Staggering Impunity

May 23rd, 2012

Charles Ferguson, the director of Inside Job and author of the soon to be released examination of the 2008 collapse, Predator Nation, wants to know where the hell the prosecutions for rampant criminal activity are:

"Almost all the prospectuses and sales material on mortgage-backed securities sold from 2005 through 2007 were a compound of falsehoods. But it starts even earlier in the food chain. We also know that mortgage originators committed securities fraud when they misrepresented the characteristics of loan pools, and the nature and extent of their due diligence with regard to them, when they sold pools to securitizers (and accepted financing from them). Most or all of the securitizers (meaning nearly all the investment banks and major banking conglomerates) then committed securities fraud when they misrepresented the characteristics of the loans backing their CDOs, the characteristics of the resulting mortgage-backed securities, and the nature and results of their due diligence in the process of creating those securities. The securitizers also committed securities fraud when they made similar misrepresentations to the insurers of, and sellers of credit default swap (CDS) protection on, those securities."

The utter lack of consequences for this illegality and, worse, the excuse-making by conservatives that the downturn was somehow a "glitch" in legitimate capitalism very nearly ensure another crisis. Possibly quite soon.

"In some cases, we already have clear evidence of senior executive knowledge of and involvement in these frauds. For example, quarterly presentations to investors are nearly always made by the CEO or CFO of the firm; if lies were told in those presentations, or if material facts were omitted, the responsibility lies with senior management. In some other cases, such as Bear Stearns, we already have evidence from civil lawsuits that very senior executives were directly involved in constructing and selling securities whose prospectuses contained lies and omissions."

And yet, not one CEO or CFO involved has been charged with so much as a misdemeanor. It's long past time we admitted that these are not titans; they are simply extremely ambitious thieves.

What If Greece Goes It Alone?

Oct 4th, 2011

Nouriel Roubini says they should do just that:

"Greece is stuck in a vicious cycle of insolvency, low competitiveness and ever-deepening depression. Exacerbated by a draconian fiscal austerity, its public debt is heading towards 200 per cent of gross domestic product.

To escape, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma."

I couldn't agree more.

Roubini lays out the pros and the cons of walking away and notes that recent examples, such as Iceland's transformation, could provide a model. However, what Roubini prescribes is going to be regarded as radical and even dangerous... to everyone but Greece.

A vast majority of Greece's current woes are due to externalized pressures. Most of the debt crisis which erupted in 2010 resulted from their heavy investment internationally in mortgage backed securities. What's more, even some Eurozone leaders, like Germany's Merkel, have stated outright that predatory hedging and credit default swap speculation elsewhere in the world dramatically expanded and has prolonged their agony.

Exit from the Eurozone is in Greece's sovereign best interests. Yet the global economy has coalesced around the demand that they not act in those interests. They are faced with choosing whether to do what is right for their people or doing what is demanded by the foreign financial institutions which hold their debt.

Going After The Banksters

Sept. 2nd, 2011

From the NY Times:

"The federal agency that oversees the mortgage giants Fannie Maeand Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.

The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

The suits stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims.

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers."

Read more HERE