No Bankers In Jail:
• Rolling Stone – Goldman Non-Prosecution: AG Eric Holder Has No Balls
That’s how law works on Wall Street. The bank walks into the room with the sordid activity, and the law firm’s partners huddle up and whip their associates – for hundreds and hundreds of billable hours straight, if necessary – until a way is found to call stealing or tax evasion or accounting fraud or whatever legal. That’s the way it should work on the prosecutorial side, too. You should start with a simple moral premise – this group of crooks ripped off X group of victims for fifty million dollars – and then you should bury yourself in law books until you find a way to put them all in jail. If Linklaters gets paid to be creative, well, Mr. Holder, we’re paying you to be creative, too. Again, though, Holder didn’t need to be creative in the Goldman case. Levin gift-wrapped the whole thing for him. He could have had a dozen easy convictions just on the evidence in that report, and if he had been creative, if he had used his vast power to roll up the guilty and flip them into more revelations, then he’d have had enough cases to last the AG’s office the next decade. But the Holders of the world do not want to be creative when the targets are politically influential rich people. Instead, they use their creativity against Roger Clemens, Barry Bonds, immigrant housekeepers, and guys who knock over liquor stores.• Dealbook (NYT Blog) – No Criminal Case Is Likely in Loss at MF Global
A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives. After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case. The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.
Comment:
The story below is a great example of why bankers are so hated and why they don’t get it. Even if it is true that history will be kind to TARP (we think the exact opposite will happen), do not even try to make this argument for at least a decade.
As we wrote a few weeks ago, bankers’ reputations are somewhere between that of a used car salesman and a drug dealer right now. TARP is so hated it was the catalyst for some of the biggest political movements of our lifetime, namely the Tea Party (they hated bailouts/TARP and blamed the government) and Occupy Wall Street (they hated bailouts/TARP and blamed Wall Street).
Given all this, for a banker to say “history will be fairly kind to TARP” redefines the term “tin ear.”
• Real-Time Economics (WSJ Blog) – Bank CEO: History Will be Kind to TARP
There aren’t any Wall Street banks left in the Wall Street bailout. But there are hundreds of Main Street banks–many unable to fully repay the Treasury Department nearly four years after the program’s launch. What do they think of the Troubled Asset Relief Program? “TARP successfully stabilized not only the banking industry but a number of other industries as well. The general view I would have is that history will be fairly kind to TARP,” Sterling Financial Corp. Chief Executive Greg Seibly said in an interview. The Treasury Department this week announced that it expects to earn about $113.3 million in a public offering of the shares it holds in the Spokane, Wash.-based bank. Treasury also has received about $6.7 million in dividends from Sterling, and will get yet a little more back when it sells warrants it continues to own. Still, it’s a steep discount and a clear net loss on the original investment of $303 million. Overall, Treasury estimates that TARP will cost taxpayers $47.75 billion, largely due to expenses related to the auto bailout and housing programs.
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For more information on this institutional research, please contact:
Max Konzelman
max.konzelman@arborresearch.com
800-606-1872
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
For the same reason that a judge* from Texas struck down property rights in this manner: “wholly dismissed our entire case with a 15-word ruling sent from his iPhone.” Ain’t technology great! Thanks, Steve Jobs! Still dead? Too bad, should have come up with an app for that one.
*describing him as a kneepad-wearing pleasure provider for the Corpofascits may be a bit crude, so I’ll refrain
http://www.huffingtonpost.com/2012/08/23/keystone-xl-pipeline-texas_n_1824893.html?utm_hp_ref=green
Until corporate personhood is six feet deep, it will only get worse. But at least the S&P is over 1400, so we have that going for us.
When the Bankers go to Jail
the Bible tells us not to steal
it’s there in black and white
our laws are based upon it too
do not do wrong – do right
but somehow since these laws were writ
we’ve seen the system fail
but things will change for all the best
when the bankers go to jail
when the bankers go to jail my friends
when the bankers go to jail
we’ll finally see justice done (we’ll have them critters on the run, i’ll get me a banker with my gun)
when the bankers go to jail
when the vampire squid has been deep-fried
in the slime of Bernank’s words
when politicians tell the truth
and not be lying turds
when “austerity” applies to them
and fairness does prevail
we’ll finally see justice done
and the bankers go to jail
when the bankers go to jail ee-hah
when the bankers go to jail
we’ll all be dancing in the streets (the taste of life will be so sweet, we’ll kiss an’ hug everyone we meet)
when the bankers go to jail
if all was as it ought to be
when any business fails
investors take a haircut
amid their tears and wails
but in our mean kleptocracy
that the MSM does hail
the working class pay all the bills
and no banker goes to jail
when the bankers go to jail dear God
when the bankers go to jail
the haircuts will be number ones (we’ll shave the head of all them bums, we’re gonna have a lotta fun)
when the bankers go to jail
we’re predators i must admit
it’s human nature too
to seek a better living for
our wives and children too
but animals we’re not you see
it not just fine detail
we keep the law, control ourselves
and the bankers go to jail
yes you bankers go to jail you thieves
all you bankers go to jail
you’ll be some brother’s jail-house bitch (you’ll be standing stark without a stitch, we’ll slap you every way you bitch)
when you bankers go to jail
you may think it’s a silly dream
to think of their demise
they’re oh so very powerful
and every banker lies
but one day soon we’ll overthrow
and have them by the tail
we’ll tar and feather all of them
and send them all to jail
when the bankers go to jail for good
when the bankers go to jail
we’ll hear the bells of freedom ring (you’ll see us dance and hear us sing, and all of us will share your bling)
when the bankers go to jail
(maw! Dan’l done shot his self a banker wid his gun maw. Maw! I done gotta shoot a banker too maw.
You watch yawself Brad. Dem bankers is nasty nasty things and th’ best thung yawl can do is haul off and shoot dem from a goodly distance wid yo shotgun – ya hear me boy?)
” bankers’ reputations are somewhere between that of a used car salesman and a drug dealer right now.”
That is kinda insulting drug dealers isn’t it.
One thing about drug dealers is they understand that when they rip some one off they may get a bullet in the head, and nobody will worry about it, it makes them behave more ethically than your average above the law wallstreet banker.
The greatest robbery in history aided by our political elites.
Scary isnt it. Nobody is watching the Economy The Country Or our Wealth.
I’m just waiting for accusations of “Liberal bias” to start flyin’ from the usual suspects.
Once they lost the Bear Stearns trial the government was scared off prosecuting the bankers. Proving intent beyond a reasonable doubt when advisors such as accounting firms and law firms sign off is a very high barrier. Recall that it is not currently a crime to be a stupid banker, who should have known better you have to have in mind to defraud from day one. Now Sarbox might be a possiblity, but since the courts have not yet defined what it means (few cases have arisen) the DOJ might be scared of what the courts might say. Anyway between the various Ponzi schemes (watch American Greed) and the insider trading area where things are at least well defined with long court records, one suspects that given how much of the DOJ’s time is now spent on terrorism cases, that they are understaffed as well.
Let me add that they still have all the drug cases to prosecute as well.
” Tea Party (they hated bailouts/TARP and blamed the government) and Occupy Wall Street (they hated bailouts/TARP and blamed Wall Street”
Two sides of the same coin. So few people seem to get that.
Why are there still no bankers in jail? The same reason Assad still in power in Syria. The same reason Putin is running Russia. Dictators run the world, not the people.
There is still hope… Liebor may prove to be one bridge too far. TARP was a gift from the corrupt political sector to the corrupt financial sector. LIBOR is clearly fraud on a large scale. No need for opinions, just go after them. They are screwing everyone.
Who will do God’s work?
Both parties are bought and paid for…for example the Republicans have their Billionaires, Koch Brothers, Sheldon Adelson, etc. The Democrats have Warren Buffet, George Soros, etc.
The strategy in public is one thing, the real strategy is to cut regulations, what rules / regulations they are don’t enforce and best of all get as much benefits from the government as possible. Juicy contacts, bailouts, etc.
What you here is just smoke and mirrors to do battle between different groups of Billionaires. This is to confuse the general public and buy off voters for their own group ( Republican or Democrat). But bottom line is those with money get more and those with power stay in power.
A quick review of online sources (notably a CRS report – http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/RL31866.pdf) comes up with 27 indictments in the fall of Enron. At least 21 were convicted or plead guilty.
There is a strong suggestion that the Bush administration pursued the Enron cases aggressively to ward off any suggestion that Enron would be protected because of the close ties between Bush and Ken Lay (“Kenny Boy”). Indeed, this effort appears to have been successful. The Bush administration did not appear to have been materially harmed by Bush’s ties to Enron and allegations of potential / actual leniency towards Enron fell by the wayside rather quickly.
Note that another source (http://blog.chron.com/lorensteffy/2011/12/why-the-financial-crisis-hasnt-spawned-more-prosecutions-2/) states that the fall of Enron yielded 28 convictions.
The S&L crisis of the 1980s produced a tidal wave of trials and convictions. Sources differ as to the numbers. However, one source (JUSTICE DEPARTMENT BOASTS 905 CONVICTIONS IN S&L SCANDAL – http://www.deseretnews.com/article/238259/JUSTICE-DEPARTMENT-BOASTS-905-CONVICTIONS-IN-SL-SCANDAL.html?pg=all) suggests a large scale effort. At the time, the Federal effort to prosecute S&L fraud was frequently denounced as inadequate (which may well be true).
In the current debacle, the count is zero to date. Why? Many sources use phrases like “Too Big Too Jail” which appears to be correct. Of course, this may be a reference to the political influence of top bankers or a fear of the economic impact of indictments. The former was alleged in the S&L crisis (see Charles Keating who ended up in jail anyway). Conversely, there were few fears that indicting S&L executives would damage the economy a generation ago.
However, I think there is a political aspect to this. Republicans appear to be much more motivated to prosecute economic crimes than Democrats. Presumably this is not a consequence of anti-business bias (on the part of the Rs). More likely, a persevered need to demonstrate independence of the corporate community.
To use a partial analogy, Calvin Coolidge largely escaped any taint from Teapot Dome and the other scandals of his time because he insisted on full investigations and prosecutions.
Of course, there was never any chance that the Obama administration would pursue criminal misconduct in the years leading up to the Great Recession. Timothy Geithner was the Director of the New York Fed before the crash and had personal responsibility for ensuring the soundness and stability of Wall Street. To say that he failed in his oversight duties would be a modest understatement.
Obama made him Secretary of the Treasury and appears happy with his performance.
below, happen to be Today’s Q(s)OTD from “liberty.quotes@centre.telemanage.ca”…
“Sometimes the law defends plunder and participates in it. Sometimes the law places the whole apparatus of judges, police, prisons and gendarmes at the service of the plunderers, and treats the victim — when he defends himself — as a criminal.”
– Frederic Bastiat
(1801-1850) [Claude Frederic Bastiat] French economist, statesman, and author. He did most of his writing during the years just before — and immediately following — the French Revolution of February 1848
Source: The Law
http://quotes.liberty-tree.ca/quote_blog/Frederic.Bastiat.Quote.6B82
“No duty, however, binds us to these so-called laws,
whose corrupting influence menaces what is noblest in our being…”
– Benjamin Constant
[Henri-Benjamin Constant de Rebecque] (1767-1830) Swiss-born thinker, writer and French politician.
Source: Principles of Politics Applicable to All Governments (1810) (Indianapolis: Liberty Fund, 2003), p. 401-402.
http://quotes.liberty-tree.ca/quote_blog/Benjamin.Constant.Quote.5EEE
“[G]overnment theft of private money and redistribution by a government elite is communism not democracy. … Communism has already been tried for over 70 years, and it doesn’t work because people work to support themselves, not their neighbors. When the rewards are confiscated and redistributed to others, people produce less or stop producing altogether. The quantity of “goods in common” declines until the system finally collapses and everybody is hungry, not just “the poor.” Then totalitarianism steps in to force people to produce (ask the Russians, the Poles, the Estonians).”
– Don Hull
Source: The UnReported News, August 27, 1995
http://quotes.liberty-tree.ca/quote_blog/Don.Hull.Quote.C6A9
~~~
though, just, to ‘pin-point’ it..
We would make ‘the Future’ that much more comfortable, if we, only, would bother to Read some..
http://search.yippy.com/search?query=Bastiat+The+Law&tb=sitesearch-all&v%3Aproject=clusty
take it as a, mere, Clue..it Is a ‘Bumper Crop’, compared to your “Farmville” doings..
Simple, banker immunity brought to you or bought by their lobbyists who have special access to lawmakers and regulators. The law no longer applies to them
Silly question, simple answer.
Perhaps the best analogy to TARP is Hoover’s RFC (Reconstruction Finance Corporation). The RFC loaned money to businesses to prevent them from failing. Effectively, Hoover was bailing out big business at the same time that million of workers and farmers (a large constituency back then) were going down the drain with no help from the government.
Hoover and the Republicans were never forgiven for it. Economics tend to view the RFC in a much more favorable light. Public opinion remained resolutely negative.
Future economic historians will probably see the TARP in a similar light. That’s not advocacy to say the least. In my own opinion, TARP was a political and economic disaster.
And did people note the cruel irony that, the very same day the Feds said that they wouldn’t be prosecuting Goldman for Financial Crisis crimes, the NYC DA indicted the guy who had been previously tried and acquitted in federal court for stealing trading code from Goldman? The message was clear: Goldman may steal with impunity, but those who would steal from Goldman will suffer the full wrath of the state, which is willing to exercise itself to the point of going after cases that, in almost any other situation, would be of no interest to prosecutors because they would view it as having been fully adjudicated already in another jurisdiction. It goes right to the heart of this post–the matters that prosecutors are willing to pursue energetically, versus those that they won’t.
There is no problem with what they did, it was “legitimate rape”
Giddy up Ostrich!
http://www.youtube.com/watch?v=INmqvibv4UU
“… why bankers are so hated and why they don’t get it. ”
They get it, they just don’t care. That’s why they are bankers, not hospice workers.