

...but hey, do what you want...you will anyway.

Trickle Down = Someone Pissing on Your Leg

If you want to spot the moment in time in which the Republican Party first rejected the empirical and embraced unreason as a political identity, don’t look to the Religious Right, look to the day Reagan and his people took supply-side economics seriously. That’s the first bowlful of monkeybrains that the GOP ate. That’s where the prion disease first took hold. Supply-side never made sense as economics; when George H. W. Bush called it “voodoo economics,” he said the truest thing he ever said in public.

  Charles P Pierce

And we know this, because we had the grand Reagan economy that did fck-all for the middle class, and ultimately, the national economy. And yet, here we are, pretending again that it will do wonders.

If you don’t believe me, believe the guy who first promulgated this nonsense to President Ronald Reagan, and who appeared in Thursday’s Washington Post.

Based on this logic, tax cuts became the GOP’s go-to solution for nearly every economic problem. Extravagant claims are made for any proposed tax cut. Wednesday, President Trump argued that “our country and our economy cannot take off” without the kind of tax reform he proposes. Last week, Republican economist Arthur Laffer said, “If you cut that [corporate] tax rate to 15 percent, it will pay for itself many times over. … This will bring in probably $1.5 trillion net by itself.” That’s wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth.

From the guy who gave us trickle down economics:

I swear I don't think I'm wrong when I opine that what the GOP and corporate elite are trying to do these days is to amass all the wealth they can, in whatever way they can, knowing that the whole shebang is racing toward a collosal collapse in the near future, and they want to be set when that happens. Screw the rest of us.

Back to Charlie:

The Deficit, which pops up every time there’s a Democratic president and/or every time the country’s real owners pull the strings of their legislative marionettes. In fact, one of them pretty much gave the game away in The New York Times on Thursday.

A new tax cut is emerging to rival those of the Bush years, and the deficit hawks have hardly peeped. “It’s a great talking point when you have an administration that’s Democrat-led,” said Representative Mark Walker, Republican of North Carolina and the chairman of the Republican Study Committee, a group of about 150 conservative House members. “It’s a little different now that Republicans have both houses and the administration.”

And there you have it: they squeal about deficits when the Democrats are in charge. It's a great "talking point" - but it has no other validity.

And here's what the trickle down guy says about what, if anything, actually promoted growth in the Reagan years:

First was the sharp reduction in interest rates by the Federal Reserve. The fed funds rate fell by more than half, from about 19 percent in July 1981 to about 9 percent in November 1982. Second, Reagan’s defense buildup and highway construction programs greatly increased the federal government’s purchases of goods and services. This is textbook Keynesian economics.

Third, there was the simple bounce-back from the recession of 1981-82. Recoveries in the postwar era tended to be V-shaped — they were as sharp as the downturns they followed. The deeper the recession, the more robust the recovery.

Finally, I’m not sure how many Republicans even know anymore that Reagan raised taxes several times after 1981.

[...]

Today, Republicans extol the virtues of lowering marginal tax rates, citing as their model the Tax Reform Act of 1986, which lowered the top individual income tax rate to just 28 percent from 50 percent, and the corporate tax rate to 34 percent from 46 percent. What follows, they say, would be an economic boon.

[...]

But there is no evidence showing a boost in growth from the 1986 act. The economy remained on the same track, with huge stock market crashes — 1987’s “Black Monday,” 1989’s Friday the 13th “mini-crash” and a recession beginning in 1990. Real wages fell.

[...]

The flip-side of tax cut mythology is the notion that tax increases are an economic disaster — the reason, in theory, every Republican in Congress voted against the tax increase proposed by Bill Clinton in 1993. Yet the 1990s was the most prosperous decade in recent memory. At 37.3 percent, aggregate real GDP growth in the 1990s exceeded that in the 1980s.

Despite huge tax cuts almost annually during the George W. Bush administration that cost the Treasury trillions in revenue, according to the Congressional Budget Office, growth collapsed in the first decade of the 2000s. Real GDP rose just 19.5 percent, well below its ’90s rate.

  WAPo

Tax cuts for the rich and the corporate have only one aim and one result: More wealth into the hands of the rich and the corporate. How can that not be obvious?

...but hey, do what you want...you will anyway.

Citibank Continues Its Economy-Crashing Ways

Synthetic CDOs. Banksters didn't pay a price for foisting them on the world and wrecking the economies of several countries in the process. So, guess what?

Two years ago, if I read the closing credits to The Big Short correctly, Bloomberg reported that banks were selling something called a “bespoke tranche opportunity,” which Bloomberg concluded was merely another name for a CDO. And now this.

[...]

From Bloomberg:

The 35-year-old Citigroup Inc. director has spent the past two years meeting clients, speaking at industry panels and becoming the face of a resurgent market for synthetic CDOs -- complex derivatives that let buyers make big, leveraged bets on the health of corporate America. Along the way, she’s helped establish Citigroup as its dominant player.

[...]

Why in the everloving fck would we trust these clowns again? And, even if we all got really stoned and decided to do that, why would we trust them with the same goddamn hand grenades that blew up everything the last time? There’s recividism and there’s recidivism and then there’s a genetic predisposition to stick your hands in everyone’s pockets and steal every last lint-covered penny that’s in there.

[...]

Once, a long time ago, a man named Charles Ponzi was so good at being a crook that his name came to define a certain mechanism for mass financial fraud, wrote that:

Then, as now, nobody gave a rap for ethics. The almighty dollar was the only goal, and its possession placed a person beyond any criticism for any breach of ethics incidental to it.

  Charles P Pierce

...but hey, do what you want...you will anyway.

Gary Cohn and Goldman Sachs' America - Alternative

If you would rather listen to the information than read the long article on Gary Cohn previously linked here, Jeremy Scahill interviews Gary Rivlin, who wrote the article.

...but hey, do what you want...you will anyway.

Gary Cohn and Goldman Sachs' America

For all Trump's campaign blasting of Hillary Clinton for being a Goldman Sachs puppet, and Goldman's near single-handed destruction of the world's economy in 2008, he has now essentially turned over the US economy to their number one crook. The Intercept has the outrageous story, including a synopsis of "the big short" and Cohn's participation in it.

With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm’s revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn’t survive the mortgage meltdown, saw Cohn as “the root of the problem.” Explained Marin, “When you become arrogant in a trading sense, you begin to think that everybody’s a counterparty, not a customer, not a client. And as a counterparty, you’re allowed to rip their face off.”

  The Intercept

...but hey, do what you want...you will anyway.

UPDATE:

If you prefer to hear this information than read it, Jeremy Scahill interviews the author on Intercepted.

Trump Era Deconstructing America - Part Whatever

Because banksters aren't still fucking us hard enough.

Banksters Must Pay

Deutsche Bank and Credit Suisse have agreed to pay out billions to resolve a probe into the alleged mis-selling of mortgage-backed securities at the height of the US housing bubble, striking deals before the Trump administration takes power.

  FT

About time.

After months of its negotiations with the DoJ, Deutsche said it had reached a $7.2bn deal with US authorities. Germany’s biggest bank had agreed “in principle” to pay a $3.1bn civil penalty and also provide $4.1bn in relief to consumers, over time.

Over how much time?

These guys have to pay $3 billion? Wow. That's got to make the think twice, eh? How many billions did they rake in on their fraudulent deals? How many people did they ruin? How many countries around the globe are still reeling?

"Alleged misselling."

The consumer relief portions of the settlements are typically far less painful for the banks than the straight payments since they are paid out over a period of years and not in cash. In the case of Deutsche Bank, Mr Abouhossein said the relief would be “primarily in the form of loan modifications and other assistance to homeowners and borrowers, and other similar initiatives to be determined, and delivered over a period of at least five years”.

[...]

Credit Suisse has also agreed to pay $5.28bn to resolve a DoJ probe of similar alleged actions. The Swiss bank said it will pay a civil penalty of $2.48bn and, like Deutsche’s agreement, provide consumer relief to the tune of $2.8bn over the course of five years.

I bet they're quaking in their boots.

The Deutsche deal caps a turbulent few months for the German bank, which saw its share price drop to a record low in September after it emerged the DoJ had made a $14bn claim.

So, they're getting a $10 billion discount. Nice.

The consumer relief portions of the settlements are typically far less painful for the banks than the straight payments since they are paid out over a period of years and not in cash. In the case of Deutsche Bank, Mr Abouhossein said the relief would be “primarily in the form of loan modifications and other assistance to homeowners and borrowers, and other similar initiatives to be determined, and delivered over a period of at least five years”.

[...]

Angela Merkel’s administration was forced to state that it would not bail out the bank, whose market capitalisation had sank to just $18bn.

[...]

Ingo Speich, a portfolio manager at Union Investment, one of Deutsche’s top 25 shareholders, said: “It’s a good compromise. The bank has shed one of the issues weighing on it, and a little bit of uncertainty will come out of the share price . . . It’s not the end of all their problems, but it’s certainly not a disappointment either.”

[...]

“We see the announcement by DB today around reaching a settlement in principle with the DoJ on the RMBS issue in the US as very positive,” said Kian Abouhossein of JPMorgan.

Indeed.

Barclays felt it should pay a fine of only about $1bn if its settlement was to be proportional with those of its rivals. It was prepared to settle for a total of about $2bn, including customer redress, according to two people briefed on the matter. But the DoJ pushed for something closer to the $5bn settlements that both Deutsche and Credit Suisse were thought to be close to agreeing, the people said.

[...]

From 2005 to 2007, Barclays fraudulently sold more than $31bn of mortgage-backed securities in 36 separate deals, prosecutors in New York said on Thursday.

And they were balking at a $5 billion fine.

“Barclays jeopardised billions of dollars of wealth through practices that were plainly irresponsible and dishonest,” said Loretta Lynch, the US attorney-general. “We are sending a clear message that the Department of Justice will not tolerate the defrauding of investors and the American people.”

A $5 billion penalty for the fraudulent theft of $31 billion and an accompanying global meltdown sends a message all right. But not that one.

..but hey, do what you want...you will anyway.

Neoliberalism + Ignorance Handed Trump the Votes

[R]eal wages for male workers are about at 1960s levels while spectacular gains have gone to the pockets of a very few at the top, disproportionately a fraction of 1%. Not the result of market forces, achievement or merit, but rather of definite policy decisions, matters reviewed carefully by economist Dean Baker in recently published work.

[...]

Through the periods of high and egalitarian growth in the '50s and '60s, the minimum wage -- which sets a floor for other wages -- tracked productivity. That ended with the onset of neoliberal doctrine. Since then, the minimum wage has stagnated (in real value). Had it continued as before, it would probably be close to $20 per hour. Today, it is considered a political revolution to raise it to $15.

[...]

Apart from wages, benefits and security, there is a loss of dignity, of hope for the future, of a sense that this is a world in which I belong and play a worthwhile role.

[...]

According to current information, Trump broke all records in the support he received from white voters, working class and lower middle class, particularly in the $50,000 to $90,000 income range, rural and suburban, primarily those without college education. These groups share the anger throughout the West at the centrist establishment, revealed as well in the unanticipated Brexit vote and the collapse of centrist parties in continental Europe. [Many of] the angry and disaffected are victims of the neoliberal policies of the past generation, the policies described in congressional testimony by Fed chair Alan Greenspan -- "St. Alan," as he was called reverentially by the economics profession and other admirers until the miraculous economy he was supervising crashed in 2007-2008, threatening to bring the whole world economy down with it. As Greenspan explained during his glory days, his successes in economic management were based substantially on "growing worker insecurity." Intimidated working people would not ask for higher wages, benefits and security, but would be satisfied with the stagnating wages and reduced benefits that signal a healthy economy by neoliberal standards.

[...]

The "change" that Trump is likely to bring will be harmful or worse, but it is understandable that the consequences are not clear to isolated people in an atomized society lacking the kinds of associations (like unions) that can educate and organize.

  Noam Chomsky

...but hey, do what you want...you will anyway.

I'm Still Mad About the Banksters

Most of the Wall Street scams that triggered what The Economist would decry as "populist" outrage in recent years weren't just morally despicable, but bluntly illegal. Many were just skyscraper-level versions of street crimes.

A Mexican-American racetrack owner launders perhaps tens of millions for Mexican drug gangs and gets 20 years. HSBC does the same thing on a much grander scale and everyone walks.

In the mortgage fraud cases, companies knowingly sold defective products to institutional investors, pension funds being a classic customer. Whistleblowers told of executives who knew they were selling investors packets of home loans prone to default, and did it anyway.

[...]

In a non-corporate context, we'd consider this among the most serious kinds of crimes that we punish. What sentence would you want for someone who stole from your parents' retirement money? From your local teachers' union?

It's bad enough that the self-pitying jerks on Wall Street who read magazines like The Economist think that paying taxes or giving employees benefits or adhering to any labor or environmental standards are unconscionable burdens. Now we're supposed to be so grateful for their sociopathic pursuit of profits that we should excuse them from the criminal code, too?

  Matt Taibbi

...but hey, do what you want...you will anyway.

Jesus, Mary and Joseph!

Three senior Irish bankers were jailed on Friday for up to three-and-a-half years for conspiring to defraud investors in the most prominent prosecution arising from the 2008 banking crisis that crippled the country's economy.

The trio will be among the first senior bankers globally to be jailed for their role in the collapse of a bank during the crisis.

The lack of convictions until now has angered Irish taxpayers, who had to stump up 64 billion euros - almost 40 percent of annual economic output - after a property collapse forced the biggest state bank rescue in the euro zone.

   Reuters

The crash thrust Ireland into a three-year sovereign bailout in 2010 and the finance ministry said last month that it could take another 15 years to recover the funds pumped into the banks still operating.

[...]

"By means that could be termed dishonest, deceitful and corrupt they manufactured 7.2 billion euros in deposits by obvious sham transactions," Judge Martin Nolan told the court, describing the conspiracy as a "very serious crime".

"The public is entitled to rely on the probity of blue chip firms. If we can’t rely on the probity of these banks we lose all hope or trust in institutions," said Nolan.

"And might as well be Americans," he probably said after that.

The Homeowner Society

This is interesting and understandable. Homeowners tend to be wealthier (or is that just conventional wisdom?) and more dependent on the status quo. It caught my eye because of a discussion I heard on the radio yesterday about homeownership.

Home ownership is believed to be a solid financial investment and is seen as a way to make people better citizens who are active in their communities. In his book, “No Place Like Home: Wealth, Community & Politics of Home Ownership,” Brian McCabe finds that our belief about home ownership as a way to improve civic life doesn’t necessarily pan out.

  Here & Now

Author McCabe follows the country's obsession with homeownership through the 2008 financial crisis and to date from the thirties and president Hoover's creation of a commission to determine ways to make all Americans homeowners. McCabe argues that, rather than creating citizens who came together to improve and strengthen the American society as hoped, the creation of a nation of homeowners promoted economic self interest and political divide. He argues that non-owners tend to engage in community politics to address social and community issues, while homeowners engage in politics where the issues protect their property values. That seems like it would have been an obvious outcome to the Hoover committee. And maybe it was.

Excerpts:

In the short term,  [...] stimulating home construction would help to provide employment opportunities for millions of unemployed workers in the building and construction trades - one of the industries hit hardest by the economic collapse [of the thirties]. Their efforts to lower the barriers to homeownership would contribute to resolving the crisis of unemployment and lifting the nation from the depths of the Great Depression.

[...]

Beyond the immediate benefits of promoting homeownerhip, the president underscored the importance of building a nation of homeowners to America's long-term viability and health. Homeownership made for better family life, greater social stability, and improved citizenship, [Hoover] reminded the delegates. It would recommit citizens to the promise of democracy and serve as the foundation of American patriotism. [...] '[Homeownership] makes for happier married life, it makes for better children, it makes for confidence and security, it makes for courage to meet the battle of life, it makes for better citizenship. There can be no fear for a democracy or self-government or for liberty or freedom from home owners no matter how humble they may be."

[...]

"You are enlisted for further service which will not stop until every American home is clean, convenient, wholesome, sanitary, and a fit place for a mother and father to bring to maturity young citizens who will keep our Nation strong, vigorous and worthy."

[...]

While the campaigns worked to solidify owner-occupied housing as the preference of the majority of Americans, promoting homeownership as the choice of the true patriot and the upstanding citizen, fewer than half of American households were able to live in homes they owned.

[...]

One of the legacies of these programs would be the enduring patterns of segregation and social exclusion that persisted as a result of federal policies to build a nation of homeowners.

And to vote conservative.

Puts a new light on George W Bush's push for Americans' homeownership, whether they could afford it or not.

UPDATE:

[F]ar from buying new homes, millennials increasingly aren’t even renting. The proportion of this demographic – aged around 18 to 35 – who end up living with their parents has been on the rise steadily since the Great Recession, peaking at about 36%, according to the Pew Research Center.

Now, for the first time in 130 years, living with your parents has become the most common living arrangement for young men and women aged 18 to 34, Pew reported this week.

  Guardian

...but hey, do what you want...you will anyway

Back to Venezuela

Brazil down.  Now Venezuela.  Funny, isn't it, that in all the reporting on the economic crises in Latin American countries there isn't any mention of the part that US banksters played in destabilizing the world economy.

In a bleak assessment of Venezuela's worsening crisis, the senior [US intelligence] officials expressed doubt that unpopular leftist President Nicolas Maduro would allow a recall referendum this year, despite opposition-led protests demanding a vote to decide whether he stays in office.

But the two officials, briefing a small group of reporters in Washington, predicted that Maduro, who heads Latin America’s most ardently anti-U.S. government and a major U.S. oil supplier, was not likely to be able to complete his term, which is due to end after elections in late 2018.

They said one “plausible” scenario would be that Maduro’s own party or powerful political figures would force him out and would not rule out the possibility of a military coup. Still, they said there was no evidence of any active plotting or that he had lost support from the country’s generals.

  Reuters

Hmmm. They admit there's no evidence of any plotting against Maduro, and yet they suggest possible coups and "predict" he won't last out his term. That's interesting.

Also - "unpopular leftist president" - unpopular with whom might be an informative detail.

...but hey, do what you want...you will anyway.

American Values

...but hey, do what you want...you will anyway.

Eric Holder's Best Tricks

Eric Holder has gone back to work for his old firm, the white-collar defense heavyweight Covington & Burling.

[...]

Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence.

[...]

Holder denied there was anything weird about returning to one of Wall Street's favorite defense firms after six years of letting one banker after another skate on monstrous cases of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses.

[...]

Here's a man who just spent six years handing out soft-touch settlements to practically every Too Big to Fail bank in the world. Now he returns to a firm that represents many of those same companies: Morgan Stanley, Wells Fargo, Chase, Bank of America and Citigroup, to name a few.

Collectively, the decisions he made while in office saved those firms a sum that is impossible to calculate with exactitude. But even going by the massive rises in share price observed after he handed out these deals, his service was certainly worth many billions of dollars to Wall Street.

[...]

Britain's HSBC bank, which admitted to massive money laundering violations, and the Swiss bank UBS, which was caught manipulating the Libor interest rate benchmark, were examples of firms that escaped vigorous prosecution because Holder and his lackeys were, ostensibly anyway, concerned about market-altering consequences.

Significantly, both banks were later caught up in even more serious scandals, leading to criticism that stiffer punishments the first time around might have prevented future damage. Holder's successor Loretta Lynch was even forced to rip up Holder's UBS deal for being insufficiently punitive. It's worth noting that Holder, before he became attorney general, represented UBS at Covington & Burling.

[...]

Britain's HSBC bank, which admitted to massive money laundering violations, and the Swiss bank UBS, which was caught manipulating the Libor interest rate benchmark, were examples of firms that escaped vigorous prosecution because Holder and his lackeys were, ostensibly anyway, concerned about market-altering consequences. Significantly, both banks were later caught up in even more serious scandals, leading to criticism that stiffer punishments the first time around might have prevented future damage. Holder's successor Loretta Lynch was even forced to rip up Holder's UBS deal for being insufficiently punitive. It's worth noting that Holder, before he became attorney general, represented UBS at Covington & Burling.

[...]

Holder also pioneered the extrajudicial settlement, striking huge deals with companies in which judges did not sign off on the agreements. [...] This essentially institutionalized the backroom deal. Everything was done in secret, and there was no longer any opportunity for judges or anyone else to check the power of the executive branch to hand out financial indulgences.

[...]

You might remember the Sinaloa cartel for their ISIS-style, unforgettably upsetting torture videos. HSBC washed their cash. They even created special teller windows to make their deposits easier. This is admitted, not alleged.

But Holder went out of his way to let them keep their U.S. charter. He gave their executives a grand total of zero days in jail, zero dollars in individual fines.

[...]

To reiterate: HSBC laundered money for guys who chop peoples' heads off with chainsaws.

[...]

When asked about this in testimony before the Senate, Holder told elected officials he was concerned harsher penalties against firms like HSBC would "have a negative impact on the national economy."

   Matt Taibbi @ Rolling Stone

Especially the CIA black ops part of it.

The most revolting [Holder invention] in my view was allowing banks like Chase the courtesy of calling their settlements "remedial payments" instead of fines for wrongdoing.

This seemingly insignificant semantic tweak allowed the bank to call $7 billion of their settlement a business expense, which meant they could claim it as a tax deduction, which in turn meant that taxpayers like you and me paid a whopping $2.45 billion of Chase's penalty.

[...]

Holder is a cynic of a type that's increasingly common in Washington.

[...]

In any civilized country, it'd be a scandal. In America, though, he's just another guy selling whatever he can to get by. It was just too bad that what Holder had to sell was the criminal justice system.

[...]

[Holder told] the National Law Journal that a big part of the reason he was going back to private practice was because he wanted to give back to the community.

Ha! What community? The community of banksters?  Hasn't he already given them enough?

...but hey, do what you want...you will anyway.

Bankers for Bernie

They may be rare, but they do exist.

In 2014, Michael Lewis’ book Flash Boys: A Wall Street Revolt helped to “pull the scales from off my eyes. It showed me that the regulatory structure was rigged and I could no longer ignore that,” [said Wade Black, COO at the boutique investment banking firm Scarsdale Equities.]

Black said he did not mindWall Street becoming a target of Sanders’ invective. He’d continue supporting the candidate, he speculated, “even to the extent that Bernie’s reforms meant I lost my job”.

[...]

Paul Ryan, a fully signed-up member of that elite club, Bankers for Bernie [is] a managing director at Tripoint Global Equities, an investment bank that works with small businesses.

[...]

“New Yorkers are particularly well positioned to see how the rich are screwing over everybody else. You just have to look at real estate prices – people will take a look at what’s happening across the city and a certain number will be disgusted by it: Bernie speaks to them,” he said.

[...]

For the Bankers for Bernie [...] Clinton’s talk about toughening up the regulators and empowering prosecutors doesn’t go far enough. He may be an investment banker himself, but Ryan prefers Sanders’ pledge to begin breaking up the banks in his first 100 days in the White House over Clinton’s more indirect promises.

“She has a thousand talking points, but when the lights are turned off and all the glare of the election fades, politics-as-normal will return, the lobbyists will get to work, and nothing at all will happen,” he said.

[...]

Ryan admits there is an element of self-interest in his support for Sanders in that his investment firm depends on the financial health of its clients who are hurting. But he also insists that his unusual position as a financier who wants to see major change on Wall Street comes from something more fundamental in him: “Conscience. I have a conscience. We have gone so far down the road of Reagan economics we’ve ended up in downright cruelty. That’s why Bernie must win.”

  The Guardian

I would like to see Bernie become president just to see if it is even possible to reverse direction at this point.

P.S.  If you haven't read Flash Boys, I recommend you read it.

...but hey, do what you want...you will anyway.

Goldman's Fine

Goldman got to keep the money it made illegally for a decade before having to give any of it back. Goldman’s asset-management unit consistently predicts annual growth above ten percent, meaning that the company fully expects to double its money within ten years. Taking that into account, Goldman didn’t really pay a penalty at all, but used ill-gotten gains to generate a bunch of money, only returning some principal well after the fact while keeping the returns.

[...]

So even if you think Goldman is paying some kind of penalty, at best it’s a cut of the profits.

[...]

[And] the biggest beneficiaries in this transaction are the Justice Department, the New York Attorney General’s office, and the other state and federal agencies who receive cash awards, from the civil penalty and the resolution of other claims.

[...]

The upshot: Law enforcement settled a case on behalf of investors and then walked away with the proceeds, while investors got nothing. Goldman Sachs and the Justice Department get to divvy up the profits of a fraud scheme perpetrated on the public.

  New Republic

...but hey, do what you want...you will anyway.