Category: Finance

It’s the Vampire Squid’s World, We Just Live in It

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So when Goldman Sachs gets caught helping clients evade taxes, and British authorities hand them a get out of jail free card:

Britain’s tax authorities have given Goldman Sachs an unusual and generous Christmas present, leaked documents reveal. In a secret London meeting last December with the head of Revenue, the wealthy Wall Street banking firm was forgiven £10m interest on a failed tax avoidance scheme.

HM Revenue and Customs sources admit privately that the interest-free deal is “a cock-up” by officials, but refuse to say who was responsible.

Documents leaked to Private Eye magazine and published in full by the Guardian record that Britain’s top tax official, HMRC’s permanent secretary Dave Hartnett, personally shook hands on a secret settlement last December.

Hartnett is due to be questioned on Wednesday by the Commons public accounts committee. The leaked documents suggest that a previous PAC chairman, Edward Leigh, was misled when he was told it was illegal to reveal details of such cases to parliament.

Leaked legal advice from James Eadie QC, which the Guardian also publishes today, says the opposite. Hartnett has discretion to reveal such facts to the parliamentary watchdog, according to the advice.

………

In the 1990s, Goldman set up a company offshore in the British Virgin Islands. This entity, called Goldman Sachs Services Ltd, supposedly employed all of Goldman’s London bankers, who were then “seconded” to work there.

The device appears to have been designed to conceal the size of the bonuses. Judge David Williams said in 2009 that it was “a way of keeping information about the GS accounts and payroll out of the public domain and confidential”.

Goldman also begrudged paying its share of UK national insurance on the six-figure bonuses. Court judgments disclose that a typical Goldman bonus to a junior banker was £143,000 in 1998, and £191,000 the following year.

The company, along with 21 investment banks and other firms, purchased blueprints for an avoidance scheme called an employee benefit trust (EBT). The bonuses were indirectly invested into elaborate share option schemes.

It took the Revenue until 2005 to demonstrate in court that these EBTs were merely illegitimate tax avoidance devices. The 21 other firms surrendered, and handed over what they owed.

But Goldman Sachs refused to pay its £30.81m bill. Instead the city firm Freshfields and the tax QC David Goldberg fought tooth and nail on Goldman’s behalf through the courts. By 2010, according to a public judgment, the unpaid bill with accumulated interest had mounted to £40m.

Seriously, we need to take these muthas down hard.

God Bless The Onion

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President’s Approval Rating Soars After Punching Wall Street Banker in Face

And in a related story:

The banker punch may have also been a boon for President Obama’s efforts to pass his American Jobs Act. When asked if he still opposed the bill this afternoon, a visibly nervous Republican house majority leader Eric Cantor said, “No no no. I’ll pass whatever the President wants. P-p-please don’t let him hurt me.”

Heh.

Bank Failures over the Past Two Weeks

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Yeah, I missed them last week.

Here they are, ordered, and numbered for the year so far.

  1. First International Bank, Plano, TX ⇐ This one is from last week, Oct 30, sorry.
  2. The RiverBank,Wyoming, MN
  3. Sun Security Bank, Ellington, MN

    Full FDIC list

    It looks like the total for this year will be somewhere around 100, which is awful, but better than 2010.

    So, here is the graph pr0n with last years numbers for comparison (FDIC only):

    Not Enough Bullets…

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    What happened in Chicago at the Occupy Wall Street protests there?

    Some traders hung out a sign reading, “We are the 1%“:

    The Occupy Wall Street movement spread to Chicago this week, where protesters have gathered outside the Chicago Board of Trade, the world’s oldest options and futures trading center. Like the protesters in New York and other cities around the country, the group gathered to protest our nation’s growing income inequality, as the top 1 percent of Americans continue to see their incomes rise rapidly and their tax rates fall. The Chicago traders, confronted by the protesters’ “We are the 99 percent” message, crafted their own not-so-subtle reply, hanging signs in eighth-floor windows that said, “We are the 1%“:

    I’m sure that these folks will carry their smirks on their faces until they see Madam Gillotine.

    H/t Cthulhu.

    Oh, Now I Get It!!!!!!

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    It seems like ir was just earlier this evening, I was wondering what political calculus could be driving numerous states Attorneys General to walk away from the so-called “50 State Deal” on “Robosigning”.  (Wait, it was just earlier this evening)

    Well, now we know why.  The New York Times just described the recent transition of New York AG Schneiderman from a very (for New York, anyway) low key Attorney General to Political superstar:

    The other day, in his office down on Wall Street, Eric T. Schneiderman owned up to an awkward truth.

    Until fairly recently, he acknowledged, if you had asked the average passer-by to name New York’s attorney general, you might have gotten a mystified “Huh?” or the answer that it was Andrew M. Cuomo (the governor who used to have the job) or Eliot Spitzer (the disgraced former governor who had it before that), rather than the correct response: Mr. Schneiderman.

    In the eight months since he has assumed the office, the emphatically unglamorous Mr. Schneiderman has maintained a low profile for the state’s top law-enforcement officer, charting a busy but anonymous course between Spitzerian aggression and Cuomoesque charm. Even his own press aide, Danny Kanner, recently confessed that, before this summer, his own parents did not know who Mr. Schneiderman was. “And I’m their kid; I work for the guy,” Mr. Kanner said.

    But then came August, when Mr. Schneiderman, 56, rejected a proposed nationwide settlement releasing some of the country’s biggest banks from a lawsuit brought by the states claiming misconduct in the mortgage markets. Almost overnight, he found his own name mentioned in a series of laudatory articles in publications as varied as Rolling Stone, The Rochester Democrat and Chronicle and the Web site Gawker.

    Adding fuel to the profile-raising fire were the phone calls Mr. Schneiderman received this summer from officials in the Obama administration who pressured him to smarten up and join his counterparts in other states in settling the case. There were reports that a Federal Reserve official, Kathryn S. Wylde, had harangued him in public for his stubbornness (at the funeral for Hugh L. Carey, the former New York governor, no less). At the end of August, an unrepentant Mr. Schneiderman was kicked off the executive committee of attorneys general in charge of the case by its leader, Tom Miller, the attorney general of Iowa.

    The cynic in me wonders if perhaps the fact that the flood of adoring correspondence was accompanied by, “Small tsunami of campaign donations,” might have something to do with the increasing numbers of Attorneys General who are balking at signing an agreement exchanging a token payment for immunity for the banksters.

    Pass the Popcorn, Mortgage Fraud Edition

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    And another shoe drops, as California leaving the 50 state mortgage deal, claiming that it’s too bank friendly, joining New York, Delaware, Minnesota, and Massachusetts (link) in objecting to the blanket grants of immunity proposed:

    California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation’s biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.

    Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation’s five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, Harris told The Times on Friday.

    The big banks were also demanding to be granted overly broad immunity from legal claims that could potentially derail further investigations into Wall Street’s role in the mortgage meltdown, Harris said.

    “It has been  a process of negotiating and sitting at a table in good faith, but ultimately I have decided that we have to go our own course and take an independent path. And that decision is because we need to bring relief to Californians that is equal to the pain California experienced, and what is being negotiated now is insufficient,” Harris told The Times in an interview.

    Harris delivered the news in a letter sent Friday to Iowa Atty. Gen. Tom Miller, who has been leading the 50-state coalition.

    Here are some other interesting bits:

    The removal of California from the discussions is a major blow to fraying efforts by the coalition, which has been trying to strike a settlement deal with the big banks for months. The move by Harris to reject the settlement talks is also a key departure from efforts by the Obama administration, which has been pushing for a fast resolution to the so-called robo-signing scandal that erupted last year.

    Just so you know, “Pushing for a fast resolution,” translates to, “Throwing lawbreakers another get out of jail free card,” because the Banksters are Obama’s real base.

    “This whole concept of a settlement on foreclosure abuse is probably dead,” said Christopher Whalen, the founder of Institutional Risk Analytics. “Nobody in their right mind is going to opt into a settlement right now.”

    So one would hope.  Neither the Obama administration, nor their corrupt lackey Iowa Attorney Gen. Tom Miller have had the slightest interest in pursuing any allegations or real wrongdoing against big banks.

    I’m not sure what is motivating the AGs to bail on what would be a win-win for them, they get to “wave the bloody shirt” of some sort of settlement payments while insuring their own access to Wall Street campaign donations, but it appears that either they think that the political calculus is changing, or they just want to do the right thing.

    Not Enough Bullets…

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    The SEC has ruled that Congressmen, their staffers, and executive branch members are free to commit insider trading with impunity:

    When you buy and sell stocks based on secrets you learned at the office, it could be insider trading.

    But when a United States Senator does it, it’s probably perfectly legal.

    That’s because the SEC has largely determined that trading stocks based on advance knowledge of action in Congress is not insider trading.

    If anything, it’s “outsider” trading — buying and selling shares based on knowledge of an outside force that’s about to hit a company’s share value.

    Think of it like a trader who sees a satellite image of a hurricane bearing down on an oil rig — and shorts the oil company’s stock in expectation of the damage.

    Except in the case of Capitol Hill, the members of Congress can be both the trader and the hurricane — buying and selling shares in expectation of the effect that their own action has on the company’s stock price.

    Some critics say that’s probably going on a lot on Capitol Hill — although they don’t have any direct proof.

    “It’s really quite outrageous,” said Craig Holman, the legislative representative for Public Citizen. “If you just take a look at the statistics, members of Congress are either geniuses when it comes to stock trading or they are in fact trading off of some of this insider information.”

    A pair of recent academic studies found that House members beat the market in their personal stock trading by about 6 percent, and Senators beat the market by about 10 percent.

    Just when you thought that Washington could not get any more corrupt.

    Occupy Wall Street Heats Up

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    First, we are now seeing support from unions and local civil society groups:

    The “Occupy Wall Street” protests, now entering their third week, are poised to get a whole lot bigger than its core of 200 to 300 people, potentially even exceeding the protesters original goals of 20,000 demonstrators, thanks to recent pledges of support from some of New York City’s largest labor unions and community groups.

    On Tuesday, over 700 uniformed pilots, members of the Air Line Pilots Association, took to the streets outside of Wall Street demanding better pay.

    …………

    The other eight organizations expected to join in the October 5 rally, based on its Facebook page, are United NY, Strong Economy for All Coalition, Working Families Party, VOCAL-NY, Community Voices Heard, Alliance for Quality Education, New York Communities for Change, Coalition for the Homeless, which have a collective membership of over 1 million.

    Additionally, since the video of a New York City deputy inspector Anthony Bologna going crazy with pepper spray on protesters went viral, the protesters are actually getting some ink in the American press. (Google news shows more coverage overseas than in the US)

    Additionally, they finally had a mass protest, and related mass arrests, on the Brooklyn Bridge.

    If the protesters, or their new supporters, can manage to get their sh%$ together, and leverage their recent US media coverage, we might actually have a real a voice for stopping the looting and starting prosecuting.

    Finally!

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    Pass the Popcorn

    Even if the mortgage non-transfer transfers conducted through MERS fulfill the technical obligations required by existing real estate and trust law (they don’t), they still don’t excuse the illegal evasion of recording fees for local county clerks.

    We’ve had a couple of smaller counties file suit, but now it’s Dallas, Texas, which turn over a huge rock, and reveal what is underneath:

    Mortgage Electronic Registration Systems Inc., along with Bank of America Corp., was sued by Dallas County District Attorney Craig Watkins over claims its mortgage-tracking system violates Texas law.

    Merscorp Inc.’s MERS, which runs an electronic registry of mortgages, cheated Dallas County out of “tens of millions in uncollected filing fees,” Watkins said in a statement. MERS tracks servicing rights and ownership interests in mortgage loans on its registry, allowing banks to buy and sell loans without recording transfers with counties.

    Watkins, in a complaint filed yesterday in state court in Dallas, claims MERS was established by banks including Bank of America to avoid paying filing fees, as well as to ease transfers of mortgages. The county asked the court to hold Bank of America liable as a shareholder of MERS and said the bank “knew or should have known” that the system would cause improper filing.

    We are talking billions, if not tens of billions of dollars in fees that were illegally evaded by the banks, and Dallas County is big enough that the banks can’t afford to settle to make the problem go away.

    My heart bleeds for these ratf%$#s.

    And The Knives Come Out for Elizabeth Warren

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    You go, girl!

    It appears that the powers that be in finance are trying to gin up a story about how there were irregularities on Elizabeth Warren’s TARP oversight panel because the details on compensation are not as granular as they would have liked.

    It’s the usual suspects:

    • Politico, who has never seen a Republican talking point that they won’t echo.
    • The Boston Herald, which even if Rupert was forced to sell it, is still in his pocket.

    In addition to being hostile to the idea that banks should be able to rip people off without consequences, she has also eloquently made the point that, “There is nobody in this country who got rich on his own,” because the accumulation of wealth is an artifact of the support that the rest of society provides you: (see the vid as well)

    In the video (at left), which was filmed at an event in Andover, Mass., Warren rebuts the GOP-touted notion that raising taxes on the wealthy amounts to “class warfare,” contending that “there is nobody in this country who got rich on his own. Nobody.”

    Warren rejects the concept that it is possible for Americans to become wealthy in isolation.

    “You built a factory out there? Good for you,” she says. “But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

    She continues: “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

    It’s kind of an anti-Randroid philosophy that Democrats should be shouting from the heavens, but the only other political figure of any national stature who does is Bernie Sanders, and he ain’t a Dem.

    I understand why the knives are out.  The Objectivist view of the divine right of wealth is an unspoken common wisdom among much of the political class, and real populism, as opposed to the teabagger rent-a-crowds,  is a threat to that.

    It’s Bank Failure Friday!!!!

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    And here they are, ordered, and numbered for the year so far.

    1. Bank of the Commonwealth,Norfolk, VA
    2. Citizens Bank of Northern California, Nevada City, CA

    Full FDIC list

    So, after a week with no bank closings, we now had two.

    The pace is clearly slower than last year, but I’m not sure if the pace of bad loans is slowing, or if we are simply running out of banks.

    So, here is the graph pr0n with last years numbers for comparison (FDIC only):

    Uh Oh………

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    It looks like company insiders have stopped buying their stocks:

    Chief executives. Board members.

    The head honchos. The people who know.

    Just a few weeks ago, they were out in force, buying up shares in their own companies with both hands.

    No longer. They’ve disappeared. Almost overnight.

    “They’ve stopped buying,” says Charles Biderman, the chief executive of stock market research firm TrimTabs, which tracks the data. “Insiders aren’t buying this rally.”

    Insider stock purchases, which surged above $100 million a day in the market slump last month, have now collapsed to just $13 million a day.

    Meanwhile the ratio of insider sales to purchases has skyrocketed. Today insiders are dumping $7 in stock for each $1 that (other) insiders are buying. That’s a worrying ratio. Six weeks ago the amounts of purchases and sales were about equal.

    It’s the kind of news that should give investors pause.

    What insiders do with their own money is one of the stock market’s best barometers.

    Gee, you think?

    But ……… That would mean ……… That our noble captains of industry are using their internal knowledge of their businesses to derive an undeserved profit!

    As the saying goes, “If you sit in on a poker game and don’t see a sucker, get up. You’re the sucker.”

    Time to get out of the big casino if you are in.

    Obama Loses Frank Rich

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    For not prosecuting the banksters. This is significant because, as Matt Taibbi notes, was “one of Obama’s great supporters in the punditry world,” and Rich’s latest piece is positively brutal:

    What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”

    After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers. The Justice Department’s bally­hooed Operation Broken Trust has broken still more trust by chasing mainly low-echelon, one-off Madoff wannabes. You almost have to feel sorry for the era’s designated Goldman scapegoat, 32-year-old flunky “Fabulous Fab” Fabrice Tourre, who may yet take the fall for everyone else. It’s as if the Watergate investigation were halted after the cops nabbed the nudniks who did the break-in.

    ………

    The fallout has left Obama in the worst imaginable political bind. No good deed he’s done for Wall Street has gone unpunished. He is vilified as an anti-capitalist zealot not just by Republican foes but even by some former backers. What has he done to deserve it? All anyone can point to is his December 2009 60 Minutes swipe at “fat-cat bankers on Wall Street”—an inept and anomalous Ed Schultz seizure that he retracted just weeks later by praising Dimon and Lloyd Blankfein as “very savvy businessmen.”

    Obama can win reelection without carrying 10021 or Greenwich in any case. The bigger political problem is that a far larger share of the American electorate views him as a tool of the very fat-cat elite that despises him. Given Obama’s humble background, his history as a mostly liberal Democrat, and his famous résumé as a community organizer, this would also seem a reach. But the president has no one to blame but himself for the caricature. While he has never lusted after money—he’d rather get his hands on the latest novel by Morrison or Franzen—he is an elitist of a certain sort. For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.

    ………

    Obama soon retreated into the tea-party mantra of fiscal austerity. Short-term spending cuts when spending is needed to create jobs make no sense economically. But they also make no sense politically. The deficit has never been a top voter priority, no matter how loudly the right claims it is. At Obama’s inaugural, Gallup found that 11 percent of voters ranked unemployment as their top priority while only 2 percent did the deficit. Unemployment has remained a stable public priority over the deficit ever since, usually by at least a 2-to-1 ratio. In a CBS poll immediately after the Democrats’ “shellacking” of last November—a debacle supposedly precipitated by the tea party’s debt jihad—the question “What should Congress concentrate on in January?” yielded 56 percent for “economy/jobs” and 4 percent for “deficit reduction.”

    Geithner has pushed deficit reduction as a priority since before the inauguration, the Washington Post recently reported in an article greeted as a smoking gun by liberal bloggers. But Obama is the chief executive. It’s his fault, no one else’s, that he seems diffident about the unemployed. Each time there’s a jolt in the jobless numbers, he and his surrogates compound that profile by farcically reshuffling the same clichés, from “stuck in a ditch” to “headwinds” (first used by Geithner in March 2009—retire it already!) to “bumps in the road.” It’s true the administration has caught few breaks and the headwinds have been strong, but voters have long since tuned out this monotonous apologia. The White House’s repeated argument that the stimulus saved as many as 3 million jobs, accurate though it may be, is another nonstarter when 14 million Americans are looking for work.

    ………

    (emphasis mine)

    If he’s losing (possibly already lost) someone like Frank Rich, who was  treating like the 2nd coming, he’s losing a lot of people.

    About the only silver lining for this is that Rich, unlike myself, or Yves Smith, is unwilling to call him and his administration corrupt over this.

    Elizabeth Warren Announces Run for Massachusetts Senate

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    Elizabeth Warren has officially declared her run for the Senate.

    I understand why she feels the need to run, but I am pessimistic.

    First, whatever you say about Republican Scott Brown, he is a very good campaigner, second, the Dems are rooting for her to lose almost as much as the Republicans are, because they can then argue that people don’t want real consumer protections.

    And if she wins, she ends up in the Senate, where she would enter a seniority driven and hidebound old boys club that would do their level best to keep her away from any meaningful voice on finance.

    I wish her luck, but it’s a lose-lose for her us.

    Well, at least she’s better than Brown, who’s a smarmy right wing ratf%$#.

    Her campaign web page is here.

    Have I Mentioned that I Love Barney Frank?*

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    He’s calling for a major restructuring of the Federal Reserve:

    U.S. Representative Barney Frank, the top Democrat on the House Financial Services Committee, is renewing a push to remove Federal Reserve regional presidents from voting on central bank interest-rate decisions.

    Frank, of Massachusetts, will submit a new version of legislation to cut the voting rights of five rotating regional representatives from the 12-member Federal Open Markets Committee, he said today. The revision of Frank’s May proposal calls for replacing them with four presidential appointees, according to a position paper released by his office.

    Eliminating regional presidents, who are selected by board members of their banks and approved by Fed governors, will make interest-rate votes more democratic, Frank said in the paper. The 7-3 vote at the last FOMC meeting in August underlined the need to replace the presidents, who have become a “significant constraint on national economic policy making,” he said.

    Regional presidents “are neither elected nor appointed by officials who are themselves elected,” Frank wrote in the paper. “They are part of a self-perpetuating group of private citizens who select each other and who are treated as equals in setting federal monetary policy with officials appointed by the President and confirmed by the Senate.”

    He’s right, of course. The regional Feds are not governmental organizations, they are quite literally owned by the regional banks they nominally regulate, and these people are therefore the employees of the regional banks.

    Anything that to any degree takes any governmental (or in this quasi-governmental) agency out from under the thumb of the banksters is a good thing.™

    *In a 110% purely heterosexual kind of way, of course, as the General would say.

    Another Nail in the Bank Sellout Settlement Deal Coffin

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    Minnesota Attorney General Lori Swanson has sent a letter to the Attorneys General of New York and Iowa (The Iowa AG is leading the negotiations) saying that any settlement that grants immunity to the banks on areas that have not been thoroughly investigated will be unacceptable to her:

    In a letter sent to the attorneys general of New York and Iowa on Friday, Minnesota Attorney General Lori Swanson said that banks shouldn’t be protected from liability in connection with the nationwide foreclosure settlement.

    Swanson said that banks should not be released from liability for mortgage securitization, securities claims or the use of a mortgage registry known as MERS, Bloomberg News reported.

    “The banks should not be released from liability for conduct that has not been investigated and is not appropriately remedied in any settlement,” Swanson wrote, according to Bloomberg News.

    State and federal officials are negotiating a settlement with the five largest mortgage services in the U.S. – Bank of America Corp., Wells Fargo & Co., JP Morgan Chase & Co., Citigroup Inc. and Ally Financial Inc.

    I think that it has become increasingly clear to people involved with the negotiations that Iowa Attorney General Tom Miller and the Obama administration are primarily interested in shielding the banks, and creating the appearance rather than the reality of accountability for the banksters.

    Note also that Swanson has some serious consumer protection cred, as she was the one who uncovered the fraudulent and self dealing behavior of the National Arbitration Forum, and forced the organization out of consumer arbitration.

    I don’t think that there has been an outbreak of ethics in the case of the banks, it’s just that the AGs who oppose this deal realize that not only are the settlement talks a corrupt endeavor, but they are a transparently corrupt endeavor, and they don’t think that they can defend it to the voters.

    It’s Bank Failure Friday!!!! (Much Delayed)

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    I didn’t do anything over the past two weeks, because 2 weeks ago, there were none, and last week, I was busy getting ready for the SCA event, but there were 2 failures on the 2nd, and 1 this past Friday.

    And here they are, ordered, and numbered for the year so far.

    1. Patriot Bank of Georgia,Cumming, GA
    2. CreekSide Bank,Woodstock, GA
    3. First National Bank of Florida,Milton, FL

    Full FDIC list

    So, here is the graph pr0n with last years numbers for comparison (FDIC only):

    It looks like it’s going to be a lot less than 2011, but it’s still gonna be a really bad year.

    Signs of the Apocalypse: Alphonse “Da Woim” D’amato Wants the Banks Prosecuted

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    He’s come out against the big banks and for New York Attorney General Eric Schneiderman:

    New York state’s attorney general, Eric Schneiderman, is making national news regarding his opposition to a nationwide $20 billion foreclosure settlement involving some of the largest banks over questionable foreclosure practices and mortgage abuses.

    While I didn’t support Schneiderman in the 2010 election, he deserves to be applauded for standing up to the big banks and some of the questionable practices that have attributed to America’s economic downturn.

    Last Oct. 13, the attorneys general from all 50 states announced that they would join forces to investigate the bank foreclosure practices after there were several reports of faulty documents being used in the seizure of homes. Thirteen of the attorneys general serve on an executive committee, working with the Department of Justice and various other federal agencies to negotiate a settlement with the five largest mortgage servicers in the United States: Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial.

    Shaun Donovan, the secretary of housing and urban development, and other members of the Obama administration have been pressuring Schneiderman to go along with and support the settlement. It has been an intense campaign to change our attorney general’s mind.

    Schneiderman has held his ground, and throughout the negotiations maintained the belief that the proposed $20 billion, which would mostly be designated to pay for loan modifications instead of going directly to Americans who were harmed by the banks’ practices, was not enough money. Also, if the banks and executive committee reached an agreement, it would prevent any further litigation or investigations against the large banks.

    As a result of Schneiderman’s holdout, on Aug. 24 it was reported that he was “removed from a leadership role in negotiating a nationwide foreclosure settlement with U.S. banks.”
    Iowa Attorney General Tom Miller, who is heading the executive committee, accused Schneiderman of “actively working to undermine the very same multistate group that it had spent the previous nine months working very closely with.”

    Bravo, Mr. Attorney General!

    ………

    By pressuring the attorneys general’s executive committee to pass this fruitless proposal, President Obama and his administration are allowing the big banks, generous campaign contributors, to once again get away unscathed for their chancy and untrustworthy practices. In times like these, we need leaders like Schneiderman to challenge the big banks, making sure that victims receive justice and restitution and that overall reform changes the mortgage industry.

    To allow a settlement to be reached that hinders future investigations into large banks’ foreclosure and mortgage practices is criminal. Fight on, Mr. Attorney General.

    I don’t think that Mr. D’Amato’s motives are completely benign: As a Republican, he has vested interest in criticizing the Obama administration, and has never been particularly interested in pursuing corruption.

    What he does know is how to pander to his constituents, and he clearly sees the enthusiastic embrace of Wall Street, and explicit toleration of its endemic corruption, by the Obama administration to be a political miss-step.

    I agree, and I would further add that it’s also good policy, as we are creating moral hazard by not prosecuting the banksters.