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Blog of Mass Destruction

Bad Actors

By The Reverend Published: April 17, 2010

The 11% Ohio unemployment figure, as well as the national unemployment number of 9.7%, have come about because of crooked, irresponsible and unaccountable Big Banks.

Lower home values, lowered credit lines on those homes, and current tight credit have all come about because of crooked, irresponsible, unaccountable and deregulated Big Banks.

Even the economic arch-conservative and former Fed Chairman, Alan Greenspan, testifying before a congressional committee after the financial collapse, admitted that simply trusting in Big Banksters to voluntarily do the right thing, to voluntarily not cheat......a position Greenspan advocated for his entire life.....was an entirely mistaken position.

The epicenter of the Big Bankster Breakdown was mortgage derivatives. Big Banksters vacuumed up mortgages, bundled them into securitized assets whose actual values and potential risks were never really known or understood...and sold them to large investors in an entirely deregulated and non-transparent way.

The charges just filed against Goldman Sachs show Sachs marketing these CDO's as sound investments while Goldman traders were shorting those same instruments. Banksters encouraged the purchase of non-regulated mortgage derivatives by their most elite customers while simultaneously betting that those derivatives would fall in value.

Your home is worth less today, your family and friends are unemployed today, credit is harder to obtain today, and the nation as a whole has financially fallen back to 1999 numbers.....BECAUSE.....Big Wall Street Banksters were reckless, irresponsible, unaccountable, and in some cases, like Goldman's, criminal.

Just how big is this traded-behind-the-scenes derivatives market?

$450 TRILLION annually.

That number, alone, informs us why Big Banksters will never quit in their fight to maintain the status quo. Indeed, the early reports explain that bank lobbying efforts of congressional figures are off the charts, exceeding even the onslaught of lobbying during the health care reform battle.

How important is the regulation of derivative markets?

"I want to see what emerges, but I will veto legislation that does not bring the derivatives market under control and some sort of regulatory framework that assures that we don't have the same kind of crises that we've seen in the past," Obama said before meeting with the President's Economic Recovery Advisory Board.

Strong words from a Democratic President who has found his political mojo recently.

Naturally, what this all means is that a firm 41% minority of the Senate, in theory representing state constituents who are now unemployed, foreclosed upon, and owners of devalued homes..... will wage political war to STOP new bank regulations....

"We are united in our opposition to the partisan legislation reported by the Senate Banking Committee," said a letter signed by all 41 Republicans in the 100-seat Senate and addressed to its Democratic Leader Harry Reid.

"As currently constructed, this bill allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks.".

Does the financial regulation bill being proposed by Senator Chris Dodd and the Democrats "allow for endless taxpayer bailouts" as Minority Leader Senator Mitch McConnell (R-KY) spouted yesterday?

Ezra Klein....

The Dodd bill makes bailouts less likely by empowering regulators and increasing transparency, raises a $50 billion fund from banks to pay for future too-big-to-fail bankruptcies, and then makes the outcome a predictable punishment rather than a chaotic rescue. That last is known as "resolution authority" -- as bloodless a word as one could possibly imagine -- and it wipes out both shareholders and management. It's all there in Section 206 of the bill: "Mandatory Terms and Conditions for All Orderly Liquidation Actions." What we call "resolution" would better be described as "execution."

Why, then, would Republicans like Mitch McConnell insist that Dodd's bill will continue "endless taxpayer bailouts?"

Because GOP word propagandist, Frank Luntz, told Republicans it was the best way to try to defeat financial regulation.

Start at the 1:00 mark....

It is important to comprehend what's going on in all of this, the latest offering of Republican political theater.

.... two key lawmakers came to New York City last week to explain what it means for Wall Street, and how financial executives
might help prevent some of its least market-friendly aspects from becoming law by electing more Republicans
, FOX Business Network has learned.

About 25 Wall Street executives, many of them hedge fund managers, sat down for a private meeting Thursday afternoon with two of the most powerful Republican lawmakers in Congress: Senate minority leader Mitch McConnell of Kentucky, and John Cornyn, the senior senator from Texas who runs the National Republican Senatorial Committee, one of the primary fundraising arms of the Republican Party.

House Republican political theater....

In February, Boehner met “over drinks” with JP Morgan Chase CEO Jamie Dimon, where he “made a pitch” for Wall Street support by explaining that “Republicans had stood up to Mr. Obama’s efforts to curb pay and impose new regulations.”

As we saw in the health care reform political theater, Republicans, traditionally the politicians who make no bones about their undying loyalty to Big Corporations, will say and do virtually anything to reward their traditional benefactors in the hopes of regaining political power.

The financial regulation legislation is simply Scene 2 in the ongoing tragic drama being acted out by Republican actors who have committed to memory their latest script lines from Frank Luntz's, Big Corporation Protection screenplay.



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