Sunday, April 5, 2009
The best way to rob a Bank is to own one: By William Black.
Mr Black was on MOyers recently. I'll paraphrase what he said.
Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.
Black developed the concept of "control fraud" — frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. And that's is what the banks committed.
There are too many points, so I will try to summarize (perhaps not all that well) some of them.
1. Where is the investigation of the facts and the story of what really happened? (There isn't any investigation.)
.2. There is a current law in effect, which came as a result of the S&L crisis, which MANDATES that 'Prompt Corrective Action" be taken when a bank is found to be insolvent. All of the big banks probably are, but they won' tell us. Gaithner & Paulson all know this, but lie. And they are not following the law to close them down.
3. "We can't let them fail." So will continue to let them limp along basically in failure mode, or give them the 2 trillion that Gaithner says they "need to survive." Two really bad choices. Japan followed this model in the 90's and had 10 years of stagnation/recession.
4. You can see the secrecy part just from the AIG details, which FINALLY were released on a Sunday evening. Major money went to Goldman Sachs, a major contributor to the problem, but Paulson was their former CEO. Another huge chuck went to UBS in Europe, who the US Govt went to court against, and recently they paid a 700 million dollar fine to the US! They paid it With OUR MONEY given to them by Paulson & Gaithner, and the Company names were never released until well after the fact.
5. This is just a small part of the REAL COVERUP with what has happened to the taxpayers money. They don't want us to know what they really did, or how bad things really are. Most of the largest banks are insolvent. They REFUSE to disclose their assets, Full stop!
6. Obama was, according to the press accounts, really quite stern and ugly with these CEO Bankers. And for good reason. They should all be REPLACED. But they "can't be," because any new CEO would then have to uncover the rocks and find all the fraud, and report on it, so HE wouldn't look bad. Not one of these big bank CEO's has been replaced! But let's go get GM instead. The public just doesn't understand the major fraud ALL these banks committed, how many trillions it will take to get them out of the jam, and NOT ONE CEO has left or faces any grand jury investigation for the FRAUD they knowingly committed.
7. The RATINGS AGENCIES, as I have been railing about now for months on these boards, also went along with this fraud, rating everything AAA, when if act they knew they have been rated as JUNK. NOTHING has happened to any of them. One has to start asking WHY NOT?
8. Gaithner was head of the Fed Reserve Bank of NY, and has as part of its mission statement to "regulate the banks in his district." He didn't do any of that, and didn't do his job, or pay his taxes. I know! Let's make him Treasury Secretary!
9.. Black contends that the meltdown did not have to happen at all. He suggests right now:
A. Replacing ALL the Top CEO'S and top managers at the biggest banks. Their have caused their banks to become INSOLVENT, but they and the government doesn't want us to know that. This is further confirmed by testimony of Elizabeth Warren this week to Congress (She heads the board reporting to Congress on the TARP capers). She can't get Treasury to admit or tell her board ANYTHING, and she is empowered by Congress to get that information. Smart people should be more than wondering...
B. Appoint new people at Treasury who ARE A SUCCESS and have a good track record, with integrity. They won't have any vetting problems with their taxes.
C. Recognize the huge losses and face the music. Instead of just stealing TRILLIONS from WE THE PEOPLE and throwing it into a black hole taking care of their friends, LEVEL WITH US, find the right people, and lead us out of this. STOP TELLING US LIES! (But I guess it's easier to gp after GM and Chrysler & the Unions).
D. Have Congress hold REAL HEARINGS and get out all the facts. We investigate every airplane crash in the most minute detail, but we don't do ANYTHINIG to investigate the worst financial meltdown in the last 80 years! Anyone else wondering why?
10. Obama knows all this, and when you then put the "pitchfork" comment into this perspective, it looks quite different from the way people are reading it, at least to me. Someone has told him, "We can't tell the people how bad it is," and he is apparently going right along with the lies and cover up too.
Wow. Here's a little something From the transcript:
BILL MOYERS: "...his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname "banksters."
WILLIAM K. BLACK: "Well, the way that you do it [large corporate failures and scandals] is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road."