Hillary: "Name one time I changed due to Wall Street money." Elizabeth W...

Rein in Wall Street

Bernie Sanders

WALL STREET is still out of control. Seven years ago, the Federal Reserve and the Treasury Department bailed out the largest financial institutions in this country because they were considered too big to fail. But almost every one is bigger today than it was before the bailout. If any were to fail again, taxpayers could be on the hook for another bailout, perhaps a larger one this time.

To rein in Wall Street, we should begin by reforming the Federal Reserve, which oversees financial institutions and which uses monetary policy to maintain price stability and full employment. Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.

Democracy and the Economic Crisis in Greece

Joseph Stiglitz,
The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Paul Ryan. Really ?

Duane Campbell

We have often argued here that the election of 2012 is critical.  As voters  we have a  major choice. Do we follow the Republican model of  continuing the current Depression, cut taxes for the rich, and cut programs for the working families?  Do we follow the lead of Bain Capital and Casino Capitalism ?  Or, do we invest in working America and put people to work ?  Do we insist that the government hire teachers, police officers, and invest in the future.

That choice has become even clearer with the selection of Paul Ryan as the Vice President candidate on the Republican ticket.

John Nichols, a progressive journalists , was the keynote speaker at an event we conducted on the media in 2002, writes from Ryan’s home state of Wisconsin. 

He says of Ryan, “ The hyper-ambitious political careerist—who has spent his entire adult life as a Congressional aide, think-tank hanger-on and House member. Or, to be more precise, a hypocritical big spender—at least when Wall Street, the insurance industry and the military-industrial complex call.

Ryan has been a steady voter for unwise bailouts of big banks, unfunded mandates and unnecessary wars. Few members of Congress have run up such very big tabs while doing so little to figure out how to pay the piper. How has Ryan gotten away with his fool-most-of-the-people-most-of-the-time politics?”

Most of all, Paul Ryan is the author and primary advocate of the Ryan Budget, the Republican plan to cut the government.  We should judge he and Mitt Romney from this plan.

Oppose Bankster Fraud

It’s time for the Big Banks to bear responsibility for the financial crisis—and for fraud and abuse against homeowners across the country. The nation’s state attorneys general are considering a settlement with the bankers, but there’s a risk they’ll let the people who tanked our economy off with a slap on the wrist. It’s urgent we tell them we need a settlement that holds banks accountable for the damage they’ve done and helps homeowners. Will you write  the White House to let them know?

 Possible letter: 

A Strong Settlement is Needed

Your Letter:

Foreclosures and the abuses of the Big Banks are crippling our economy. In neighborhoods like mine and across the state, we’ve seen people underwater on their mortgages and even losing their homes. Even worse, in many cases the Big Banks broke rules, falsified paperwork or defrauded homebuyers—and gambled with our homes to enrich themselves. They have yet to be held responsible.

Robert Reich (The Defining Issue: Not Government's Size, but Who It's For)

Robert Reich (The Defining Issue: Not Government's Size, but Who It's For)

The Greatest Hoax in the History of Money: The Fed, the Banks, the Lies | California Progress Report

The Greatest Hoax in the History of Money: The Fed, the Banks, the Lies | California Progress Report

Massachusetts Sues 5 Major Banks Over Foreclosure Practices

By GRETCHEN MORGENSON. New York Times. Dec. 2, 2011.

Citing extensive abuses of troubled borrowers across Massachusetts, the state’s attorney general sued the nation’s five largest mortgage lenders on Thursday, seeking relief for consumers hurt by what she called unfair and deceptive business practices.

In addition to creating a new and significant legal headache for the banks named in the suit — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC Mortgage — the Massachusetts action diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties...

The attorney general, Martha Coakley, and her investigators contend that the banks improperly foreclosed on troubled borrowers by relying on fraudulent legal documentation or by failing to modify loans for homeowners after promising to do so. The suit also contends that the banks’ use of MERS “corrupted” the state’s public land recording system by not registering legal transfers properly.

“There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.”

Judge rejects deal cut by SEC

The Sacramento Bee has a good editorial this morning on a federal judge who refused to accept an SEC deal with the major banks that would only provide only weak punishment to Citi corps for one of their several frauds. http://www.sacbee.com/2011/11/30/4088324/judge-sends-sec-a-message-on-wall.html

As judge Jed. S. Rokoff  said and the cost is obscured rather than revealed and the punishment is less than the profits made by Citi Corp in a few days. This weak agreements apply to each of the other deals proposed, JP Morgan, Bank of America, Chase, USB and others.

This should be a time of legitimate enforcement of financial regulation and fraud. What would it take ?  The Dodd-Frank bill has passed.  It is too limited.  It did not re-establish the 1936 Glass- Steagall  rules.   At present the Republican Party is working night and day to limit and restrict even the limited Dodd-Frank rules.  Each of the Republican candidates for President campaigns to even further restrict regulation.

The Financial Crisis Inquiry Commission in their report described the even existing oversight functions as cramped and not enforced because there are insufficient regulators.  That is, the Republicans protect the banks by preventing the hiring of sufficient regulators even for the present rules.  That means that the entire financial crisis could be repeated in any day.

Secret Fed Loans Gave Banks $13 Billion

 Nov. 28 (Bloomberg) -- The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. No one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue. Betty Liu reports on Bloomberg Television's "In the Loop." (Source: Bloomberg)

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

The Banker - Occupy Wall Street

What this video calls a Robin Hood tax is what we argue for as a Financial Transaction tax.
One British pound is $1.57 dollars.   This small tax could pay for much of the damage done by the economic crisis.

Trader on the BBC says Eurozone Market will crash

Wall Street Donated $41 Million to Supercommittee Members | Truthout

Wall Street Donated $41 Million to Supercommittee Members | Truthout

Obama’s Speech, His Banks, Our Jobs

By Nomi Prins

Before tomorrow's 2012 pre-election speech in which President Obama's vocal elocution will be earnest, and results - to put it mildly - tepid, about how he could create jobs dammit, if only the Republicans would behave, it's interesting to note who's supporting Obama keep his job.
A cursory look at the early stages of his campaign fundraising reveals that the same group of people that benefitted from policies (bi-partisan) that lavished them with cheap money, secret loans, debt guarantees and other forms of perks not available to the average citizen, are backing him for President. Big Time.
And whereas it's true, Obama's most recent poll numbers look as abysmal as any President (save FDR who he will never, ever be) facing a depressed economy and a near double-digit 'official' unemployment rate (worse if you get beneath its massaged surface), this isn't effecting his most important support, the financial kind. To date, Obama's Presidential bid dosh comes largely from - wait for it - the financial sector.
Yes, the same sector that screwed the country over, and that, despite some unpleasant lawsuits they will likely settle,  remains as powerful, unrepentant, unaccountable, selfish and Main-Street-destabilizing as before Obama took office. No wonder he's been able to keep Treasury Secretary, Tim Geithner by his side - someone has to allay Wall Street concerns that true retribution or meaningful regulatory repercussion will befall them.

The Banks that are too big to fail- should not exist

13 Bankers. The Wall Street Takeover and the Next Financial Meltdown.  (2010.) Johnson and Kwak.

The currently proposed reforms of Wall Street by the Obama Administration are too limited.   To protect our economy and our society we need to

1.     Re-establish the Glass Steagal act of 1933 which separates savings banks from commercial banks.

2.     Break up the banks that are too big to fail.

3.     Add  substantive regulation to the markets.

   This recent  work  develops the important thesis that the U.S. is being directed and exploited by an Oligarchy.  This Oligarchy protects  their profits and their privileges, they dominate the government.  And, they will continue to do so until they are stopped.  The authors argue that in the crisis of 2007/2009, which the oligarchy  created, the the rich seized billions of dollars for themselves.  They made massive profits from the economic disaster. The Great Recession cost  the homes, the jobs, and even the lives of working people.  It is devastating our schools. This is the nature of our current state.

13 Bankers has additional importance since it was published in Spring 2010 just as the Washington/ Wall Street debate on regulatory reform reached its zenith.

Move Your Money

Adrianna Huffington.
Last week, over a pre-Christmas dinner, the two of us, along with political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and Nick Penniman of the HuffPost Investigative Fund, began talking about the huge, growing chasm between the fortunes of Wall Street banks and Main Street banks, and started discussing what concrete steps individuals could take to help create a better financial system. Before long, the conversation turned practical, and with some help from friends in the world of bank analysis, a video and website were produced devoted to a simple idea: Move Your Money.

The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo -- all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.

Meanwhile, America's Main Street community banks -- the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of -- are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.

Which Side Are you On?

Which Side Are You On?
100 Days
By Christopher Hayes

This article appeared in the April 6, 2009 edition of
The Nation. March 18, 2009.

Legislative fights in Washington rarely break down
neatly along class lines. Often, the coalitions on
either side of an issue are unwieldy and eclectic, with
one sector or industry battling another. The notable
exception is the Employee Free Choice Act (EFCA), which
would reform a broken labor elections system, making it
easier (one might say possible) for workers to
unionize.

On March 10 the bill was reintroduced in the House and
the Senate, ushering in the final act in a six-year
legislative battle that has become the most bruising
and intense in Washington, one that--literally--pits
Capital against Labor.

For the GOP the politics are straightforward. Woven
into the DNA of the modern conservative is opposition
to unions and unionism of any kind. Defeating the bill
has become a kind of jobs program for right-wing hacks:
no fewer than sixteen groups are raising money,
mobilizing constituents, running ads and lobbying
senators to kill it.

But for a Democratic Party that for several decades has
awkwardly attempted to be the party of both business
and labor, it's a very difficult circle to square. "It
comes at a bad time," says a wealthy, business-friendly
Democratic donor. "[Democrats] are blaming bankers,
blaming lots of people, and it sounds like these people
are anti-business.... A lot of us warned the guys
working for Obama that [EFCA] would be a problem. They
said, Don't overreact to this--it's a long way from
becoming law, blah, blah, blah."

In this particular fight, class solidarity--if I may
use a phrase that has long since gone out of
fashion--seems to trump partisan loyalties.

Obama supporter and advocate of progressive taxation
Warren Buffett has come out against the legislation.
And according to that wealthy Democrat I talked with,
he's not alone: "I think a lot of Democratic donors are
downright pissed off," he told me. His fellow
well-heeled Democratic donors, he said, are complaining
that "this is the danger of having Democrats control
Congress and the White House." The head of a large
progressive nonprofit echoed the point. The act, he
said, "happened to come up a few times" recently with
donors. He was surprised by how intense their
opposition is. "The passion of it threw me off a bit,"
he added.

Part of the source of these tensions is the fact that
the disgraced financial sector (which increasingly
leans Democratic in its donations) has largely thrown
its weight behind opposing the bill--despite the fact
that these same businesses are being kept on life
support by the government. A Citibank retail analyst
downgraded Wal-Mart's stock for fear that the bill
would pass; the next day she hosted an "informational"
conference call featuring a representative from the US
Chamber of Commerce, who spent the entire call warning
darkly about EFCA. (After the Huffington Post broke the
news of the anti-EFCA call in mid-March, Citi hurriedly
hosted a call with members of the United Food and
Commercial Workers.)

"This is the biggest battle between labor and
corporations in this country since the Taft-Hartley Act
of 1947," the AFL-CIO's organizing director, Stewart
Acuff, told me. What makes the battle especially
intense is that while both sides have attempted to
shape public opinion, polls show that the issue doesn't
amount to even a blip on voters' radar. A recent poll
found majority support for a bill that would make it
easier to organize, but only 12 percent of respondents
said they were following the EFCA bill "very closely."

That means victory will ultimately come not from
shaping public opinion but from pressuring the handful
of swing senators. Each side is ferociously organizing
constituents in those senators' states.

A few of these red state Democrats--in a kind of parody
of squishy centrism--have hinted they'd like to find
some legislative compromise. "This legislation is not
perfect," Arkansas Senator Mark Pryor said recently.
"And while I have been supportive in the past, I will
consider amendments to make it better if and when it is
considered by the Senate." Nebraska Senator Ben Nelson
said he thinks that "there'll be a major effort to
modify it before it ever comes up for consideration,
and I'll have to take a look and see what it is then."
Some senators have floated compromises, such as
extending the amount of time management would have to
negotiate a first contract before binding arbitration.

If Senate Democrats think an amendment will give them
political cover, they're fooling themselves. Just ask
big business. Speaking on the Citi conference call,
Glenn Spencer of the Chamber of Commerce said, "There
is no amendment you could make to this bill to make it
acceptable. From top to bottom it's a bad piece of
legislation. You'd have to start with scrapping this
bill."

Labor also sees EFCA as a black and white issue and is
eager to take away the middle ground. Acuff says the
fundamental question is, "Are you for unions or are you
against unions? If you're against this legislation,
you're against unions. You can't say you're for unions
if you don't think workers should be able to form
unions without fear of retaliation."

Sometime in the next few months, every Democratic
elected official is going to have to answer a very old
question that in a post-meltdown world is newly
resonant: Which side are you on?


About Christopher Hayes Christopher Hayes is The
Nation's Washington editor. His wife works in the White
House Counsel's office.

______________________

Citigroup robs the bank- and you and I- again

Citigroup's Clever Plan to Screw Taxpayers Again

From The Business Insider, Feb. 23, 2009:

So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company's tangible equity and putting it in less desperate need of a complete takeover.

And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup's goal here is to keep the US's ownership under 50%, so this won't be a de facto nationalization.

Well, that's nice for Citigroup...and another ream-job for taxpayers.

Citigroup's common equity is currently worth $10 billion. If the US were to convert all $45 billion of its preferred at the current stock price, it should end up with 80% of the company, not 40%.

For the US to convert $45 billion of preferred to common and only get 40% of the company, Citigroup's existing common equity would have to be valued at $65 billion, not $10 billion, and the conversion price would have to be about $10 a share. Or the US would only be able to convert $4 billion of its $45 billion, which wouldn't help Citigroup's tangible equity ratio much.

So is that what Citigroup is trying to do here? Persuade the US goverment to convert to common stock at a price miles above the current trading price, screwing the US taxpayer yet again?

Or does Citigroup have some other secret plan up its sleeve whereby it can take up to $75 billion of debt (preferred stock) off its books and not end up diluting its current shareholders 90%?

Nationalize the Banks : Baker

Published on Sunday, February 8, 2009 by Beat The Press
Dealing With Bankrupt Banks: Nationalization or Welfare

by Dean Baker

The media continue to do more to misinform the public than to inform
them when it comes to plans for fixing the financial system. Following
the absolute worst in journalistic practices, a front page Washington
Post article explains the Obama administration's policy by telling
readers that the "approach reflects Treasury Secretary Timothy F.
Geithner's philosophy of how governments should respond to financial
crises."

Trees had to die for this garbage? The reality is that the reporters
have no clue as to what Timothy F. Geithner's philosophy of how
governments should respond to financial crises. The reporter knows
what Timothy F. Geithner told them, so why don't they just stick to
passing this information along to readers instead of speculating about
his innermost thoughts?

The excursion into philosophy deflects readers from the real issue.
Mr. Geithner wants to use taxpayer dollars to keep bankrupt banks in
business. In effect, he wants to tax teachers, fire fighters, and Joe
the Plumber to protect the wealth of the banks' shareholders and to
pay high salaries to their top executives. No readers of this piece
would understand that this is the process being described.

The Post editorial page carried on with this deception. An editorial
on saving the banks dismissed nationalization because it would involve
the government in running the banks. Then it discusses the idea of
buying bad assets and warns, "but there is a huge risk that the
government would badly overpay in the first place."

Actually, this is not a risk, this is the point. If the government
paid the market price for these assets the banks would be bankrupt and
we would be back to step 1, nationalization. The point of buying the
bad assets is to pay too much, so that the banks can get enough money
to stay solvent. (It is worth noting that deciding how much the
government will overpay, and to whom, also involves the government in
running the banks in a really big way.)

It would be nice if the Post and the rest of the media would report
honestly on the bank bailout and stop trying to conceal plans for a
massive redistribution of wealth to the bank shareholders and their
top executives.

Dean Baker is the co-director of the Center for Economic and Policy
Research (CEPR). He is the author of The Conservative Nanny State: How
the Wealthy Use the Government to Stay Rich and Get Richer (
www.conservativenannystate.org) and the more recently published
Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also
has a blog, "Beat the Press," where he discusses the media's coverage
of economic issues. You can find it at the American Prospect's web
site.

Its time to take over the banks : Baker

"The banks have stolen enough. It's time to take them over."

by Dean Baker
Huffington Post
1/25/09

Hold onto your wallets. The bankers are coming bank for more money.
They burned through the $350 billion that we gave them in the first
round of the Troubled Asset Relief Program (TARP) and they are worried
that even the second $350 billion will not be enough money to keep
them solvent. The selective leaks from Treasury tell us that the banks
will need far more money to cover their bad debts.

The latest story is that the banks want to sell us their bad assets at
above market prices, which was the original plan that Treasury
Secretary Paulson proposed, except the banks want to push off their
junk on an even bigger scale. In one version, the government would set
up a Resolution Trust-type corporation (RTC), like we did with the
bankrupt Savings and Loans in the 80s, which would hold all the
garbage and then gradually resell it to the private sector to recover
a portion of what the government paid.

This is a reasonable course, except there is one big difference
between what we did with the S&Ls in the 80s and the leaked plan being
floated. The S&Ls were taken over by the government and then resold to
the private sector. These were bankrupt institutions that were put out
of business. The stockholders were wiped out, which is what is
supposed to happen to stock holders when their company goes bankrupt.

But this is not what happens in the plan being discusses. In this
plan, the taxpayers just do the banks the great favor of paying above
market prices for their junk so that we can relieve them of the burden
of their past mistakes. The taxpayers get to eat the losses and the
bank executives and their shareholders go on their merry way.

These folks are not market fundamentalist types. The Wall Street view
of the world, and apparently the view of at least some people in the
Obama administration, is that the government always is there to help a
bank or banker in need.

The idea that we would give one more penny to this crew that has
wrecked the economy should make taxpayers furious. There is a
legitimate public interest in keeping the banks operating; a modern
economy needs a well-operating financial system. But, there is zero
public interest in rewarding shareholders and overpaid banks
executives.

These executives bankrupted their banks and brought the economy down
with them. They belong in an unemployment line not collecting
multi-million dollar paychecks in their designer office suites.

The obvious answer is to take over the insolvent banks, just as we did
with the insolvent S&Ls. The government should form an RTC as we did
in the 80s, which would dispose of the assets over time, collecting as
much money as possible for the government. The bankrupt banks would be
restructured and sold back to the private sector as soon as their
books were straightened out. The point of the exercise is not have the
government run the banks, the point is to keep the financial system
running without giving even more money to the richest people in the
country.

This is the only reasonable solution to the mess that the bankers have
created. The other solutions are simply efforts to transfer dollars
from hardworking taxpayers to overpaid and incompetent bank
executives. It is hard to believe that anyone would take it seriously,
if not for the enormous political power of the Wall Street gang.

It's too bad that the Republicans' anger over giving tax breaks to
workers who did not pay income taxes does not extend to giving tax
dollars to Wall Street banks who have wrecked our economy. Where are
the anti-government conservatives when we need them?
__._,_.___