Posts Tagged ‘Wall Street’

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The Justice Department’s decision not to prosecute Goldman Sachs in a financial-fraud probe is another sign of the cronyism that has kept Attorney General Eric Holder from taking action against other big Wall Street firms, says Peter Schweizer.

On Thursday the Department of Justice announced it will not prosecute Goldman Sachs or any of its employees in a financial-fraud probe.

The news is likely to raise the ire of the political left and right, both of which have highlighted one of the most inconvenient facts of Attorney General Eric Holder’s Justice Department: despite the Obama administration’s promises to clean up Wall Street in the wake of America’s worst financial crisis, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

Why is that? In a word: cronyism.

Read more by Peter Schweizer at The Daily Beast

After a long summer of high-profile scandals — JPMorgan Chase trading, Barclays rate-fixing, HSBC money laundering and more — the debate about the financial sector is becoming livelier.

Why has it become so excessively dominated by relatively few very large companies? What damage can it do to the rest of us? What reasonable policy changes could bring global megabanks more nearly under control? And why is this unlikely to happen?

Read more by Simon Johnson at NY Times

For obvious reasons, Wall Street is always right on top of any legislation in Congress that has anything to do with the world of finance.

And, as you know, it’s not like Lloyd Blankfein is glued to C-SPAN. The Street has Washington watch-dogs that keep a careful eye on what’s happening on The Hill, but even they couldn’t do it without help.

At least, that’s what former lobbyist, Biden aide, and Senate staffer Jeff Connaughton writes in his new book, “The Payoff: Why Wall Street Always Wins.” The way he tells it, information has a bit of a journey before it gets from Washington to Wall Street, but it can happen in the blink of an eye.

Read more by Linette Lopez at Business Insider

Previously we showed that when it comes to Wall Street’s returns, the 8% market return benchmark that every first year analyst finds in Ibbotson’s is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning “investment”, which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles “without admitting or denying guilt” and in the process is slapped with a fine that barely covers the government’s legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.

Read more at ZeroHedge

Banking Titans Call for Break Up of “Too Big to Fail”

The following bankers are calling for the big banks to be broken up:

* Former Citi CEO Sandy Weill

* Former Citi CEO John Reed

* Former Citi chairman Richard Parsons

* Former Merrill Lynch chairman and CEO David Komansky

* Former Morgan Stanley CEO Philip Purcell

And Many more at Washington’s Blog

Those wondering why the Department of Justice has refused to go after Jon Corzine for the vaporization of $1.6 billion in MF Global client funds need look no further than the documents uncovered by the Government Accountability Institute that reveal that the now-defunct MF Global was a client of Attorney General Eric Holder and Assistant Attorney General Lanny Breuer’s former law firm, Covington & Burling.

There’s more.

Records also reveal that MF Global’s trustee for the Chapter 11 bankruptcy retained as its general bankruptcy counsel Morrison & Foerester–the very law firm from which Associate Attorney General Tony West came to DOJ.

And more.

–SNIP–
As Richard Eskow of the Huffington Post recently wrote:

More and more Washington insiders are asking a question that was considered off-limits in the nation’s capital just a few months ago: Who, exactly, is Attorney General Eric Holder representing? As scandal after scandal erupts on Wall Street, involving everything from global lending manipulation to cocaine and prostitution, more and more people are worrying about Holder’s seeming inaction — or worse — in the face of mounting evidence.

This isn’t going away.

Read more by Wynton Hall at Breitbart.com

Despite his populist posturing, the president has failed to pin a single top finance exec on criminal charges since the economic collapse. Are the banks too big to jail—or is Washington’s revolving door at to blame? Peter J. Boyer and Peter Schweizer investigate:

* Obama’s 2009 White House summit with finance titans, in which the president warned that only he was standing “between you and the pitchforks”

* Why, despite widespread outrage, financial-fraud prosecutions by the Department of Justice are at 20-year lows

* Attorney General Eric Holder’s lucrative ties to a top-tier law firm whose marquee clients include some of finance’s worst offenders

* How Obama’s trumpeted “task force” for investigating risky mortgage lenders—announced in this year’s State of the Union speech—is badly understaffed and has yet to produce any discernible progress

Read more at The Daily Beast

Nearly four years after U.S. taxpayers bailed out Wall Street, the debate over how to deal with America’s too big to fail banks rages on.

One very outspoken critic of TBTF banks has been Dallas Fed President Richard Fisher.

“The TBTF institutions that amplified and prolonged the recent financial crisis remain a hindrance to full economic recovery and to the very ideal of American capitalism,” Fisher wrote in the Dallas Federal Reserve’s 2011 annual report entitled “Choosing the Road to Prosperity: Why We Must End Too Big to Fail — Now.”

Read more By Stacy Curtin at Yahoo Finance

Repo Man

If you’re making money on the Wall Street scale — which is nothing like your boring, middle-management in the Fortune 500, Hamptons-and-Mercedes, barely–a–1 percenter type money — then you can buy basically anything.

–SNIP– For a few measly millions, Wall Street not only bought itself a president, but got the start-up firm of B. H. Obama & Co. LLC to throw a cabinet into the deal, too — on remarkably generous terms. President Obama, for a guy prone to delivering prim and smug little homilies denouncing greed, greed, greed — the only of the seven deadly sins that truly offends Democrats (though Mrs. Obama has done some desultory work on gluttony) — is strangely comfortable among the Gordon Gekkos of this world.

–SNIP– Wall Street can do math, and the math looks like this: Wall Street + Washington = Wild Profitability. Free enterprise? Entrepreneurship? Starting a business making and selling stuff behind some grimy little storefront? You’d have to be a fool. Better to invest in political favors.

Read more by Kevin D. Williamson at National Review

Ronald Reagan, George W. Bush, George H.W. Bush, and Clinton Each Prosecuted Financial Crime More Aggressively than Obama

Top economists and financial experts agree that our economy will never recover unless Wall Street fraud is prosecuted. See this and this.

But the government has more or less made it official policy not to prosecute fraud, and instead to do everything necessary to cover up for Wall Street.

Read more at Washington’s Blog

by Sarah Palin

Mark Twain famously wrote, “There is no distinctly native American criminal class except Congress.” Peter Schweizer’s new book, “Throw Them All Out,” reveals this permanent political class in all its arrogant glory. (Full disclosure: Mr. Schweizer is employed by my political action committee as a foreign-policy adviser.)

Mr. Schweizer answers the questions so many of us have asked. I addressed this in a speech in Iowa last Labor Day weekend. How do politicians who arrive in Washington, D.C. as men and women of modest means leave as millionaires? How do they miraculously accumulate wealth at a rate faster than the rest of us? How do politicians’ stock portfolios outperform even the best hedge-fund managers’? I answered the question in that speech: Politicians derive power from the authority of their office and their access to our tax dollars, and they use that power to enrich and shield themselves.

The money-making opportunities for politicians are myriad, and Mr. Schweizer details the most lucrative methods: accepting sweetheart gifts of IPO stock from companies seeking to influence legislation, practicing insider trading with nonpublic government information, earmarking projects that benefit personal real estate holdings, and even subtly extorting campaign donations through the threat of legislation unfavorable to an industry. The list goes on and on, and it’s sickening.

Astonishingly, none of this is technically illegal, at least not for Congress. Members of Congress exempt themselves from the laws they apply to the rest of us.

Read more in the Wall Street Journal

The president’s failure to demand a reckoning from the moneyed interests who brought the economy down has cursed his first term, and could prevent a second.

By Frank Rich, nymag.com, 7/03/2011

–SNIP– What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”

After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers.

–SNIP– Rather than purge the crash’s crimes, Wall Street’s leaders are sticking to their alibi: Everyone was guilty of fomenting this “perfect storm,” and so no one is. Too-big-to-fail banks are bigger than ever, and Masters of the Universe swagger is back.

Read more at http://nymag.com/news/frank-rich/obama-economy/presidents-failure/

Interesting commentary from a liberal writer

By Greg Hunter’s USAWatchdog.com, 6/27/2011

The Federal Reserve has been a clandestine organization since its inception. It is not really part of the federal government; it is merely a subcontractor for monetary policy. The Fed is basically a cartel of both U.S. and European banks. It has pulled the levers in the economy from behind a curtain of secrecy since 1913 and has always enjoyed a certain degree of respect and admiration. All that changed when the economy melted down in 2008. The respect and admiration of the Federal Reserve is being shredded right along with its veil of secrecy. The Fed allowed everyone to think the cost of controlling the 2008 financial crash was just a measly $3.3 trillion. This giant lie was exposed after Senator Bernie Sanders of Vermont put a provision in last year’s financial reform bill that forced the Fed to come clean on $9 trillion in additional emergency loans and bailout money. The Fed funneled cash to foreign banks and companies right along with American banks and companies. It basically rewarded reckless and illegal behavior of greedy Wall Street bankers that caused the mess we are in now.

Nothing is fixed and nothing has really changed. The economy is still a wreck, and the Fed still wants . . .

Read more at http://usawatchdog.com/federal-reserve-secrets-and-lies/

by David Stockman, lewrockwell.com, 5/09/2011

This talk was delivered at the New York Historical Society on May 8, 2011.

It took 200 years to build and perfect the classic gold standard system; then it was destroyed in about seven weeks when the Guns of August 1914 thundered across Europe; and now I am allotted seven minutes to resurrect it. Fortunately, Churchill’s defense of democracy also applies to the daunting task at hand: To wit, the classic gold standard is the worst possible monetary system – except for all of the alternative inflation-generating, savings-destroying, debt-breeding, bubble-emitting and boom and bust-prone systems which have been tried in the 100 years since its demise. Hence, we offer six present day monetary vices which are curable by gold:

Read more at http://www.lewrockwell.com/orig11/stockman7.1.1.html