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Letting the Banking Rats Out of the Bag

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Posted on Aug 11, 2009
banking hearing
AP / Susan Walsh

Bank of America Chief Executive Officer Kenneth Lewis prepares to testify on Capitol Hill in Washington before the House Oversight and Government Reform Committee on June 11.

By Robert Scheer

The good judge smelled a rat.

“Was there some sort of ghost that performed these actions?” New York federal Judge Jed S. Rakoff demanded to know Monday in rejecting a deal that would let Bank of America off the hook in yet another banker bonus scandal. The Securities and Exchange Commission had charged the bank with covering up for outrageous bonuses given out at Merrill Lynch as the bank acquired the failed stockbrokerage, and now it was letting the bank off the hook with a chicken-feed fine.

“Do Wall Street people expect to be paid large bonuses in years when their company lost $27 billion?” the judge asked, and Lewis J. Liman, the lawyer for Bank of America, assured him they do: “My God! Bonuses on Wall Street? It is not a matter of surprise.”
 
But for those of us less sophisticated in the ways of Wall Street, it is a surprise that Merrill Lynch executives were rewarded for failure at the same time Bank of America was using $45 billion in taxpayer funds to take over the brokerage house. Six hundred ninety-six executives who helped run Merrill into the ground were granted more than a million bucks each. 

BofA lawyer Liman attempted to put an egalitarian spin on this government-sponsored welfare for the superrich by pointing out that all told, another 39,000 Merrill employees averaged only $91,000 in bonuses, but the judge wasn’t having it: “I’m glad you think that $91,000 is not a lot of money; I wish the average American was making $91,000.”

That’s the point; the average American is paying for the banking debacle not only in taxes for the bailout but with lost jobs and homes. Yet the SEC, which is supposed to be protecting the ordinary citizen’s interests, decided to give BofA execs a bye. The question is why Bank of America and Merrill failed to inform their shareholders that such payoffs were part of the deal. The details of the bonuses were known to BofA CEO Kenneth Lewis and other top bank executives but not mentioned in the merger agreement or proxy statements sent to the company’s shareholders for approval.

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The SEC complaint did accuse BofA of misleading its shareholders, but instead of digging deeply into how such decisions had been made and by whom, a deal was concocted in which BofA got off with a paltry $33 million fine. That is less than the bonus received by one of the Merrill execs. Yet the SEC deal would have closed the case on how that decision was made. 

“You filed a rather uninformative, bare-bones complaint,” Judge Rakoff told SEC lawyer David Rosenfeld, who lamely defended the decision to avoid going after the bankers involved, and it is instructive of whose interest he was serving that “[t]he lawyer for Bank of America periodically whispered what appeared to be suggestions to Mr. Rosenfeld,” as a New York Times article put it.

Whispering between government regulators and the Wall Street honchos ostensibly being regulated is what got us into this mess in the first place. The SEC looked the other way as the banking bandits piled on hundreds of billions in toxic holdings, and its lawyers evidently still do not get the message that they are not supposed to be facilitators of financial rip-offs.

Thankfully, at least one judge had the courage to challenge the rules of the game and at least delay its predictable outcome. “I would be less than candid if I didn’t express my continued misgivings about this settlement at this stage,” Rakoff said. “When this settlement first came to me, it seemed to be lacking, for lack of a better word, transparency. I did not know much about the facts from the complaint, I did not know much, or really anything, about the basis of the settlement.” He said that accepting the settlement “would leave uncertain the truth of the very serious allegations made” by the SEC and whether any of the bonus money was “derived directly or indirectly from the $20 billion” that BofA received from the government.
 
That is the only error the judge made; the figure is actually $45 billion in government bailout funds for BofA and $118 billion more in public money to guarantee its toxic assets. Given that enormous investment of taxpayer funds, and the trillions more put at risk because of the folly of those richly rewarded banking bonus babies, transparency would indeed seem to be required as the order of the day. As Judge Rakoff concluded, Bank of America and Merrill Lynch had not only “effectively lied to their shareholders” but the money to finance their bonus scam had come “from Uncle Sam.” 

Why has it been left to one stellar judge to sound the alarm, and why is Congress and the Obama administration looking the other way? 
 

Click here to check out Robert Scheer’s new book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”


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By Priest, March 24, 2012 at 2:21 am Link to this comment
(Unregistered commenter)

Kevin was very special to Elaine and me from the first sesshin we attended 6 or 7 years ago to the most recent a few weeks ago, when he came in during an evening sitting walking slowly with his cane and friends in support.  I’ll miss his humor and his dedication.

car insurance quotes car insurance

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By Ed Smerud, December 29, 2010 at 11:00 pm Link to this comment
(Unregistered commenter)

in this country if you steal a lot of money you are a hero and the poor guy
stealing a loaf of bread is going to prison, the big banks should be in jail and lose
there wealth,when will the people wake up and start saving themselfs

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By MarthaA, August 23, 2009 at 12:27 pm Link to this comment

Emanuel Towns,

In my mind “too big to fail” is a farce. Four or five sound banks that had not gotten involved with the corruption of toxic assets could have been given the TARP money, as they would have been able to hold the economy up, better than the CORRUPT banking corporations and CORRUPT insurance corporations; whereas, now those toxic assets are still out there waiting to be whammied onto the American public again.

I am of the firm opinion that stable banks that didn’t have toxic assets should have been pumped up to make them even more stable, so that they could have upheld the economy, as well as start a new market for those toxic assets; instead of saving the CORRUPT bankers and holding their toxic assets to foist off on the people at a high price at a later date.

The CORRUPT bankers should have fallen, and actually should be in jail or out on bail, their banks could have been taken over by sound banks.  CORRUPTION should always fall, but it appears this was planned CORRUPTION since it was not allowed to fall, but really should never have been held up. The best I can figure is that there had to have been a Noble and Nearly Noble plan to break the economy for the 70% MAJORITY COMMON POPULATION, while still maintaining an economy for the Nobles and the Nearly Nobles.

I don’t know about this law suit, but I am certain that the Right-Wing has seeded the courts with Right-Wing judges, because I check every time I vote, and the only judges there were to vote for were Republicans, but now they have taken their political designation clean off the ballot, therefore I vote out all judges that are ashamed to show their political leanings on the ballot. It is my opinion that the politics of judges must be shown on the ballot, instead of taken off.

Since there are so many right-wing judges, it is difficult to get justice.  It seems every time a good judge makes a decision, the Right just takes it to a higher court where they have their judge that will knock down any kind of justice. 

As I said, “too big to fail” is a farce, a dupe pulled on the 70% MAJORITY COMMON POPULATION.

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By EMANUEL TOWNS, August 21, 2009 at 8:14 pm Link to this comment
(Unregistered commenter)

There’s a constitutional attack against the TARP program that is now on appeal to the Second Circuit Court of Appeals.

  The Henry Builders law suit is a direct attack upon the national government’s concept of “too small to be included.”  (Docket No. 09-0730CV)

  A family business and a senior citizen seek to have the Emergency Economic Stabilization Act of 2008, declared unconstitutional and forever removing from the American vernacular, “too little to be included.”

  This is the only known direct attack on EESA on equal protection grounds.

  The entire issue of what has happened to the rest of America as a result of the selective legislation to bail out the financial sector has been completely ignored by the national and local media.

  However, the judicial declaration that EESA is unconstitutional will strike at the heart of the national program to bail out the select financial community and others the government claims are “too big to fail.”

  It is time that the Henry Builder Case receives as much consideration as cases involving the constitutional rights of those who our government claims are terrorists.

  America’s Left Out Campaign does not question the right of those who seek habeas relief to be heard by our courts and media outlets but insists that America’s only law suit that strives to put an end to the bailout of a class of one deserves equal attention.

  This case is currently on appeal to the 2nd Circuit Court of Appeals.

  Three (3) days after the case was filed a District Court judge dismissed this vital action on the spurious grounds that the court did not have Article III standing.

  The briefs filed with the 2nd Circuit patently establish that the lower court’s hasty ruling was erroneous.

Emanuel Towns II
P.R. Representative
America’s Left Out Campaign

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By MarthaA, August 17, 2009 at 4:49 pm Link to this comment

Could it be that the whole “capitalist pyramid scheme” that is based upon the perpetual support of the 70% MAJORITY COMMON POPULATION’S support at the base of the pyramid is known to be a scam by the Noble and Nearly Noble descendants of the Nobles and Nearly Nobles that set up the system to function in the same fashion that was used by the Noble Pharaoh of Ancient Egypt and the Nearly Noble toadies to the Pharaoh of Ancient Egypt, and that fraud does not exist as a crime for political fraudsters, banksters and insurancsters of the Noble and Nearly Noble Cast, only the Cast of Commoners that perpetually support the base of this “giant pyramid scheme”?

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By Chris Fretwell, August 17, 2009 at 1:55 pm Link to this comment
(Unregistered commenter)

“Why has it been left to one stellar judge to sound the alarm, and why is Congress and the Obama administration looking the other way?” Amswer:“truth is treason in the empire of lies” Ron Paul

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By "G"utless "W"itless Hitler, August 17, 2009 at 6:41 am Link to this comment

“So, I made a mistake on the 0000’s.  I meant to say One Million for each family!!  I know you knew what I meant!!  The government would only have to spend about 200 million or 300 million, depending how many housefolds there are in the U.S..”—Anoosh

Hmmmmm….  #Families X 1,000,000 = 300,000,000.  So 300,000,000 / 1,000,000 = #Families.  So the #Families in the U.S. = 300. 

Yes, it truly is a small world!

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By Anoosh Hambarsumian, August 16, 2009 at 2:17 pm Link to this comment
(Unregistered commenter)

So, I made a mistake on the 0000’s.  I meant to say One Million for each family!!  I know you knew what I meant!!  The government would only have to spend about 200 million or 300 million, depending how many housefolds there are in the U.S.. 
It seems our government does nothing to help its people, but is sooooo willing to help countries, who hate our guts, but love our money.  Democracy cannot be bought with money.

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By MarthaA, August 15, 2009 at 7:23 pm Link to this comment

ishmael,

Do you think running would be beneficial?  God says stand, and when you have done all you can do to stand, stand.  Don’t think God wants us to run, but you can if you want to.

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By PhreedomPhan, August 15, 2009 at 3:28 pm Link to this comment

Here’s a man with the right ideas.  Economist Hudson on the Renegade Economist.

http://video.google.ca/videosearch?hl=en&q=renegade+economist&um=1&ie=UTF-8&ei=KeiGSuCzB4ayswPIgPGhBw&sa=X&oi=video_result_group&ct=title&resnum=4#

Rick

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By ishmael, August 15, 2009 at 11:57 am Link to this comment
(Unregistered commenter)

Unfortunately Moses did lead anyone anywhere, God did;  and as far as we know God will send cleansing fire to the country of the second beast;  so don’t wait for someone to lead you (no one will come), run.

_________________
“To talk about regularization of banks, means either to betray complete ignorance, or to fool the simple folk with high sounding words” (Lenin in ‘Pravda,’ May 29th-30th, 1917:  ‘The threatening catastrophe and boundless promises,’  Collected Works, vol. 25, p. 329.)

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By "G"utless "W"itless Hitler, August 15, 2009 at 11:39 am Link to this comment

Anoosh,

you might want to add a few more zeros there, buddy.  Suppose the letter o is a zero.  To give everyone in the country one million dollars, we’d have to spell you name like this:  Anoooooooooooooosh.  That would be the number of zeros needed behind the 2.

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By MarthaA, August 14, 2009 at 5:08 pm Link to this comment

Noble and Nearly Noble Pyramid Scheme

Why is fraud that scams an individual or a group of individuals a crime, but organized political fraud that scams the public for the same reasons—- MONEY and POWER—-  perfectly legal to perform under its own language of crime speak, “organized political sophist propaganda”?

What is the difference between fraudsters?  Why is a non-political fraudster a criminal? —and, why is a political fraudster an upstanding solid citizen that has only participated in an “economic correction” that it is the responsibility of all of the taxpayers as a collective to bail out in order to save the economy?

Political fraudsters, banksters and insurancsters are an integral part of CAPITALISM and have been since the time that Nobles and Nearly Nobles discovered that the Commons could be privatized in order to force the Common Population, as individuals, to work to get back small parts of what was, by the force of CORPORATE GOVERNANCE, taken from them and privatized as commodities for the Nobles and the Nearly Nobles to make markets for the Nobles and the Nearly Nobles at the expense of the Commoners having to toil for hourly wages in the employ of the Nobles and Nearly Nobles in order to get back enough of what was taken from them in the form of MONEY to pay for a marginal existence that is the existence of a wage slave.

Could it be that the whole “capitalist pyramid scheme” that is based upon the perpetual support of the 70% MAJORITY COMMON POPULATION’S support at the base of the pyramid is known to be a scam by the Noble and Nearly Noble descendants of the Nobles and Nearly Nobles that set up the system to function in the same fashion that was used by the Noble Pharaoh of Ancient Egypt and the Nearly Noble toadies to the Pharaoh of Ancient Egypt, and that fraud does not exist as a crime for political fraudsters, banksters and insurancsters of the Noble and Nearly Noble Cast, only the Cast of Commoners that perpetually support the base of this “giant pyramid scheme”?

The Jewish people of Ancient Egypt grew weary of the “pyramid scheme” of the Noble Pharaoh’s and Nearly Noble toadies to the Pharaoh and left Ancient Egypt for the Promised Land under the leadership of Moses, to a land of “milk and honey” where they as the Common Population would not have to support the weight of the Nobles and Nearly Noble Egyptians at the top of the “pyramid” by their back breaking labor at the base of the pyramid.

When will a 21st Century Moses arise for the 70% MAJORITY COMMON POPULATION of the United States that will lead the 70% MAJORITY COMMON POPULATION to freedom, to a Promised Land where the 70% MAJORITY COMMON POPULATION as a Class and Culture of the United States do not have to be a 70% MAJORITY POPULATION of wage slaves at the base of a “capitalist pyramid” supporting the Noble and Nearly Noble capitalists at the top of the “pyramid”? —When will the 70% MAJORITY COMMON POPULATION of wage slaves of the United States say, “Let My People Go”?

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By John, August 14, 2009 at 1:45 pm Link to this comment
(Unregistered commenter)

Rakoff is a hero,I sincerely thought that change was coming but it appears to be more of the same, the Political system needs to be purged. No taxation without representation, all of these politicians are owned by cooperate America and special interest groups. Corperate Welfare is the theme, privatize the profits socialize the loss. No business is to big to fail (AIG) and no CEO or other executive should get a dime for running a bank or investment Co. into the ground.

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By Anoosh Hambarsumian, August 14, 2009 at 11:40 am Link to this comment
(Unregistered commenter)

My son was unable to buy a house he saw and liked, at $439,000, because B of A made so many stipulations and by-laws.  I thought the bail-out was meant to help the average citizen buy homes.  Instead, they are giving bonuses to their people.  If every household in America were given #1,000,000, then the economy would really get moving.  That would cost the government only, maybe $200,000,000, instead of billions and no results. 
Wake up fellow Americans.  Our representatives do not care for us.  They have done nothing for us.  All they care about is to be voted into office, because then they can get rich off of us and the lobbyists who keep them in “the money.”

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By PhreedomPhan, August 13, 2009 at 7:04 pm Link to this comment

I think I may have mentioned this before.  A great website for presenting history books and articles from as far back as the early 19th Century and maybe even further.  You can find a number of books through which you can trace the banking scam all the way to the national bank set up by Washington and Hamilton, probably linked to the Bank of England.  You can also find out how that bank grabbed England by the Gotchas and squeezed.

http://yamaguchy.netfirms.com/

Rick
http://PhreedomPhan-lostliberty.blogspot.com
http://phreedomphan-americasenemies.blogspot.com

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By hippie4ever, August 13, 2009 at 3:23 pm Link to this comment

Bank of America was technically in default in 1986 thanks to the tanking of Brazil’s economy. The FDIC kept it hush-hush and later the bank achievement solvency thanks largely to the real estate cartels.

So they should have known better, and learned from their experience, and they didn’t. Wrap the BofA in a big American flag manufactured somewhere by slaves in the Peoples Republic of China.

Yet thousand and thousands of my brothers are incarcerated right now, because they possessed cannabis. That is their “crime.” What a disgusting society—I actually agree with (G)utless about revolution; that really concerns me.

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By "G"utless "W"itless Hitler, August 13, 2009 at 2:19 pm Link to this comment

“Personally I don’t see anything short of a full blown revolution that will alter the course of this sinking ship we are on.”—FreeWill

Precisely!  A land ripe for revolution is a target rich environment.  I imagine the guilty parties would enjoy their booty a bit less if some good citizens took a shot at ‘em every time they showed their faces in public.  Their current temerity comes from their absolute certainty that they are far more ruthless than the average schmo.  A few bullets whizzing past the ol’ brainpan on a daily basis will disabuse them of that notion with a quickness.

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By Palindromedary, August 13, 2009 at 2:09 pm Link to this comment
(Unregistered commenter)

The typical hard-working American has scratched the surface and found only lead. So lead we have and lead we need to use to overthrow those criminals who have stolen from us. Nothing will change until we do.

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By glider, August 13, 2009 at 12:14 pm Link to this comment

I propose a new phrase acknowledging the current state of our crony capitalist system:

“To Big To Regulate”

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By glider, August 13, 2009 at 11:05 am Link to this comment

felicity
“magic status of too-big-to-fail, which meant that the government would have to cover their losses to keep them from actually failing”

This goes way beyond the “too big to fail” smokescreen.  The Banksters and their cronies have FIXED THE RESPONSE TO THE SCANDAL.  Common sense solutions are being ignored and minimalist placating patches are being proposed.  People should not be focusing on the “too big to fail” past event, but rather the outrage over the corrective measures not being taken.

1. Forcibly reinstall new management teams
2. Break’em up into “small enough to fail” entities
3. Reinstate regulations overturned by the Banksters
4. Illegalize all derivatives trading
5. Prosecute executives for racketerring
6. Prosecute colluding regulatory officials
7. Prosecute colluding congress members

The chances of any such steps being taken is exactly zero.  The Obama patches will make sure lightning does not strike in the exact same spot again.  Unfortunately that is not the risk we face.

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By msgmi, August 13, 2009 at 9:46 am Link to this comment
(Unregistered commenter)

Wall Street has a Country Club mentality. Profits/losses and bonus payouts have no meaning, they are a product of the Wall Street culture manifested in hubris. Self-regulation is a myth and has no heartbeat.

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By glider, August 13, 2009 at 9:32 am Link to this comment

BobZ
“I still think Obama will press for regulatory reform in the Fall as he mentioned yesterday. But we need to remind him of this promise and make him and the Congress do it”

If you want to confirm that Obama and his cronies will do nothing of substance to control the banksters keep an eye on the graph of unregulated derivatives at the bottom of this post (note that the June 2008 notional value was $687 trillion). 

What they are talking about are small patches that rationalize the perpetuation of this system which has been appropriately labeled “weapons of mass destruction” by Warren Buffet.  Gietner even goes out of his way to praise the value of having a vigorous financial sector with innovative financial products.  If Obama ever caught on and had the guts to take this system on it would be more likely he would end up assassinated than effective in bringing the legislation.

http://en.wikipedia.org/wiki/File:Total_world_wealth_vs_total_world_derivatives_1998-2007.gif

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By felicity, August 13, 2009 at 9:31 am Link to this comment

I have wondered if we are merely experiencing the end result of a beautifully engineered scheme begun who-knows-when but which got off to a running start with the sub-prime mortgage caper.

Banks, investment firms, the insurance syndicate and the real estate consortia initially made mega-bucks on selling subprimes and in the process reached that magic status of too-big-to-fail, which meant that the government would have to cover their losses to keep them from actually failing.

How clever can this be. Selling sub-primes was extremely profitable which in turn made you big and very rich, so big the government would have to bail you out, so the money you were bound to lose in sub-primes gone bottom up, you would not actually lose thanks to the government. 

And now, of course, the original engineers of this scheme, including the lackies who did the leg-work, are being rewarded big time with bonuses. Why not, it was a beautiful scam.

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By FreeWill, August 13, 2009 at 8:27 am Link to this comment

“G"utless “W"itless Hitler
Well…. If the solutions are that easy perhaps you would be generous enough to share them with us. 
  Personally I don’t see anything short of a full blown revolution that will alter the course of this sinking ship we are on.  I have no faith in Obama or the Dems. to do anything of consequence regardless of how pissed off their doe eyed supporter get. When the law is complaisant with the braking of the law you really do have a problem.  The judge in this case is exceptional to the norm where obfuscation, delay, or plain old bribery would usually make the matter go away.
  I read the other day that a Nazi war criminal was finally tried and convicted.  (Only about .01% of actual cases have even been tried.) This is 60+ years after the war crimes were committed.  Now I ask you, what chance do we stand to see any of the current crop of Killers ,Con Artists, and Thieves being brought to justice?...
  Yes, exactly none.

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By "G"utless "W"itless Hitler, August 13, 2009 at 6:12 am Link to this comment

“I don’t know how we can sever this money (pay for influence) pipeline.”—FreeWill

You don’t?  It’s as easy as pie.  Corruption on this scale provides a target rich environment.

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By christian96, August 13, 2009 at 5:06 am Link to this comment

Cuntitis1——-Ain’t you got nothin to say important
except to showoff your knowledge about how usins
ought to write?

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By Brock, August 13, 2009 at 1:18 am Link to this comment
(Unregistered commenter)

Wait a minute.

Stop the presses.

Is this the same “Bank of America” that I was informed just yesterday, would be taking over for the servicing of my FHA loan ?

Taylor Bean & Whitaker was just shut down.  FHA say over the phone that Bank of America is taking over.

If they are having these problems, will I be in the same boat 30 days from now ?

Is there ANYONE out there that is reliable ?

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By cognitis1, August 13, 2009 at 12:19 am Link to this comment

Ralph demonstrates by the same comment both his faculty of “cut and paste” and also his difficulty of reading others’ comments. Christian in professing his literary merits detects its illiteracy: hypothetical conditional clauses use the subjunctive (average American WERE making; if Obama WERE serious).

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By christian96, August 12, 2009 at 7:30 pm Link to this comment

I agree with the judge.  I wish the average American
was making $91,000.  I have master and doctoral
degrees, taught at major universities, and served
as School Psychologist for public schools.  My
annual disability income is less than $50,000
including Social Security.  If Obama was serious
about stimulating the economy he would eliminate
any taxes on anyone making less than $50,000.  Don’t
hold your breath!

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By Ralph K., August 12, 2009 at 6:41 pm Link to this comment
(Unregistered commenter)

Cognitis 1

but citizens are conscious of their interests and use the government to contend for rights.

Are you kidding?  Are you telling me that you actually believe that?

I was at a Supermarket Bank of America today, and since I get paid a whopping 0.3% for my Bank Deposits
I thought it interesting to find out what they would
charge me for a loan,(not that I am in need of one)
  The Banker told me that they make only loans from
$100,000.00 on up and the interest would vary from
12% to 20% depending on the loan.

  At Wachovia I asked the same question and I was
told that it depends whether fixed or VARIABLE! The
Interest for a fixed loan could run about 7% to 9%. of course that banker knew that I didn’t need a loan, so
I asked how she would feel if she had the amount of
money at Wachovia that I do and got a measly 0.3%.
Her Answer: “Thats Banking”.  There was a fellow some
time ago who wrote: “What is a bigger Crime, to rob
a Bank or to open one.”
    I hope that a lot of men like Judge Rakoff will
come out of the woodwork and soon and I wish them all
the success in the world.

  In a small town on the eastern border of Bavaria there is an old Ropemakers Shop and hown
into stone over the entrance it says:
  The Little Thieves they hang them
  The big ones they let free
  If the matter were reversed
  I would sell a lot more Rope.
    _ _ _ _ _ _ _ _ _ _ _

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By jc, August 12, 2009 at 5:26 pm Link to this comment
(Unregistered commenter)

-To SG,

To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.

Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.
Thomas Jefferson

Praise the Lord, Jesus Chris

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By boggs, August 12, 2009 at 4:09 pm Link to this comment

I hope it won’t be a hard decision for all the ordinary hard working Joes out there to decide their business should be given to the local Credit Unions.
Drop the big banks. Who needs em? If you are unfortunate enough to have a big bank credit card, drop it. (pay it off of course) but quit using it.
Drop any other corporate services that you can possibly live without. Its really peaceful in my home since I thru out the TV. Who needs to listen to CNN sell stuff on my dollar? Not me.
The only way to talk to these elite capitalists is to let them feel a pinch in the sales of their product. Incidentally, these are the same greedy pigs who want to deny the rest of us the singlepayer option HC.

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By glider, August 12, 2009 at 2:59 pm Link to this comment

BobZ
“I still think Obama will press for regulatory reform in the Fall as he mentioned yesterday. But we need to remind him of this promise and make him and the Congress do it”

Whatever Obama presses for will be largely inconsequential.  If you have paid attention to what he has done and who he has surrounded himself with this is evident already.  I wonder whether Obama is even remotely aware of his stooge role.

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MarthaA's avatar

By MarthaA, August 12, 2009 at 2:40 pm Link to this comment

A Win-Win deal for the Big Bank/Insurance wheeler-dealers, no matter which way the economy goes, they can’t lose, therefore have taken full advantage, because they have pawned their losses off on the good old common pop. I am of the opinion that all of these big bankers and big insurance dealers should be put in jail, given a fair trial and put in prison.  Every last toxic one of them.

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By cognitis1, August 12, 2009 at 1:17 pm Link to this comment

The lesson Bob imparts to his children is accepting subjugation with the hope of Rakoff or Wilson saving them: the necessity for extraordinary “whistle blowers” necessarily demonstrates a totally corrupt government. Only slaves and beasts depend totally on “saviours” or “leaders” or “whistle blowers” to conserve their interests rather than contending for rights themselves. Slaves and beasts laud “whistle blowers”, but citizens are conscious of their interests and use the government to contend for rights.

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By BobZ, August 12, 2009 at 12:56 pm Link to this comment

Thank you Judge Rakoff for saying what millions of American’s would liked to have said to BofA and Merrill Lynch. These two companies not only let down their shareholders and customers, they let down America. They had a fiduciary responsibility that they totally abandoned. Judge Rakoff is a great public servant that we should all be thankful for and proud of. I am not concerned about this issue and its larger dimensions coming down to one individual. Often times this is the case - Joe Wilson blew the whistle on Bush and Cheney, one person blew the whistle on Enron, Senator Dorgan who voted against the repeal of the Glass Steagall act. This is a lesson we need to impart to our children - that it is ok to stand up for what you believe in, even when everyone else just wants to go along with the program.

I still think Obama will press for regulatory reform in the Fall as he mentioned yesterday. But we need to remind him of this promise and make him and the Congress do it. And we can’t let the Republican’s try and strong arm this like they are trying to do with health care reform.

Thanks again Judge.

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By cognitis1, August 12, 2009 at 12:51 pm Link to this comment

glider:

I consent with most of your recent post. US Ruling Class pursues its interests with its influence and money, while the Middle Class and Lower Class aren’t even conscious of their interests beyond beastly desires of eating sleeping mating. Ruling Class has subjugated both political parties to its interests through venal Campaign Finance laws and the Media. Most “Progressive” or “Liberal” commenters here expect insurrection leaders such as Ralph Nader or Ron Paul to save them as domestic beasts or children; and they always sense disappointment or perfidy, when these leaders either concede to the Ruling Class or are excluded by it. Expect the Ruling Class to continue to effortlessly regulate the Middle and Lower Classes, just as a master regulates his dog.

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By Hulk2008, August 12, 2009 at 12:50 pm Link to this comment

Way to go once again, Robert Scheer !!

And to answer someone above .... yes I’d rather be right than “king”.  When you come down to tacks, you hae to live with yourself.  I have never been able to just unhook my own conscience and hang it someplace for expedience. 

On another issue, Presidents and Congress did the dirty work for many prior years .... with plenty of blame going back to multiple administrations.  At least the Obama administration is trying to make things a bit more transparent.  If (big IF these days) “O” gets a crack at a second term, then lay more blame at his feet if things continue as-is.  After all, it took W more time just to prep the Iraq War .....

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By adrienrain, August 12, 2009 at 12:47 pm Link to this comment

There is nothing ‘free’ about this market system. They are gambling, and if they win, they get richer and if they lose, we the people, who are suffering because of their BS, make up their losses so they can gamble some more.

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By Eric L. Prentis, August 12, 2009 at 12:36 pm Link to this comment

The reason that Wall Street banking crooks can steal many-many-many billions of dollars from US citizens, with the impunity that matches 15th century European royalty, is because the mafia bankers completely own our stinky-ass politicians.

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By Dwight VW, August 12, 2009 at 12:09 pm Link to this comment

Quite a judge:

http://en.wikipedia.org/wiki/Jed_S._Rakoff

I wonder how he would have handled the 9/11 insurance cases.

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By Spiritgirl, August 12, 2009 at 11:53 am Link to this comment

I applaud Judge Rakoff.  I also believe that it’s time to let the bastards fail - as they have let the average American FAIL!  The “free-market” capitalism that we’ve had shoveled down our throats has failed regular Americans. 
1)When did having a “free-market” mean that there are no rules and regulations? 
2)When did having a “free-market” mean that Americans must be thrown under the proverbial bus?
3)When did having a “free-market” dictate that we no longer use “COMMON SENSE”?!

For all of the partisanship that is on display, when did the American people start to loose site of “shared goals”, “shared responsibility”, and “shared sacrifice”?  Are these terms an anathema to everyone?  There are millions of “US” facing foreclosure because these greedy selfish bast—ds defrauded, deceived, and duped us all - where is the logic, and morality in that?  And yet, we the people are supposed to continue to stand by meekly as they continue to steal our money while giving us the finger, I DON"T THINK SO!!!  The paralyzed prostitutes we call Congress have long since sold US out to the CORPORATE OLIGARCHY, and until WE all see that and coalesce around that WE THE PEOPLE will continue to be run over by them!!! 

All of these bast—ds need to be scrubbing the toilets with their toothbrushes, not rewarded for their arrogance and greed!!! 

Just in case many of you don’t understand the rights “we in a democracy have” please read:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government.

That is from the Declaration of Independence, that is why they were fighting the King of England, how much more will you take before you raise your voice in protest!

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By glider, August 12, 2009 at 9:48 am Link to this comment

“Why has it been left to one stellar judge to sound the alarm, and why is Congress and the Obama administration looking the other way?”

Despite the best intentions of the founding fathers the battle to create a U.S. government that serves the people equally was lost long ago.  The loopholes have been found and exploited.  Currently we have an placating illusion of democracy whereby the people are given a false choice between two candidates that are both largely pre-selected by a wealthy powered elite.  It is much less transparent but no different than the Grand Ayatollah pre-selecting the presidential candidates of Iran.  Of course this is going on at lower levels of government as well.  A significant part of the private interest’s coup d’etat is the consolidated and manipulated mass media.  This condition along with the fact that their manipulations are deliberately made complex enough to rise above the peoples ability to comprehend disempowers the ability of the people to altar the course of the country.  Unfortunately there is no escape.  The only moderating force would seem to be that the puppeteers will back off enough so as to not kill the goose that has layed their golden egg.  I am also interested in what effect the Chinese system may have on these powers.  It is interesting that thusfar they have resisted attempts to subject their currency to “free market” floating currency manipulations.

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By hippie4ever, August 12, 2009 at 8:30 am Link to this comment

“Why has it been left to one stellar judge to sound the alarm, and why is Congress and the Obama administration looking the other way? ”—Robert Scheer

Seldom has a question here been so easy to answer: because the judge is honest and Obama and Congress are not.

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By adrienrain, August 12, 2009 at 7:58 am Link to this comment

Can’t kill the goose that laid the toxic leaden egg! Heaven forbid that the rich should pay for their mistakes the way others who make bad financial decisions do - by declaring bankruptcy, and living on a budgeet while they repay their debts - TO US!

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By Fat Freddy, August 12, 2009 at 7:22 am Link to this comment

There are so many causes for the financial crisis it is just mind boggling. There was a total lack of savings and production. Everything was consumption. Not just on the part of individuals, but businesses as well. Everyone was incredibly over leveraged. But yet no one seems to want to admit that. We are still pointing fingers, and doing nothing. Ultimately, PhreedomPhan is right. It all falls right in the lap of the Federal Reserve. But the only thing worse than the House of Cards that was built on these Fed policies, are the policies (or lack of) that are attempting to “fix” the current crisis.

Re: Large financial institutions, FDIC Chairman Sheila Bair   and ICBA Chair Terry Jorde (.pdf)  have some pretty good ideas (.pdf)  that have fallen on deaf ears. You be the judge.

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By ChaoticGood, August 12, 2009 at 7:19 am Link to this comment

Whoa, its not so simple !!!
You cannot kill the goose that lays the golden egg…

The international banking cartel is led by the G8 plus 1.  That cartel keeps control of the monetary policies of the world.  This is a totally corrupt club where the financial fate of billions of people is decided.  It has allowed America to get ever larger loans and has let America keep its worthless currency artificially “worthwhile”. If you start persecuting these folks, you will loose the concensus and risk losing American influence over the worlds money supply.

If you reshuffle the deck, you risk having a world where America is far worse off than it is now.  So I ask you all…Do you want to be right or do you want to be King?

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By Anarcissie, August 12, 2009 at 7:17 am Link to this comment

’... Why has it been left to one stellar judge to sound the alarm, and why is Congress and the Obama administration looking the other way?’

Answer:  You elected Obama and the Congress.  The judge, being a mere appointee, was probably an accident.  Maybe another accident will fix it—I’d be careful crossing streets, if I were Rakoff.

Someday, maybe, the people will stop being deluded about their great leaders and take a walk.  Unfortunately that day seems long in coming.

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By thebeerdoctor, August 12, 2009 at 7:16 am Link to this comment

It was distressing for myself to learn that Paul Krugman says that Bernanke deserves to remain at his job. Even critics seem to eventually succumb to the monetary myths created, historian Niall Ferguson, author of The Ascent of Money, has recently become a chief apologist for the Fed’s monetary policies. Despite the admonishment by global investor Jimmy Rodgers that the Federal Reserve has actually just become a printing press, no one seems to mind. It seems the printer has jobs to do 24/7.

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By FreeWill, August 12, 2009 at 7:12 am Link to this comment

We live in the greatest ponzi scheme of all time.  Our current money supply is controlled by an elite group of Bankers who have creatively managed to create a system that stealthily steals from every working person. Moreover, without anyone being concerned or for that matter being aware of it. 
See this great short film:
http://www.documentary-film.net/search/watch-free.php?&ref=189
  As long as these Bankers control the money supply corruption in our government is assured.  They create and distribute the wealth to whomever they see fit.
It is all part of the money pipeline between Banks , Corporations, lobbyists,  and the politicians they buy and the so called ” Regulators”.  ” Permit me to issue and control the money of a nation and I care not who makes it’s laws,”  (Mayer Anselm Rothschild, Banker.) In 1913 when the Federal reserve was created the Revolution that the founders fought for was lost.  Our so call democratic elections are nothing more than a Dog and Pony Show. Real decisions are made and bought by the financial elite and paid for by the average citizen.
  “Our” representatives continue to disregard the citizenry at large in favor of the money conduit from the corporate and bank interests.  I don’t know how we can sever this money (pay for influence) pipeline.  But until that is done, I really don’t see much “Change” happening.  It will continue to be Business as usual and the poor and middle class will continue to pay for increasingly larger executive bonuses.  We have been sold out by President Obama who we had believed would finally be someone who would stand for the people but who once again has capitulated to the the mighty Corporate and Banking masters.
  If you don’t like the tiger in your yard that’s threatening you, then why are you feeding it?  Any real turnaround of this countries speeding decline as a nation, must begin with a total revamp of the money supply system and the reestablishment of the gold backed dollar.

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By Shift, August 12, 2009 at 6:54 am Link to this comment

The U.S. is collapsible.  The economy collapses and then is pumped up with printed and borrowed dollars.  Banks collapse and are pumped up with printed and borrowed dollars. 

It’s different with U.S. citizens.  A citizen collapses and he is run over.

I wonder what happens when the bailout bubble collapses?

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By coloradokarl, August 12, 2009 at 6:42 am Link to this comment

Maybe the Judge is sending a message “MORE!!!”

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By Bitter and disappointed, August 12, 2009 at 6:34 am Link to this comment
(Unregistered commenter)

Weren’t these payoffs what the second term of the Bush administration was all about? 

Bush was so unpopular that he could not sell the privatization of Social Security in 2005.  That, we were told, would have provided investment bank and mutual fund managers with some $200 billion in fees over ten years.

So they lost round one of that boxing match with the American taxpayer. But when the Wall Streeters regrouped, they come up with an even more ambitious scheme.  A stupendously ambitious gamble of breathtaking scope. 

And they sure showed us!  How many trillions are we in the hole for, thanks to our gutless politicians? 

I still can’t get over candidate Obama urging the giveaway of $700 billion in September 2008 just so the Democrats would not be blamed for the subsequent crash.  The most expensive campaign in American history.

Interesting that from the point of view of the bonus recipients the source of their bonuses makes no difference.  A cut of every transaction, whether it’s a taxpayer bailout or private investment gamble. 

When the Holy Roman Empire had to pay off the Vikings and the berserkers—1000 years ago—it was called Danegeld.

What should we call these 21st century sackings?

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By cognitis1, August 12, 2009 at 6:25 am Link to this comment

Only the ignorant and stupid would expect presiding SEC Chairman Schapiro to correct errant policies of her predecessors, as Schapiro had served her entire career at SEC and NASD and recently presided over NASD’s regulatory division. Schapiro is one of many relics of Clinton Administration including Hilary Clinton, Eric Holder, Rahm Emmanuel among others; since Obama had been familiar with non of the above, evidently he has been assigned his cabinet by the same powers and authorities who installed him.

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By Spike, August 12, 2009 at 5:19 am Link to this comment
(Unregistered commenter)

Rakoff - Courage - Good

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By PhreedomPhan, August 12, 2009 at 4:21 am Link to this comment

Our Republic died in 1913 with the creation of the Federal Reserve if, in fact, it hadn’t died when Hamilton convinced Washington to incorporate a national bank.  What we are witnessing now is the funeral arrangements.

Does anyone really believe it’s not the same old same old with Uncle Tom in the White House?  Consider these events:  the U.S. signs a “memorandum” concerning “climate change” with China; Goldman Sachs, the banking house the Washington decided to bail out while allowing its main competitor, Lehman, to fold buys $1 billion in carbon assets, Uncle Tom (Sam’s dead) appoints Robert Hormats, Trilateralist and VP of Goldman Sachs as an under-Secretary of State to be a key negotiator in dealings with China.  I can’t help but wonder who is going to get those “carbon assets.”  I don’t wonder who is going to pay for them.

Rick
http://PhreedomPhan-lostliberty.blogspot.com
http://phreedomphan-americasenemies.blogspot.com

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By ardee, August 12, 2009 at 3:43 am Link to this comment

Far too much of what is going on is , in fact, the same old same old. Far too much is being ignored by our electorate who will, no doubt, elect the same slate of bought and paid for legislators once again.

Will we the people ever awaken from our slumber…or stupor ?

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By Lisa R. Holt, August 12, 2009 at 3:13 am Link to this comment
(Unregistered commenter)

That’s exactly what I want to know.  A friend of mine who worked on the Obama campaign simply commented to me in an email recently, “I think Obama’s really for Wall Street more than anyone else”.  Based upon “how things are going” as this article clearly resounds, I tend to agree with my friend…

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By Dwight VW, August 12, 2009 at 3:01 am Link to this comment

Great story.  Thank you for reporting this.  Please follow up after the next hearing.  Here’s another report:

http://www.nakedcapitalism.com/2009/08/judge-takes-sec-and-bank-of-america.html

Obama’s SEC under Mary Schapiro - same old same old?

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