Bank of America Settlement Only Proves Invincibility of Wall Street

[Octafish]

Critics say even the largest settlement to date shows that the big banks never really pay for their financial crimes

byJon Queally
CommonDreams staff writer, Aug. 22, 2014

It's not nothing, say critics, but the U.S. government's announced $16.65 billion settlement with Bank of America announced on Thursday—so far the largest associated with the Wall Street-fueled mortgage malpractice that led to the 2008 financial meltdown—is more stage-acting than justice and more business-as-usual than real punishment.

Presented to the public as a victory for the Justice Department who negotiated the deal on behalf of the government, details of the BofA settlement—as with previous high-profile agreements with Citibank and JPMorgan—offer a clear view of how large banks have avoided responsibility for the behavior that sent the global economy into a tailspin just six years ago. Much of the money—as much as $7 billion of it—is not paid in cash as a fine, but is instead included as "soft money" in which banks are credited for writing down existing mortgages. Other large portions of the settlement are allowed to serve as business expenses which allows the banks to exploit them as tax write-offs.

SNIP...

Criticizing the BofA settlement and other similar deals, William D. Cohan, a former senior mergers and acquisitions banker who has written three books about Wall Street, wrote a scathing op-ed for the Times this week in which he called out Attorney General Eric Holder for trumpeting the agreements as wild success stories. Cohan wrote:

The fact is that by settling with the big Wall Street banks for billions of dollars — money that comes out of their shareholders’ pockets — Mr. Holder is allowing them to avoid the sunshine that Louis Brandeis wrote 100 years ago was the best disinfectant. Instead of shining the bright light on wrongdoing that took place at the Wall Street banks, Mr. Holder’s settlements allow them to cover it up permanently.

And that helps no one. The American people are deprived of knowing precisely how bad things got inside these banks in the years leading up to the financial crisis, and the banks, knowing they will be saved the humiliation caused by the public airing of a trove of emails and documents, will no doubt soon be repeating their callous and indifferent behavior.

Instead of the truth, we get from the Justice Department a heavily negotiated and sanitized “statement of facts” about what supposedly went wrong. In the case of JPMorgan, the statement of facts was 21 pages but contained little of substance beyond the fact that an unidentified whistle-blower at the bank tried to alert her superiors to her belief that shoddy mortgages were being packaged and sold as securities. Her warnings went unheeded and the mortgages were packaged and sold all the same.

Critics of both the banks and the government's effort to go after them in the wake of the crisis have repeatedly said that criminal prosecutions--including the threat of prison sentences for individual bankers and executives--would be the strongest and best response to activities that have unleashed so significant and widespread pain across society.

SNIP...

According to Yves Smith, who runs the Naked Capitalism blog, "the dirty secret" of these agreements is that "the Administration is not just protecting the banks. It now also needs to hide how cronyistic its behavior has been."

CONTINUED...

http://www.commondreams.org/news/2014/08/22/bank-america-settlement-only-proves-invincibility-wall-street

Something's not right when banks get away with bilking We the People as official policy.

[villager]

1. Well, "both" main political parties are their subdivisions, Octafish...

So they have us coming, going, "voting," and otherwise...

[Octafish]

3. That's where, historically, the ''Buy-Partisan'' comes in.

Since the repeal of Glass-Steagal, UBS has specialized in all kinds of Buy-Partisan Wealth Management investing:

http://financialservicesinc.ubs.com/revitalizingamerica/SenatorPhilGramm.html

Success stories, village.

[malthaussen]

2. No, "invicible" is too big a word.

If they are truly "invicible," then no point exists in railing against them. Say rather that it proves they have a bit more power than is good for the people.

-- Mal

[Octafish]

6. When the S&L industry ''collapsed'' in the 1980s due to deregulation...

...protections were put in place to see that it never happened again to the S&L industry. The reason? The U.S. taxpayers were on the hook for all the bad commercial loans, sleight of hands, shady investments, CIA warmaking, and sundry other rip-offs the likes of Neil Bush were capable of pocketing.

The banking industry was another matter. Wall Street and the banksters got their toadies on the Potomac to deregulate the banking industry by the repeal of Glass-Steagall. Forensic economists like William K Black warned us, who'd served the People in prosecuting the S&L crooks, were ignored by the last and current administrations. Of course, the U.S. taxpayers were on the hook for the trillions "lost" there, too.

I agree the banksters and Big Money boys are not invincible. However, I am tired of seeing the other pole of power -- the People -- kept from wielding political power because concentrated money today is more effective politically than anyone who gets elected can do. If I wasn't an optimist, I'd think our situation would be insurmountable. Because people think, malthaussen, we have a chance.

[polynomial]

11. Thank you Octafish for the Neil Bush link

After a lot of refection in my very personal work experience with the Union Pacific Rail Road Company I have decided to build a file about the money and family ties of the Bush family. This also will be combined in a book with my personal OSHA claim that the Union Pacific Safety management team in the Chicago Service unit did with intention try to ditch my injury report.

Still waiting for the labor department determination, however many tell me the railroad is so powerful and corrupt my OSHA claim could be a struggle.

Yet the OSHA investigator said I will have a chance to tell my story. The Union Pacific Safety manager pressured me to lie about my injury. My story is a very compelling issue about that very retribution and retaliation that permeates the rail road industry.

The real striking story that caught my attention was one about a Wikipedia article about the history of the Bush family going back to WWII and Grandpa Prescott Bush likely a big financier of the Nazi.

Also about Herbert Walker Bush as such close friends with the Brown Brother and Harriman group, that is the Harriman that created the Union Pacific Rail Road. besides President Lincoln signing off for the Union Pacific too.

My experience in understanding in what it is to work surrounded by a fascist Nazi environment called railroad safety management team that will likely create a charged debate about eminent domain the railroad have enjoyed for decades.

There seems to be a laundry list of dirty money this family has profiteered by wars, business, and Banking though the decades. The current Bergdahl story has a deeper history to which is tightly connected to the Union Pacific Railroad, Sun Valley where Bergdahl grow up.

Seems Harriman contracted a group of Nazi’s during the war to help decide where the best place to build a small resort town next to his railroad so located, as a ski resort equivalent to the Swiss Alps.

The kicker to contract rich Nazi makes me believe that area is loaded with fascist that are definitely constitutionally antithetical monied Nazi.

It’s a wonderful story that Harriman bought and bribed the Media and Hollywood to sell his new resort town. Sun valley…

Thank for your story

[Octafish]

13. You are most welcome, polynomial. A great family in the annals of crime...

My good friend the late Bartcop pegged their ilk and cronies the Bush Family Evil Empire.



BFEE Scorecard

Bartcop coined the term "Bush Family Evil Empire" to denote the 60-year pre-eminence of one family in the formation of the political philosophy in the United States, that of the War Party. The first to do so to my knowledge on the World Wide Web, Bartcop chronicled their ascension to the top of the national security state by hook and by crook. At least three generations have held high national office, while also making big money off war and looting the public Treasury. The last president of the United States, a man who wasn't elected fair and square by any stretch of the imagination, actually said: "Money trumps peace" at a press conference. For some reason, not a single "journalist" had the guts to ask him what he meant by that.

Bartcop did. And We and Democracy are better for it.

Know your BFEE: They Looted Your Nation’s S&Ls for Power and Profit

Know your BFEE: Social Security is a Side Show while Banksters Walk and You Pick Up the Tab

Know your BFEE: Siegelman Judge is a big-time War Profiteer

Know your BFEE: WikiLeaks Stratfor Dump Exposes Continued Secret Government Warmongering

Know your BFEE: John Roberts earned his Sgt. Pepper stripes as an Iran-Contra cover-up artiste.

Know your BFEE: David Vitter was pampered by the DC Madam

Henry Paulson, Banker to the BFEE

Know your BFEE: Goldmine Sacked or The Best Way to Rob a Bank Is to Own One

Know your BFEE: Phil Gramm, the Meyer Lansky of the War Party, Set-Up the Biggest Bank Heist Ever.

Know your BFEE: 1984 Death of Outstanding Congressional Staffer Buried Poppy-Moon Relationship

Know your BFEE: Forget Rev. Wright, It s Bush and His Cronies Who Owe an Apology for Rev. Moon!

Know your BFEE: They Looted Your Nation’s S&Ls for Power and Profit

Know your BFEE: War and Oil are just two longtime Main Lines of Business

Know your BFEE: Scions of the Military Industrial Complex

Know your BFEE: Spawn of Wall Street and the Third Reich

Know your BFEE: A Crime Line of Treason



N'yah. Lot more where they came from, see.

[hifiguy]

14. In a just society every male Bush

Would be behind bars for life.

[Octafish]

15. That branch, although once I thought Marvin was a nice guy...

Last edited Fri Aug 22, 2014, 09:45 PM - Edit history (2)

...I know many good people with the surname Bush. Then, again...

Police Report: Bush family maid crushed between building and car.

http://www.lookingglassnews.org/viewstory.php?storyid=3079

[bobthedrummer]

18. Thank you Sir, K&R.

Banksters
http://banksterusa.org

[Octafish]

19. Banksters plus secret inside information is Wall Street on the Potomac.

Explains thes need for NSA Domestic Spy Ops and related sundry FASCISM

Secret police, spying on everyone.

Know who said what to whom.

Operate under secret laws, in secret and unaccountable.

Wars without end make them ever more powerful.

Their banksters hide trillions in loot offshore,

We don't even know all their names.

So we can't talk about them.

And they hold the most wealth and power ever wielded.

And no one voted them in.

PS: Thank you, bobthedrummer. The honor is mine, Sir.

[Blue_Tires]

4. Of course it's cronyist and incestuous...

There is a well documented revolving door of:

Megabank boardroom--->High-power Wall Street law firm/D.C. lobbyist--->Justice Department/SEC...Rinse and repeat...

That's why when the megabanks get caught breaking the law, they are *always* able to settle things behind closed doors instead of ever going to court -- Because all these people know each other...

Corporate America is the only entity that can regularly break federal law and be able to "negotiate" their own punishment in secret...

[Octafish]

7. We Might Have Avoided The Financial Crisis If We'd Listened To John Dingell

By Shadee Ashtari
The Huffington Post, 02/25/2014

In 1999, then-Sen. Phil Gramm (R-Texas) spearheaded the effort to repeal the 1933 Glass-Steagall Act, greatly contributing to the events that led to the 2008 economic collapse.

The Depression-era banking law was designed to limit and regulate the activities of commercial banks to prevent another economic meltdown.

On Nov. 4, 1999 -- almost a decade before the latest financial crisis -- Rep. John Dingell (D-Mich.) delivered an urgent, prescient plea, warning of what may happen without the Glass-Steagall firewall.

Dingell, whose father helped pen the 1930s Glass-Steagall Act, said in his 1999 argument against the deregulatory vote:

I think we ought to look at what we are doing here tonight. We are passing a bill which is going to have very little consideration, written in the dark of night, without any real awareness on the part of most of what it contains.

I just want to remind my colleagues about what happened the last time the Committee on Banking brought a bill on the floor which deregulated the savings and loans. It wound up imposing upon the taxpayers of this Nation about a $500 billion liability ...

Having said that, what we are creating now is a group of institutions which are too big to fail. Not only are they going to be big banks, but they are going to be big everything, because they are going to be in securities and insurance, in issuance of stocks and bonds and underwriting, and they are also going to be in banks.

And under this legislation, the whole of the regulatory structure is so obfuscated and so confused that liability in one area is going to fall over into liability in the next. Taxpayers are going to be called upon to cure the failures we are creating tonight, and it is going to cost a lot of money, and it is coming. Just be prepared for those events.

Reps. Nancy Pelosi (D-Calif.), Steny H. Hoyer (D-Md.) and John Boehner (R-Ohio) were among those who voted to revoke Glass-Steagall. Years later, after deregulated banking practices and loan standards cost taxpayers more than $700 billion in bank bailouts, many of those lawmakers regretted their actions, including former President Bill Clinton -- who signed the repeal into law -- and former House Speaker Newt Gingrich (R-Ga.).

“The banks had been working on it for 40 -- no, hell no -- since it was enacted, the banks have been trying to get rid of it,” Dingell told Politico in 2008. “They worked like hell. They finally wore this place down. Everybody forgot what happened during the Depression and why Glass-Steagall was passed.”

CONTINUED...

http://www.huffingtonpost.com/2014/02/25/john-dingell-financial-crisis_n_4849678.html

Thank you for remembering the Revolving Door, Blue_Tires. Reminded me of what this guy said:

Neil Barofsky Gave Us The Best Explanation For Washington's Dysfunction We've Ever Heard

Linette Lopez
Business Insider, Aug. 1, 2012, 2:57 PM

Neil Barofsky was the Inspector General for TARP, and just wrote a book about his time in D.C. called Bailout: An Insider Account of How Washington Abandoned Main Street While Rescuing Wall Street.

SNIP...

Bottom line: Barofsky said the incentive structure in our nation's capitol is all wrong. There's a revolving door between bureaucrats in Washington and Wall Street banks, and politicians just want to keep their jobs.

For regulators it's something like this:

[font color="red"]"You can play ball and good things can happen to you get a big pot of gold at the end of the Wall Street rainbow or you can do your job be aggressive and face personal ruin...[/font color]We really need to rethink how we govern and how regulate," Barofsky said.

CONTINUED... http://www.businessinsider.com/neil-barofsky-2012-8

I'm so old I can remember when integrity in office was considered normal.

[woo me with science]

5. Wall Street owns the government, both parties.

Who ya gonna vote for, sucker?!

[Octafish]

10. Good Democrats.

At the least, that would be those Democrats who envision, promote and enact policies and legislation that advance the interests of the People ahead of those of the superrich and their corporations. Good Democrats are proved by their actions in office, which whittles down the caucus considerably, every two years. Not many are left to put up the good fight in office, my Friend, seemingly by design.

[hifiguy]

8. Frank Zappa said it best

“The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”

[Octafish]

12. Europe’s Chief Banker Seeks Tax Cuts and Spending to Spur Growth

JACKSON HOLE, Wyo. — Mario Draghi, president of the European Central Bank, said Friday that European governments must move from a focus on austerity to a “more growth-friendly composition of fiscal policies.”

Mr. Draghi’s comments were a change in tone for him, reflecting mounting concern that economic growth is sputtering in many European countries and that existing efforts have proved insufficient to spur faster growth.

Speaking before an annual gathering of central bankers and economists at a resort in the Rocky Mountains, Mr. Draghi said that the central bank was moving to increase its own stimulus campaign but that governments in the eurozone also needed to help bolster demand for goods and services.

“Since 2010, the euro area has suffered from fiscal policy being less available and effective,” he said. “It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, and I believe there is scope for this.”

CONTINUED...

http://www.nytimes.com/2014/08/23/business/international/draghi-calls-for-less-austerity-and-more-stimulus-in-europe.html?_r=0

Who is Mario Braghi? Before he became Europe's chief Trickle Down banker...

PROFESSOR MARIO DRAGHI JOINS GOLDMAN SACHS

LONDON – Goldman Sachs today announced that Mario Draghi is joining the firm as a Managing Director. He will serve as Vice Chairman of Goldman Sachs International, as a member of the Group's Commitments Committee.

Based in London, Professor Draghi will work with the firm's senior management in Europe and New York on European strategy and on developing and expanding the firm's business globally. Specifically, he will help the firm develop and execute business with major European corporations and with governments and government agencies worldwide.


Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centres around the world.


Notes to Editors

Mario Draghi has extensive international experience of macro-policy making and corporate activity. A graduate of the University of Rome, he earned his PhD in Economics from the Massachusetts Institute of Technology in 1976 and subsequently served as Professor of Economics at the University of Florence from 1981 to 1991.

He was Director General of the Italian Treasury from 1991 to 2001 and served as Chairman of the European Community's Economic and Financial Committee. He was also a member of the G7 Deputies. In 1993 he was appointed chairman of the Italian Committee for Privatisations. He served as an advisor to the Bank of Italy in 1990 and was an Executive Director of The World Bank from 1984 to 1990.

Professor Draghi has significant corporate experience both as a lawmaker, having chaired the committee that re-drafted Italian corporate and financial legislation, and as a former board member of several banks and corporations (Eni, IRI, BNL, IMI).

He is a member of the Board of Trustees of the Princeton Institute for Advanced Studies and a Fellow at the Kennedy School of Government, Harvard University.

Professor Draghi chaired the committee that drafted the legislation governing the Italian financial markets (the so-called "Draghi Law&quot . He has also written and edited several publications on macro-economic and financial issues.

PRESS RELEASES ARCHIVE

http://www.goldmansachs.com/media-relations/press-releases/archived/2002/2002-01-28.html

Zappa was correct, hifiguy. These clowns no longer even bother trying to hide the new plantation. It's a socialized casino for the super-rich and it's austerity for the 99 percent.

[Initech]

9. The real criminals are looting this country without punishment.

Unarmed black kid walking down the street? Blam. Death penalty. This is fucked up on so many levels.

[Octafish]

16. Just Us in the USA

John Roberts helped Poppy skate on Iran Contra and helped Smirko steal Florida. Now he's Chief Justice and appointing nothing but GOP cough BFEE judges to FISA court.

...exclusive, unaccountable, lifetime power to shape the surveillance state...

http://www.bloombergview.com/articles/2013-07-02/chief-justice-roberts-is-awesome-power-behind-fisa-court

And some wonder why the rich keep getting richer and the rest are penured cannon fodder, fit only for fleecing and target practice.

[Octafish]

17. NYPD never choked a Banker

The Bank of America settlement and the “justice” of capitalism

wsws.org, 23 August 2014

Attorney General Eric Holder, the head of the Department of Justice, returned to Washington Thursday from his tour of Ferguson, Missouri—which was this month put effectively under martial law—to announce a cash settlement with Bank of America over its role in helping cause the 2008 financial crisis by making billions selling fraudulent mortgage-backed securities.

The deal will cost the bank only about a third of the $16 billion the Justice Department claims as the size of the settlement. Like previous settlements, it effectively shields the bank from further prosecution and protects the bankers responsible for forcing more than ten million families from their homes.

The actual cash settlement is under $10 billion, of which the company will end up paying only about $5 billion because its fine is tax-deductible. The company’s stock rallied at the news. Bank of America CEO Brian Moynihan praised the deal, saying it “is in the best interests of our shareholders,” and puts its legal troubles behind it. “Of the big stuff, that’s really the one that’s left out there,” he concluded.

“The NYPD never choked a banker,” read a sign left at the impromptu memorial of Eric Garner, the Staten Island man strangled to death by the New York Police Department as they arrested him for selling loose cigarettes on the street. Indeed. No bank executive has been arrested, much less criminally charged, for crashing the economy in 2008.

CONTINUED...

http://www.wsws.org/en/articles/2014/08/23/pers-a23.html