Category: Finance

2 Years???? 2 F%$#ing Years?!?!?!?

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Yep, it’s that misbegotten bastard child of Timothy Geithner, Larry Summers, and Barack Obama*, the Home Affordable Mortgage Program, HAMP, where the Treasury has finally decided to require a single point of contact for homeowners participating in the program:

Mortgage servicers must provide a single relationship manager to borrowers being evaluated for a Home Affordable Modification Program trial by Sept. 1, according to guidance released by the Treasury Department Wednesday.

The guideline is required of the 20 largest servicers participating in HAMP, and it is one of the largest adjustments to the program since its inception in March 2009. Since then, more than 670,000 borrowers received a permanent loan modification, and more than 1.8 million trials have been extended.

“Over the past two years, two of the biggest complaints we received from borrowers were servicers are losing documents and they can’t connect with anybody who can actually track them down. Every time they call they can’t get a hold of someone with access to their case,” Laurie Maggiano, director of policy at the Treasury’s homeownership preservation office, said in an interview with HousingWire Wednesday.

The relationship manager must be an employee of the bank and cannot be a contractor. This manager will be assigned when the servicer makes successful contact with the delinquent borrower. The borrower must meet the initial criteria of the program, such as owner-occupancy and a 31% debt-to-income ratio.

The program has been in place for about 2 years, and since day 1, the complaints have been about no one being a point of contact, meaning that you had repeatedly lost paperwork, changing conditions, dual tracking, where when you were talking with one bankster, another was in the process of foreclosing, etc.

People have been screaming about this.

The press has been screaming about this.

Congress has been screaming about this.

But nothing was done until the 2012 election loomed, because, after all, this was not a program to help people, it was a program to cheat people, and help the banks.

*Who knew that bad programs were conceived by three beings?  For the rest of nature, it’s either parthenogenesis (Amoeba, lobbyists) or some sort of sexual reproduction involving only two participants. There are echos here of the Asimov novel The Gods Themselves.

Is Angela Merkel the George W. Bush of the Eu?

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It appears that Ms. Merkel doesn’t realize that she’s not bailing out the Greeks, she’s bailing out the German banks who are owed the money, but she’s still being a hard-ass and virtually assuring that we will see defaults, as well as worsening social unrest:

Also at issue was the technical operation of the European Stability Mechanism (ESM), the permanent euro zone bailout fund due to come into force in mid-2013.

As ministers prepared to tackle the increasingly precarious financial situation in Greece, Dr Merkel made clear her resistance to any debt restructuring by the country.

Addressing students in Berlin, Dr Merkel said private sovereign creditors should not bear losses until the ESM starts its work.

“It would raise incredible doubts of our credibility if we simply were to change the rules in the middle of the first programme,” Dr Merkel said.

The rise in dissatisfaction with the EU, and the rise on nationalistic, and frequently xenophobic, parties in the EU is a direct result of the fact that it is being run as a support group for the banks, who, after all, were the ones who f%$#ed up everything in the first place.

I stick with my original statement on the Euro Zone: the country that needs to leave is not any of the PIIGS (Portugal, Ireland, Italy, Greece, and Spain), but Germany, which has increasingly seen the Euro as a way to artificially deflate its currency for export purposes, both within and outside of the EU.

They are a predatory exporter, only marginally better than China.

It Isn’t Real Until They Start Convicting White Billionaires

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Yes, hedge fund manager Raj Rajaratnam was found guilty all 14 charges of which he was accused, primarily insider trading and conspiracy, and there is a lot of talk about how this presages a new era of enforcement.

It isn’t, for a couple of reasons.

First, notwithstanding his wealth and power, Rajaratnam was still very much an outsider in the rather lily white halls of high finance.  Simply put:  He was never a member of the club, he was just a guest, and so it was an easy shot for prosecutors to get.

Second, is the likelihood that this investigation, and his wiretap, likely had something to do with his extensive ties, and extensive philanthropy toward, his native Tamil community in Sri Lanka, which likely investigators to suggest that there were potential material support issues regarding the Tamil Tigers, the now defunct terrorist group.  (A caveat here, I’ve heard nothing but rumblings on this, but if I were dealing with a judge dubious about a wire tap warrant, I’d let “Tamil Tigers” slip out).

It may be the start of something bigger, but I will not believe it until we start seeing big fish with pale complexions being frog marched in handcuffs.

And While They Were Going After bin Laden, They Found Time to Kiss Up To The Banks…

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This awful policy is driven by a desire for campaign donations.

The New York Times has an editorial excoriating the Obama administration for deregulating foreign currency swaps:

A loophole in the law — which the bankers and their friends, including the administration, fought for — allows the Treasury secretary to exempt the instruments. The arguments in favor of exemption, beyond a desire to please the banks, were always unconvincing. They still are. The Treasury Department has asserted that the exempted market is not as risky as other derivatives markets, and therefore does not need full regulation.

That claim has been disputed by research, but even if it were true, it would be a weak argument. For instruments to be relatively safer than the derivatives that blew up in the crisis, necessitating huge bailouts, hardly makes them safe. Worse, dealers could probably find ways to manipulate the exempted transactions so as to hedge and speculate in ways that the law is intended to regulate.

……

The department has also said that because the market works well today, new rules could actually increase instability. That is perhaps the worst argument of all. It validates the antiregulatory ethos that led to the crisis and still threatens to block reform.

The Treasury’s plan will be open for comment for 30 days. Count us opposed.

(emphasis mine)

There can be a fine line between regulatory capture and corruption, and I am not sure on which side this falls.

In a way, this is worse than Bush and His Evil Minions™, because W was (correctly) perceived as a radical, but the actions of “Team Geithner” now firmly entrenched this thinking on both sides of the aisle.

H/t Paul Krugman for the graph pr0n.

It’s Bank Failure Friday!!!!

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It’s odd, we’ve had alternating weeks of feast and famon.

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

  1. First National Bank of Central Florida, Winter Park, FL
  2. Cortez Community Bank, Cortez, FL
  3. First Choice Community Bank, Dallas, GA
  4. The Park Avenue Bank, Valdosta, GA
  5. Community Central Bank, Mount Clemens, MI

Full FDIC list

And here are the credit union closings:

  1. Utah Central Credit Union, Salt Lake City, UT

Full NCUA list

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

Economics Update

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It’s Jobless Thursday, and initial claim hit a 3 month high, 429 K, with the 4-week moving average rising, though continuing and extended claims fell.

The numbers have been disappointing, which is not surprising, since the economy grew at an anemic 1.8% annual rate in the 1st quarter.

The problem is that too many people in power (see Geithner, Timothy, for one) think that the economy is recovering fine because the banksters are making lots of money, so they are concerned about the deficit and inflation, as evidenced by this story with its hand wringing about inflation rising, but even though it’s still well under the 2% (I would argue for 6% right now) that the Fed says that we need.

BTW, if you want to read it, here is the Federal Reserve Open Market Committee statement for you to read.

It’s Bank Failure Friday!!!!

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Remember when I said last week that things seemed to be slowing down?

Well, not so much:

  1. Bartow County Bank, Cartersville, GA
  2. New Horizons Bank, East Ellijay, GA
  3. Nexity Bank, Birmingham, AL
  4. Superior Bank, Birmingham, AL
  5. Rosemount National Bank, Rosemont, MN
  6. Heritage Banking Group, Carthage, MS

Full FDIC list

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

It’s still better than last year at this time, but this was a very busy week.

This is the Basic Model of Brokerages and Retail Investing

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The LA Times has a story on retail currency trading, and how it’s basically an excuse for financial firms to fleece retail investors:

An estimated 615,000 Americans are dabbling in foreign currency trading, encouraged by advertising from the two biggest U.S. brokers, FXCM Inc. and Gain Capital Holdings Inc., both based in New York.

Combined, FXCM and Gain have about 260,000 accounts, a third of them in the U.S.

These customers are losing money in spectacular fashion.

At FXCM, 75% to 77% of customers lost money each quarter last year, according to newly required disclosures to the Commodity Futures Trading Commission. At Gain, which operates through http://www.forex.com, the number of unprofitable customers hovered between 72% and 79% every quarter last year, according to its filing.

…………

More commonly, however, it’s the customers who lose out on these transactions, despite required disclosure statements that warn investors: “Your dealer is your trading partner, which is a direct conflict of interest.”

Gain ended up making an average of $2,913 from every active trader it had last year, even though the average customer account contained only $3,000, according to the company’s financial data.

FXCM made $2,641 for every active trader, while the average customer had $3,658.

(emphasis mine)

So, not only is your broker not acting in your best interest, he is actually actively attempting to f%$# you.

So the game is rigged against the small retail investor, right?


Wrong.

It’s rigged against everyone, big or small.

The recent suit against JP Morgan Chase makes that clear:

New documents unsealed recently in a class-action lawsuit against JPMorgan Chase — some of which name Mr. Dimon, the chief executive — paint yet another picture of a bank profiting while its clients suffer. At issue is a precrash investment vehicle, named Sigma, in which the bank had invested $500 million in assets from pension funds and other clients, nearly all of which the clients say was lost when the investment tanked in 2008.

The clients were blindsided because they believed that Sigma was a safe way to invest. JPMorgan was not taken by surprise. As Louise Story reported in The Times on Monday, court documents show that warnings by top bank officials about Sigma and similar investments went all the way up to Mr. Dimon’s office.

The gist of the warnings was not how to protect clients, but how the ailing Sigma presented the bank with what one e-mail described as “very big moneymaking opportunities as the market deteriorates.”

When Sigma did indeed collapse, JPMorgan collected nearly $1.9 billion, according to the suit, a figure the bank disputes, without providing any alternative figure.

Let’s be clear here: Even if this behavior was legal, and in the regulatory environment pre (and possibly post) Dodd-Frank, there is a non-zero chance that it was, this is clearly something that rates a criminal investigation, and if any violations are found, even if they are only tangential to the transaction, they should be pursued aggressively.

Fundamentally, when fraud goes unpunished, it creates an environment where fraud becomes the norm, and Wall Street is crooked to its core.

And Now the New York Times Condemns the Sellout

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Notwithstanding their coverage of the foreclosure crisis, and the malfeasance of the mortgage services, which has largely focused on the hardships of the well to do (unsurprising given the nature of the New York City real estate market), the editorial board understands that there has been fraud and bad behavior all around and they understand that proposed settlements are sellouts to the big banks that service mortgages:

Americans know that banks have mistreated borrowers in many ways in foreclosure cases. Among other things, they habitually filed false court documents. There were investigations. We’ve been waiting for federal and state regulators to crack down.

Prepare for a disappointment. As early as this week, federal bank regulators and the nation’s big banks are expected to close a deal that is supposed to address and correct the scandalous abuses. If these agreements are anything like the draft agreement recently published by the American Banker — and we believe they will be — they will be a wrist slap, at best. At worst, they are an attempt to preclude other efforts to hold banks accountable. They are unlikely to ease the foreclosure crisis.

………

But the gist of the terms is that from now on, banks — without admitting or denying wrongdoing — must abide by existing laws and current contracts. To clear up past violations, they are required to hire independent consultants to check a sample of recent foreclosures for evidence of improper evictions and impermissible fees.

The consultants will be chosen and paid by the banks, which will decide how the reviews are conducted. Regulators will only approve the banks’ self-imposed practices. It is hard to imagine rigorous reviews, but if the consultants turn up problems, the banks are required to reimburse affected borrowers and investors as “appropriate.” It is apparently up to the banks to decide what is appropriate.

While it appears that the OCC, which has a history of acting on behalf of the finance industry rather than the public,has been at the core of the most egregious giveaways, it is also clear that the most of the machinery of the federal government, at least those portions directed by Ben Bernanke and Timothy Geithner, are doing their level best to ensure that there are no real consequences to what in a sane regulatory environment would be felonies involving people being sentenced to extended stays in “Club Fed”.

Instead, it increasingly appears that the Feds will be negotiating a sweetheart deal that will include provisions to make actions by the state attorneys general, and possible private torts difficult, if not impossible.

It’s nice that the “paper of record” has finally noticed this.  People like Yves Smith have been screaming about this for months.

It’s Bank Failure Friday!!!! (on Saturday)

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

  1. Western Springs National Bank and Trust, Western Springs, IL
  2. Nevada Commerce Bank, Las Vegas, NV

Full FDIC list

And here are the credit union closings:

  1. Mission San Francisco Federal Credit Union, San Francisco, CA

Full NCUA list

 
Well, things seem to be slowing down, which is a good sign.

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

Mortgage Settlement Talks Bifurcate

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The Feds and the state Attorneys General have separated their settlement talks with mortgage servicers and banks:

Iowa Attorney General Tom Miller said the reported side settlement between mortgage servicers and federal regulators will in no way affect the ongoing investigation he is leading along with 49 other state attorneys general.

Several media outlets are reporting that the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve are engaging in talks with mortgage servicers and that agreements could be signed as early as next week.

“A separate settlement by the Office of the Comptroller of the Currency will not affect our investigation,” Miller said in a statement. “The settlement neither preempts, nor impacts our efforts. State attorneys general will continue to work together unabated with a broad coalition of federal partners.”

My guess here is that, notwithstanding AG Miller’s attempt to come up with a weak deal, see Yves Smith’s coverage for more information, is that the OCC’s proposed deal is too weak for even him to follow up on.

Additionally, they may be attempting to distance themselves from the manufactured sh%$ storm about Elizabeth Warren advising them.

Of course, if you are an optimist about this, and I am not, it could be that the AGs realized that the two efforts were incompatible, since a federal settlement is primarily about looking at future behavior, while the Attorneys General are charged with investigating and pursuing prior and ongoing wrongdoing.

My guess is that there is some political heat being generated, both from the teabaggers who are crying, “leave Britney the big banks alone,” and people interested in property rights and the rule of law, who want criminal prosecutions of what is fraud and theft an an almost unimaginable scale.

H/t Yves Smith.

Hoo Boy!

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One of the things that gets turned off if there is a government shutdown is FHA loans:

I was hoping not to have to write this particular piece, but it seems I may have no choice, so here we go with housing.

What happens to today’s housing market without FHA loans?

Right now FHA loans are about 20 percent of the overall mortgage market (purchases and refis) and 40 percent of purchase applications.

Compare that to around 11 percent of the overall market during the last shutdown in 1995. For the nation’s big public home builders, it’s far more of an impact, according to analysts. 

This basically means that the housing market shuts down for the duration, because if 40% of home buyers can’t buy, the remainder will be able to extract even more in the way of lower house prices.

House prices have fallen 7 straight months, but prices are sticky in the short term, so you will have the housing market freeze.

Neil Barofsky Opening Up a Jar of Whup Ass on Timmy “Eddie Haskell” Geithner

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Yes, it’s from a week ago, but it’s a must read:

TWO and a half years ago, Congress passed the legislation that bailed out the country’s banks. The government has declared its mission accomplished, calling the program remarkably effective “by any objective measure.” On my last day as the special inspector general of the bailout program, I regret to say that I strongly disagree. The bank bailout, more formally called the Troubled Asset Relief Program, failed to meet some of its most important goals.

From the perspective of the largest financial institutions, the glowing assessment is warranted: billions of dollars in taxpayer money allowed institutions that were on the brink of collapse not only to survive but even to flourish. These banks now enjoy record profits and the seemingly permanent competitive advantage that accompanies being deemed “too big to fail.”

Though there is no question that the country benefited by avoiding a meltdown of the financial system, this cannot be the only yardstick by which TARP’s legacy is measured. The legislation that created TARP, the Emergency Economic Stabilization Act, had far broader goals, including protecting home values and preserving homeownership.

These Main Street-oriented goals were not, as the Treasury Department is now suggesting, mere window dressing that needed only to be taken “into account.” Rather, they were a central part of the compromise with reluctant members of Congress to cast a vote that in many cases proved to be political suicide.

Just go read the it.

Your Government Reigning In Meaningless Speculative Arbitrage

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And surprise, surprise, it’s Sheila Bair’s FDIC that has put a stop to this bit of cheating.

All things considered, I think that as a rule of thumb, if Timothy “Eddie Haskell” hates a policy, like protecting consumers, or hates a person, like Sheila Bair or Elizabeth Warren,* you can be pretty sure that it’s a good policy or person, or at least that the policies/people are better than Geithner and his policies.

Case in point,the FDIC levying a fee on a form of bank arbitrage that had banks profiting at taxpayer expense:

The introduction of a new insurance charge on overnight borrowing by banks in the US has led to the collapse of a profitable arbitrage opportunity that financial groups have used to rebuild their balance sheets after the financial crisis, traders say.

The Federal Deposit Insurance Corporation, which guarantees deposits at US banks, on Friday began levying the charge on funds borrowed by banks in the overnight money markets.

The move is part of a plan to rebuild the FDIC’s deposit insurance fund after the failure of more than 350 banks since 2007. The charge is based on the risk rating of the borrower, but is believed to be about 15 basis points for larger banks.

In response, banks are abandoning trades in which they borrowed in the overnight Fed funds market – often from government-controlled mortgage finance companies Fannie Mae and Freddie Mac – at about 10bp-15bp, then deposited the money at the Federal Reserve at an overnight rate of 25bp.

Some dealers estimated these trades could have allowed banks to lock in profits of about $200m since late 2008, when the Fed began paying overnight interest of 25bp on so-called excess reserves.

“What some banks now face is that the FDIC has just ‘taxed’ the arbitrage that they have been playing,” said William O’Donnell, strategist at RBS Securities.

Understand this: the taxpayers own Fannie and Freddie, and the Federal Reserve, so this was basically free money for the banks to be the banks.

I’m sure that Geithner is mad as hell about this, because it’s shut down another way for banks to extract money from taxpayer money to firm up their balance sheets, but our esteemed Treasury Secretary can talk to Bender.

It’s nice to know that someone in the Obama White House, even if it is someone that they would rather not have there, is actually doing things that prevent this sort of looting by the financial industry.

*Have you ever wondered why all of Timmy’s sworn enemies always seem to be women? I wonder some times.

It’s Bank Failure Friday!!!!

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Well, it appears that  the pace of bank failures is slowing, and maybe this year won’t be as bad as last year

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

  1. The Bank of Commerce, Wood Dale, IL

Only one this week, and none last week.

Full FDIC list

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

I’ve dropped the second pic, the line is far enough along to be clear without a zoomed in view.

State AGs Rebel Against Obama Admin’s Attempt to Protect the Banks

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It’s interesting, first you have Republican state Attorneys General objecting to principal write downs as a part of any settlement, and now you have Democratic AGs saying that they are not willing to sign off on an agreement that increasingly looks like another sop to the big banks and mortgage servicers:

The proposed global settlement for mortgage servicer fraud and abuse, put forward by a working group representing all 50 state Attorneys General, received some high-profile dissent on Wednesday. Republican AGs in four states – Kenneth Cuccinelli of Virginia, Greg Abbott of Texas, Pam Bondi of Florida and Alan Wilson of South Carolina – objected to the term sheet that contains the proposed deal, which would reinforce that servicers follow the law, change some aspects of mortgage servicing and potentially create a quota of loan modifications and principal reductions which top servicers would have to meet. The settlement, the quartet said, “appears to reach well beyond the scope of our enforcement role, and, in some instances, far exceeds the scope of the misconduct which was the subject of our original investigation.” And they specifically reject principal write-downs as part of any deal, saying that it creates a moral hazard for borrowers who fail to pay their mortgages. Republican AGs in three other states – Oklahoma, Alabama and Nebraska – have raised their objections to the lead AG on the settlement, Tom Miller of Iowa, as well.

But Republican AGs are not the only ones with concerns about the settlement. Democrats in AG offices across the country find themselves uncomfortable with the deal, in particular the speed with which it is being ushered through the system and the lack of clarity over what claims they would have to relinquish under the deal. The opposition from both sides puts into jeopardy a quick resolution to the investigation, which is being pushed hard by the White House, possibly as a means to kickstart the ailing housing market.

You see,the AG taking point on this Democratic Iowa AG Tom Miller, appears to be a stalking horse for the Obama administration, which has bought big, into extend and pretend as a way to save the banks and the housing crisis, and you have Republicans who oppose anything that will help distressed homeowners, and you have Democrats who think that the fact that there has been no formal investigation, no subpoenas, and no specifics on what specific malfeasance that they would give a “get out of jail free” card to the banks.

The thing is, you need more than 35 of the AGs to sign off on this, and you need all of them from the large or hard-hit states (FL, CA, NV, NY, TX, AZ off the top of my head) for you to have a meaningful settlement here.

Yves Smith is right on her assessment of the settlement as it currently stands:

As we indicated, if this deal falls apart, or Obama merely comes up with a Potemkin program that fails to forestall state AG action, the public will be better served. The evidence is that enough judges still care about the rule of law that more and more bank abuses will come to light if the authorities leave matters to the courts.

I’m not worried about a, “Potemkin program that fails to forestall state AG action,” I’m worried about a, “Potemkin program that succeeds in forestalling state AG action,” because the issue is not paperwork problems.

The issue is that there is extensive, pervasive, and systemic fraud, and it is not just against the homeowners, but it is promulgated against the holders of the mortgage backed securities as well, who lose as the servicers rake in big fees during a foreclosure.

Should the Obama administration once again choose Wall Street over Main Street, and use supremacy claims like those favored by the thoroughly corrupt OCC to prevent investigations, we will all be worse off, and not just because Barack Obama and Eric “Place” Hold have made a mockery of the rule of law.

Without a thorough accounting of what has gone on, it will happen again … and again … and again … .

So Give Bloombert Your Papers, Mr. Bernanke

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The Supreme Court has declined to hear the Federal Reserve’s appeal of the court order directing them to turn over data on its discount window lending program:

The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.

The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News’s parent company, Bloomberg LP. The Clearing House Association LLC, a group of the nation’s largest commercial banks, had asked the Supreme Court to intervene.

“The board will fully comply with the court’s decision and is preparing to make the information available,” said David Skidmore, a spokesman for the Fed.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic.

“I can’t recall that the Fed was ever sued and forced to release information” in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh.

Well, it’s about f%$#ing time for the Fed to be sued and forced to release information, Professor Meltzer.

I’m not sure that there will be much in the way of revelations in the documents, this has been proceeding for a well over a year, so by this point, the recipients are pretty well known, but this is an important precedent (or non-precedent, since the Supreme Court declined to rule).

My guess is that there is real law-breaking buried somewhere in these documents, both by the big banks and the Fed, but, we won’t see any prosecutions, because in Barack Obama’s Justice Department, prosecutions are just for whistle blowers.

This Is Not Criminalizing Failure

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The FDIC is suing 3 former WAMU executives for $900 million, which I call a good start.

Felix Salmon, who I generally find to be pretty good on such things, calls it criminalizing failure:

If the risks they took paid off, they would have been hailed as heroes, and the FDIC would have no problem with their behavior. There certainly wouldn’t have been a lawsuit like this one, since the FDIC has to show that it suffered damages before it can bring it.

I don’t like the idea of criminalizing failure. Banks by their nature are leveraged institutions which are vulnerable to runs and to declines in their asset values. There’s always a natural tension between managers, who are looking to maximize profits, and regulators, who are looking to minimize risks. But in this case there’s no indication that WaMu’s regulators, including the FDIC, expressed any concern about Killinger’s strategy. If they were OK with it, at the time, it’s easy to see how the executives considered that a green light to go ahead and implement it with gusto.

But at the same time, it’s unconscionable that these guys should be able to get away with what they did just because they did it out in the open, in front of supine regulators. They knew that they were too big to fail; they knew that ultimately WaMu’s liabilities (or at least its deposits) were being backstopped by the US government; and they knew that if they wanted to get their total compensation up into the $100 million range they were just going to have to take enormous risks and gamble with the money they had essentially unlimited access to at the Fed’s discount window.

(emphasis mine)

Two points here, the first general, and second specific to this case.

The first is that a doctor who is sued for leaving a surgical instrument inside you, is not a victim of criminalizing failure. In fact, there is nothing criminal at all about the lawsuit. It’s not a criminal case, it is a civil tort as the result of negligence, and it is completely reasonable and justified.

The second point here, is that what these guys did, relying on a complacent regulator, the thoroughly captured Office of the Comptroller of the Currency (OCC), a federal backstop of depositors, a complacent board, and an “I don’t give a sh%$ about anything but this year’s bonus” attitude to knowingly engage in reckless practices in pursuit of short term gain, should be a criminal matter.

If someone is speeding and driving recklessly, and runs down a crossing guard, they do get charged with a crime, negligent homicide, and these guys were speeding and driving WaMu recklessly, so perhaps, they should be charged with negligent bankicide, because, after all, in Citizens United, the Supreme Court said that that corporations were people.