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The Five Biggest Lies Bush Told Us About Iraq

The Five Biggest Lies Bush Told Us About Iraq

By Robert Scheer, Christopher Scheer and Lakshmi Chaudhry

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Live Chat: Robert Scheer on the Financial Crisis

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Posted on Apr 15, 2010

(Page 3)

3:23 Comment From mrfreeze

April 15, 2010 3:23 PM

Robert, your article points out, once again, that there were a number
of “whistle blowers” from many different fields that predicted (or at
least worried) about the housing crisis. What is it about our system
that so squelches their voices?



3:24 Robert Scheer

April 15, 2010 3:24 PM

I believe it would be wise to restore the right of the states to
protect the consumers. In California for example, we have had
constitutional restriction on by scripture, incidentally. But those
restrictions are no longer in effect because of Federal preemption. I
think the power of the lobbyist over the federal government is too
strong to expect congress to protect ordinary consumes. we’d be much
better of with notion of state’s rights envisioned by founding fathers,
where state legislators and governments had the power to protect the
voters who are physically closer to them and is the case with
washington politicians.



3:24 Robert Scheer

April 15, 2010 3:24 PM

     Responding to mrfreeze

 

3:26 Truthdig

April 15, 2010 3:26 PM

     We’ve got about 5 questions in
the pipe. We’re going to stagger them to make the answers clearer.
Sorry for the delay, we’ll try to get to everyone.



3:27 Comment From GilreathM

April 15, 2010 3:27 PM

What kind of answer is that?  Individual states used to have
laws against usury but even those laws have gone the way of the dodo.



3:28 Comment From Samuel the Brave

April 15, 2010 3:28 PM

Hi Robert—big fan of your work. Are you at all optimistic that Obama
can enact anything like effective change when it comes to reforming the
financial industry?



3:29 Robert Scheer

April 15, 2010 3:29 PM

  I dont know if there were many, there was the
wonderful Brooksley Bourne, who has chaired the commodity futures
regulation strongly sounded alarmed at the entire derivitates market
was in deep trouble. there is mr. falcon, who attempted to regulate
Fannie and Freddie, but most people who knew better kept silent out of
concern for their careers, or were being paid off by the lobbyist, in
the form of campaign contributions or future job oppportunities. Take
the case of Enron, where wendy Gramm, who proceeded Brooksely Bourne as
the commodities regulator, and whose husband, Phil Gramm, pushed
through the law, preventing any, any regulation, of the commodities of
the derivates market, went to work as a member of the board and chair
of the audit committee board of directors of Enron. The revolving door
between government and the big corporations is employed by
both  democrats and republicans ad the result is that there
are very few whistle blowers to protect the public interest. when they
do dare to stand up to the consumer, as Bourne and falcon did, they are
quenched by their superiors in the government. Tiothy Geitner and
Lawrence Summers come to mind, who are running dogs of the large
corporations.  



3:29 Comment From Richard Nixon

April 15, 2010 3:29 PM

There voices are squelched for the same reasons they always have been,
people don’t want to look at the truth when it is negative.



3:30 Robert Scheer

April 15, 2010 3:30 PM

     yes, but only if there is a
far larger public outcry.  



3:30 Robert Scheer

April 15, 2010 3:30 PM

     (to sam)

 

3:30 Comment From Bluepunk

April 15, 2010 3:30 PM

So if it was at the state level, and the county level where
foreclosures are fought over, then that is where the problem is
at…?  Are we ready to fill in the holes with good laws and
investigate our own state and local leaders?



3:31 Robert Scheer

April 15, 2010 3:31 PM

     Bluepunk: We have a better
shot at controlling politicians on the state level than we do
federally, which is the wisdom that founders of this country grasped.
 



3:31 Comment From Debbie McCormick

April 15, 2010 3:31 PM

Besides pelting the president, Ms. Pelosi and Mr. Reid with emails
supporting financial reform, what should we be doing to help?



3:32 Robert Scheer

April 15, 2010 3:32 PM

     We should be in those emails
and letters, wanting Obama, not to fall for the advice of his key
economic advisors, particularly Summers and Geitner, who got us into
this mess, who were playing the same role in the Clinton
administration. He should turn to Joseph Stigleitz and Reisch and other
well-intentioned economists who know exactly what should be done.
 



3:32 Comment From Kafka

April 15, 2010 3:32 PM

Just a question: why is the US unable to hold its ‘elected’ oficials to
confront an international war tribunal?



3:33 Robert Scheer

April 15, 2010 3:33 PM

     We’ll answer that in a
subsequent column and I have to go get something to eat



3:33 Truthdig

April 15, 2010 3:33 PM

     OK thanks everyone



3:33 Robert Scheer

April 15, 2010 3:33 PM

     see you next week!



3:33 Truthdig

April 15, 2010 3:33 PM

     Thanks Robert



3:33 Truthdig

April 15, 2010 3:33 PM

     We’ll be back next week



3:33 Comment From GilreathM

April 15, 2010 3:33 PM

I hear a lot about states rights but I never hear about states
responsibilities.  Why is it that everybody wants their rights
but nobody wants the responsibilities that go with rights?



3:33 Comment From Debbie McCormick

April 15, 2010 3:33 PM

thank you!



3:34 Comment From GilreathM

April 15, 2010 3:34 PM

bye

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New and Improved Comments

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By David Vognar, April 18, 2010 at 8:02 pm Link to this comment
(Unregistered commenter)

Scheer, money goes to kill people in other countries. How is this a good thing?

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By Vincent OBrien, April 17, 2010 at 1:59 pm Link to this comment
(Unregistered commenter)

I keep hearing how some people got very rich “betting” against this or that stock, fund, or whatever. I have tried in vain to find out how this works. This much I know about betting. You make a wager and someone has to fade you. If you win the bet you keep the money. If you lose, the one that took or faded your bet keeps the money.
  My question is: Who fades the bet ? How do you place such a bet ?

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By Tim Trevathan, April 16, 2010 at 9:48 pm Link to this comment
(Unregistered commenter)

http://www.ft.com/cms/s/0/e2c10df6-619d-11de-9e03-
00144feabdc0.html
Insight: SEC gets tough on Wall St tribalism
By Gillian Tett
Published: June 25 2009 16:52 | Last updated: June 25
2009 16:52
In recent years, Henry Hu, a finance professor of
Texas University, has often been a thorn in the side
of the banking world. In his academic research, Hu
has repeatedly highlighted the systemic risks created
by credit derivatives and other complex instruments.
Most recently, he has expressed alarm about the so-
called “empty creditor” problem – or the fact that
lenders, such as banks or hedge funds, are
increasingly using credit derivatives to hedge in
ways that create perverse incentives to tip companies
into default.
EDITOR’S CHOICE
More columns by Gillian Tett - May-28

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By Christopher C. Currie, April 16, 2010 at 6:27 pm Link to this comment
(Unregistered commenter)

Wall Street’s “Credit Default Swap” SCAM!

This is my take on Wall Street’s near financial collapse in the fall of 2008, based on the situations and points revealed in Simon Johnson and James Kwak’s book “13 Bankers—The Wall Street Takeover and The Next Financial Meltdown.”

PROBLEM:  Wall Street firms liked to pedal Credit Default Swaps as if they were ”insurance policies” to “hedge investors’ bets” against any potential default on a loan,  bond, or in some cases other “financial instruments” created by Wall Street firms.  But unlike insurance companies which were required by law to maintain adequate “statutory reserves” to ensure that they will have adequate cash on hand to pay up when the insured liability materializes, the issuers of Credit Default Swaps rarely (if ever) maintained such reserves.  They got away with this, because Credit Default Swaps are considered to be “derivatives” that are created, sold, and traded in Wall Street’s unregulated “shadow banking” markets.  Being “backed up” only by their issuer’s reputation, I believe it would be more accurate to call them “unfunded liability swaps” or “insurance scam swaps.”  Nevertheless, they were very popular, because even if the Credit Default Swap creators kept the large commissions/fees that they received in a “statutory reserve” of some kind, those reserves would probably not have been sufficient to cover the corresponding default risks, so the purchasers of Credit Default Swaps thought they were getting a “really good deal” for their money.

IMPACT:  The fact that Credit Default Swaps are inherently fraudulent in nature is bad enough, but the destructive role that they play gets even worse.  By using Credit Default Swaps to create elaborate interlocking financial dependencies among themselves (and by using their alleged “hedge your bet” capabilities to create an illusion that they are far more “financially solvent” than they really are), large Wall Street firms have created a situation whereby the bankruptcy of even just one of them will create a chain reaction of “pay up” requirements that will bankrupt ALL of them (unless our government quickly “bails them out”)!  This is what happened when Lehman Brothers went bankrupt, because the US Treasury Secretary couldn’t find any other firms who were willing to “buy them up” (unlike the case with Bear Sterns).  The resulting chain reaction of “pay up” requirements created primarily by the interlocking (and crumbling) “house of scam-cards foundation” of Credit Default Swaps quickly brought the rest of the “Big Banks” to a point where they were technically bankrupt as well.  But rather than declare bankruptcy, their CEOs essentially decided to simply stop trading altogether and wait for our government (and US taxpayers) to bail them out.  And as Paul Harvey used to say, “The rest is history.”  The impact of Wall Street’s Credit Default Swap Scam on America’s economy (and the economies of many other nations) has been PAINFUL, to say the least.

RECOMMENDED SOLUTION:  So because they are essentially fraudulent in nature, and because they have been playing such a key role in making “Wall Street Banks” seem to be “too big to fail”, Congress should OUTLAW ALL CREDIT DEFAULT SWAPS, but give those Wall Street firms about a year to “unwind” their interlocking “house of scam-cards foundation” in a way that will enable them to remain solvent and functional.

Christopher C. Currie

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