US Senate Rubber-Stamps the Dictatorship of the Big Banks

The US Senate’s passage of the Obama administration’s financial reform bill Thursday was hailed in the media and by official Washington as a landmark effort to curb the power of the big banks. But on Wall Street itself, the news was greeted with a mixture of dismissal and applause.

There is a striking and politically illuminating contrast between the market reaction and the populist phrases mouthed by Democratic politicians in Washington. Harry Reid, the Democrat majority leader in the Senate, boasted, “When this bill becomes law, the joyride on Wall Street will come to a screeching halt.”

President Obama was more restrained, declaring, “Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years.” But he hailed the passage of the bill as a triumph over intensive lobbying by the major banks (who were among his biggest financial backers in the 2008 presidential campaign).'

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Congressional Hypocrites Were Betting Against Stocks As Country Collapsed

Remember all that scorn in Congress about evil shortsellers betting against America and bringing the country down?

Well, it turns out Congress-people did it, too. And they used derivatives to do it, which they now say they abhor.

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When you have a Congress that is betting their own fortunes on the collapse of the economy, then they will vote to continue the policies that have collapsed the economy.

Looting Main Street: How the Nation's Biggest Banks are Ripping Off American Cities

The sewer bill, in fact, is what cost Pack and her co-workers their jobs. In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 — but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world's grandest toilet — "the Taj Mahal of sewer-treatment plants" is how one county worker put it. What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street — and misery for people like Lisa Pack.

And once the giant shit machine was built and the note on all that fancy construction started to come due, Wall Street came back to the local politicians and doubled down on the scam. They showed up in droves to help the poor, broke citizens of Jefferson County cut their toilet finance charges using a blizzard of incomprehensible swaps and refinance schemes — schemes that only served to postpone the repayment date a year or two while sinking the county deeper into debt. In the end, every time Jefferson County so much as breathed near one of the banks, it got charged millions in fees. There was so much money to be made bilking these dizzy Southerners that banks like JP Morgan spent millions paying middlemen who bribed — yes, that's right, bribed, criminally bribed — the county commissioners and their buddies just to keep their business. Hell, the money was so good, JP Morgan at one point even paid Goldman Sachs $3 million just to back the fuck off, so they could have the rubes of Jefferson County to fleece all for themselves.'

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More Toxic Paper: New Subprime Bonanza in the Housing Market

Whew. That was fast. It didn't take long for Wall Street to figure out how to game Obama's new mortgage modification program, did it? The plan was hyped as help for "struggling homeowners", but it turns out, it's just another stealth bailout for pudgy bank-execs. It's funny, the program hasn't even kicked in yet and, already, bigtime speculators are riffling through their filing cabinets looking any garbage paper they can find to dump on Uncle Sam. Take a look at this on today's Bloomberg report:

"Subprime-mortgage securities are rising at an accelerating pace as the U.S. begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump....Senior-ranked bonds tied to borrowers with poor credit will mostly benefit after the Treasury Department said for the first time it would seek to cut the size of mortgages, reducing the likelihood that loan modifications will fail, according to JPMorgan Chase & Co., Morgan Stanley and Barclays Plc. (Bloomberg)

What does it mean? It means that Obama's mortgage modification extravaganza has touched-off a gold rush in toxic paper. Subprime securitizations, which had been worth next to nothing, are now the hottest trade on Wall Street. It's a subprime bonanza! The investment sharpies are scarfing up all the crummy MBS they can get their hands on, because they know they can trade it in for Triple A FHA-backed loans when the program get's going. It's another swindle cooked up by Treasury Secretary Timothy Geithner to keep the brokerage clan in the clover. Here's how a Wall Street veteran explained it to me.'

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Obama is a Liar: Illegal Wars, Fraudulent Bailouts, Egregious Assault on Civil Liberties

Obama lies as cravenly, if not as crudely, as George W. Bush. He promised us that the transfer of $12.8 trillion in taxpayer money to Wall Street would open up credit and lending to the average consumer. The Federal Deposit Insurance Corp. (FDIC), however, admitted last week that banks have reduced lending at the sharpest pace since 1942. As a senator, Obama promised he would filibuster amendments to the FISA Reform Act that retroactively made legal the wiretapping and monitoring of millions of American citizens without warrant; instead he supported passage of the loathsome legislation. He told us he would withdraw American troops from Iraq, close the detention facility at Guantánamo, end torture, restore civil liberties such as habeas corpus and create new jobs. None of this has happened.

He is shoving a health care bill down our throats that would give hundreds of billions of taxpayer dollars to the private health insurance industry in the form of subsidies, and force millions of uninsured Americans to buy insurers’ defective products. These policies would come with ever-rising co-pays, deductibles and premiums and see most of the seriously ill left bankrupt and unable to afford medical care. Obama did nothing to halt the collapse of the Copenhagen climate conference, after promising meaningful environmental reform, and has left us at the mercy of corporations such as ExxonMobil. He empowers Israel’s brutal apartheid state. He has expanded the war in Afghanistan and Pakistan, where hundreds of civilians, including entire families, have been slaughtered by sophisticated weapons systems such as the Hellfire missile, which sucks the air out of victims’ lungs. And he is delivering war and death to Yemen, Somalia and perhaps Iran.

The illegal wars and occupations, the largest transference of wealth upward in American history and the egregious assault on civil liberties, all begun under George W. Bush, raise only a flicker of tepid protest from liberals when propagated by the Democrats. Liberals, unlike the right wing, are emotionally disabled. They appear not to feel. The tea-party protesters, the myopic supporters of Sarah Palin, the veterans signing up for Oath Keepers and the myriad of armed patriot groups have swept into their ranks legions of disenfranchised workers, angry libertarians, John Birchers and many who, until now, were never politically active. They articulate a legitimate rage. Yet liberals continue to speak in the bloodless language of issues and policies, and leave emotion and anger to the protofascists. Take a look at the 3,000-word suicide note left by Joe Stack, who flew his Piper Cherokee last month into an IRS office in Austin, Texas, murdering an IRS worker and injuring dozens. He was not alone in his rage.

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Wall Street's Bailout Hustle

Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash.'

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The Massachusetts Senate Race: A Populist Protest Vote Against Wall Street Puppets

Any Democrat now wishing to survive must immediately carry out a sharp anti-Wall Street, economic populist turn. A few ideas in that regard, to be supplemented by the detailed economic recovery program displayed on my website: make Wall Street pay for the depression by enacting a 1% Tobin tax on all Wall Street financial transactions and turnover, including stocks, bonds, and above all financial derivatives.

Claw back any remaining money of the bailout or TARP. Reimpose the Glass-Steagall law to separate commercial banking, insurance, and stock brokerage. Outlaw credit default swaps and adjustable rate mortgages. Enact a 10% federal usury law to limit interest rates on credit cards and payday loans. Stop all home foreclosures for five years or for the duration of the present economic emergency, whichever lasts longer.

Seize the Federal Reserve and make it a bureau of the Treasury, passing to issue 0% federal credit for industry and agriculture, not speculation and financial services; stop federal borrowing and start federal lending. Launch a massive program of infrastructure in the spirit of the Tennessee Valley Authority, featuring 100 nuclear reactors of the most modern type, 1,000 modern hospitals, and 50,000 miles of maglev and high-speed rail, while rebuilding the entire interstate highway system in the water systems of every American city.

This is the kind of program which can create 30 million new jobs over just a few years, creating full employment in this country for the first time since 1945. The only interests that need to be sacrificed in order to get out of the depression in this way are Wall Street interests, and it is time for politicians desirous of survival to begin taking the struggle to Wall Street. Otherwise, we appear to be heading for for a seizure of power by a bonapartist regime of General Petraeus and Mitt Romney, the notorious Wall Street asset stripper and hedge fund hyena who was much in evidence at the Scott Brown rally tonight.'

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Is The U.S. Economy Being Tanked By Mistake or By Intent?

The government wants Americans to believe the greatest economic collapse in history was the result of ineptness and mistakes yet still have confidence in their financial institutions.

Should American bankers be let off the hook because they self-declare, before an investigational panel, that the failure of their newly invented risk swaps and other highly leveraged investment schemes was simply due to "mistakes"? Not malfeasance – just every-day mistakes? Bankers just fell asleep at the helm at a critical juncture in American history. Is that what we are being led to believe?

Oh well, it’s just 18 million American homes that now lay empty in the wake of unprecedented foreclosures, and the bankers have collected obscene bonuses for reckless lending of their depositors’ money. It’s like the captain and crew of a ship saying, not to worry, twenty-percent of the passengers were lost overboard, but this was due to unavoidable mistakes, and then being rewarded with bonuses when they reach port.'

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Let the Plunder Begin: The Return of Robert Rubin

So, the real goal is to slash spending to impose onerous austerity measures that will lay the groundwork for dismantling critical social programs, like Social Security, Medicaid and Medicare. That’s why Rubin is working hand-in-hand with his allies in and out of the White House. It has nothing to do with what’s best for the country. It’s another looting operation spearheaded by the same band of Wall Street pirates who just blew up the financial system...'

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Is America Finally Starting to Stand Up To Wall Street?

The elites hate to acknowledge it, but when large numbers of ordinary people are moved to action, it changes the narrow political world where the elites call the shots. Inside accounts reveal the extent to which Johnson and Nixon’s conduct of the Vietnam War was constrained by the huge anti-war movement. It was the civil rights movement, not compelling arguments, that convinced members of Congress to end legal racial discrimination.
- PhD Economist Dean Baker'

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