Big Banks |

The Deep State

Here’s a pretty unsettling look at the status quo in both Washington and corporate board rooms from someone who has seen it all from the inside, Mike Lofgren, a former GOP congressional staff member with the House and Senate Budget Committees, who talked with Bill Moyers below and filed this report on the subject.

One highlight from early on in the discussion:

It’s kind of a natural evolution when so much money and political control is at stake in the most powerful country in the world … a hybrid of corporate America and the national security state … everyone knows about Wall Street and its depredation, everyone knows how corporate America acts. They’re both about the same thing. They’re both about money, sucking as much money out of the country as they can, and they’re about control – corporate control and political control

It’s the red thread that runs through the history of the last three decades. It’s how we had deregulation, financialization of the economy, the Wall Street bust, the erosion of our civil liberties, and perpetual war.

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Bill Black Explains How Best to Rob a Bank

William Black, associate professor of economics and law at the University of Missouri, Kansas City, explains how best to rob a bank in this TED presentation.

It starts out poorly by blaming the too-big-to-fail banks for $11 trillion in lost wealth due to the financial crisis – that wealth would never have been created without the TBTF banks, so, blame them for the boom and bust, but not just for the bust – but it gets better.

I’ve not read Black’s book – The Best Way to Rob a Bank Is to Own One – and probably never will, due largely to that Serenity prayer thing. These things are best left to people like Black.

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The Big Banks are Doing Fine

Among other news about spying and Dennis Rodman’s latest escapades in North Korea, Bloomberg reports that bank profits in 2013 rose to a seven year high.

In what is yet another somewhat disturbing sign of the times, profits would have reached an all-time high last year if not for the nation’s biggest banks having to set aside many billions for legal costs and penalties associated with their prior misdeeds.

Don’t Mess with Goldman Sachs

[Alternate title: More Tarnish on the Goldman Shine - Part 63]

Via this ProPublica story, ex-Federal Reserve Bank of New York examiner Carmen Segarra is in the news today after she found fault with the company policies on conflict of interest at Goldman Sachs and brought that to the attention of her superiors.

That finding by the examiner, Carmen Segarra, potentially had serious implications for Goldman, which was already under fire for advising clients on both sides of several multibillion-dollar deals and allegedly putting the bank’s own interests above those of its customers. It could have led to closer scrutiny of Goldman by regulators or changes to its business practices.

Carmen SegarraBefore she could formalize her findings, Segarra said, the senior New York Fed official who oversees Goldman pressured her to change them. When she refused, Segarra said she was called to a meeting where her bosses told her they no longer trusted her judgment.

Her phone was confiscated, and security officers marched her out of the Fed’s fortress-like building in lower Manhattan, just 7 months after being hired.

“They wanted me to falsify my findings,” Segarra said in a recent interview, “and when I wouldn’t, they fired me.”

Of course, Segarra has sued for wrongful termination and lots of juicy details have already been revealed about the cozy relationship between one of the world’s most powerful investment banks and its regulator, the New York Federal Reserve.

As is the case for the Treasury Department, there is what amounts to a revolving door between the New York Fed and Goldman Sachs as evidenced by former Goldman partner William Dudley who now runs this particular branch of the central bank. Top Goldman executive E. Gerald Corrigan used to run the New York Fed as did Stephen Friedman who headed up the risk committee at Goldman was Segarra was at the Fed.

This is a comprehensive report at ProPublica that is well worth reading in its entirety and there’s no telling how this will end up. One thing seems certain – Segarra’s chances of walking through that revolving door over to Goldman Sachs have decreased substantially.

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