watching over the expanding #Occupy Wall Street movement in Week 3 (it is a full on movement across America now, not just a fringe of anticapitalism activists from Canada ":AddBusters") or desperate Americans in their millions, it is clear that the tactics are showing the great fear this might actually force a big change in how this economy works. And of course, for whom it works.
The initial flashpoint was not the marchers, (there were 3,000 United Way marchers in the NYC streets with no attention at all from the police) and the marathon 20,000 and 100,000 's of spectators with no police interest in them of any kind.
No, the interest of Mayor Bloomberg and the Wall Streeters was in the SIGNS in the first days. The ones demanding change in how WS is run. ( more under squiggle)
Those homemade or printed signs calling America to pay attention. That points out how sensitive the New York occupation is. Don't misunderstand, I think it is great that some 52 or now 75 odd other cities are in the occupy movement, but the Wall Street one is the clearest connection with the mess we are in. It needs to grow and grow and others need to keep the message going and people informed.
A few hundred people with home made signs were warned by the police they would be confiscated? And they were starting at 9:30 am . Not for vulgarity or incitement to riot, there were few if any of that sort but for the message about what Wall Street was and is. Why on earth for? Were they that important? It seems they were.
They were important because nowhere in the Congressional halls or Federal offices are the conversations even going on at the moment with what to do with the failed banks.
The banks want to be kept on as a pet of the elites, not turned back into genuine economic tools to rescue America. This is the biggest banks that are spectacular and catastrophic failures. They extracted wealth from ordinary Americans, and flung it upwards to their biggest owners to gamble on things that had no real impact on ordinary Americans until they failed. And we are now bearing the costs. Even if we were foreclosed and out of a job, we are still being punished by $$$ trillions in added debt to keep the bank shares of the rich fully funded and solidly in control. We are punished by the demands to cut services so the $ billions and $ trillions flowing to prop up the banks can be kept on stream.
That's all. That's it.
The entire discussion going on at the top levels of the Administration and their close contacts with Wall Street is all about helping the banks stave off investigations into their doings, resistance to criminal complaints, covering up huge irregularities and downright scheming and frauding in the home mortgage and real estate business along with companion frauds in the trillion dollar bond business. The USA is on the hook for $$$ trillions to prop up the banks currently, and possibly much more if the bankers keep getting their way. All this from technically failed banks. Yes, that's right. They are insolvent and only the favor of Treasury injects of capital printed next door at the Mint (called QE 1, 2, 3) or on in house copiers dedicated to creating certificates are holding their doors open.
It is obvious the finger in the dike, the loans to TBTF banks hasn't done zero except keep them afloat as deciders of where and when capital flows again. The economy is struggling in fits and jerks to get restarted and these worthies can't help because they are frightened of being caught in an avalanche of non performing loans that will add to and expose the huge mess they already are trying to hide. They don't want to play. They are even using their own refusal to lend or fix the problems they created as extortion to compel the Administration to go along with their schemes.
When a country gets into an immense economic crisis, there generally are immense consequences and revamps or reworks of how things are done. The existing political banking cronyism has successfully thwarted all such tiny and meager steps so far.
It is way past time to do nationalization of the largest banks which are the core reason of the crisis in the economic sphere we face. How does it start? Since nobody among the Villagers, or DC insiders can even talk about it without trembling, here is a basic first step. Any of a couple of our ongoing disasters are all that's needed to be cited as justification.
Here is one solution: get ahead of the European banking loan (which are heavily into US big banks also)and the coming soon after world financial crisis Part 2 and 3. Suspend the SEC and put its staff and practices in the hands of a investigation
team. Why did they miss Madoff for over ten years and the banks' shenanigans for more than that? that's enough to nail them for now.
Set up a special emergency banking commission composed of forensic accountants, investigators, lawyers with knowledge base specialties in bank finance, bond underwriting analysis and others and a special prosecutorial team to dig into the banking practices. They will review and rework the existing home construction/ ownership mortgage programs. Not congressional hot air and dummy talk specialists.
Launch this agency directly into, as its first mission, the mess at the big 5 TBTF banks . Launch another divlsion of the agency, identical in scope and types of personnel, directly into the foreign loans these banks have made. There are a number of technical specialists at the universities, FBI and other agencies who have the legal and technical background to be detached and then lent to these partner agencies for urgent work.
And if Timmy Geithner doesn't want the responsibility or any part of doing this under his supervision or partnership with DOJ, fire him and bring in somebody that sees this as a first priority about getting the country back on track.
To get immediate full compliance with the project:
Announce the TBTF Big Five banks are technically insolvent, the Treasury will call all loans made by the US of A to those insolvent TBTF institutions due immediately.
The liquidity problem, inability to repay, the dramatic drop in share prices down to pennies on the dollar means the Treasury acting on behalf of the US of A can simply pick up the companies without paying hardly anything at all in default of their debts just as banks customarily do with deadbeat debtors.
Then, the most senior officers get fired, their records and memos get turned over to the special commission to be reviewed and compared for violations of security trading, collusion, bid rigging and many other possible violations of banking laws, security and exchange regulations.
The special commission can handle the actual review, and where the most egregious and obvious offenders are revealed those names go to the DOJ for criminal referral. All their papers, dead tree or electronic, are material evidence in the most serious forms of financial crimes and indeed, are a direct assault on America. Go for it.
The prosecutions can be publicized on cable TV or similar. An education for the American public.
Review outstanding loan portfolios, insured products, the anagram list of various "products" like CDO's and decide which will be supported, which will be terminated. List ones believed based on fraud that will be rescinded. Stop ALL foreclosures in their tracks and set up a genuine workout desk and agencies in every state the banks do business in to hand over reviewed portfolios to local banks capable of serving the area in the home mortgage business to implement. Rebuild the failed five as a single national bank with strictly limited scope in the domestic, commercial and home mortgage business. More changes in scope:
Large scale national and international and capital investment will be handled by another branch and transparency will be a feature, not a hidden mystery.Those requesting new loans will be judged by their social value along with modest profitability to safeguard the assets of the Bank. Part of the Bank's mission could be the desperately needed trillions of dollars investments
in infrastructure, electrical upgrades, transportation of a comprehensive kind our nation is lacking. Instead of demanding the jobs and products be sourced from overseas, the loans would be contingent on at least 80% sourcing from local and national entities. Even foreign companies that customarily do business with America could share, as do American companies in turn do abroad. This is so as not to disrupt others too much while we recover.
With regard to European crisis, cut Greece, Ireland a break. The loan portfolio should be shaken up, the usury wrung out of it. The bonds and loans are becoming impossibly onerous as the terms become stiffer and stiffer. This has to cease.
No additional money from the USA, but suspend the interest payments for two years and renegotiate them down dramatically and spread them out for double or triple their term to avoid another failure and give them a chance to get solvent and productive. They can manage to rebuild their economy then, not shrink it by 5% as has happened with "austerity" fetish as now on their current account demanding increasing interest
payments to foreign lenders like the USA and Germany in a depressed environment.
Back to America:
Without getting to far down the road of "what it would look like" remember there are are 8700 some odd banks, credit unions, cooperatives, savings and loans that are functioning quite well except they are constrained and held back by the depredation and economic crisis/mess these very biggest so monster banks have caused.
They could be enlisted to clean up the mess in their local areas by adding to the expertise and independent work needed to wring out and resolve the big banks failures to do their job on the local level in the communities.
If you have looked at the excellent diaries or postings of bobswern or
Jerome there are plenty of evidentiary links showing the failures and the inability of the leadership at these biggest banks to do any more except insulate themselves from accounting for and fixing the fundamentals.
Geithner even went to Ireland this past spring to scuttle, to break off the generous deal that would have not imposed crippling austerity on the Irish people.
That kind of seals the deal on HIM as to what his aims are. It was US banks that would have had to write down some of the Irish loans, and they are not even trying to write down the predatory mortgage loans here, so they won't do them elsewhere, even when they were fraudulent as the current spate of lawsuits from foreign banks against US banks in our courts are showing.
Any thoughts or tips or comments on this approach? It could be as simple to launch as an executive decision, just what President Roosevelt did on taking office in 1933. Now, after 3 years of TBTF trillions in bailouts and more promised even in secret, it is time to do something that would work, and not waste more time for the saving of all investor elites