I knew this was coming. As the public outrage over the great Heist of 2008 is finally sinking in and upwards of 7.5 million out of work Americans are wondering how they are going to live in their cars without freezing this joyous Christmas season, while Wall Street is making godzillions of bonus dollars off the TARP money (still working the credit derivative markets for all they can get) Ben Bernanke, Chairman of the Secret Shadow Banking Industry is blaming his fellow Bankers.
What a typical shark feeding frenzy this is going to be. Anyone need some extra popcorn?
Let's take a look at what 'Helicopter Ben' (our own modern day Pontius Pilate) begins 'washing his hands' of his responsibility as the number one regulator of our nation's financial system.
Federal Reserve Chairman Ben Bernanke on Monday blamed banks for slowing the recovery and keeping unemployment high. Despite hundreds of billions in dollars in taxpayer bailouts, the nation's banks have dramatically reduced their lending this year.
"Banks' reluctance to lend will limit the ability of some businesses to expand and hire," Bernanke said. "Because smaller businesses account for a significant portion of net employment gains during recoveries, limited credit could hinder job growth." Bernanke predicted that the unemployment rate will get worse before it gets better. "The best thing we can say about the labor market right now is that it may be getting worse more slowly," Bernanke told several hundred people in suits crowded into a midtown Manhattan hotel ballroom. "Access to credit remains strained for borrowers who are particularly dependent on banks," Bernanke said. "Bank lending has contracted sharply this year...[and] banks continue to tighten the terms on which they extend credit for most kinds of loans."
Bernanke also touched on "too big to fail." While some, like Rep. Paul Kanjorski (D-Penn.) and Bank of England Governor Mervyn King, have said that big banks should be broken up, Bernanke said in response to a question, that "making banks smaller isn't going to do it." Former Fed chairman Paul Volcker and former Citigroup chairman and co-CEO John Reed, among others, have advocated for some sort of restoration of the Glass-Steagall act -- the Depression-era law that kept commercial banks and investment banks separate. That, too, would result in the breakup of the biggest banks. But Bernanke said that such a move "would not be constructive."
Yes, now that things are getting 'really really desperate out there' in America, Ben Bernanke does not want anyone to look behind the 'curtain' and remember such 'facts' as these:
They began to present research in 1999 showing that large banking companies including Wells Fargo and Citigroup had created subprime businesses wholly focused on making loans at high interest rates, largely in the black and Hispanic neighborhoods to the south and west of downtown Chicago. The evidence eventually led Illinois to file suit against Wells Fargo in July for discrimination and other abuses.
But during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies. The hands-off policy, which the Fed reversed earlier this month, created a double standard. Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates.
"In the prime market, where we need supervision less, we have lots of it. In the subprime market, where we badly need supervision, a majority of loans are made with very little supervision," former Fed Governor Edward M. Gramlich, a critic of the hands-off policy, wrote in 2007. "It is like a city with a murder law, but no cops on the beat."
Or perhaps Mr. Bernanke doesn't think we know exactly where he was looking (the other way) when all of this took place as noted by Matt Tabbi:
Waking up to discover the mortgage market was a giant criminal enterprise
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
via Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks.
This is a potentially gigantic story. It seems that a court has ruled that about half of the mortgage market has been run as a criminal enterprise for years, which would invalidate any potential forelosure proceedings for about, oh, 60 million mortgages. The court ruled that the electronic transfer system used by the private company MERS — a clearing system for mortgages, similar to a depository, that is used for about half the mortgage market — is fundamentally unreliable, and any mortgage sold and/or transferred through MERS can’t be foreclosed upon, at least not in Kansas.
Coincidentally I’d been working on something related to this all day yesterday. All over the country, lawyers are contesting foreclosures because of similar chain-of-custody issues. I have some material about this coming out in my next Rolling Stone story, so I can’t get into this too much, but suffice to say the lenders and the banks were extremely sloppy about their paperwork (at best — there is a fraud angle as well) and jammed up the system with missing and/or mismarked mortgage notes. Since a sale isn’t legal unless there’s full transfer of the physical note, a lot of the sales of mortgage-backed securities were not entirely legal, since the actual notes were often not transferred.
Let's remember what the 'job' that the Federal Reserve is charged with is all about....The Federal Reserve is best known as an economic shepherd, responsible for adjusting interest rates to keep prices steady and unemployment low. But since its creation, the Fed has held a second job as a banking regulator, one of four federal agencies responsible for keeping banks healthy and protecting their customers. Congress also authorized the Fed to write consumer protection rules enforced by all the agencies.
During the boom, however, the Fed left those powers largely unused. It imposed few new constraints on mortgage lending and pulled back from enforcing rules that did exist. In other words - it completely and utterly failed in it's mission because it is not an independent organization, it is simply an enabler and parter of Wall Street and the Banks.
This is exactly why Former Fed chairman Paul Volcker and former Citigroup chairman and co-CEO John Reed, among others, have advocated for some sort of restoration of the Glass-Steagall act -- the Depression-era law that kept commercial banks and investment banks separate. That, too, would result in the breakup of the biggest banks.
The real question is why is Bernanke saying that such a move "would not be constructive?"
Let's go over the list of the controlled fraud to date so we know exactly who did what, and the kinds of criminal activities that Ben Bernanke does not want anyone to look at, while he 'washes his hands' of any responsibility for the greatest financial meltdown in the history of our nation, and pretends he had nothing to do with this disaster.
The White-Collar Prison Gang
Even though felons like Enron's Jeffrey Skilling, Worldcom's Bernie Ebbers, and Tyco's Dennis Kozlowski are in prison, corporate America's criminal class is thriving, untouched, and mindful that very few of their kind get caught.
So far during the current economic crisis, not only are most banksters unscathed, but they've been rewarded with trillions of taxpayer dollars, interest-free Federal Reserve money, and an open-ended checkbook for as much more as they want. Who said crime doesn't pay?
The Crimes of Wall Street
Schechter names many, including:
-- "Fraud and control frauds;
-- Insider trading;
-- Theft and conspiracy;
-- Ponzi schemes;
-- False accounting;
-- Diverting funds into obscenely high salaries and obscene bonuses.
-- Bilking investors, customers and homeowners;
-- Conflicts of interest;
-- Mesmerizing regulators;
-- Manipulating markets;
-- Tax frauds;
-- Making loans and then arranging that they fail;
-- Engineering phony financial products; (and)
-- Misleading the public."
Add to these:
-- buying a controlling stake in Washington;
-- assuring their own officials run the Treasury, Fed, and all functions related to the economy and finance, including the regulatory bodies; and
-- writing laws and regulations that govern their industry and activities.
The above is just a 'partial' list of the criminal activities that Mr. Bernanke is now pretending he didn't know about and blaming his fellow bankers on. I must agree with William K. Black on his assessment of the matter:
As Mr. Black so pointedly acknowledges on what has been absolutely 'allowed, without any pretension on the part of our regulators (including the Federal Reserve and the SEC) to protect the American people:
"Now we know what happens when you destroy regulation," Black said. "You get the biggest financial calamity for anybody under the age of 80."
What's more, the government ignored warnings and existing legislation to stop it before the current crisis got worse.
"They didn't even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the savings and loan crisis," Black said. "Even while the institutions were reporting they were the most profitable savings and loans in America, we knew they were frauds. And we were moving to close them down."
There was advance warning of the current collapse. Black says that the FBI blew the whistle; in September 2004, "there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle."
What has now occurred in our government and in most of our financial markets can only be called the biggest cover-up and/or "The Biggest Crime In The World."
Just think about that for a minute. We aren't talking 'Watergate/Nixon burglars here, or White Water/Vince Foster crap, or even the Savings and Loan Scandal or Enron. What our current 'cover-up' is all about makes these other incidents pale in comparison, and if we do not stop it now, we will without a doubt be heading towards what may be the final and absolute crash of the entire United States of America's economic system, that will likely never recover. I'm not hand wringing here, just read anywhere what financial experts are saying about what is being allowed to continue in our country, the world over. This is exactly the reason China, Russia, the Middle East and Europeans are looking to 'dump' the dollar. America has rightly earned the reputation of a country that can no longer be 'trusted' with our own financial markets.
So as Ben Bernanke blames his fellow bankers and refuses to even consider the advice of 'sane individuals' who have been there, done that, such Paul Volcker let's remember that Mr. Bernanke isn't fooling anyone:
That's what former Wall Street banker Nomi Prins told Schechter when he interviewed her last December. "You're talking double-digit trillions of dollars - minimum - already in the beginning of 2009, and we are nowhere near done with finding out how much loss there really is."
One estimate was $197.4 trillion, including "monies lost, value depreciated, and money spent to try to stabilize the system....and that (figure) may be low," yet it's incomprehensible. And getting to the bottom of it through a modern-day Pecora Commission may duplicate the 9/11 whitewash. According to economist Dean Baker:
"Instead of striving to uncover the truth, (an investigation) may seek to conceal it" and tell banksters they're free to steal again.
According to Schechter: "We need investigations by insiders who know where the bodies are buried, and in many cases, not yet" interred. We need more State Attorneys like Eliot Spitzer and enough honest politicians to embrace them. We need proof of who's on the take followed by "a jailout, not (another) bailout. We need to remember Balzac's insight (that) 'Behind every great fortune lies a great crime,' " in a culture where the only one is getting caught.
It is way past time for an independent investigation of Wall Street and the Federal Reserve. They have led this nation down the path of destruction, and instead of showing any sense of duty to our nation, they continue 'with business as usual' and are in fact rubbing our faces in their avarice and greed, while giving us the ultimate 'middle finger' essentially saying: FUCK YOU AMERICANS - WE ARE THE CROOKS AND LIARS AND WE ARE GETTING AWAY WITH IT, SO FUCK YOU.
I would like to nominate William K. Black as the only decent financial expert capable of going after these bastards as an Independent Investigator. God knows that Attorney General Eric Holder is not about to 'do his job' and reign in the SEC, the NYSE, or any of the other hideous corrupt Wall Street 'Goldman Sachs' gang. President Obama continues to ignore the blatant criminal activities on Wall Street, and it is long past due that we demand with a grass roots movement to stop the current gutting of 'regulation reform' that is now taking place under Chris Dodd and Barney Frank.
For god's sake, what part of restore the Glass-Steagall Act don't they get? Or, they get it, but they just won't due it, because they are such Whores to Wall Street and the Banks.
I for one believe that William K. Black is probably the absolute best and most knowledgeable individual in the United States to take up the specter of an Independent Investigator for a complete investigation with all legal powers to adjudicate, investigate and proceed with criminal actions to prosecute those individuals who have perpetuated the biggest cover up and crime that our country has ever been subject to in our nation's history.
I welcome your serious comments and suggestions to forward to Congressman Grayson. I will forward this diary to his office, because he is on the Financial Services Oversight Committee, and I will ask him to respond to this diary and your comments.
Thank you for your help in this endeavor.