The cesspool of Washington, DC, was not cleaned out with the DNC victory taking over all levers of power. When the GOP takes over, it most certainly is not cleaned up, either. Like in Britain, both main parties are criminal affairs where the appearance of popular support is dropped like a hot potato the instant either party wins power. This is why true campaign finance reforms are never passed whenever one or the other controls all three sections of our government. Today, we examine the firing of the Chief Investigator of the TARP programs.
First, let’s look past the obvious struggle for power going on in Iran, with the people taking to the streets to openly challenge their government and look at dynamic China:
Hundreds of baton-wielding police on Sunday dispersed protesters and cordoned off a city hotel in central China after a young man’s mysterious death sparked unrest, a local official and a witness said…. Discontent with local officials and police in China often leads to mass protests, which can gather size and force with remarkable speed. Mild frustration can turn into fury within minutes.
Let’s be frank here: if any population in the US dares to overturn and destroy cop cars, masses of paratroopers move in to shoot and kill anyone who dares poke their noses above ground. Look at how casual the people are who are looking at this defiance of police power! In the US, they would be beaten and arrested just for taking photos! The police in England are being investigated for beating to death, anti-WTO demonstrators and recently, beating grandmothers who took pictures of the cops at a demonstration against a power plant in England.
Then there is Israel: nothing from that hell hole ever makes the news. They kill peaceful demonstrators with utter impunity. Even American citizens who are killed never make the US news. So, as the US media gloats over chaos in Teheran or China, one thing we better remember: the only way we can take back power is to make life uncomfortable for both political parties! So, let’s poke around inside the latest scandal and how it and others have evolved.
First, Senator Dodd is finally going to have hearings about the Derivatives Beast:
Congress will take a second shot at the derivatives industry after its decision nine years ago to forgo regulations led to a $592 trillion market that brought financial firms to their knees. Using President Barack Obama’s regulatory overhaul proposal last week as a foundation, Senate Banking Committee Chairman Christopher Dodd is holding ahearing today on how to rein in a market that grew almost seven-fold since 2000 and complicated government efforts to assess the risk of banks’ interconnected trading when credit markets froze two years ago.
Lawmakers will field ideas from those who want to move all derivatives trades to monitored exchanges as well as from regulators seeking authority over dealers and an analyst who says some contracts should be banned. Members, who exempted private derivatives from oversight in 2000, are targeting the financial instruments after American International Group Inc. needed a $182.5 billion U.S. bailout because of credit-default swap trades on mortgage-linked securities.
HAHAHA. All the gnomes who buy the services of Congress will have full bellow as to how to ‘regulate’ them which is, of course, as close to zero as humanly or rather gnomenly possible. And one, yes, one person will be talking about eliminating the Derivatives Beast. Oh, the gnashing of teeth, the howls of rage this will produce will be deafening.
The reason I chatter about the Cave of Wealth and Death is so we can better understand relationships and interior thinking. It is pretty simple: the Goddess of Infinity gave the gnomes a baby that she said, will protect them from Risk. They then got very greedy and fed the Derivatives baby until it grew into a monster. The fact that they could make it grow at a rate that was tremendously fast and indeed, grew it to be bigger than all financial instruments and businesses on earth was proof that this thing is magical, attached to the Goddess of Infinity and will eventually zero out when it reaches infinite growth rates.
Knowing that this thing is part of the Infinity/Zero Death goddess operations means, we must isolate and kill it as fast as possible. It may even be too late! Pretending we can now control this thing, now that it is approaching infinity, is foolish. But Congress will try to pretend to control it while the banking gnomes will pretend to not feed it but this is impossible. It is doomed to failure. It is corruption incarnate.
The head of the Finance committee should be arrested. Hell, the previous head, Gramm, should be arrested, too. Both should be charged with TREASON:
It’s also been nearly a year since a former loan officer at Countrywide Financial charged that the mortgage lender had classified Mr. Dodd as a “very important person” (a.k.a., a “friend of Angelo” Mozilo, Countrywide’s then-CEO). As such, Robert Feinberg said, Mr. Dodd received — and knew he’d received — preferential rates and fees on two mortgages he and his wife refinanced in 2003. As a power on the Senate Banking Committee, he also knew this was a conflict of interest. This was the era when Countrywide originated and then sold to Fannie Mae high volumes of subprime loans.
All of Congress and all our Presidents since Reagan trotted into office, know perfectly well, they are treading on the edge of the cliff when it comes to conflicts of interest and campaign contributions. This is why they adamantly refuse to fix the mess they created.
The SEC charged Mr. Mozilo with fraud and insider trading earlier this month, and the Los Angeles Times reported in May that there is an FBI investigation which “includes a probe of [Countrywide's] role in an influence-peddling scandal involving” Mr. Dodd. The Senate Ethics Committee won’t comment on its own investigation of almost a year.
I hope that doddering old coot, Dodd, is arrested. Mr. Dodd denies receiving any special treatment, and nearly a year ago he promised to release the Countrywide mortgage documents and clear up the matter. We are still waiting, though he did attempt to placate the Connecticut press with a peek-a-boo release of a few select documents and a review by his own lawyers in February.
So, Dodd owns an estate in Ireland? Indeed, a surprising number of elected officials own properties outside of the country. But it is much worse: when they retire, they work for foreign entities and even foreign governments. Reagan’s ‘speech’ in Tokyo, delivered by an old man obviously suffering from Alzheimer’s disease, garnered him over $2.5 million and opened the floodgates for the sale of the services of all our elected officials. Reagan should have been investigated and arrested after that ridiculous business.
I was not surprised to learn, via Open Secrets.com, that one of Dodd’s top contributors is a foreign bank:
The bottom half of my story today is all about the firing of the Troubled Asset Relief Program’s investigator. But before we dig into that story, first, we must remind ourselves, how the GOP played this game when they controlled all the levers of power:
On the eve of the confirmation hearing for Commerce Secretary-designate Robert A. Mosbacher, who raised more than $25 million in large donations for President Bush and other GOP candidates last fall, the Republican National Committee yesterday reversed its previous position and made public a list of 249 individuals and corporate representatives who gave at least $100,000 to the Bush cause.
Back in 1989, the flood of bribes took off. So did talk about reforming things when McCain and the Keating 5 got in so much hot water back then. But the end result was a collapse in morals, not increased morals.
Tuesday, November 2, 1999 202-224-0894 GRAMM’S STATEMENT AT HEARING ON WORLD TRADE ORGANIZATION Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement prior to the testimony of U.S. Trade Representative Charlene Barshefsky at the committee’s hearing on the World Trade Organization:
“Of all the members of the administration, I think you have done more to promote trade, prosperity and job growth than anybody. I think this has been a difficult administration to be trade representative in. You’ve been torn by many different forces. I think you have done an outstanding job in standing up for economic growth and job creation for prosperity and the future.
“I had to laugh when I was reading an article about the new head of the World Trade Organization, who showed up in Seattle and every kook group and lunatic fringe in America and the world was there to protest the one activity that consistently creates the goose that laid the golden egg, and that’s trade.
“One of my great frustrations is that everybody benefits from trade but nobody knows it. Of all the issues I’ve dealt with in public life, it is the most important and the most difficult and hard for people to understand. “I think it is very important that we continue forward with our GATS negotiations, that we move into services, which is an area where we have comparative advantage.”
The ‘kooks’ who took to the streets like the Iranians and Chinese were beaten and defeated using paratroopers. Today, there are zero demonstrations against the destruction of US sovereignty. The meetings no longer happen in the US but are held in distant lands like Greece, for example. And there, NATO troops surround any meetings and keep at bay, any possible demonstrators who are handled with the same level of brute force we see in China and Iran or even, Israel.
Note that in 1999, Gramm, a corrupt creep, was gloating over opening ‘services’ to world markets and we know what happened next: US office functions were instantly moved overseas and our trade deficit became a wretched mess. I would love to have criminal hearings concerning how many of our political leaders conspired with the businesses and banks that were bribing them, into destroying our entire economy and running up around $5 trillion in trade deficits in less than 20 years.
The current financial crisis is not all Phil Gramm’s fault. Who says? Well, Phil Gramm says. Big surprise. But in a lengthy defense of his record and analysis of the current mess Friday afternoon in Washington, Gramm did allow that it might be at least a teeny bit his fault. Call it the beginning — maybe — of the nuanced consideration of the causes of the crisis that was impossible during the fall election campaign….
Now these laws are under fire, cited by critics — mostly but not exclusively on the political left — as major precipitating causes of the financial meltdown. And while both were signed into law by Bill Clinton, Gramm has taken the most heat. (It hasn’t helped that, since leaving the Senate in 2002, he’s been working for Swiss banking giant UBS, which has sustained huge losses on bad mortgage securities and derivatives.)
The last sentence says it all: Gramm refused to protect the US working public and sold us all down the Yangtze River and then turns around and works for a Swiss bank who is rewarding him for past services. Now, on to the main basis of today’s news story: Obama has fired the independent investigator of the TARP program:
He was appointed with fanfare as the public watchdog over the government’s multi-billion dollar bailout of the nation’s financial system. But now Neil Barofsky is embroiled in a dispute with the Obama administration that delayed one recent inquiry and sparked questions about his ability to freely investigate.
The disagreement stems from a claim by the Treasury Department that Barofsky is not entirely independent of the agency he is assigned to examine a claim that has prompted a stern letter from a Republican senator warning that agency officials are encroaching on the integrity of an office created to protect taxpayers.
Sen. Charles Grassley, R- Iowa, sent the letter Wednesday to Treasury Secretary Timothy Geithner demanding information about a “dispute over certain Treasury documents” that he said were being “withheld” from Barofsky’s office on a “specious claim of attorney-client privilege.”
This is a murky business, as usual, when there is corruption, there is murk. This is due to murk being the state of affairs in any swamp. Swamps are murky and money movement in politics is always, by definition, murky, mushy, muddy, filthy messes. This is why cleaning out systems is needed regularly. We call these events, ‘Revolutions’ and ‘Civil Wars’. Note that the two biggest wars (aside from the ongoing wars with our neighbors and the Natives) in our domestic territory were these sorts of wars.
Barofsky also wrote that “To date, Treasury has not withheld any documents from my office on the grounds of privilege, and has made its personnel available to our auditors and investigators as requested.”
The dispute first arose as Barofsky’s office was auditing the controversial bonus payments to executives at AIG. The company, which is receiving large amounts of assistance from the government, paid bonuses to top executive last year, which prompted a firestorm of criticism from lawmakers and the general public.
Treasury spokesman Andrew Williams said yesterday that the department believes that putting Barofsky’s office under the supervision of the secretary will be helpful to the agency and give it privileges the office would not otherwise have.
That paragraph is a shining example of ‘total bullshit’.
“The request to clarify the SIGTARP’s complex legal status within the executive branch was sent to the Department of Justice only after Department of Treasury consulted with Mr. Barofsky who had no objection,” Williams wrote in an e-mail, using the acronym for the watchdog agency’s official title, the Special Inspector General for the Troubled Assets Relief Program.
After the silly Clinton sex scandal wore out its welcome, the GOP gleefully killed the ‘independent prosecutor program’. Since then, we have no independent prosecutors like the ones that were created during the Nixon Watergate scandals. Both parties were most anxious to ditch this business back in 1999 because both were increasingly corrupt.
So we had a decade of utter, blissful, total corruption. And they want to keep it this way. The money at stake here is significant: like any greedy organization, they know they can pile debts on top of the entire US economic and political system and thus, gain access to trillions of dollars in wealth. We saw yesterday in the news here at Culture of Life, that Goldman Sachs is making tremendous profits, selling US debts which were created to bail out Goldman Sachs.
One of the many matters that Barofsky’s SIGTARP investigators were looking into was exactly this entire business as we shall see in their last report which was released a short while ago.
The Congressional Oversight Panel tonight said it would not launch an investigation into the dispute between the Treasury Department and bailout watchdog Neil Barofsky over Barofsky’s independence.
“There can be no doubt that SIGTARP must be available to investigate freely and independently all aspects of Treasury’s role in TARP, and I share your concerns about these troubling news reports,” the panel’s chair, Elizabeth Warren, said in a letter to Rep. Jeb Hensarling, R-Texas, responding to his calls for an investigation.
But Warren said she had spoken earlier to Barofsky, who expressed confidence that the Justice Department, asked by Treasury to rule on the issue, will come down in favor of the watchdog’s independence.
“He informed me that he is confident that the Department of Justice, which is considering the matter, will not endorse any incursion on his independence,” Warren wrote. “In the meantime, he has complete confidence that Treasury is promptly and appropriately processing SIGTARP’s requests.”
So, instead of standing up for Barofsky, he was kicked out. I suspect, it was because he communicated with the GOP who is trying desperately to pretend to be a bunch of moral people seeking to prevent corruption, not the ultimate in corruption. Of course, they are fakers, liars and cheats. They only want the rival party investigated.
The Democrats, instead of cleaning house, simply picked up the slimy reins of power from the GOP swamp monsters and drove the US even deeper into the exact same swamps. Instead of a revolution in power, we had a regression in power. So the pretense of wanting change is dropped in favor of keeping the status quo going. This is because the same gnomes own BOTH political parties.
Ever curious, I went to the pdf of the SIGTARP investigators and found it to be full of delightful information. I wish we could get more information but of course, this will prove increasingly impossible. Since we see from this report, the biggest banking houses who are incidentally, the owners and feeders of the Derivatives Beast, don’t want us to learn anymore information:
It is no shock to me to see the names in this SIGTARP report. These are the exact same entities who the Office of the Comptroller of the Currency also tracks in their Derivatives Report:
These are the gnomes who are the fathers and feeders of the Derivatives Beast. The OCC has been defanged by the Treasury to the point, all it can do is issue warnings and track disasters cooked up by the Federal Reserve and our elected officials, all operating in the dark, off the record, on behalf of the owners of the Federal Reserve who happen to be the same clowns we are bailing out in the TARP program. Back to the dead SIGTARP investigation:
As these entities grow stronger again, thanks to trillions in US taxpayer-backed guarantees and the Federal Reserve sucking down immense amounts of equities, these guys exit the TARP programs. Of course, these same entities bribe Congress and manipulate our laws on their own behalf which is why our economic system collapsed. Yet, due to their immense influence, they get bailed out even as their political contacts destroy US jobs with our insane WTO deals!
Whoppee. After going trillions into debt to bail out these gnomes, we get $2 billion back. Wow. Talk about differentials. For every $100 of risk we took on, we get a pay back of $1. Below is some interesting remarks from the SIGTARP investigators:
Determining If a Bank Is Healthy
Banking sector regulators (such as FDIC, the Office of the Comptroller of the Currency (“OCC”), and the Federal Reserve) use a variety of measures to enforce compliance with banking regulatory standards. Central to these measures is the notion of capital. The term “regulatory capital” is generally used to describe the cushion a bank has against future losses. As a starting point, it is helpful to think of the bank’s capital as being roughly equal to the shareholders’ equity. If capital is adequate, then theoretically the firm could cover all liabilities by selling all assets, and still have something left over for its shareholders. If, however, losses become greater than the bank’s capital, the firm would be insolvent — assets could not cover outstanding liabilities.
Much of the disputes rumbling around underground, one of the things SIGTARP is tripping over, is the business of ‘what is capital’. This is why they are going to some trouble, in this report to Congress, to explain capital. Of course, they dare not refer to ‘Das Kapital’ by Karl Marx. Instead, they pussy foot all around it. Naturally, they prefer to discuss what banks think, is ‘capital’.
The banks, of course, want zero capital and simply be allowed to hand out loans. And when the loans go under, hand it all off to the government. This happens to be why we have a TARP program in the first place! The zero-capitalization business of the bankers is why they are all, across the board, completely bankrupt! And, instead of going bankrupt, they handed off all this to the government….which is now going bankrupt!
The solvency of the bank, therefore, depends on how it accounts for losses (which reduce its assets) and how capital is defined. In practice, there are many different ways of defining capital, each describing a different level of cushion against losses.
The banks view all of this as an accounting problem: where can them move their losses so these don’t show up on their books? The answer was obvious: move it all to the central bank and the central government! Voila! No more red ink in Goldman Sachs or Citigroup!
“Tier One Capital” versus “Tangible Common Equity”
Two of the most relevant measures of capital adequacy are tier one capital (“T1”) and tangible common equity (“TCE”). For many TARP recipients, these two measures are significantly divergent in the current market, capturing different aspects of their health or lack thereof.
‘Tangible’ is fancy talk for ‘real’.
T1, often called “core capital,” is the measure of bank capital traditionally used by regulators in the United States. It can be described as a measure of the bank’s ability to sustain future losses and still meet depositor’s demands. T1 is a concept coordinated internationally through an agreement known as the “Basel II Accord.”92 Federal regulators look at T1 to calculate the tier one capital ratio (“T1 Ratio”), which determines what percentage of a bank’s total assets is categorized as T1 — the higher the percentage, the better it is for the bank. Under traditional Federal regulations, a bank with a T1 Ratio of 4% or greater is considered adequately capitalized.
4% is not good enough. Other countries had a higher level. Indeed, the main way to prevent wild lending which creates a credit bubble, is to require bankers to hold up to 20% in T1 capital! The US refused to do this for political reasons: the gnomes who were running a banking business on virtually no capital at all, wanted to keep on doing this so they spent over a billion dollars, bribing elected officials to allow this.
TCE is a more conservative measure of capital adequacy. Only capital that is “real” and possesses the last claim on the assets of a company can be counted as TCE. It can be thought of as the amount that would be left over if the bank were dissolved and all creditors and higher levels of stock, such as preferred stock, were paid off. TCE is the highest “quality” of capital in the sense of providing a buffer against loss by claimants on the bank. TCE is used in calculating the tangible common equity ratio (“TCE Ratio”) which determines what percentage of a bank’s total assets is categorized as TCE — the higher the percentage, the better it is for the bank. Preferred stock is an example of capital that is counted in T1, but not in TCE.
And what did we get in exchange for capitalizing the entire gnome banking system? We handed over a tangible property: the entire US future tax revenues for all eternity, so these corrupt little monsters could capitalize their bankrupt operations! And in return, we didn’t get TCE, we got RAPED. That is, we got useless paper in exchange.
As Treasury officials have recognized, the massive infusion of preferred shares as a result of its CPP investments have altered analysts’ views of tier one capital. Analysts have begun to view Treasury’s preferred shares investment more as debt than traditional tier one capital, causing investors and analysts to discount tier one capital as a measure and look more closely at TCE as a measure of a bank’s health.
It totally messed up the Treasury as well as the Federal Reserve. So, in exchange for bailing out a bunch of gnomes who are hopelessly entangled with foreign powers or even owned outright by foreign powers, we got to destroy our own ‘capital’. Our ‘capital’ is our own debts! This is why the mess is growing worse, not better. So what, if GS or JP Morgan or Bank of America can resume handing out credit to all and sundry?
They are bankrupting us! This is why we must tax these guys at over 90%. They have to pay the future taxes which they sold off! They have to pay down the debts they created, themselves! They have to also go to prison for corrupting our government. Instead, they rule us and look at how they dumped the investigator for the SIGTARP organization! Below is more news from today:
The bond market is falling in love again with Goldman Sachs Group Inc. and Morgan Stanley and, for the first time in more than nine months, is giving these Wall Street icons a chance to close the gap with JPMorgan Chase & Co.
In the two days after Lehman Brothers Holdings Inc. went bankrupt last September, Goldman Sachs’s 5.95 percent bonds due January 2018 paid investors as much as 6.32 percentage points more than similar-maturing Treasuries, or double what they yielded a week earlier. Morgan Stanley’s bonds were even worse, widening to 800 basis points.
The surge in credit costs, the most both companies have experienced, cast doubt on a business model that relied on debt-market funding. Now, bondholders are accepting the smallest difference in yield for the New York-based banks’ bonds relative to Treasuries since before Lehman Brothers collapsed. Goldman Sachs and Morgan Stanley, which were among 10 banks that last week repaid loans from the U.S. Treasury, are emerging from the credit freeze with lower leverage and a stronger competitive position.
So, our entire future is much, much worse and our collective finances are much, much worse but lucky day for the gnomes! Their future is assured! They are getting their beloved bonuses so they can resume having wild sex with fashion models and can live in palaces while we get to face the angry Chinese communists who will be demanding full payment for all the money we owe them.
And we owe them money thanks to the hard work of Gramm and Dodd and fellow corrupt criminals in Congress! And our Presidents who seem to all be in hock to foreign powers! And to these gnomes. Arrest everyone. Charge them all with treason!