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.