http://dailyagenda.org/...
So how were congressional members selling the bill?
This bill is being sold as applying only to new, presumably tiny start-ups. But it actually applies to very large corporate creations. Some of the estimates think that 98% of Initial Public Offerings will fall within these exemptions.
This will be the exception that swallows the rule. This will be the provision that applies to most IPOs, which will work against Mom and Pops. This is going to be the face of fraud in the future.
How will corporations exploit the provision?
The key generally is not corporations trying to exploit this provision: It’s CEOs. What the CEO is frequently doing is looting the corporation. The way you loot a corporation is by making things very opaque. Make it difficult for investors, regulators, and outside auditors to figure out what’s going on… virtually everything in this act makes this world of start-ups much more opaque.
The phrase in the Bible is: “All those that doeth evil hateth the light.”
Why is Obama pushing this legislation?
And why are there no major convictions on Wall Street? We know that there was fraud, and we know the folks running these companies must have committed fraud.
Why aren't they in prison?
Here is William Black again on this point.
http://www.pbs.org/...
WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.
BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?
WILLIAM K. BLACK: Yes.
BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?
WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.
And why isn't John Corzine in prison? 1.6 billion dollars is missing. This is money stolen from client's accounts. And why are the executives of this company still on salary and possibly receiving bonuses?
Personally, I think all the Wall Street bailouts were wrongheaded. This was simply taking from everybody and giving to Wall Street. But granting all the perverse arguments defending these bailouts, why are there no major convictions?
