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While no one was looking, a Congressional committee voted to gut Sarbanes-Oxley, the financial reporting regulation that was passed by a Republican Congress and signed into law by President Bush mere weeks after the Enron scandal broke. While everyone is understandably focused on health care, and having learned precisely nothing from the economic calamities of last year, Congress is busily seeing to it that our economic future is at risk.

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Mon Oct 19, 2009 at 08:05 AM PDT

Rational Bad Behavior

by The Lighthouse Keeper

NOTE: this is not a health care diary.

Bank of America handed out $3.6B in bonuses to Merrill Lynch executives after the two companies merged during the height of the bank meltdown. Obama's SEC slaps them on the wrist. And Obama publicly wonders why bank executives should be held accountable.

The current signs are not good for meaningful financial system reform with real teeth. If the President is not behind serious financial reform, can we trust Congress to produce decent legislation protecting the American taxpayer base from another systematic rape by the banks? Again, here, the signs are not good.

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I guess it's better to know the cold reality than to walk around with the illusion that you can get help. One can act accordingly instead of being naive.

The Home Affordable Modification Program, commonly known as HAMP, has been basically a failure thus far. Banks such as Wells Fargo, Citi, and others who took bank bailout money were obligated to pay lip service to helping homeowners/mortgagees who ran into trouble due to the terrible economy.

But the banks hate this program. In the real world, they do not want to cooperate with homeowners who want to take advantage of this program.

If you're in trouble, don't get your hopes up that Obama's program can help you. Or that Obama has the slightest interest in helping or the power to help you.

The problem with HAMP is twofold: first, that a broke homeowner really needs a real estate attorney in order to get the modification they need; and second, that the mortgage servicer is expected to do the actual work.

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I think it would be much better for the country and for him personally (to resign)... I come from the business side," he said. "If you had a chairman or president in the business world facing these allegations, he'd be gone.

Yes, Mark. So if it was right for Bill Clinton, why did you go back to work on Friday? After all, you were front and center when Congress went after the President for the same thing!

A huge diary appeared a couple days ago taking Keith Olbermann and Rachel Maddow to task. For lampooning the eminently lampoonable Mark Sanford. I probably shouldn't link to this well-intentioned nonsense but for context, here it is.

Sanford deserves all the abuse he gets, and more.

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If a country wants to badly enough, it can harness technology to repress and watch its people.

If tech companies want to badly enough, they can sell whatever the Hell they want to those regimes.

We've all heard about the Chinese "Great Firewall" and their attempts to pollute all new PCs sold in the country with special 'security' software. Well, thanks to two major Western tech companies, Iran is more competent and equally determined to ensure that their people have no internetworking communication with the outside world.

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I've been working in the Silicon Valley area for a bit over a decade. You know, the Silicon Valley that's waiting with bated breath for a new gusher of money to come from the Obama Administration to fund - get this - "Green" Jobs and "Green" Research! (Yes, the quotes are my mini-meme for this piece.)

I submit that the American "Green" industry, specifically that centered in the community of Silicon Valley, is a fraud. Traffic needlessly chokes the freeways every day. The inversion layer over the Valley turns it into a smoggy brown soup on hot days. Now they want Green jobs? Please.

But that's only the context, not the primary thesis, for what I have to say.  

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In this country, if you don't push paper financial instruments around on your desk, your skills are devalued and possess no market value. American labor is being ruthlessly reduced to irrelevance by the monied class in this country.

IBM want stimulus money in the form of project contracts. Meawhile, they're laying off thousands of people. Not from lack of work, but from the desire to chop wages. You see, just because IBM has yet to suffer any significant effects from our ongoing economic meltdown, that's not good enough for their shareholders.


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This is a rant, complete with substantial profanity. It's not my normal mode in any way, but times have changed. If you're of a squeamish sort, please stop reading now and don't bother commenting. I don't want to hear about it.

What prompted this was being treated recently to that severely misguided rant courtesy of Rick Santelli of CNBC, that fellator of Jeffrey Immelt, his paymaster and the CEO of GE. But this is not about him. His meme is already dead.

Rage does not begin to describe how I feel.

I'll tell you one way to give Wall Street some certainty, and to restore confidence in the American financial markets. Start arresting some of these amoral motherfuckers and trying them for securities fraud.

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Well, it's about damn time.

Now, of course, California will be stuck with open primaries - an issue that is so unrelated to budget reconciliation as to be delusional. But, just as with the Maine Sisters and Specter and the Obama Stimulus, a couple of "centrist" Republicans can pretty much completely hold the system hostage until they get their tiny little needs met.

Look at the bright side, at least California's K-12 educational system can now go back down to 50th in the country, where it belongs.

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Our banking and financial system is nowhere near out of the woods. Thanks to a now-defunct company named World Savings (whose polluted loan portfolio constituted a poison pill for Wachovia, which recklessly purchased World Savings and in turn went under), the option ARM loan, which World Savings pioneered, now threatens a very serious second wave of real estate defaults.

And courtesy of another company I've written about before, a massive second wave of ARM-related mortgage defaults is heading our way. Combined with a freshly cresting wave of commercial real-estate defaults in every city in the country, this second round of failures will be more prolonged and possibly more damaging than the first one.

We wonder why the banks have not turned around and used the taxpayer-provided bailout funds to grease the wheels of consumer and business credit? I think I have the answer.

I'll also add a rather painful personal take on this subject at the end of this post.

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I want to offer this point to enhance the discussions here about both Caroline Kennedy and the gay marriage movement. In short, Caroline Kennedy has publicly staked out a firm position in favor of gay marriage rights.

By the way, if anyone has recently posted on this (I've checked and didn't find anything) I'll pull this diary.

To quote from Politico's questionnaire of Kennedy (an aide drafted the responses to the eight-question list):

QUESTION 2: Same-sex marriage. Do you support the right of gay and lesbian couples to marry? Do you think it's appropriate that Rick Warren, who campaigned to ban gay marriage, is delivering the invocation at Obama's inauguration? If not, have you expressed that to the president-elect?

ANSWER: "Caroline supports full equality and marriage rights for gay and lesbian couples."

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Wall Street is the poster child for corruption. There is no level of the financial services industry, except maybe the Credit Unions, that has remained untouched by the Financial Culture Of Corruption. As Paul Krugman noted today:

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it.

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