|This is the longest damn tunnel ever.|
This is by far the best snapshot portraying the current situation, from Richard Zombeck at HuffPost. It is also the most sobering -- and a little horrifying. A must-read for anyone who has others depending on them. But there is light at the end of that dark tunnel. First, read this:
Below the Fold: Rumor Has It We're Screwed
By Richard Zombeck, HuffPost
We're screwed. That's as good a place to start this post as any. Congress and the Administration have been co-opted -- bought and paid for. Financial regulation is a joke and fraud is a business model and seen as standard operating procedure. Fines are so ridiculously non-punitive that they not only don't serve as punishment, but may actually incentivize crime.
I made that point on Revolution Boston 1510 back in November 2011 on The Jeff Santos Show, "If I got arrested robbing houses and had to give back ten percent of what I stole, not only would I keep robbing houses, I'd hire a crew."
In the words of Noam Chomsky:
The most effective way to restrict democracy is to transfer decision-making from the public arena to unaccountable institutions: kings and princes, priestly castes, military juntas, party dictatorships, or modern corporations.Even the normally conservative publication The Economist used the term "Bankster" in a recent piece.
For some, there's no apparently obvious way out of this. We've become so entrenched and apathetic that upward movement or change seems nearly impossible.
L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY, writes at the end of a recent post on Economonitor, "Why We're Screwed" that there are two possible scenarios.
In the first, we allow Wall Street to carry on its merry way, as the foreclosure crisis continues and Wall Street steals all homes, packaging them into bundles to be sold for pennies on the dollar to hedge funds. All wealth will be redistributed to the top 1% who will become modern day feudal lords with the other 99% living at their pleasure on huge feudal estates.Which will take decades and, according to Wray, seems inevitable and by design.
The second is that, "the 99% occupy, shut down, and obliterate Wall Street," and it's a pretty fair assumption that we won't see that any time soon.
Add to the mix a general public that's beaten, depressed, apathetic, over worked, under paid, over medicated (prescribed or otherwise), and generally misinformed or ill-informed and there's not much fight left.
The LIBOR scandal, for example, has been discussed ad nauseam. Misreported as it is, it's still being talked about. For people who get their news in sound bites in the hopes of appearing well informed at the office or in the bar what they get isn't always what they need.
Larry Kudlow from the self-named "Kudlow Report" on CNBC called the LIBOR debacle a victimless crime. Remember, this is coming from an over paid guy with his own show on a major network. Not some unpaid hack blogging on Huffington Post. Of course, this is the same guy who blamed poor people for the mortgage crisis. A statement like that could only come from someone who either has no business commenting, much less reporting, on the economy, or is simply lying.
Kudlow argues in the segment that when the LIBOR went down it benefitted borrowers, so who cares? The problem is it didn't just go down. It was manipulated in both directions. As far as it being a victimless crime: LIBOR goes up, it affects mortgages, student loans, credit cards, rent, etc. LIBOR goes down and it affects state and local government - schools, nursing homes, roads, hospital - yup, no victims there.
Student loan too high? LIBOR. Rent going up? LIBOR. Mortgage just adjusted to 12 percent? LIBOR. Leaky roof at the nursing home, no pillows at the hospital, three-year-old pot hole on your street? LIBOR. In fact there's probably a little LIBOR in your morning coffee.
Here's your victimless crime explained by Pam Martens over at Alternet. The whole piece is well worth reading as Martens worked on Wall Street for 21 years:
The Libor rate was used to manipulate, not just tens of trillions of consumer loans, but hundreds of trillions in interest rate contracts (swaps) with municipalities across America and around the globe. (Milan prosecutors have charged JPMorgan, Deutsche Bank, UBS and Depfa Bank with derivatives fraud and earning $128 million in hidden fees.)As America watches the disparity of wealth grow exponentially, we need to understand that this was not, as Kudlow would like us to believe, a handful of drunken frat boys monkeying with some esoteric index overseas. This was a cartel style, institutionalized transfer of wealth on an unfathomable scale and a crime that the Fed, Congress, and the Administration knew about.
Rigging Libor also inflated the value of the trash that Wall Street was parking in 2008 and 2009 at the Federal Reserve Bank of New York to extract trillions in cash at near zero interest-rate loans from the public purse. When rates rise, bond prices decline. When rates decline, bond prices rise. The Federal Reserve made loans to Wall Street based on a percentage of the face value of their bonds and mortgage backed securities that they presented for collateral. By pushing down interest rates, the banks were getting a lift out of their collateral, allowing them to borrow more.
Here's a quote from a transcript that Mark Gongloff of HuffPo wrote about in "New York Fed's Libor Documents Reveal Cozy Relationship Between Regulators, Banks."
"We know that we're not posting um, an honest LIBOR," a Barclays employee tells a New York Fed analyst in an April 11, 2008, call, "and yet we are doing it, because, um, if we didn't do it, It draws, um, unwanted attention on ourselves."Nice and cozy. Maybe we'd see a little pat on the head or a group hug in the video version. Hot cocoa anyone?
The New York Fed representative expresses sympathy and understanding:
"You have to accept it," she says. "I understand. Despite it's against what you would like to do. I understand completely."
More to the point of this sort of behavior being standard operating procedure, in "Libor fraud exposes Wall Street's rotten core," at the Washington Post.
We don't know who else was fixing bets. Other big banks, including some of the largest in the United States, are under investigation. Barclays doesn't appear to have acted alone, and it is clear that its fixes weren't secret deals by rogue traders. Traders put requests to manipulate the rates in writing and even joked about delivering champagne to those who helped them. It is also clear that many of those who didn't have a fixer -- including consumers, community banks and credit unions -- lost money. Barclays padded its bottom line by taking money from everyone else. It won when it shouldn't have won -- and others lost when they shouldn't have lost. The amount of money involved is staggering.The article also points out that on any given day, the credit related transactions linked to LIBOR could be worth $800 Trillion.
In L. Randall Wray's piece, "Why We're Screwed," he writes of the banks:
... they took over the whole economy and the political system lock, stock, and barrel. They didn't just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.No article about the irresponsible and criminal behavior of bankers would be complete without the requisite troll blaming consumers and homeowners. Here's a comment from a reader who calls themselves SirCadbury and is a card carrying member of the "You were asking for it by wearing that skirt" club. Here's the comment (emphasis not mine):
Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.
Just because you are good at something and make money from it, EVEN AT THE EXPENSE OF OTHERS WHO DIDN'T WORK AS HARD OR STUDY, does not make you a thief or any sort of a criminal.There's apparently not enough evidence in the world to stop idiotic comments like this from continuing, but I'm going to try any way.
You want to know THE REAL REASON your silly example of schools, fire departments etc.... have lost????? THEIR OWN GREED!!!
In a recent article in "The Raw Story" Sarah Jaffe of Alternet wrote "Countrywide whistleblower reveals rampant mortgage fraud part of 'everyday business,'" in which she writes about whistleblower Eileen Foster, who was an investigator in charge of Fraud Risk Management at Countrywide. The article is a great read for anyone who wants to start their day with that sickening feeling that usually accompanies utter rage. The following quote from the piece is for the anonymous "SirCadbury" and others of his ilk, who still think this all about greedy and irresponsible borrowers.
A team of investigators went to Boston to look into the complaints in person and were shocked by what they found. "Typically when you're looking for fraud you've got to really look because one of the primary components of a fraud is concealment," Foster said. "These people weren't concealing it. They were concealing it from corporate, but every person who walked into those branches every day was a participant."Let's leave it at that.
"One process was to cut a signature off one document, paste it and make a photocopy so it looks like an original signature," she continued. "A part and parcel of everyday business was to do anything it took to fund a loan."
They had templates for fabricating documents, cases of Wite-Out for changing names and a method for gaming the automated underwriting system--plugging in income values until they got one that worked and allowed them to underwrite the loan. They'd keep a template bank statement from each bank, then plug in different borrowers' names and an asset amount to prove that the borrower could make the payments on the loan.
Da-da clipped the whole thing so that he might offer a solution. Now, to the light.
Sure, this looks hopeless, but Da-da has an idea. Arrest the perpetrators and the heads of The Cabal. Zero out all our debt. ALL of it. We then retain all of our property and money to $2M. The Central Banks all go out of business forever, replaced by something simple and transparent. Then we forgive the perpetrators. In exchange for returning all the money and going away forever, they get to keep $5 million of all their holdings. They can keep one big house. Two cars. No planes. No exotic properties in this New Age of Austerity. We then redistribute The Cabal's wealth amongst those who sorely need it -- like all the rest of us. We use all that money for education and rebuilding. The massive real estate confiscated is turned into parks and universities. Everyone gets free educations as far as they want to go. And that's only a few trillion. We use the rest of the money to build scads of Starship Enterprises. Or we just zero out all the money and do without it, New Frontier-style.
So, right: it's kinda like the French Revolution, but without all the violence, and with lots of cool space uniforms and doves and bunnies and free schools and geekiness. Da-da figured that, since Capitalism was dead, we might as well start over with something that had lots and lots of upside.
|Yup. With $800 trillion, you can build a lot of these.|
Or better yet, get rid of money, entirely. And just build it.