Banking

Blanche Lincoln Rambos Wall Street

RamboThe financial services reform bill is on the Senate floor this week. The recently announced criminal investigation of Goldman Sachs, the bumbling testimony of Goldman's and the rocking Wall Street protest last Thursday show that momentum is with reformers. This bill could codify the "doom loop" of a "boom and bail" economy, or it could set us on the path to a more sustainable future. The good news is that a group of Senators has stepped forward to champion a critical set of issues worth getting excited about. Send a message to your Senator in support of these "too big to fail" amendments at BanksterUSA.org

Big Bank Front Group Ad Tries to "Swift Boat" Financial Reform

Submitted by Anne Landman on

A financial industry front group with the deceptive name "Stop Too Big To Fail" (STBTF) is running a new TV ad in Virginia, Missouri and Nevada that tries to trick voters into opposing financial reform by claiming the bill before the Senate institutionalizes taxpayer-funded, big-bank bailouts. A voice-over intones that

No
Main Source: 
Huffington Post, April 28, 2010
Topics: 
Corporate Campaigns
Banking
BanksterUSA
Economy

Will the Fabulous Fab Push the Bank Reform Bill Over the Top?

On Monday night, Senate Republicans lined up like lemurs and voted “no” on a motion to bring the Senate bank reform bill to the floor for a debate. Forty Republicans and one Democrat, Senator Ben Nelson (D-Kansas), stood shoulder to shoulder with 1,500 bank lobbyists and said “no” to Wall Street financial reform. (Evidently, Nelson was displeased that his friend Warren Buffett did not get special treatment in the bill.)

Before gloom sets in, it is worth noting that on Tuesday, all eyes will be on the “Fabulous Fab,” the Goldman Sachs trader at the heart of the SEC’s recent charges against the firm. Some of us are rooting for the Fab, hoping that his testimony will put financial reform back on the floor and put us on the path to reform.

The SEC vs. Goldman: The Kitty has Claws

cat clawsLast week’s Securities and Exchange Commission (SEC) action against Goldman Sachs landed like a bombshell on Wall Street. To the titans of Wall Street it must have seemed like the nice little kitty they had been stroking and cuddling over the years, viciously sank in teeth and claws.

The SEC has faced intense criticism from the public and media regarding the way it loosened leveraging rules, a key cause of the implosion of major investment banks and the meltdown as a whole. The SEC also took a pounding over its handling of the Bernie Madoff fiasco. SEC officials chose to ignore explicit warnings from whistleblowers that Madoff was running a Ponzi scheme. The SEC also mishandled its first major case related to the crisis, being roundly scolded by a federal judge for not being tough enough on Bank of America’s secret bonus and salary deal with Merrill Lynch.

Goldman Accused of Cutting the Brakes

One of the most salient analogies of the financial meltdown was offered by Financial Crisis Inquiry Commission chair Phil Angelides when he grilled Goldman Sachs CEO, Lloyd Blankfein, over the firm’s unsavory proprietary trading. Angelides was questioning Goldman’s practice of minting toxic, mortgage-backed securities and badgering credit-rating companies for the highest rating for those securities, while betting in the market that those securities would later fail.

Angelides likened this business practice to “selling someone a car with faulty brakes and then taking out an insurance policy on the driver.” With Friday’s Securities and Exchange Commission (SEC) filing of civil fraud charges against Goldman Sachs, we learned more about those faulty vehicles. We learned that Goldman had cut the brakes.

More Must be Done to Stop Foreclosures

Foreclosure filings were at historic highs in March -- 367,056 -- an increase of nearly 19 percent from the previous month, and the highest monthly total since 2005, according to RealtyTrac. Almost two years after the onset of the financial crisis with unemployment at historic highs, nothing is being done to put a stop to this on-going tragedy.

Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an update of our Wall Street Bailout accounting that, unlike other bailout assessments, includes Federal Reserve loans. CMD finds that the Federal Reserve, the U.S. Treasury and Federal Deposit Insurance Corporation (FDIC) combined have disbursed a total of $4.7 trillion on the bailout, of which $2 trillion is still outstanding.

Is it Time to Pull the Plug on the Financial Crisis Inquiry Commission?

Last week, in the middle of former Federal Reserve Chairman Alan Greenspan’s testimony in front of the Financial Crisis Inquiry Commission (FCIC), the lights went out.

According to Greenspan, Fannie Mae and Freddie Mac were to blame for the housing bubble. The Fed may have noticed, but it couldn’t really do anything about it. "Regulators cannot successfully use the bully pulpit to manage asset prices, and they cannot calibrate regulation and supervision in response to movements in asset prices. Nor can they fully eliminate the possibility of future crises,” said Greenspan.

After that self-serving drivel, no wonder the God’s zapped the electrical system. There was a lot Greenspan could have done to rein in the housing bubble, not the least of which was simply telling people there was a bubble as housing prices began following an unprecedented and unsustainable path.

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