Settled But Not Resolved

Back on April 16th, before BP became the most hated corporation in America, the then most hated - Goldman Sachs - was sued by the SEC for fraud. I said then that Goldman would settle for very little money and not admit any wrongdoing.

Well guess what happened today? Financial Reform passed. And Goldman settled for $550 million and no admission of wrongdoing. They did admit to some errors in marketing, but no actual wrongdoing.

In other words, the administration's crack economic team accepted a fine that, in Goldman money, is the same as a traffic ticket and let them totally off the hook for any actual violations. In fact, Mary Schapiro's improved and more efficiently corrupt SEC pretty much acknowledged that Goldman played within the rules when they withheld important information from clients.

I knew it. I knew this administration wouldn't see it through. I knew Goldman would buy their way out of this. I knew the already failed economic team would let them off the hook.

This is why the Financial Reform bill is a waste of time and not needed. Because there is still zero appetite for actually enforcing the existing laws. Because all that will happen is Obama's pre-failed economic team will have more laws and regulations to not enforce and whole new agencies will be formed - probably headed by previously failed administrators - and they will also not enforce anything.

The settlement was predictable. It is how the SEC has operated for years and years. It is how almost all government regulation of large entities works. File some charges, hold a great press conference, wait 90 days and the quietly settle for a small fine and no actual wrongdoing.

And this administration obviously wants to follow in that tradition. Sure, we can send a CEO to prison for an umbrella stand, but prosecute a firm that was at the heart of the meltdown? Prosecute a firm that somehow profited from the meltdown? Nope. Not in the Hope and Change playbook.

See, it still comes back to the same song. Bernanke, Geithner, Schapiro and the rest are the same folks that brought you this meltdown recession. Why would they want to actually go to court where it might be revealed that their incompetence and laziness was a prime contributor to this mess. It was, after all, Geithner who saw to it that Goldman got paid every dime AIG owed when everyone else got bupkes. And it was Bernanke who granted a commercial bank charter on a Sunday with no waiting period to get Goldman their chunk of free TARP money. And Schapiro? She watched all of this unfold.

The last thing Obama's failed team wants is for this to be heard in a court of law. They cannot afford any sworn testimony as to their complicity in this mess. And who pays? Well, we do, of course. That $550 million is nothing when stacked next to the $13 billion Little Timmy Geithner and Benny Bernanke took from taxpayers to give to AIG to pay Goldman 100 cents on the dollar. Our money is paying the fine. And Schapiro endorses this - is even proud of it.

So the new financial reform bill? Pointless before it is law. The idea that new laws unenforced are any better than old laws unenforced is either a definition of insanity or a very well thought out scam. Either way, not good for us. Some promise repeal. Nonsense. Repeal just does not happen.

In 1994, Republicans took control of Congress on a promise to repeal the Brady Gun Control Act. Well, every word of Brady is still in place. Not even a change. Repeal is a lot harder to accomplish and is empty a promise as is Change. It sounds great to rally the troops, but it is not realistic.

Where is the Congress? They are pretending this is not even happening. Democrats are happily pointing to their shiny new law and declaring all problems magically solved. Republicans are pointing to the new law and raising money from Wall Street on the false promise of repealing it. In other words, same stuff, different day on the Hill.

We can change things a little by simply standing up on November 2 and voting the Congress out of office. One last great layoff of 470 or so corrupt Democrat-Republicans who have totally games the system to benefit themselves. On November 2, fire the stinking lot of them and let's get a real new team in place.

I am selling shirts with this campaign slogan to make my point and hopefully move some votes back to the reality side of the ledger.
As a capitalist and a free market person, I am selling them for both profit and with the intent of donating to those candidates that are willing to step outside the parties and declare a concern for the Constitution and the people.

You can order them here: http://www.itisnotagame.spreadshirt.com

Premature Regulation

Yesterday, the House of Non-Representatives passed the Financial Reform bill and sent it along to the Senate. The good news is that the Senate will not violate their vacation and laziness schedule to vote on this before the holiday weekend. And they should not vote on it at all. In fact, it should be "laid upon the table," to use Congress-speak.

This bill is too far out in front of the investigation of exactly what happened to cause the financial meltdown, or whatever we are calling it today. In fact, the actual investigation is just getting started. So the idea of new regulations and agencies is insane without any knowledge of what happened and, more importantly, what didn't happen.

Because what we already know did not happen was any kind of meaningful enforcement of existing regulation and law. We already know that Wall Street knew this. What we don't know is whether regulation already exists to deal with some of this. What we don't know is what existing agencies already had the authority and were too lazy or corrupt or both to use it.

As an example, I just heard Goldman Executives tell the investigating commission that they do not keep separate track of derivatives as compared to cash. Now I am not an expert on financial regulation, but it would seem to me that a publicly traded company would have to keep some kind of track of cash versus derivatives. It would also seem logical that they would want to internally track this stuff.

But there they sit, telling this commission that they don't know. For the last 6 months they have refused to provide answers to these questions. And therein lies the problem with the financial regulation bill.

The Congress has no idea what is needed. They can't, since the investigation is incomplete. For all those fools know, the bill is not needed. The new agencies are not needed and the new regulations are not needed. In fact, it is entirely possible that all that is needed is a kick in the pants of existing regulators.

And that is a problem that will haunt us regardless of this bill or any other new law. The same folks that brought you the meltdown/crisis/whatever are the same folks bringing you the solution in the form of this bill. And it is a bipartisan band of hacks and politicians. Since the existing regulations and laws were not enforced, why would these new ones be any better?

Well, look at who is pushing this farce.

Obama's economic team. Looks almost exactly like Bush's. The Senate approved all of those appointees even though they had obviously failed in their jobs. Why would they do that? To keep any real enforcement from happening. To avoid the existing laws. To prevent their friends from facing the consequences of their actions.

At the top we have little Timmy Geithner. The former New York Fed president and now Treasury Secretary who boldly ignored the excesses at the banks he was supposed to regulate and then led the charge to use tax dollars via AIG to cover them. He was a leading hand in the demise of Lehman, the gifting of Bear and the rest of the bad Sunday deals.

Next is Bernanke. The Fed Chairman. Recently reappointed. A man who is so totally out of touch with the actual world that he considers total secrecy to be transparency. The ultimate bank regulator that thinks his job is to protect the banks from us - the customers. He was the one that came up with the Maiden Lane vehicles that allowed the Fed to buy all of those toxic assets (mostly at an inflated par value) from the banks he failed to regulate.

For those that remember, this was what Helpless Hank Paulson's TARP was supposed to do. That is how the great and powerful Hank proposed it to Congress in 2008. Troubled Asset Relief Program. But once he had the money, he got together with his pals Geithner and Bernanke and simply handed it out. No strings, no questions. In fact, that trio chartered banks on Sundays just to be able to give them our billions.

And not one of them ever asked how it happened. Nor did the leadership on either side of the aisle in Congress. While the Republicans were griping about bailouts and such, they were also fastidiously avoiding any real investigation into what happened. The Democrats were even more anxious to avoid an investigation.

In Congress we had Frank and Dodd and Shelby and Cantor. Pelosi, Boehner, Reiid and McConnell. All proclaiming to have an answer and a way forward. But all actually doing everything they could to ignore their failures and their own culpability. Every one of them busy raking in the campaign dollars at the back door while shoving out tax dollars out the front door. All very interested in hiding the mess and covering up the failure.

Why? Because both sides had a hand in this mess. Because both parties ignored it so they could keep sucking in the campaign cash. Because, at the end of the day, both parties are wildly corrupt and wildly out of touch. They talk about "Main Street" but wouldn't know Main Street if they passed out drunk on it. The preferred tactic was to blame each other while avoiding any enforcement or investigation.

See, Congress is way more concerned about Citi and Goldman then about you or me. They barely know we exist. After all, we don't have lobbyist armies and millions to hand out. We can't buy them fancy dinners and cool gifts. We are only the voters who they like to try to fool every so often.

Those laws do exist. Goldman already faces civil prosecution under the existing law. Most of the chicanery was illegal then and still is without this new financial reform bill. The bill before the Senate is simply not needed. What is needed is a thorough investigation of not only Wall Street, but Washington. Both the regulated and the regulators.

Much like the oil spill, the agencies charged with preventing this stuff simply failed. They got too cozy with the companies they were supposed to be regulating. They ignored obvious violations. And the Congress ignored that to pass a series of bailouts and giveaways designed to cover up this monumental failure of government.

So table this stupid bill. Wait for the results of the commissions and investigators. Don't create new agencies that may not be needed. Enforce the existing laws. Push the lazy bureaucracy to actually do something.

To the president, fire those losers you stupidly rehired. They have already failed at least twice each. Try new people. People not part of the gamed system. At least try honest people.

And, most of all, to the Congress, please, please just stay on vacation. Permanently. You are not helping and you are not solving. And come November, we will do what we can to make those vacations lifelong.

Fool us once, shame on you. Fool us over and over, well......


As a capitalist and a free market person, I am selling them for both profit and with the intent of donating to those candidates that are willing to step outside the parties and declare a concern for the Constitution and the people.

You can order them here: http://www.itisnotagame.spreadshirt.com

Meanwhile, Back at the Banks....

While the entire nation is rightfully engaged in the Gulf oil spill, Congress and their pals at the banks and on Wall Street have been cooking up the much talked about financial reform bill. The one with all the new regulations and agencies we don't really need. The one that was oh so urgent just last month, but is now able to wait a few weeks for a conference committee to be formed.

If ever there was a symbol of Congress' total failure, this piece of idiocy has to be the one. If we run the clock back to 2008 and the first TARP robbery, we see the Republican and Democratic leadership preaching that without $750 billion of our money, the entire financial world will cease to exist. We were told by both parties that there was no choice, we had to save the economy and so on. This is mostly history, so no need to restate all of it.

However, keep in mind as you read, that the leadership of both parties was on board with TARP and the rest of the secret Federal Reserve bailout orchestrated by Little Timmy Geithner and his cronies.

Now the much talked about financial reform bill has passed both houses of Congress. The versions are different, mandating a conference committee to resolve the differences and create a bill acceptable to both. And this is where the real problems will start.

First off, as I have said, we probably don't need new regulations. We have plenty. What we need are effective, honest regulators. We have none. Look at the cast of characters. Geithner, who as president of the New York Fed, was the principle regulator of the banks that led us to this mess and never once lifted a finger to challenge their actions. Bernanke, who as chairman of the Fed did everything he could to secretly prop up these bad practices. Hank Paulson is thankfully no longer in government, but never forget that this one time prince of Wall Street sat idly by while his pals were gaming the system and then turned into a scared old man begging for relief for his friends. The 3 of them hatched more closed door Sunday deals than anyone ever.

Now comes news that JP Morgan and its sainted CEO Jamie Dimon squeezed billions out of Lehman Brothers just days before it failed. Billions. In fact, according to reports, Dimon and his gang of thieves took the last liquidity out of Lehman with the blessing of Bernanke and Paulson. The bankruptcy estate of Lehman is suing for this money back. Since JP Morgan was and is a New York bank, you can safely assume that Geithner was party to this. This was after Dimon was gifted an almost debt free Bear Stearns by Geithner (on a Sunday) and gifted a cleaned up Washington Mutual over a weekend. Apparently, that was not enough and the wizards running the government economic management team felt he deserved another $8 billion or so from Lehman as it was failing.

In fact, it is quite plausible to determine that this sanctioned robbery was the final straw for Lehman. All accounts reveal a secret meeting between Dimon, Bernanke and Paulson to make sure Jamie got his money and that Lehman would fail. In effect, they pretty much tipped the Lehman piggy bank over and poured it into JP Morgan's coffers.

Of course, JP Morgan strongly denies this, pledging to fight in court and prove that Lehman was simply poorly run and the billions were justified somehow, even though they would cause the failure that JP Morgan wanted the billions to protect itself from.

But wait, there's more!

While all of that was going on, it has been reported and verified that Lehman was hiding massive debt by creating new companies and then selling the debt just before the books closed for the quarter to enhance their financial health and then taking it back once the reports were filed. All evidence says that the CEO, the auditors and the government "regulators" knew about this and looked the other way. Even though this is exactly what took Enron down and sent people to jail.

Now comes news that the biggest welfare baby banks - Citi and Bank of America - were doing the same thing. And again with the blessing of Bernanke, Geithner and the rest of the already failed economic team. Apparently, not one of the regulators thought duplicating Enron's failure was a problem. Not one auditor dared complain. Yet, we gave them literally hundreds of billions to cover this stuff without any penalty or enforcement.

In the aftermath of TARP and the rest of the trillions to Wall Street and friends, these new revelations would seem to scream for harsh regulations and restrictions. The problem is, we don't need that. We have plenty of regulations and oversight. What we have is a wildly corrupt system of Wall Street firms/big banks and government regulators that effectively shuts down meaningful oversight.

Perhaps if a fresh crew had been hired by the administration or if the Republicans had possibly presented a cogent argument against any of these pre-failed people, then we might at least get a new group to look at the situation. But we had the same tired old crew in Congress as well. They are just as beholden to the big money folks as the regulators, if not more so. I did not hear the GOP raise a lot of objections to Geithner over his role in the crisis. They did point out his inability to do a proper tax form, but not his inability to perform his duties as a regulator at the Fed.

After Obama inexplicably reappointed Bernanke, the Republicans griped about secrecy and his refusal to release information he had promised, but not a lot about his abject failure in his role as principal regulator for the banks. Not a word about the endless back door deal making on Sundays.

When they had a chance to bring in a new team, both parties took the easy way out. They just moved the same players around on the field. Geithner to Treasury, Schapiro to SEC and so on.

Then the regulation fight began. Needless to say, it immediately got folded into the partisan food fight along with everything else. Here Congress - and especially the Republicans - had a chance to make a serious and thoughtful argument and they chose to go with their more comfortable and partisan game of just say no. The Democrats had an opportunity to actually pass a meaningful law that might have added enforcement power to existing agencies. They went with the predictable and easier solution of new agencies to compound the old.

In fact, the only thing in that bill worth squat is the mandated public audit of the Federal Reserve - something Bernanke objects to almost hysterically. The rest of it can be trashed tomorrow. That provision passed as an amendment in both houses with overwhelming bipartisan support.

It is almost impossible to justify new regulation and agencies when all evidence suggest that the existing laws are simply not being enforced to the fullest. That the already legislated oversight is not being performed. And to take the word of the same band of failures that got us here is just ludicrous.

Congress no longer represents us or our needs. Our best interest is just a cute catch phrase to them. It is their own selfish interests that they serve. Their endless game of power grabbing. The wasteful and always counterproductive "blame the other guy" game. The needless and pointless sniping. The cowardly attack from behind a friendly media (both sides!).

That is what our once amazing representative government has devolved to. A sandbox of kicking and screaming bullies who desperately need a time out. Well, I say, let's give them a long time out.

Come November, send the existing Congress home for a long time out. Vote against the lot of them. They are lying to us all day every day only to serve themselves and their corrupt political parties' need for power.

Come November, throw them all out.

I am selling shirts with this campaign slogan to make my point and hopefully move some votes back to the reality side of the ledger.
As a capitalist and a free market person, I am selling them for both profit and with the intent of donating to those candidates that are willing to step outside the parties and declare a concern for the Constitution and the people.

You can order them here: http://www.itisnotagame.spreadshirt.com

Bernanke's Folly or Hiding Maiden Lane

Today the Senate, in a rare but refreshing bipartisan move, received an amendment to the Financial Reform bill that would require the Federal Reserve to be audited regularly. Ben "I want transparency" Bernanke fired off letters and made phone calls to oppose this.

His reasoning: "Such amendments, if enacted, would seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."

Huh? I thought he has testified many times that all of his actions were directed towards preventing such things. So why the obvious fear of a public look under the hood of the Fed? Could there be stuff he was not supposed to do? Maybe trillions of our dollars to his pals?

There is his steadfast refusal to identify the banks that took zero percent loans on the grounds that it is not our business and we might question those banks' stability. Why does he want to hide these transactions? Perhaps there is more there than normal business? Or perhaps he is far more interested in protecting his Wall Street pals than in protecting the American people.

And let's not forget Maiden Lane, LLC. All 3 of them.

What's Maiden Lane? Well, that is the dirty little secret Bernanke and Geithner have struggled to hide. Remember how TARP was going to take all those nasty 'toxic assets' off the banks' hands so they could free up capital for lending? Remember how Paulson, Bernanke and Geithner gifted Bear Stearns to Jamie Dimon at JP Morgan without the bad assets on the books? Remember how AIG suddenly had none of those?

Well, it is because the New York Fed under Geithner, with Bernanke's blessing created Maiden Lane. Actually they created 3 of them. The first took to $30 billion in garbage off of Bear's hands so that Dimon wouldn't have to take any losses on buying a losing company. Those assets have lost at least $2 billion thus far.

Maiden Lane 2 took the assets off of the books of AIG. Almost $200 billion there and Maiden Lane 3 another $30 billion off of AIG. That last $30 billion had credit default swaps against it. The same credit default swaps that AIG paid Goldman Sachs $13 billion - of our money! - to satisfy at 100 cents on the dollar when nobody else was getting par.

The assets held by Maiden Lane are all mortgages. Some have defaulted. Maiden Lane (and therefore the Fed) now owns a shopping mall and holds the defaulting mortgages of several resort hotels - some outside the US. I am pretty sure that this is way outside the Fed's charter. This is only some of what Bernanke does not want you to know he did with our money.

Seeing the pattern here? Things they don't want you to know. But, wait! Bernanke's Folly gets better. In the name of saving American jobs and businesses, Maiden Lane hired CT Corporation as its registered agent. CT is a wholly owned subsidiary of Wolters Kluwer, a multi-national information services company based in the Netherlands. Yep, the Netherlands. As in not a US company. Why take this offshore? Perhaps Bernanke will be asked that at some point, but I would not hold my breath.

Regardless of his tough talk about transparency, the harsh truth is that Bernanke has perverted the intent of the Fed from central bank to a huge off balance sheet hidey hole for his pals on Wall Street. Geithner knows this since he was there. And they are terrified that we will get to see just how corrupt and disingenuous this little empire is.

Which brings me to the president. Obama renominated this guy. And he made Geithner Treasury Secretary. This is like putting Tattaglia and Corleone in charge of the FBI. The 2 guys most responsible for hiding the misuse of trillions of our dollars are put in charge of our dollars. I am not saying Obama knew this. I am saying that he chose the same tired, failed folks to fix the system they broke. And in that he failed us. The only change evident are the new business cards everyone got.

And now, faced with audits and transparency, Bernanke has obviously broken into a cold sweat. And even more so because there is huge bipartisan support for this. If only there was a way we could dump Bernanke in November.

Barney's Kangaroo Court

So Barney Frank held another show hearing yesterday. This time, he gaveled in a hearing on the collapse of Lehman Bros. Because only by looking backwards can the Congress move forward. Given that there is now the bankruptcy auditor's report on Lehman, I had to wonder what the point was. After all, Richard "I know nothing" Fuld wasn't going to say anything of any significance given that he faces civil and - hopefully - criminal prosecutions.

Also featured in yesterday's waste of time and money were the three regulators who were supposed to know what was going on. They would be the ever incapable Bernanke, Geithner and Schapiro. And they could not be expected to have anything new or useful either. After all, they exist solely to protect their phony baloney jobs.

So what was the point?

Well, after 2 rounds of speeches disguised as questions it became obvious. Barney wanted another round of partisan finger pointing and sniping. The phrase "members on the other side if the aisle" was more common than any other. Not one member of the committee failed to jab at the other side of the aisle.

In the meantime, while the feckless members of Congress on the dais proceeded in their all too common partisan slap-fest, the 3 failed regulators got another free pass courtesy of Barney and company. In their testimony, none of those 3 took any responsibility or even attempted to point out their own agencies' failures. Looking at them, they resembled nothing more than one of those goofy "see no evil, hear no evil, speak no evil" posters.

Bernanke claimed to know nothing. Geithner claimed to lack the authority and Schapiro claimed to have no regulations. All of which struck me as odd given the civil prosecution of Goldman.

By all accounts, Lehman cooked the books on a quarterly basis to hide their true financial condition. This was the "Repo 105" method where they transferred their debt off balance sheet to another company set up specifically for this and then brought it back after the quarterly reports were done. This is exactly what sent Enron execs to jail.

Yet, the 3 regulators claimed no authority to deal with it. In fact, today, Schapiro had the audacity to propose even more regulation to prevent what is already an obvious fraud. She seems to think that the existing regulations do not prohibit this, even though they clearly do prevent it.

And all of that said, I am stuck wondering which was the worst part of yesterday's episode of the Barney Frank show. The total shirking of responsibility by Bernanke, Geithner and Schapiro or the endless partisan sniping by the committee. If I have to choose, it is going to be the partisan sniping.

"The other side of the aisle" is a meaningless phrase when discussing events that affected all Americans. It is a waste and a travesty when discussing a large part of the cause of the economic mess we find ourselves in. See, recession and unemployment have no party affiliation. They hit Democrats and Republicans equally hard. All Americans are paying for this mess.

Yet, the Congress cannot seem to put the partisan nonsense aside and actually do their jobs. Jobs that they, unlike millions of good hard working Americans, still have.

So while the 3 failed regulators are a problem, it is the Congress from which the real problem arises. It is the endless partisan needling that paralyzes any recovery. It is the constant finger pointing and insult hurling that prevents any serious growth.

Come November, it is time to lay off all of them. Every Member of Congress that is running needs to be unemployed. At the very least, we will create 435 new jobs.

Civil Fraud?

According the the Wall Street Journal today, the Securities and Exchange Commission has charged Goldman Sachs with "Civil Fraud," for part of their role in the whole mortgage backed securities/collateralized debt obligation mess that was at the center of the financial crisis.

Civil Fraud? Why not criminal charges? Why not a referral to the Justice Department for an indictment? Well, it is simple and sad.

By going with civil fraud - the equivalent of a lawsuit - the kids at Mary Schapiro's SEC get to look like they did their job when they have not. By going with the tough sounding civil fraud method, Schapiro gives the thieves at Goldman an easy and painless out. Schapiro basically gets to look heroic while making sure her pal Blankfein never has to break a sweat on this.

Why? Because within the next 12 months, Goldman will quietly settle with the SEC for a relatively small sum and not have to admit any wrongdoing. That is what almost always happens in these "civil fraud" cases. And once the settlement is paid and the papers signed, Goldman can go right back to the same stuff they were doing, but this time with impunity. And you can bet that the settlement will somehow be paid with our money.

Had Schapiro actually done her job at any level and brought criminal charges against Goldman executives, they would have had to defend themselves in a public trial. No secret settlement deal (likely to be announced on a Sunday). None of this pointless "without admitting any wrongdoing" that is so popular among the financial regulators.

In effect, Goldman will be paying the government to go away. With Mary Schapiro's blessing. By not having to defend their criminal actions, Blankfein and his band of financial pirates can happily sail off and look for other victims to pillage.

Given that the "financial crisis" cost the taxpayers of this country trillions of dollars and millions of jobs, one would hope that the lazy regulators might wake up and actually enforce a law. Throw handcuffs on Blankfein and see how he looks in an orange jumpsuit.

I find is somewhat mystifying that a CEO can go to prison for an umbrella stand, but not for literally fleecing a nation by illegally manipulating markets to maximize profit at the cost of their own investors and clients. In case nobody remembers, the execs at Enron went to jail for doing pretty much the same things.

Yet Blankfein (Goldman), Fuld (Lehman), Schwartz (Bear), Lewis (BofA), Mozillo (Countrywide), Thain (Merrill) and the rest are going to get away with it if the ever lazy and incompetent Schapiro has her way. She has no interest in actually enforcing the laws she has sworn to uphold. Her interest is in protecting her friends. Just like Bernanke, Geithner and the rest.

See, they think and say that their first priority is to protect the banks and Wall Street pirates. Not so. Their actual job - were they to do it - is to protect us from them.

But that won't happen. Not with this already failed crew. They showed us that in 2008 when they all ignored Lehman's manipulations and Lewis' lies. Mozillo's amazingly corrupt practices. Schwartz's criminal declarations of fiscal health while his firm was on life support. Dimon's manipulation of government to enhance his firm at our expense. Schapiro's total ignorance of Madoff and Stanford's fraud.

This I put squarely at the president's feet. He kept Schapiro and the rest of the gang that couldn't regulate in place. He rehired them from the Bush administration. After their failure was obvious. He has allowed the regulators to continue to not do their jobs while seeking more regulation to be ignored.

I have said it before and will say it again. We do not need more regulation or new agencies. There are already more than enough laws, regulations and agencies. We need effective agencies, regulators and enforcers. Not the Wall Street CEO sycophants we now have. We need actual people of integrity in these positions and not recycled failures like Schapiro, Geithner and Bernanke. This is Obama's failure and only he as president can fix it by firing this lot.

I challenge the president to fire these losers and hire people that were not at the core of the meltdown. People that do not cower when a Blankfein or Dimon speaks.

And come November, we need a new Congress. One that will actually take these clowns to task. A Congress that will stop dragging CEO's to meaningless hearings held for the sole purpose of saying they held a hearing. A Congress that will drag Schapiro in and ask her bluntly, "So when do you intend to actually enforce a real law?" A Congress that will ask Geithner why he cannot use existing regulation. A Congress that will call Bernanke out for concealing the shell game the Fed has played with our money.

At this point, my attitude is that if they were in office in 2008, then it is time for them to go. All of them. Because they all knew the game that was afoot and they all ignored it, lied to us and then went home to stash their loot.

Come November, the most important qualification for elective office is to not currently be in elective office.

Come November, we the long suffering people will have to effect the change we want ourselves. One vote at a time at the ballot box.

Come November, the choice is ours. More of the same lies and diversions or a government that actually works.

You Can Bank on the Lies

I just reread my post from yesterday and want to point out that I am not a financial professional in any way. To be totally honest, I don't really understand a good portion of the mumbo-jumbo uttered by the masters of deception in the financial industry. What I do know, however, is when someone is lying. And these guys have been lying at levels that would make Nixon blush.

This morning, the Wall Street Journal reports that the biggest banks - Goldman, JP Morgan, Bank of America, Morgan Stanley, et al - have been manipulating their balance sheets to make their financial condition look better than it really is. To be specific, they are moving debt around at the end of the quarter for reporting purposes and then putting it back after the reports are published.

In other words, they are cooking the books to make investors and regulators happy.

Sound familiar? It should. Just a few weeks ago a report was issued pointing out that this is exactly the behavior that sunk Lehman Bros. The Lehman report even let us know that the liars at the top of Lehman had a named procedure for this - "Repo 105."

Well, it seems Mr. Fuld at Lehman was not alone in this sham of a scam of a lie. In fact, based on the Journal's report, it is a common practice. Even everyone's fair haired boy Jamie Dimon at JP Morgan uses this tactic to enhance the numbers. Considering that Dimon may be history's largest recipient of government largesse in the form of Bear Stearns and Washington Mutual with tax dollars guaranteed to back up any losses, this is particularly wrong.

Not illegal, mind you. Barely legal, yes. Unethical, yes. Wrong, yes. But legal. Apparently, the bankers and Wall Street kids have twisted the laws to the point where cooking the books is now legal. And folks wonder why the banks are spending millions on an ad campaign against any kind of new regulation.

Before I go on, let me simply say that I am not in favor of a new agency or extensive new regulation. I believe that we have a ton of regulations already. What we don't have is willful enforcement. What we have are lazy regulators, a complacent government, a corrupt congress and a blind Federal Reserve. We need to close some loopholes in the regulations, but that is all. No new agency, and not a total revamp of the regulatory morass.

Congress can stop with the bogus show hearings and get to work today on establishing a serious investigation. Not more hearings where the Fools on the Hill recite prepared 3 minute questions leaving no time for an answer. Not more of the "J'accuse" style hearings so popular. What we need and still don't have is a forensic style investigation. One run by folks not seeking reelection and not looking for a big job on Wall Street. All Congress cares about is the next election. The only way Congress could be more out of touch would be if they were literally blindfolded.

In a previous post, I suggested that Dr. Elizabeth Warren and Fox Business' Eric Bolling (also a lifelong investor by trade) head up the investigation. Why those two? Well, they are pretty much the only 2 voices that are honest about this stuff. Warren already heads a commission to oversee TARP. She has never once hesitated to call it the way she sees it. Bolling is literally the only financial reporter to be honest about the way his friends deceived a nation. In other words, honest folks that have no secondary agenda. It is not a matter of conservative or liberal, Democrat or Republican. It is a matter of honesty.

Back to the machinations of the financial industry. One has to ask why this behavior is not being more strongly investigated. Why it took this long to surface. Well, it is simple. The so-called regulators at the Federal Reserve saw it happen, but decided it belonged to the Securities and Exchange Commission. The SEC felt it was a Fed issue. Truth? Both are so deeply intertwined with the entities they are supposed to regulate, they cannot see the violations for the cocktails. Or, as I like to put it, both the regulators and the regulated all belong to the same club.

So when the seemingly heroic Dimon makes his case against regulatory reform, what he is really saying is that he does not want to lose his ability to manipulate the numbers his shareholders see. He does not want to admit that his seemingly solid company is no more solid than Lehman was. Same for Blankfein at Goldman. He keeps sending out letters and press releases talking about fixing things and being more "transparent" but he is not. While proclaiming transparency he is cooking his books, too.

As we approach the April 15 tax deadline, American taxpayers are reporting honestly their income and expenses. Why? Because the IRS - the principle regulator for personal finance - can and will find any cheating. As they should. Like it or not (and nobody does) that is the law right now.

But, for some reason, the large banks and Wall Street firms do not feel this obligation. Why? Because their principle regulators are not so interested in regulating or honest reporting. Why? Because Fed Chairman Bernanke and Treasury Secretary Geithner have been in on this little game all along. They knew about it back at the beginning. And if they suddenly take action, then they will have to recuse themselves at best - if not resign in disgrace - because they helped game the system for their pals.

This is not a partisan issue. Geithner was president of the New York Fed when the big banks were cheating and gaming the system. It was his job to regulate them. Yet Lehman, Bear and the rest were allowed to run wild. Paulson - the ever present architect of this lie - was Treasury Secretary. He was point man on the scam of a generation. And Bernanke? Well, either he is a total fool or simply a very dishonest man. Either way, he is not doing his job as regulator. In fact he constantly seeks to protect these banks by hiding their transactions and interest free borrowing.

All of them promised transparency. And all of them immediately sought to thwart that. Here we sit, 2 years later, and we know nothing more of what really went on. No criminal investigations. Not even the blatant stuff like Fuld and Schwartz lying to shareholders about their companies. Not even Ken Lewis, who actually admitted to lying and concealing the real costs of the Merrill deal.

Where is the administration on this? Well, they want all new regulations and agencies. Without even a clue as to what is needed. They seem to think that somehow creating a new agency will be a magic wand and simply stop the bad practices by its very existence. They are wrong. The people Obama has hired to look at this are all part of the same crowd that got us here. We don't need a new agency.

We need the existing ones to do their existing jobs. And that is exactly what the administration won't do. Point out the failure of government. Thus we still have Geithner, Bernanke, Schapiro, Rubin and the rest of the usual suspects. Why Obama appointed them is beyond me. They already had failed. So, in traditional government methodology, they got promoted rather than fired. Obama routinely points to the "previous administration." Memo to the president - you hired most of that "previous administration's" financial/economic team. It is now the current administration and still ineffective, incompetent and likely corrupt.

So again, I have to call for that independent investigation. If I am right about Bolling and Warren, they will proceed independently anyway. They do care about the truth and do care about transparency. They care about getting the truth and creating an environment where I can safely invest and not worry that some Jamie Dimon type is really just scheming to take my money.

Until there is an open investigation outside the Congress and administration, we should wait. One of the biggest failures of government over the decades has been the tendency to leap before they look. To do something - anything - so they look good. Well, right now, government doesn't look any too good. Nor do the banks.

Meanwhile, Back at the Banks...

While the politicians and media are all wrapped up with their traditional silliness ranging from the obsession the media has with Tiger Woods (just another pathetic excuse for a human who cheated on his wife) to Jon Kyl's promise to filibuster the non-existent Supreme Court nominee, the banks and Wall Street have been happily continuing to rig the system and prvent an actual investigation of just what happened.

Before I get there, I have to comment on the 2 distractions above. The media obsession with this sad excuse for a man, this adultering pig is simply nauseating. And the delicacy with which it is handled is baffling. The same media that will call folks racists and fascists without a flinch seem unable to call Woods what he is. An adulterer. Plain and simple. He cheated on his wife. Why this is somehow the lead story everywhere is bad enough, but the fact that the cowardly media (all sides) prefers terms like 'womanizer,' 'philanderer,' and the ever ludicrous 'sex addict,' to the more accurate adulterer eludes me. Call things what they are and stop the excuse factory. I will happily say it - Tiger Woods is a disgusting pig that cheated on his wife repeatedly. A serial adulterer. All this clown is addicted to is the adulation of his fans.

As to Kyl's promise of a filibuster, this is perhaps the final proof that the Senate is now officially pointless. There is no vacancy on the court and no nominee to discuss. So why would Kyl make such a stupid and empty threat? Because he has no interest in governing and lots of interest in pulling in campaign cash. Democrats should not be happy or feel somehow vindicated. Democrats invented the concept of skewering Supreme Court nominees with Bork and Thomas. All Kyl is doing is elevating the art of silliness that seems to pervade the Congress these days. Threatening to stop a nomination that has yet to be made for a vacancy that has yet to exist? Excellent job Senator! You have managed to turn nothing into something just to avoid the simple fact that this Congress is a failed body and a corrupt one. Kudos to to the man with the giant pile of poop.

And while these distractions dominate, the folks on Wall Street and at the big banks continue to lie and threaten. Earlier this week, Wall Street's new fair haired wonder boy, Jamie Dimon (who was gifted Bear Stearns and Washington Mutual) stated that any new regulation might cause credit to become unavailable. In case Dimon has not noticed, credit is still hard to get and getting more difficult. What Dimon meant was that regulation would hamper his ability to continue to lie to shareholders and the public.

What he really meant was that he and his cohorts had invested a lot in corrupting and baffling the existing regulators and they did not want to have to actually follow the rules. If they followed the rules, why the fear of a consumer protection agency for financial institutions. As we all know, the law abiding need not fear the police.

And today, the liars from Citi stepped up and apologized for what happened there, while claiming to not know about it. Well, Mr. Prnice and Mr. Rubin, how could you not know there were tens of billions of dollars in risky assets on the books? Because someone said so? Aren't you supposed to know this stuff? Aren't you supposed to have independent auditors look at it? Or are you simply lying some more to avoid admitting that you made a walloping huge paycheck out of trashing an entire economy.

What Prince and Rubin really mean is "We knew, but we were making a lot of money and really didn't care all that much about anything else." What they are really saying is "We are so sorry we got caught."

And therein lies the real problem. Nobody has been caught. No investigation. No forensic examination of who did what. As long as people like Ken Lewis, John Thain, Lloyd Blankfein, Alan Schwartz and Bill Fuld are able to simply lie and not get called out, the system will continue to fail the investors and depositors. These guys lied endlessly. And boldly. And, apparently, without penalty.

As long as Geithner and Bernanke are running the regulatory scheme, there is no regulation. These are the same 2 that let it run wild in the first place. The same guys that were in on every Sunday decision. Every decision to send my money to the crooks on Wall Street to cover their bad bets. Somehow and for some inexplicable reason, Obama left these 2 in charge after they proved their incompetence.

And still no real investigation. No independent look at what, how, where and why. We already know who. Geithner and Bernanke fear an actual independent investigation. They know that it will inevitably point out their failure. The bankers fear an investigation. They know it will inevitably point out their lies.

And the administration and Congress? They just hope it will go away. They fear the bankers. They don't fear us, though. And come November, we need to remember that they work for us and fire them. All of them.

Meanwhile, at the Banks

While everyone was watching the artificially hurried and rigged vote on Health Care, the issue of financial regulation slid under the radar. The importance of this cannot be minimized of exaggerated. When this president took office, we were in one of the worst recessions in history. We pretty much still are. A recession triggered, in large part, by misbehaving banks, disingenuous investment firms and lazy, incompetent (and possibly corrupt) regulators.

Once the cause of Health Care took center stage, that freed up the Senator from banking land - the ever untrustworthy Chris Dodd - to quietly push his bogus financial reform package. And it freed up his Republican counterpart - the earmark loving Shelby - as well.

The financial press took their eye off this as well in their haste to cover Health Care. This freed up everyone to have some fun at our expense. Blankfein, Dimon, Pandit and the rest took the opportunity to manipulate the process to ensure that any new regulation would actually be the same as the old ones.

Let me be very clear on one point. With a few exceptions (Ken Lewis comes to mind) most of the banks and investment firms acted barely within the law in their endless gaming of the system to make sure that they profited from our losses. And today brings more proof that the Congress in their haste to send a trillion of our dollars to Wall Street did so with no regard for the taxpayer.

Today we read that Dimon's firm - JP Morgan - having been gifted Washington Mutual and Bear Stearns by the troika of Geithner, Paulson and Bernanke can now get a massive tax refund thanks to some little known and rarely mentioned provisions in Obama's so-called stimulus package. The package that was supposed to get our economy up off the mat. The other trillion taxpayer dollars flung down the corrupt rabbit hole maintained by the Pelosi-Boehner gang.

It seems that a minor little tiny piece of that legislation allowed the banks to move their losses around to cover profitable years, thus reducing their tax burden. Something that nobody commented on at the time. Something that the deficit hawk Republicans failed to point out as a cost of the legislation. Something that the tax-happy Democrats failed to mention. Nothing from CBO either.

To be fair, the law was written by Congress and the real pirates of this time - Dimon and friends - followed it. One can only assume that they paid their pet Congress Critters to write it in there, but it passed and was signed without a single mention in the press. No objection from the White House. Not a peep from Barney Frank or the ever untrustworthy Dodd. Not even a flinch from the false queen Nancy the last.

In fact, I think I can easily say that the only time those clowns are bipartisan is when they are acting in secret to help their lords and masters on Wall Street.

You can be sure that Dodd's proposed new regulatory scheme will be the next fast track piece of nonsense coming off Capitol Hill. And this one will be high grade nonsense.

The minute the Lehman report came out, all such legislation should have been stopped. Frozen. Put on hold. After all, it only makes sense. Here we have proof of how the system was being gamed. It would make sense outside Washington to investigate those abuses and see who else is playing the game. Take a serious look at what is really needed.

The first course should have been to call Geithner down to the hill for a public hearing on just what he was doing while he was failing in his job as New York Fed CEO and principal regulator of the Wall Street banks. Then Bernanke to demand he reveal just how much money he handed out and to whom while he was failing in his job as Fed Chairman. Then Paulson to ask the same questions.

None of this happened. In fact, both parties in Congress have done everything they can to ignore it. Rather than actually find the facts and act on them, Congress persists in acting to please pollsters and pundits while actually satisfying the special interests that fund them.

This is sure to become the next partisan football kicked around. Democrats will clamor for more regulation and new agencies while Republicans will cry about too much regulation and too much government. And this once, both will be right and both will be wrong.

We already have reams of regulation but no regulators willing to enforce them. Witness the always untrustworthy Mary Schapiro, now head of the SEC. She had the raw nerve to complain that regulators did not do their jobs. Yet, she was one of them as FINRA head. Her agency ignored things like Madoff and allowed the endless trading of credit default swaps and exotic derivatives.

Yet, there she is, now head of the SEC. Somehow, this administration took her failure, Geithner's failure and Bernanke's failure and accepted them. Even promoted them. And this sham of a Senate confirmed them into their jobs. That should tell all of us what the Senate cares about. Nothing. Except themselves.

There are no less than 7 agencies currently charged with enforcing tens of thousands of regulations. Most likely a hundred thousand federal employees or more. Add in the states and their laws. We have plenty of law, regulation and enforcers at all levels. Just none of them are any good.

Now ask, do we need more law or clearer law? Do we need more enforcers or active, effective enforcers? Does the Fed really work anymore? Who supervises them? Who are these bond rating firms? Are they ever reviewed? By who? And a lot more really obvious questions like that. The ones neither Democrats or Republicans ever seem to ask. I don't care how much profit Wall Street makes. I care that they do so within the rules.

I challenge this president to appoint a non-political commission to openly investigate the banks. None of the circle currently dining at the White House. No power brokers or lobbyists. No cronies or hacks.

I say we give it over to Elizabeth Warren and Eric Bolling. They understand how Wall Street works and how the laws work. Take it away from the partisan grindhouse and have an actual open, transparent investigation. Force the Fed to keep Bernanke's false promise of transparency. Force Geithner to keep Obama' promise of the same.

One thing I am confident of with both Dr. Elizabeth Warren and Eric Bolling is that they will keep the best interests of the people in mind. These are 2 ethical, honest Americans, who care because they love this nation. Neither of them aspires to power. And both know a lie when they hear one.

When their Commission issues its report, then Congress can look at regulation. If any of them are not being investigated themselves.

Lehman Cooks Books - Nobody Surprised

So now we have the auditor's post-mortem examination of the fall of Lehman Brothers. Most people agree that this marked the real beginning of the financial crisis that led us into this recession. And, while almost everyone knew there was some shenanigans going on, the report reveals more than just a little misdirection.

In the interest of disclosure, I am not an accountant or financial expert. In fact, I am like most Americans - a victim of this massive and ongoing fraud. Those are strong words, but these were serious crimes.

According to the report, Lehman CEO William "Whatever it takes to make me look good" Fuld ordered his people to clean up the books at Lehman to reduce the debt on their balance sheets. And clean they did. In fact, what they did was to cook the books. They even had a name and a procedure for this recipe - "Repo 105."

Yep. A publicly traded company entrusted with billions of investor dollars created a process by which they could move exorbitant debt off the books to fool regulators and shareholders as to the health of the company. Now, we all know that publicly traded companies are supposed to have independent auditors examine these books looking for just the type of thing Repo 105 was doing. So what happened there?

Well, according to the report, the auditors - Ernst and Young - were in on it. Right. The very folks who are supposed to monitor for fraud were helping to commit it. And the credit rating firms? Well, they were so corrupted it is barely worth this sentence.

Former CEO Fuld claims he had no idea this was going on. That make him either culpable in the fraud and cover up or criminally negligent. The law requires the CEO to sign off on these reports, and Fuld did. In fact, just days before Lehman joined the dinosaurs in ignoble extinction, Fuld told everyone and anyone that the firm was in good shape and not to worry. In private, Fuld was begging for Hank "Pirate" Paulson to save his company.

The report reveals a very troubling problem. Where were the regulators? Well, they were conspicuously ignoring things. One does not hide over $80 billion in debt and not leave a trail. Yet, the regulators, auditors and board members were happy to go on about their day and pretend that nothing was wrong.

To be fair, at least one financial reporter - Eric Bolling of Fox Business - openly challenged Fuld's rosy report. While most of the financial press was buying Fuld's nonsense hook line and sinker, Bolling announced on-air that the lawyers were in the boardroom. Keep in mind that some of these Wall Streeters are Bolling's friends, yet he reported the truth anyway.

Here is what the report really tells us. It tells us that the regulatory system is broken. That Wall Street cheats. That big bankers lie and get away with it. That the financial press is largely (except Bolling) a pile of sycophants. That the government looked the other way.

So what will it really take to restore our confidence in what is obviously a gamed system? Well, some prosecutions might help. Fuld in handcuffs would help. Ernst and Young punished if not shut down might help. But what would really help is real transparency. The transparency that Bernanke, Paulson and Geithner promised and then proceeded to avoid.

Maybe we need new regulation and new agencies, and maybe not. We cannot be sure until we examine - in the open - what went wrong and who failed. Not some confidential secret report, but a truly open process.

And given the state of the regulators and Congress, I nominate Eric Bolling and Elizabeth Warren to head it up. Sure, Bolling is a conservative. But he is also an honest investor and one that knows how the liars on Wall Street work. And Elizabeth Warren is one of the few truly plain spoken folks anywhere in the process.

The bottom line of the Lehman report should read, "Everyone involved failed to do their jobs. All of them had a hand in the fraud and all of them should pay."

After all, we the taxpayers are already paying for their crimes.