I want to turn back to Phil Angelides’ op-ed in the New York Times this morning, because in addition to making the case for bank accountability as a deterrent to future crimes, he says that the relevant authorities have had smoking gun evidence in their hands for two years.
Meager resources have been applied to investigate the financial assault on our country, which wiped away trillions of dollars in household wealth and has resulted in 24 million people jobless or underemployed. The Financial Crisis Inquiry Commission, which Congress created to examine the full scope of the crisis, was given a budget of $9.8 million — roughly one-seventh of the budget of Oliver Stone’s “Wall Street: Money Never Sleeps.” The Senate Permanent Subcommittee on Investigations did its work on the financial crisis with only a dozen or so Congressional staff members.
Despite their limited budgets, both inquiries turned over rocks and exposed disturbing financial practices, and both entities referred potential violations of law to the Justice Department. The final reports from the two investigations were completed last year, but the resources that were needed to dig deep beneath those rocks — or the rocks turned over by private litigants or other investigatory efforts — weren’t mobilized. One example: The Financial Crisis Inquiry Commission’s report contains evidence about Clayton Holdings, a company hired by more than 20 major financial institutions to perform “due diligence” on mortgage loans those companies were buying, bundling and selling. Clayton sampled 2 to 3 percent of those mortgages and found a significant number of defective loans. Yet the other 97 percent were not sampled, and that fact and the information about loan defects were never disclosed to investors — “raising the question,” the report noted, “of whether the disclosures were materially misleading, in violation of securities laws.”
In numerous court cases, plaintiffs, including the Federal Housing Finance Agency, have cited this evidence to support their claims of fraud and misrepresentation. But, inexplicably, there is no indication that the Justice Department promptly convened a high-level investigation to thoroughly examine who knew what when at these banks. In contrast, after the savings-and-loan debacle of the late 1980s, more than 1,000 bank and thrift executives were convicted of felonies. But today the rate of federal prosecutions for financial fraud is less than half of what it was then.
And I would add that this financial crisis is several orders of magnitude larger than the S&L scandal.
Angelides is right on. The Clayton Holdings evidence cannot be spun away. They found major defects in the underwriting of mortgages inside MBS deals. The banks did not disclose these defects to their investors, and in fact used the defects to secure discounts on loan pools from originators. In other words, the banks had a financial incentive to obtain crappy loans from the originators with shoddy underwriting. That’s precisely what would make them more money on the deal. This set off the chain reaction that led to worse and worse loans and a larger and larger bubble (after all, you can really goose demand if you don’t care who gets the loans and everyone can suddenly qualify as a homeowner). The whole of the crisis can be seen with the Clayton Holdings data, and it happens to tell a story about massive and systematic securities fraud.
Yet the SEC is only now getting around to using such data to prosecute, right as the statute of limitations has almost run out.
Angelides adds some advice for the RMBS working group, the task force investigating some of these crimes. He says it needs far more resources than the 55 investigators Eric Holder has so far provided. He says that the scope needs to be broader and the cases focused on the greatest harm to borrowers (DoJ claims the scope is sufficiently broad). And he says that the working group “needs to be free from political meddling,” though he inexplicably says that could come from House Republicans, who have no formal role connected to the panel. This represents Angelides running partisan interference, as in the very next paragraph he criticizes the federal regulators for not referring any criminal activities to law enforcement (House Republicans don’t run the Federal Reserve or the Office of the Comptroller of the Currency). Angelides is right that the statute of limitations on some of these crimes should be extended by an act of Congress, though good luck getting that done this year.
The contrasts between this op-ed and Tim Geithner’s couldn’t be more acute. Geithner’s playing a partisan game about Dodd-Frank, a mere shadow play with little connection to the actual policy on the financial industry. Angelides is talking about what has happened, and what needs to happen.




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Excellent article, David. The Reuters article you cited has this one small paragraph which seems to sum up the overall strategy: “The general nature of the subpoenas and the overlap with SEC inquiries suggest investigations related to the financial crisis could drag on for years.”
This stands in stark contrast to the enthusiasm of just a few years ago for providing retroactive immunity to the tele-coms who had illegally spied on the American people.
Slow walking until the statute of limitations runs out is what Oblabla and Folder were hired for.
Bonus question What would Malcom X have called these sellouts??
The scourge of Medical marijuana has eric ‘s panties all twisted up, bank rape not so much.
Sweet Justice would see eric behind bars as a co-conspirter .
Again Geitner has to go as well as Eric Holder the invisable Attorney General. Maybe we will get Schneiderman or Kamilla Harris. But
So who’s going to hold the admin accountable for it’s essentialy nonfeasance? The repubs? I think not. A Schneiderman prosecutorial pattern going forward? Don’t know. Last I’d heard he was being viewed as having folded, and having larger aspirations.
Seems like O’s bet has been, on balance, Wall St money is better working for him than any electoral bump by going after Wall St. It’s the same old “who ya gonna vote for/we suck less” schtick.
What is it about Obama that makes people accept being co-opted into things they didn’t believe before? Obama is a paper tiger – has no spine at all, so how is it that he can do this? It’s an interesting thing to me.
There is currently no divergence of opinion about how to proceed regarding bank fraud by politically connected crony capitalists. State supported Capitalism is Fascism. We live in 1984 Orwellian times and the revolution will not be televised.
the fix is in … the global super-rich elites are in charge and have been for a number of years… our bought-and-paid for news media have zero interest in biting the hand that feeds them so any expectation that serious proposals for reform will see the light of day are delusional…
the hard piece of reality that none of us particularly want to face is that the whole house of cards (the corporate military industrial government complex fueled by the state religion of capitalism) must come down… unless and until it does, we can propose, discuss, reveal, protest, whistle-blow and vote for the candidates of our choice until hell freezes over and won’t make a damn bit of difference…
And, yes, I DO take it personally
How does Obama pull it off? My thought is that it’s a product and extension of our stupid media-stoked,sports/entertainment fueled, “winner-loser” mindset. Issues don’t matter. It’s “our team” vs “their team”. Simple as that.
Obama’s failure to pursue justice against the despicable, criminal, and obviously guilty banksters, is, IMO, his most significant and far-reaching failure to the American people. Oh, you can pile on any number of other failures to “preserve, protect, and defend the constitution…”. You can add how he has failed to work for the 99% while fully protecting the interests of the 1%.
Around 1,000 guilty banksters and real estate speculators went to jail in the 80′s connected to the S&L scandal. So far, NOBODY here has even been indicted to my knowledge. The Countrywide “trio” just paid back SOME of the money they stole. Fannie and Freddie criminal conspirators are wintering in Barbados and St. Barts. And the “Big Five” NY banks and their stable of thieves are actually probably gonna make even MORE money from their criminal activities while pasisng any penalties on to bond and stockholders, if not us, the American people.
My continued compliments to you David for the fine work you do. And kudos to my colleagues here, if I may use that term. If only we could get more of our fellow citizens to frequent FDL, read the articles and participate in the discussions, we could fix the problems that plague our country.
He is….remember his law firm been doing work for the Financial Industry….this guy has been bad news for a long time…..remember who urged BClinton to pardon Marc Reich(sp),the arms seller…..And while there think of how many people of African ancestry were killed at the hands of those guns furnished by Reich to oppressive brutal African Govt.
Folks these people see themselves as careerists….none of ‘em in office understand or care about the suffering of those(MLK,MX etc,etc) who fought for underprivileged people to get an equal take in society.They instead think,that it’c cuz of their genius they are in those positions.
Now remember that it was the underprivileged class who were 10x more likely to be sold bad mortgages….and then think of what has happened to those families cuz of foreclosure.However,Obama & Holder don’t give a damn about these folks.
That puzzled mee to. But my answer….”You can ALL of the people SOME of the time. You can fool SOME of the people ALL of the time” . And, There’s a sucker born every minute.”
newcarguy,
All you need to do is fool some of the people some of the time. Look at all the sleeping sheep that would turn on the pols if they could only be shaken awake for some of the time. Think Matrix.
You may give more credit than I do. Being “fooled” implies utilizing some critical faculty, I think, but having the input intentionally skewed. I see it more as automatic identification with a set of characteristics; doesn’t require thinking, just automatic response. And when you realize that, indeed, you only need SOME of the populace — that critical swing group — to be manipulable. Hey, poof!
Really doesn’t matter though, does it, the degree to which psyops are used, as long as they obtain the desired result?
Well if you were a bankster, and Obama was your man…how would you make sure he got re-elected?
If it were me, I would pay my no name Republican politicians to back seriously whacked out social agendas, that only about 10% of the population could handle.
This would leave my hand picked politician, President Obama, as the only viable choice. I would then be sure that my pawn makes my trillion dollar crimes fade behind the statute of limitations.
Speaking hypothetically, of course!
I concur with bittersweet’s assessment of Obamafrauds relationship to his patrons. Is anyone really surprised by this? It has been Obamafraud’s MO from the day he took office. The rule of law does not apply to political and economic elite, there are no war crimes committed by Americans. Whistle Blowers, however, are treated as an existential threat. He should adopt the slogan, “Give W’s policies a 4th term, Obamanation ’12″.
There is no doubt that 0 is long term protecting the 1%. It seems that he is attacking big oil to end the subsidies because he knows that it won’t get done, but it will give his supporters a talking point of how strong he will be in a second term.
My question to the population at large is “why vote for either candidate put forward by the two headed monster disguised as two different political parties?” Neither person will work for the 99%, but the people that make up the largest bloc in either party are members of the 99%. In voting for the candidate, the mass of people are voting against their own economic and personal (civil rights) interests. I think the answer is that the subversion of our educational system has suceeded beyond the wildest dreams of the elite: the students very seldom look beyond the propaganda taught by teachers who don’t look very deeply either. There was a time that the schools did foster independent thought. Now, I think, not so much. “Let me see where I put that tv remote. American Idol is about to start.”
Sounds like a really good plan to me.
Glad you’re on OUR side.
..
..
..
You ARE….right?
The first word is probably synonymous with a dying medical show on FOX, and the second word most definitely rhymes with those mites in the grass that make you itch really really bad …
This is why Clinton got to run against an extremely feable Dole. Clinton was their guy all along-nafta,welfare reform,glass-steigal repeal,derivative deregulation etc
Subversion? It’s been their plan all along — from Chautauqua to Columbine. People often say the public school system sucks when, in reality, and true to everything John Taylor Gatto mentioned in “The Underground History Of American Education”, the public school system is doing exactly what the political and business elites intended: churn out generation upon generation of dumbed-down and distracted wage-slave voter-drones all hopped up smoke, mirrors, and pipe-dreams. The perfect Prussian fodder for the war-making apparatus or the drab, predictable cog in some rich bastard’s wheel. It’s worked beautifully — for all the money poured into public education, they’ve reaped fantastic returns on their investment time and time again.
So yeah, the public schools are fine.
The students and teachers?
They’re fucked.
There was never such a time — at best, they fostered the illusion of independent thought. Never the real McCoy. In no way shape or form were the Rockfellers, the Fords, and the Carnegies going to bankroll a system capable of uprooting and overturning their own apple carts via producing a citizenry capable of true critical and independent thought, deed, and action.
Bill Clinton came out in support of the Keystone XL Pipeline of Death, according to a report on Countdown yesterday. Olbermann expressed confusion over this turn of events. Even I know that Hillary’s ex campaign manager is a lobbyist for TransCanada.
Anyone who’s not aware that Holder is a corporate stooge must not know that his claim to fame is defending United Fruit’s employment of paramilitary groups to murder unionists in Latin America.
The Banksters will assure that the race is Obama vs. Romney. They win either way.
House Ni****s.
for reasons that i don’t understand, no one seems to care to track the history of barry.
barry is a “legend”. he was crafted by the cia in concert with david rockefeller and his acolytes.
barry’s mother was a spook working under the cover of the us aid. the anthropologist job was designed to allow her access throughout indonesia, mainly the island of java, so as to identify opponents of the sukarno regime and his give-aways of indonesian hydrocarbons and other mineral assets to the united states oil and gas corporations. this large group of discontented were construed as members of the PKI[parti kommuniste indonesie]. lolo soetero was either a major or colonel in the indonesian military, which at the time was managed by the cia[and the indonesian military ran indonesia, much as the egyptian military and the pakistani military run those countries].
barry grew up in djakarta in a special section of that city principally the shelter for intelligence service personnel and indonesian military. it was much like baghdad’s green zone.
in the mid-1960′s, in a history little related in the usa, the indonesian military, under direction from the usa/cia, rounded up all those discontented with the usa/cia managed military dictatorship that was nominally headed by sukarno. lolo soetero is considered one of the managers of the death squads that exterminated 500,000 – 2,000,000 indonesian opponents of the usa-implemented military dictatorship.
there are also strong indications that barry’s dad, obama senior, was an informant for mi6 and the cia. and that he may have even had a more operational status with those intell service entities.
in a very real sense, then, barry has always been all mobbed up. though he may have made his start at occidental, at some point he decided to enter officially into the outfit. his entry to columbia was facilitated by david rockefeller and his handler was david’ courter, zbigniev brezinski[sic].
some think his years at columbia were “cover” years and that he was never a student there.
so too with his harvard law years. harvard has long functioned as if a cia proprietary, so anything the outfit wanted could be arranged.
there are stories that at some time, the outfit dispatched barry to pakistan as an operations officer. in pakistan, his mission was to advance the great game objectives of his handler, zbig.
for all practical purposes, the history of the usg since the manipulated victory of ronald raygun is a history of the outfit managing the usg via a long line of operatives[george h w bush, wj clinton, george w bush, and now barry obomby soetero].
and that is the only story that fits the record of the performance. barry has been, is a “spook”.
many don’t want to contemplate that the election of ronnie raygun was the result of an outfit coup d’etat. but it was. and we have been under the thumb of the secret state every since.
the quandary is, how do we terminate this dictatorship?