Too big to jail

The Road to Hell Was Paved With Obama Cronyism

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President Donald Trump’s naïve (or willfully blind) notion that Wall Street will work better at raising capital if it is unleashed from strident Federal regulation is unhinged from the facts on the ground. Those facts, as illustrated above, are that the Boards of two of the largest banks in the U.S. are utterly spineless when it comes to holding their CEOs and employees accountable in the face of a tsunami of crimes.

– From the Wall Street on Parade article: What JPMorgan and Citigroup Have in Common When It Comes to Crime

Opposition to Trump is extremely important, particularly when it comes to someone like me who sees his Wall Street love affair and disregard for civil liberties as serious threats to the nation. That said, it is absolutely imperative to see Trump as a symptom of a sick and broken system as opposed to the root cause of anything. The corporate media and legions of mourning Hillary cultists continue to present the Trump threat in extraordinarily simplistic and unhelpful terms. They act as if he’s the head of some evil snake, and that disposing of him as an individual will get America back on track. This couldn’t be more wrong.

I spent most of the Obama years warning about the dangers of his policies. I didn’t do this for kicks, or because I thought he would try to stay in power forever, but because I knew his monumental cronyism would only pave the way for major problems down the road. Well the backlash to Obama came quick, and we the people won’t do the country any good if we focus on Trump the man, as opposed to the entirely corrupt, billionaire/special interest-controlled cesspool of a society we inhabit. We need to focus on Trump’s policies, not Trump the man.

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It Takes a Village to Maintain a Dangerous Financial System

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Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.

We know through painful experience that freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.

The answer lies in the fact that there are two types of laws: just and unjust. I would be the first to advocate obeying just laws. One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that “an unjust law is no law at all.”

We should never forget that everything Adolf Hitler did in Germany was “legal” and everything the Hungarian freedom fighters did in Hungary was “illegal.” It was “illegal” to aid and comfort a Jew in Hitler’s Germany. Even so, I am sure that, had I lived in Germany at the time, I would have aided and comforted my Jewish brothers.

– From the post: Martin Luther King: “Everything Adolf Hitler did in Germany was Legal”

Last month, Anat R.Admati, the George G.C. Parker Professor of Finance and Economics at Stanford University’s Graduate School of Business, published a very important working paper titled, It Takes a Village to Maintain a Dangerous Financial System. At 26 pages, it’s a bit longer than what you might leisurely read in the course of your daily activities, but I strongly suggest you take the time. Of course, if you don’t have the time, I’ve provided some key excerpts for you below.

Despite deconstructing an intentionally complicated subject, the paper was both an enjoyable read and easily understandable. Additionally, the range of issues she successfully covered in such an short piece was nothing short of heroic.

I knew it would be good after reading the abstract…

Abstract: I discuss the motivations and actions (or inaction) of individuals in the financial system, governments, central banks, academia and the media that collectively contribute to the persistence of a dangerous and distorted financial system and inadequate, poorly designed regulations. Reassurances that regulators are doing their best to protect the public are false. The underlying problem is a powerful mix of distorted incentives, ignorance, confusion, and lack of accountability. Willful blindness seems to play a role in flawed claims by the system’s enablers that obscure reality and muddle the policy debate. 

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Texas Judge Orders DOJ Attorneys to Take Ethics Classes

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This is simply priceless.

The Hill reports:

A federal judge in Texas on Thursday tore into Justice Department lawyers who argued the immigration case involving the Obama administration, ordering them to take ethics classes.

In a blistering court order, U.S. District Court Just Andrew S. Hanen said he was “disappointed” about having to address the subject of lawyer behavior, calling it “at best, a distraction.”

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Introducing the Gigantic and Dangerous Wall Street Loophole You’ve Never Heard of

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This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.

The vanishing of the trades was little noted outside a circle of specialists. But the implications were big. The missing transactions reflected an effort by some of the largest U.S. banks — including Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, and Morgan Stanley — to get around new regulations on derivatives enacted in the wake of the financial crisis, say current and former financial regulators.

The trades hadn’t really disappeared. Instead, the major banks had tweaked a few key words in swaps contracts and shifted some other  trades to affiliates in London, where regulations are far more lenient. Those affiliates remain largely outside the jurisdiction of U.S. regulators, thanks to a loophole in swaps rules that banks successfully won from the Commodity Futures Trading Commission in 2013.

Many of the CFTC employees who were lobbied in these meetings went on to work for banks. Between 2010 and 2013, there were 50 CFTC staffers who met with the top five U.S. banks 10 or more times. Of those 50 staffers, at least 25 now work for the big five or other top swaps-dealing banks, or for law firms and lobbyists representing these banks.

The lobbying blitz helped win a ruling from the CFTC that left U.S. banks’ overseas operations largely outside the jurisdiction of U.S. regulators. After that rule passed, U.S. banks simply shipped more trades overseas. By December of 2014, certain U.S. swaps markets had seen 95 percent of their trading volume disappear in less than two years.

– From the excellent Reuters article: U.S. Banks Moved Billions of Dollars in Trades Beyond Washington’s Reach

The following story is guaranteed to make you sick. Once again, we’re shown that following trillions in taxpayer funded bailouts and backstops, TBTF Wall Street banks immediately went ahead and focused all their attention obtaining loopholes in order to transfer risk and make billions upon billions of dollars in the financial matrix, as opposed to adding any benefit whatsoever to society.

From Reuters:

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Chart of the Day – Americans are NOT Happy

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Readers of this site don’t need me to tell you, but the following statistics from the Wall Street Journal prove that despite record stock prices and non-stop propaganda, fewer and fewer people are believing the hype.

We learn that:

On a benchmark measure of Americans’ unease, 65% of those surveyed said the country is on the wrong track. That is the highest level of unease since November 2014, and nears the levels seen at other historical moments of voter discontent.

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How UBS Sent Millions to the Clintons After Hillary Saved the Mega Bank While Secretary of State

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A few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts.

If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court.

Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS, an outcome that drew criticism from some lawmakers who wanted a more extensive crackdown.

From that point on, UBS’s engagement with the Clinton family’s charitable organization increased. Total donations by UBS to the Clinton Foundation grew from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014, according the foundation and the bank. 

The bank also joined the Clinton Foundation to launch entrepreneurship and inner-city loan programs, through which it lent $32 million. And it paid former president Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.

– From today’s Wall Street Journal article: UBS Deal Shows Clinton’s Complicated Ties

The best part about Hillary Clinton’s run for the Presidency, is the endless series of scandals and shadiness that inevitably comes along with being part of an entrenched status quo family that prioritizes the accumulation of wealth and power above all else. The reason Barack Obama was able to generate so much genuine “hope” prior to his election in 2008, is because he was a complete unknown. He could say all the right things, and it was easy for people to believe the hype.

The exact oppositie is true of Hillary. No one believes anything that comes out of her mouth. Everyone knows she is dishonest, shady, and as Camille Paglia perfectly summarized in her Salon article today:

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“Bank Lives Matter” – Obama Administration Makes Another Move to Protect Profits of Criminal Mega Banks

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Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.

HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.

– From the Intercept article: Obama Administration Finds New Way to Let Criminal Banks Avoid Consequences

Two days ago, I highlighted a feel-good story about how officials in Santa Cruz County decided to take mega bank criminality into their own hands by voting to cease business relationships with five criminal TBTF mega banks. Here’s an excerpt from the post, Santa Cruz County Votes to Cease Doing Business with Five TBTF Mega Banks:

“There seems to be no limit to the greed in some our nation’s largest banks. I believe it is critical that the County only work with the most trustworthy institutions as we invest and protect the public’s tax dollars. Santa Cruz County should not be involved with those who rigged the world’s biggest financial markets.

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Santa Cruz County Votes to Cease Doing Business with Five TBTF Mega Banks

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This is impressive. Very, very impressive.

It appears that Ryan Coonerty, the Supervisor of the Third District of Santa Cruz County, wrote a letter back in June to the rest of the Board of Supervisors, in which he bravely pleaded the county cease business operations with five of the TBTF Wall Street Mega Banks. Why you ask? Well, because they are criminal felons. Considering Eric Holder refused to punish them (see: Cronyism Pays – Eric “Too Big to Jail” Holder Triumphantly Returns to His Prior Corporate Law Firm Job), someone has to take a stand.

Here are a few choice excerpts from the letter:

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JP Morgan to Pay Another Slap on the Wrist Fine for Engaging in Systemic Consumer Credit Card Debt Fraud

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Just yesterday, I published a post titled: Florida Man Sentenced to 2.5 Years in Jail for Having Sex on the Beach. The purpose of that post wasn’t to justify his actions, but rather to highlight the difference between how average citizens are treated under the U.S. “justice” system, and how thieving, remorseless financial oligarchs are treated.

While, Mr. Caballero may have ruined the day of a few beach goers by crudely having sex on a public beach in broad daylight, he didn’t run the U.S. economy into the ground and cause destitution to tens of millions of Americans. Nor did he received trillions in taxpayer backstops and bailouts, only to turn around and pay himself a record bonus and then carry on with extremely profitable, illegal financial schemes. No, it was the bank executives who did (and continue to do) all of that. Guess who ends up in prison?

And now, for the latest financial scam perpetrated by JP Morgan, as well as the insignificant slap on the wrist fine, I present the following from Reuters:

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Florida Man Sentenced to 2.5 Years in Jail for Having Sex on the Beach

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Back in May, I highlighted the case of 40-year-old Jose Caballero, who faced 15 years in jail for having sex on a Florida beach in broad daylight. Here’s an excerpt from the post, titled: Florida Man Faces 15 Years in Jail for Having Sex on the Beach (Still No Bankers in Jail):

This story demonstrates how completely and totally broken the U.S. justice system is. Should this couple have been having sex in public and in broad daylight? Absolutely not. Should there be some sort of punishment? Absolutely.

That said, the punishment should fit the crime in a just civilization, and 15 years behind bars for public sex is more akin to what you’d expect in Saudi Arabia. It’s particularly appalling when compared with the license to commit fraud and steal, which politically connected oligarchs have been granted. After all, who was really harmed by this couple’s act? Sure, some tourists may have had their day temporarily ruined or inconvenienced. A three-year-old girl may have seen something, but would probably have no way of understanding what it was. On the other hand, criminal bankers have demonstrably ruined the lives of hundreds or millions, if not billions, of people across the globe. Yet not a single TBTF executive has been prosecuted. They were bailed out instead.

Meanwhile, what about the pastor who faces only four months for molesting a little girl. Yes, you read that right. Our society is so completely fucked up, that two people irresponsibly making love in public will have their lives ruined, while a religious authority caught molesting a little girl receives a slap on the wrist.

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