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Thread: We Have Reached Peak Wall Street!

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    Default Why Isn't Wall Street in Jail?

    Why Isn't Wall Street in Jail?

    Financial crooks brought down the world's economy —
    but the feds are doing more to protect them than to prosecute them

    By Matt Taibbi / RollingStone
    FEBRUARY 16, 2011 9:00 AM ET




    Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

    "Everything's f**ked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

    I put down my notebook. "Just that?"

    "That's right," he said, signaling to the waitress for the check. "Everything's f**ked up, and nobody goes to jail. You can end the piece right there."

    Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

    The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

    Invasion of the Home Snatchers

    Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims."

    To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

    But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is f**ked up.

    MORE- http://www.rollingstone.com/politics...-jail-20110216
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

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    Default We Have Reached Peak Wall Street!

    Though the mainstream financial media and the blogosphere differ radically on their forecasts—the MFM sees near-zero systemic risk while the alternative media sees a critical confluence of it—they agree on one thing: the Federal Reserve and the “too big to fail” (TBTF) Wall Street banks have their hands on the political and financial tiller of the nation, and nothing will dislodge their dominance.


    Have We Reached Peak Wall Street?


    Given how easily the bankers bamboozled the Washington establishment into bailing them out in 2008 to the tune of tens of trillions of dollars in backstops, guarantees, subsidies and zero-interest loans, this is a reasonable assumption. Especially when coupled with the free hand the Fed has to reward the banks with zero-interest loans and limitless liquidity.

    Add in the unsurpassed political power of the banks’ lobbying and campaign contributions and the hog-tying of regulatory agencies, and it’s no wonder few see any threat to the Fed/financial sector’s dominance.

    There’s also a compelling narrative that supports the Fed’s policies of keeping interest rates near-zero by printing money to buy mortgages and Treasury bonds: were the Fed to allow interest rates to normalize back up to the historically average range, credit-based consumption and housing sales would dry up, pushing the nation into a recession or even a depression.

    What’s left unsaid is that such a contraction in credit would severely undermine the banks’ profits and solvency, and that it's that which is driving the Fed policy more than a concern for Main Street. Take a look at what happened to phenomenally robust financial profits in 2008: a contraction in credit caused financial profits (and solvency) to absolutely crater.

    Interestingly, the collapse of financial profits back to 1.5% of GDP (gross domestic product) merely returned the financial sector to the level of profit it had earned in the 1960s and 70s. No one reckoned the high-growth 1960s were a depression, yet the collapse of financial profits back to the level of the go-go 1960s triggered the systemic insolvency of America’s financial sector.


    This chart reveals the key driver of Fed policy: the enormous profits of Wall Street and the TBTF banks are based on an extraordinary expansion of leveraged credit that is visible in the red line—the ratio of total credit to GDP. This line traces out the birth of financialization in the early 1980s and the implosion of leveraged debt in 2008.

    Simply put, the only way the financial sector (Wall Street and the banks) could continue to grab almost 5% of the nation’s entire output as profit is if the Fed keeps interest rates near-zero and floods the system with the limitless liquidity of expanding credit and money-printing. Here is a snapshot of the Fed’s balance sheet, which reflects its unprecedented expansion of money:


    This chart shows that the Fed manipulates interest rates by buying equally unprecedented amounts of mortgages and Treasury bonds:


    Thus there are three reasons why analysts extrapolate the Fed’s current policies in a straight line into the future:

    1. Any contraction in credit would once again imperil the financial sector’s profits and solvency.
    2. Since Wall Street is politically dominant, the Fed will not allow credit to contract.
    3. Mainstream economists and politicians fear a recession triggered by credit contraction more than they fear a collapse of the U.S. dollar.


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    Default

    Some of the worst things that America ever created: The Fed, Wall Street, the CIA and Goldman Sachs.

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    Quote Originally Posted by Katz View Post
    Some of the worst things that America ever created: The Fed, Wall Street, the CIA and Goldman Sachs.
    One out of four's not bad. I agree with the Fed.
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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    Quote Originally Posted by aslan View Post
    One out of four's not bad. I agree with the Fed.
    ditto on the FED !!!!!!!
    best regards,
    mr fr0g MMOA honorary predator
    STRENGTH - HONOR - HEART
    that's my take on it your mileage may vary.
    for senior citizen fuzzy count click link:
    http://www.youtube.com/watch?v=DrTiP4ZIUfI

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    Quote Originally Posted by Katz View Post
    Some of the worst things that America ever created: The Fed, Wall Street, the CIA and Goldman Sachs.
    The fraudfecta!

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    Quote Originally Posted by DDutton View Post
    The fraudfecta!
    The Fed. Wall Street. CIA. Goldman Sachs.
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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    Quote Originally Posted by aslan View Post
    Goldman Sachs.
    Thread: Goldman Sachs: The Great American Bubble Machine

    T
    he first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

    Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

    They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

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    Quote Originally Posted by DDutton View Post
    Thread: Goldman Sachs: The Great American Bubble Machine

    T
    he first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

    Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

    They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.
    That's why we have rules. To discount capitalism because it doesn't work perfectly without rules to keep it within bounds is like saying food is evil because when we overeat we get sick. The alternative to capitalism is the central planning of communism. It, like all human institutions, contains the same flaw-- it depends on human judgment. To think that central planners are more moral in their judgments than employees of Goldman Sachs is a ludicrous idea. No system works without the imposition of man-made rules to make it work properly. The difference between the two systems, capitalism and central planning, is the amount of human intervention that is required to make the systems work. With capitalism, it's minimal. With central planning, it is by definition maximum, since the government is the system. Hence, the chance for human error is maximized with central planning. IF men were infinitely wise and innately good, then I would vote for central planning, but then, capitalism would work, as well. Since we don't have infinitely wise and infinitely good people, I vote for the system with the least amount of necessary human intervention, and that system is capitalism. Even when people are able to game the system (until we can fix it), it is still better than the alternative, the central planning of communism. Where am I wrong?
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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    Quote Originally Posted by aslan View Post
    That's why we have rules. To discount capitalism because it doesn't work perfectly without rules to keep it within bounds is like saying food is evil because when we overeat we get sick. The alternative to capitalism is the central planning of communism. It, like all human institutions, contains the same flaw-- it depends on human judgment. To think that central planners are more moral in their judgments than employees of Goldman Sachs is a ludicrous idea. No system works without the imposition of man-made rules to make it work properly. The difference between the two systems, capitalism and central planning, is the amount of human intervention that is required to make the systems work. With capitalism, it's minimal. With central planning, it is by definition maximum, since the government is the system. Hence, the chance for human error is maximized with central planning. IF men were infinitely wise and innately good, then I would vote for central planning, but then, capitalism would work, as well. Since we don't have infinitely wise and infinitely good people, I vote for the system with the least amount of necessary human intervention, and that system is capitalism. Even when people are able to game the system (until we can fix it), it is still better than the alternative, the central planning of communism. Where am I wrong?
    Maybe you are not wrong at all. Goldman Sachs is wrong.

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    Quote Originally Posted by Katz View Post
    Maybe you are not wrong at all. Goldman Sachs is wrong.
    If a law is broken, yes, But if no law is broken, it's the system that needs fixing.
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

  12. #12

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    Quote Originally Posted by aslan View Post
    If a law is broken, yes, But if no law is broken, it's the system that needs fixing.
    "We must hurry and make the big money on Wall Street now, before these sorts of activities become illegal!" - Joseph Kennedy 1927
    "We must hurry and make the big money on Wall Street now, before these sorts of activities become illegal!" - Lloyd Blankfein 2014
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

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    Quote Originally Posted by zengrifter View Post
    "We must hurry and make the big money on Wall Street now, before these sorts of activities become illegal!" - Joseph Kennedy 1927
    "We must hurry and make the big money on Wall Street now, before these sorts of activities become illegal!" - Lloyd Blankfein 2014
    A less worldly individual might point out such a discrepancy to legislators rather than attempt to profit on what was an unintended flaw in the system. Surely, you zengrifter, with your high ideals, would be one of those opting to inform the Congress to get the system fixed for the welfare of the country.
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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