Was it fraud that brought on the financial crisis?

[highnote]

That's what William K. Black thinks. He was the senior regulator who cracked down on banks during the S&L crisis of the 80's.

This interview is the best explanation I've heard of what went wrong with banking -- not only in the U.S., but globally.

http://www.pbs.org/moyers/journal/04032009/profile.html

[highnote]

I just finished watching the interview again. If this interview doesn't make you get on the phone to your congressman and demand an investigation then I don't know what will.

Black claims there is a massive coverup going on by the Treasury Dept., Obama admin and the major banks.

I'm inclined to believe him. What other reason did the the banks and Treasury have for not telling taxpayers for how how the bailout money was being spent?

[Tom]

Santa Claus, the Easter Bunny, your government is honest.......

Of COURSE there is a cover up.
Of COURSE the government has screwed this up royally.
Of COURSE helping people is not on their list.
Of COURSE government will not be able to fix this.

[The Judge]

This is what I and a few others have been saying sense day one. the CEOs have a conflict of interest. That is they do whatever can make them the most money in the shortest period of time no matter the long term consequences. The most important thing for them was to make the multi-million dollar bonuses NOW the heck with tomorrow.

These guys are crooks and the government knew it.

[highnote]

U.S. citizens' tax money has been used to protect individuals and companies that committed fraud and the use of tax money was authorized by government.

So now what are taxpayers going to do about it?

[The Judge]

WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him... we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us?

[highnote]

THat was a good point. In fact, the whole interview was filled with good points.

Another good point he made was that the banks should have gone into receivership with the FDIC -- like they did under Regan -- except under Regan no one called it nationalization -- but it's exactly the same thing.

Why don't they want the banks to go into receivership? Because that would mean new management. The new management would discover the level of fraud and the bad guys (former management) would be prosecuted.

But since the bad guys have stolen billions of dollars they now have political clout. Because you can buy a lot of protection with billions of dollars.

So, will anything be done to prosecute all the fraud?

[boxcar]

I just finished watching the interview again. If this interview doesn't make you get on the phone to your congressman and demand an investigation then I don't know what will.

Black claims there is a massive coverup going on by the Treasury Dept., Obama admin and the major banks.

I'm inclined to believe him. What other reason did the the banks and Treasury have for not telling taxpayers for how how the bailout money was being spent?

Welcome to the Real World, SJ. I hope for the next four years you enjoy BO's promise of change in DC that would come in the forms of honesty and transparency in his administration.

Boxcar

[highnote]

Welcome to the Real World, SJ. I hope for the next four years you enjoy BO's promise of change in DC that would come in the forms of honesty and transparency in his administration.

Boxcar


Thanks Boxcar. Let's hope he can keep a promise.

Do you know what else happens in the real world -- kings and queens have their heads lopped off by angry mobs.

He's not off to a good start -- hiring a guy who claims he didn't know he had to pay taxes to run the Treasury and be the head of the IRS.

Now Geithner wants 2 trillion more for his banker buddies and probably won't tell us again where the money is going. He was the head of the NY Federal Reserve, but claims he was never a regulator. What? It's pathetic.

These guys know no limits to greed.

But in all fairness to Obama -- McCain was part of the Keating 5 -- not exactly my idea of a politician with integrity and high morals.

Either way, we lose.

[PaceAdvantage]

But in all fairness to Obama -- McCain was part of the Keating 5 -- not exactly my idea of a politician with integrity and high morals.At least McCain was investigated (by Democrats no less) and found to have violated nothing. When does the Obama investigation begin?

[Tom]

There he goes again.

PA, facts only cloud the issues. Please stop spreading truth. :D;)

[highnote]

At least McCain was investigated (by Democrats no less) and found to have violated nothing. When does the Obama investigation begin?


McCain got a slap on the wrist. But it is naive to think that he was only guilty of "poor judgement".

The sooner the investigation of Obama begins the better as far as I'm concerned.

Why do you think Obama says he doesn't want to look back -- he wants to move forward and solve the problem. He knows what is behind him is a lot fraud. Maybe he isn't guilty of it, but certainly some big campaign contributors are.

[JustRalph]

The head investigator of the Keating 5 later stated that McCain should have never been investigated........it was a witch hunt

I am no McCain fan............but he got a raw deal on that one

[highnote]

The head investigator of the Keating 5 later stated that McCain should have never been investigated........it was a witch hunt

I am no McCain fan............but he got a raw deal on that one


We'll probably never know the truth.

But the topic is about the current bank mess now, anyway, and the fraud that has been committed.

The thing that disappoints me most about Obama is that he says he wants to move forward and fix the problem rather than look back.

The message he sends is that the bigger the crime the less likely the criminal is to get prosecuted because the havoc that was wreaked is in more urgent need of fixing than putting the perp behind bars.

[highnote]

Here's more from Professor Black on the banking scam that taxpayers are paying for while bankers get the profits -- some of the bankers who are making billions from taxpayer subsidies are not even Americans -- they're foreigners. Isn't it nice to see your taxpayer dollars at work.


http://finance.yahoo.com/tech-ticker/article/225897/Geithner's-Stress-Test-%22A-Complete-Sham%22-Former-Federal-Bank-Regulator-Says?tickers=UBS,C,BAC,XLF,SKF,FAS?sec=topStories&pos=9&asset=TBD&ccode=TBD

[highnote]

Here is part two of the interview.

http://finance.yahoo.com/tech-ticker/article/225823/Mortgage-Fraud-Epidemic-How-the-FBI-Blew-It-and-Why-There's-No-'Perp-Walks'?tickers=JPM,BAC,XLF,MHP,MCO,WB,FAS

[Tom]

Our founding fathers went to war over far less abuse than this miserable excuse of a government has heaped on us.

Time to shut this government down - stop it cold.
A national strike until a vote of confidence is held.
Why should we go by the constitution when the elected piggies do not?

Stop this nonsense before it is too late.

Bummy demanded GM top guy quit - when does he demand those who are far more responsible in congress resign.....himself included!

[highnote]

Gov't cracking down on mortgage scams that take advantage of Obama admin's efforts to make home loans more affordable.

But the Gov't has yet to arrest anyone for the subprime scam and the 80 billion dollars of Liar Loans made by Indy Mac. BWAHAHAHAHAHAHAHAHAHA

http://news.yahoo.com/s/ap/20090406/ap_on_bi_ge/housing_scams

What a laugh.... BWAHAHAHAHAHAHAHAHA :lol:

[DJofSD]

Black interviewed on Yahoo. (http://finance.yahoo.com/tech-ticker/article/225823/Mortgage-Fraud-Epidemic-How-the-FBI-Blew-It-and-Why-There%27s-No-%27Perp-Walks%27?tickers=JPM,BAC,XLF,MHP,MCO,WB,FAS?sec=to pStories&pos=8&asset=TBD&ccode=TBD)

[robert99]

We'll probably never know the truth.

But the topic is about the current bank mess now, anyway, and the fraud that has been committed.

The thing that disappoints me most about Obama is that he says he wants to move forward and fix the problem rather than look back.

The message he sends is that the bigger the crime the less likely the criminal is to get prosecuted because the havoc that was wreaked is in more urgent need of fixing than putting the perp behind bars.

Politicians around the World know that to stand up and tell the real truth and expose the full scale of this global financial disaster will ruin their economies and currencies. No single or combined countries can cure the $600 Trillion + toxic debt mountain, except by global lean times over decades. At G20 toxic debt was the vital real issue but skirted around and discussion /solution avoided.

There is no bail out money in the bail-out sense - like the money to GM, the money is going straight down the drain but keeps GM/the banks going for another day that is all -no country has got the money to actually bail out the banks so that they could return to health (whatever that might mean). That is why the politicians want to look forward - facing the real facts and honest speaking is now suicidal for all nations.

With abysmal regulation on top of deregulation it will be impossible to find watertight cause to criminally convict many except the fraudulent salesmen little guys. Moral fraud is not necessarily criminal fraud - just sharp practice. Should any big guy get convicted then a rash of international lawsuits against their firms will follow claiming full loss compensation and the US taxpayer then pays even more - else the banks will go bankrupt - causing a domino effect collapsing on other major banks - Catch 22. Retribution will come later, I am sure, but today it is all about keeping the whole pack of cards from falling over.

[Valuist]

Thanks to Greenspan's terrible policies, we've been living in a bubble economy since the mid 90s. When the tech/dot com bubble blew up earlier this decade, it was just in time to inflate a new bubble: the real estate market. To this day, Greenspan is in full denial over playing a major role in the current financial crisis.

[highnote]

One other great point Black made in the interview at the first link is that capitalism is a great system when FRAUD is NOT involved. Both parties benefit from the transaction.

When fraud is involved, like in the current financial crisis, the results are devastating and only the criminal wins.

[riskman]

Many taxpayers are getting screwed twice. What about all the hard working people that lost thousands in their 401K's , the thousands that lost their jobs, the stockholders and investors holding worthless paper. Why are all these CEO's and and other corporate officers of banks and investment firms that received TARP funds getting a pass. They have the gall to sit there and are laughing their asses off at us. The White House and those empty suits in Congress continue to to kiss the asses of these charlatans on Wall Street. These politicians are the "toxic assets" and should be auctioned off to the LOWEST bidder.

[riskman]

There is a lot of public anger by share holders at companies like AIG, Lehman Bros, Citi Bank, Bank of America, Merrill Lynch, etc. The share holders get nothing out of the bailout, just stocks that are virtually worthless. I am surprised that class action suits have not been brought against the Directors and Officers of the former and succeeding banks/ companies claiming that
they failed to disclose material facts about company management and providing misleading information about the status of the company’s financial condition. Even if these companies are insolvent the stockholders can sue for common law fraud, negligent misrepresentation and breach of fiduciary duties. This is one way the real facts may be brought out. Who knows since the federal government are now shareholders an award may be made punishing these fraudsters. The rating agencies should also be sued by the state attorney generals and the regulatory agencies.

[highnote]

It gets worse... The banks who defrauded taxpayers are going to do it again... this time for trillions of dollars rather than just a pittance -- apparantly billions of dollars are not enough for them...

http://www.huffingtonpost.com/jeffrey-sachs/the-geithner-summers-plan_b_183499.html

[delayjf]

Not only will they not be indicted but they will get paid as well. Payback for selling out this country all in accordance with Soro's plan to collapse the US economy and replace it with a european style social democracy. Soro's himself said he was doing just fine in this economy, in fact his hedge fund has made billion(s). Follow the money - he's in on it.

[highnote]

"There are certain professions in which the collective genius of
the American people dominates the field: semiconductor
design, fast food product differentiation, fire-control systems
for air-to-air combat, and con artistry. That these are not, at
the moment, sufficient to earn a current account surplus, is a
problem being worked on, not least by the service exporters in
the latter occupation."
John Dizard, Financial Times

[delayjf]

You left out Porno. ;)