Economy

Scott Brown Successfully Capitalized on the Bailout Blues

Massachusetts Attorney General Martha Coakley lost her special-election for the Senate seat vacated by the untimely passing of U.S. Senator Edward Kennedy. Much has been said about the role of health care reform in the race. Apparently everyone in Massachusetts has health care and reasonable doubts about an expensive national plan that might not improve their services.

But in the final days -- lagging in the polls -- the race was less about health care and more about the Wall Street bailout and the state of the economy. Her opponent, Scott Brown, successfully capitalized on the bailout blues and Coakley pulled out the big guns and resorted to a theme she perhaps should have emphasized throughout, bashing the big banks.

Senator Dodd’s Dilemma: Who to Take to the Ball?

On Friday, the Wall Street Journal reported that President Obama's signature financial reform, a Consumer Financial Protection Agency (CFPA), was in trouble in the Senate.

Senate Banking Chairman Chris Dodd (D-Conn.) was considering dropping the idea of creating an independent, stand-alone consumer protection body, empowered to crack down on banking abuses, in order to get a regulatory revamp passed this year with bipartisan support. Dodd is apparently considering shrinking the CFPA into a division of an already-existing federal agency (no doubt one with a proven track-record of failing consumers.)

Dodd is faced with a dilemma. Although he introduced a rather strong financial services reform bill in Congress last year -- one which creates an independent CFPA, curtails the powers of the Federal Reserve and tackles many Wall Street abuses -- it appears that big bank lobbyists who have spent millions fighting reform are now chipping away at his bill.

Too Big to Fail, Not Too Big for Jail

U.S. Attorney General Eric Holder appeared before the Financial Crisis Inquiry Commission today. He cited his strong statutory authority to go after the firms that had a role in the worst economic disaster since the Great Depression. His team was tackling securities fraud, accounting fraud, financial discrimination and fraud related to the stimulus bill. It was an impressive list, but what was not impressive was the first case he touted – Bernie Madoff.

You remember Bernie. His kids turned him in. It appears that the FBI considers this the high-water mark of criminal detective work.

Sleepless Nights on Wall Street, Nightmares on Main Street

The top bankers that were called to testify before the independent Financial Inquiry Crisis Commission in Washington today touched on the drama of the September 2008 financial crisis. They complained of nervous anxiety and sleepless nights. They didn't apologize for a thing, but they did -- to a man -- express their deep appreciation to the American taxpayer for saving their hides.

So how are the big banks treating those taxpayers these days? Almost every banker touted his firm's voluntary housing loan modification efforts to help families facing foreclosure. Jamie Dimon of JP Morgan Chase, for instance, cited 570,000 new trial loan modifications and 112,000 permanent modifications.

Murder on the Orient Express?

The independent Financial Crisis Inquiry Commission got underway this morning in Washington. The commission was authorized by Congress to get to the bottom of the causes of the financial crisis and produce an independent report, much like the 9-11 commission.

The commission sent a strong message by first putting under oath the titans of Wall Street. They didn't pick the subprime mortgage lenders or Fannie Mae or Freddie Mac. They didn't pick the credit rating agencies. They didn't even pick the big housing or investment firms that failed. Instead, they chose the largest firms that survived the crisis and now are profiting off of it due to the extraordinary interventions of the U.S. government.

Obama Joins the "Repo the Dough" Coalition

Today the Washington rumor mill sprang into overdrive as word trickled out that the Obama administration was thinking of applying some sort of fee to banks in order to take back bailout dollars and fund deficit reduction. Here at BanksterUSA we are thrilled that the Obama team has joined our "Repo the Dough" campaign and urge it to apply a financial transaction tax to destructive stock market speculation. A one time tax on bank bonuses simply will not suffice.

The Problem with the Revolving Door - It Brought Us Too-Big-To-Fail

Tiffiniy Cheng is guest blogging this week. She is the campaign coordinator for "A New Way Forward" and founder of "Open Congress."

Bailouts and political connections go hand in hand according to a just released academic study. The study, which was conducted by the Ross School of Business at the University of Michigan researchers, shows concretely that lobbying, campaign contributions, and the finance/federal government revolving door has helped the most damaging banks despite the dangers they pose to our economy.

Brace for a "Jobless Decade"

By any measure, the last decade was a rotten one. It started with a stolen election and the worst terrorist attack in American history. It is ending this week with the United States mired in two wars and deep into a catastrophic recession.

It’s hard to imagine that the next decade could be worse, but could it?

As Owners of AIG, the American Public Deserves Some Answers

More than a year after reckless Wall Street gambling collapsed the economy, no employee of a major American bank or financial institution is behind bars. This fact is all the more astounding when it comes to AIG.

AIG was at the heart of the financial meltdown. Their "innovative" use of risky credit default swaps (a type of insurance policy on bonds) helped transform boring bond trading into a highly leveraged, high-velocity global business.

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