After reading Matt Taibbi’s latest Rolling Stone article, “Everything Is Rigged: The Biggest Price-Fixing Scandal Ever,” it occurred to me that the corruption of our financial system laid out in this and many of Taibbi’s previous writings are just the sort of thing that a prophet like Elijah, Jeremiah, or Isaiah would be railing about if he were alive today. 

The biblical prophets showed their people and their nation the sins that God was angry with. Idolatry. Violence. Adultery. Lying, cheating, and stealing. 

And that’s what is being revealed by a few journalists with the honesty and courage to report what the alphabet networks, the mainstream moron media, the liberal state-controlled press, have ignored or refused to investigate. Lying, cheating, and stealing. It’s at the heart of our financial industry. 

Taibbi concluded this particular article with the following: “The scale of [this corruption] is so enormous that ordinary people simply cannot see it. It’s not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever’s in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing — and it’s only just coming into view.” 

What we’re finding out (at least the few who are checking out the reports in Rolling Stone and a few financial blogs are finding out) is that the big banks have colluded in fixing the prices of commodities, interest rates, and all sorts of financial instruments. They’ve cheated borrowers, they’ve cheated governments, they’ve cheated their own clients. They are cheating the public, the taxpayers. It is institutional corruption, and it affects virtually everyone.

The power of these institutions and the wicked men who run them is so great that our own regulatory bodies, law enforcement bodies, and the courts, are refusing to take any serious action (meaning criminal prosecutions and jail time) against what are enormous crimes, equivalent to the largest bank robberies ever committed, multiplied by 100. Multiplied by 1000. It is clear to me that some form of intimidation or bribery or both is being used on the people who are supposed to be policing the fairness of our markets and banks. Judges dismiss charges based on the phoniest of excuses. The Attorney General refuses to bring criminal charges because, they say, it could destabilize the world economy. (I don’t actually believe this to be true, but that is their excuse.) They are too big to jail. Yes, some large fines have been levied. In the cases I’m aware of, it simply reduces the profits of the institution, profits which can be made up quickly with a few more weeks and months of their criminal operations. 

I can’t go into all the details here. Every concerned citizen, every patriot,  needs to read this article. We need an advocate for justice more powerful than the billionaires and the bent public officials they control. In addition to all the other problems this nation faces, pray for justice.  

The Queen of Sheba, when she visited Solomon’s kingdom and observed his wisdom and judgment, said, “… because the LORD loved Israel forever, therefore he made thee [Solomon] king, to do judgment and justice.” 

It is appropriate to ask God to bless America with leaders who will do likewise, against all odds. Otherwise the looting and pillage will continue, and likely escalate. 

This is a brilliant historical summary of our parasitic banking/finance industry and its incestuous relationship with government — and what that means regarding the government’s strategy and the housing market today. 

Why does “too big to jail” matter?
A.    Declining to prosecute either the banks themselves or individuals at the banks for financial fraud sends the message that crime pays and in the unlikely event of a financial penalty from the Justice Department in lieu of prison, that any financial penalty is just part of the cost of doing business.  It enables those willing to commit crime to do it repeatedly.  Meanwhile, the best deterrent to crime is to put criminals in prison.   That includes those at powerful banks and corporations.    No one should be above the law.

Of course, naming the problem is important. It is more important to see action, and a change in policy. 

Weaselly words from our nation’s chief law enforcement person. He claims they were “appropriately aggressive” in pursuing criminal fraud at the Big Banks in the aftermath of the ‘08 crisis. Key word is “appropriately,” which is a matter of opinion. Because they considered that bringing a big bank to trial could have national and international economic repercussions, that presumably means — once you parse this — that they hesitated to bring prosecutions because they would not be “appropriate.” Basically, if a bank is big enough, it has a get out of jail free card. It’s called corruption.

Why aren’t Wall Street banks being taken to trial by our regulatory bodies?

I probably disagree with 90% of Senator Elizabeth Warren’s agenda. But she asks vital questions here. It isn’t merely that “mistakes were made.” Laws were broken. Penalties are assessed, settlement deals are reached, but these are paid out of ill-gotten profits. Where is the incentive to follow the law??? Her other question, beginning about the four minute mark, deals with the market valuation of these banks. The price of the stocks of these big banks is lower than “book value.”  Book value is defined as the value of the assets of an enterprise, if it were to go out of business and assets were sold (minus liabilities it would have to pay out). Why won’t stock investors pay at least the alleged liquidation value of big banks? The implication is that they don’t believe the banks’ claims about the value of their assets. 

Steal a little and they throw you in jail. Steal a lot and they make you king. — Bob Dylan

If you needed another reminder of how Obama has bent himself over backwards several times to save banks who engaged in massive fraud, here it is.

If I read this article from Naked Capitalism correctly, the story goes like this.

In 2008, as part of dealing with the collapse in the real estate market and the threat of our major banks going bankrupt, Congress created the Federal Housing Finance Agency (FHFA), to oversee and regulate real estate-related government sponsored entities like Fannie Mae and Freddie Mac.

The FHFA, under its director Ed DeMarco, brought a lawsuit against the biggest banks in the country for fraud — something I have been complaining about since 2009 in every forum I participate in. The FHFA asserts that the banks “duped” Fannie and Freddie and presumably other government sponsored entities into buying mortgage backed securities. I don’t know why they use the term “duped” since this is just another word for fraud. They fooled the purchasers of these securities into believing they were more secure (AAA credit rating) than they actually were.

If the banks were to lose this lawsuit, it could mean up to $200 billion in penalties.

The lawsuit appears to be going badly for the banks.

It appears that DeMarco intends to press this suit to its full conclusion. This could hurt bank profits!!! No, we can’t have that. The Obama Administration wants to replace DeMarco, presumably with a “softer” regulator who might choose to settle the suit, rather than press it forward. Because that would be embarrassing, not to mention ghastly expensive, for the banks. No, we can’t have that, can we? 

Every day in every way this President makes me more convinced he is the worst. President. Ever. If fraud is not prosecuted, we will get more fraud. The government should not be an advocate for fraudsters, but is has been. Shame.

scatteredaesthetics:

Don’t vote for the status quo. Vote Ron Paul.

There is enough truth in this cartoon for it to be very unfunny. However, I am voting for Romney, for better management of the government under the corrupt Federal Reserve-fueled financial-industrial-federal complex. Also, I care about religious liberties and the non-interference of the federal government in social issues which should be the province of the several states. What others call “wedge issues” happen to be very important to me. Voting for Ron Paul will not change the financial system. There is no vote at this time that will change the system until understanding of the vampiric nature of that system reaches a critical mass among the population, and individuals put forward candidates at all levels who are committed to the cause of replacing it. That time is not now. The rational choice is to do what can be done incrementally, and as half-hearted as I am about it, Mitt Romney is the option we are presented with now. If his administration is simply “less bad” we have won a small victory. Meanwhile, we continue to try to educate as many as we can on the raping of our economy by the financial industry and central banking system. 

Banksters gone wild, part 3: TARP Inspector General says the bank bailout was a scam. 

Sold to Congress as a way to help the economy, aid struggling mortgage-holders and revive Main Street businesses, TARP was geared to one primary overriding purpose — saving the very Wall Street banks who caused the crisis. 

I recommend the 35 minute video above — an excellent interview with Neil Barofsky, former Inspector General and overseer of the $700 billion taxpayer-funded TARP bank bailout. Barofsky has written a book, Bailout, about his experiences in Washington attempting to curtail fraud and increase accountability in the use of taxpayer money given to banks through the TARP bailout. 

As an alternative, or to supplement the video, I suggest a print interview with Barofsky conducted by PBS’ FRONTLINE documentary series. 

What happens when Wall Street banks are among the top 20 contributers to a winning presidential campaign? 

In 2008, Goldman Sachs, JPMorgan Chase, Citigroup, UBS, General Electric and Morgan Stanley were among the top 20 contributers to President Obama’s campaign. Other large banks contributed hundreds of thousands of dollars through their political action groups, bundlers, and employee donations, though they did not make the top 20 list. The named institutions were all beneficiaries of bailout money from taxpayers through the TARP bank bailout program. General Electric has a finance arm that made the company eligible for bailout guarantees. UBS is a foreign bank which received bailout money indirectly — nearly a hundred billion dollars of taxpayer money flowed through the TARP bailout of multinational insurance corporation AIG out to foreign banks. 

When banks are the top supporters of political candidates, expect government to use its power to benefit banks, putting other interests in second place. This is exactly what Neil Barofsky saw happen to TARP monies and programs. Barofsky was the inspector general for the TARP bailout program in the first two years of its operation, His new book Bailout offers the details. 

Barofsky says Americans “should be enraged by the broken promises to Main Street and the unending protection of Wall Street. …Tarp was supposed to be used by the banks to restore lending, help pump that oxygen into the lifeblood of the economy, and it just didn’t happen. One of the reasons why it didn’t happen is the money went to the banks with no strings attached, no conditions, no incentives, just essentially piles of money given to them without any instructions whatsoever and sort of this hope that somehow or other they use the money to achieve the policy goals of the administration. Of course, that never happened and you just look at the malaise the economy has been in in the years every since.” 

Barofsky’s main points:

TARP included a housing program meant to help 4 million homeowners. But only 20 percent of that goal was reached. 

TARP saved and stabilized the financial system (at least for the time being). But to what end? “What we’ve done is essentially preserve a fundamentally broken status quo that led to the financial crisis in 2008, and we took a lot of problems in the system and in some ways made them worse.” (The “too big to fail” banks are now bigger and more systemically important — also dangerous — than ever before.) 

The way the bailout was implemented focused in every way on saving the banks, not on helping Main Street and the economy at large. Benefits to homeowners and small business were largely incidental. 

The Dodd-Frank banking reform bill is not a solution — Barofsky says that it “may have inadvertently sowed the seeds for the next financial crisis” because it continues the perversion of market forces and capitalism, and it continues to incentivize the risky/greedy behavior that led to the 2008 crisis — when the risks pay off, the banks take the profits, but when they create another crisis, the taxpayer takes the loss. “Heads I win, tails you lose,” is the rule by which the biggest banks now play. 

FRONTLINE asked Barofsky about effective governmental oversight and regulation of the financial sector. His reply:

Unless you recognize the flaws of our system and how fundamentally broken our system of regulation is, it’s going to remain hopeless. …

Fundamentally we have, on the one hand, the corrupting influence of the megabanks, which have to be broken up. They have such a corrupting influence because of the power, their size, their economic might and also because of the corruption of ideology because of the revolving door. So many of the Treasury officials come from the Wall Street banks they’re supposedly regulating. So that’s part of the fundamental problem.

On the Washington side, in addition to that, you have the problems of regulators who often have incentives not to be really good regulators. The curse there again is partly the revolving door. I was told point blank in 2010 that if I didn’t change the harshness of my tone on Wall Street, as well as on the administration, that I was going to be doing me and my family real harm because I wasn’t going to have this job forever. If I wanted to get a job on Wall Street or advance within the administration, I needed to soften my tone. I was told that if I did soften my tone, very good things could potentially [follow].

I obviously didn’t take that advice, as this book clearly demonstrates, but that’s the decision that’s facing a lot of our regulators. You either have people who made their millions on Wall Street and come into government … or you have folks who look at their bosses who made that money and want to be them. And the path to being like that is rarely by being a tough, effective regulator. It’s by rolling with the punches — rolling over, really, and pulling your punches and trying to get that big job. That’s not to say that all regulators do that but that’s our incentives and we need to change the incentive structure for regulators.