Obama admits Wall Street fraud?

[raja]

In his press conference tonight, Obama said:

"We were on the verge of a complete financial meltdown, and the reason was that Wall Street took extraordinary risks with other people's money. They were peddling loans that they knew could never be repaid. They were flipping those loans and leveraging those loans. Higher and higher mountains of debts were being built on loans that were fundamentally unsound . . . and all of us are now paying the price."

Isn't Obama admitting here that Wall Street committed massive FRAUD? :eek:

Isn't it illegal to sell something purported to be of great value that the seller knows is actually of no value, all the while keeping that knowledge from the buyer? fraud: Any act of deception carried out for the purpose of unfair, undeserved and/or unlawful gain, either valuable financially or comprising a legal right.

I was amazed that no reporter at the press conference questioned this. What am I missing here?

Doesn't Obama's admission demand immediate legal action against the perpetrators of this fraud?
Shouldn't it force government prosecutors to launch a widescale investigation of Wall Street to expose those who committed this fraud and bring them to justice?

I just emailed Helen Thomas (Hearst reported) and Brian Ross about this . . . and, of course, will email all my Congressmen.

[cjppjc]

Re: Obama admits Wall Street fraud?

. . . and, of course, will email all my Congressmen.

I know you will. The over/under for you giving up is August 2010.:cool:

[raja]

Re: Obama admits Wall Street fraud?

I know you will. The over/under for you giving up is August 2010.:cool:

That's your prediction . . . .

My prediction is that by late 2010 or 2011, things will be so dire that even cynics will speak out and use the threat of withholding their votes to pressure politicians into action.

It's been 40 years since I was active politically. I never wasted my time after that period because I knew it was hopeless to mobilize public sentiment . . . until now. This time it IS different, because of the power of the internet and the depth of the crisis we are about to undergo.

Anyway . . . do you agree with my assessment that Obama was admitting fraud, and this will likely force widescale investigation into Wall Street malfeasance?

[Jim Nickerson]

Re: Obama admits Wall Street fraud?

That's your prediction . . . .

My prediction is that by late 2010 or 2011, things will be so dire that even cynics will speak out and use the threat of withholding their votes to pressure politicians into action.

It's been 40 years since I was active politically. I never wasted my time after that period because I knew it was hopeless to mobilize public sentiment . . . until now. This time it IS different, because of the power of the internet and the depth of the crisis we are about to undergo.

Anyway . . . do you agree with my assessment that Obama was admitting fraud, and this will likely force widescale investigation into Wall Street malfeasance?

raja, that farm-air must be doing wonders for your enthusiasm for demanding the elected officials to act upon existing laws. I wish you well. I don't know if you read Carl Denninger's blog, but he, too, is someone who keeps pounding the table for laws enforcement to act, you might find something of worth in his exhortations to keep your own "fire" on these issues burning. I'm serious. [EDIT: have you considered that perhaps being on a farm and learning exactly what bullshit is, that that educational experience has prompted you to become active against all the bullshit that wafts out of Washington, DC.]

I ran across this opinion piece tonight from some guys that run OPM, and their outlook, were it to come to fruition, might be a "force" that would produce enough crying, screaming, suffering, etc. that maybe, just maybe, those responsible for enforcing laws would become serious.

From the end of the article:

There’s the real economy which generates the earnings, and then there’s the investor sentiment/perception which
dictates the multiple they are willing to pay for those earnings. We already know that the real
economy is in severe decline. What happens if investor sentiment changes? We assess three
scenarios below:

1. Earnings stay constant; P/E ratios hit cycle lows: We assume a scenario where investors
are nervous, people need to sell stocks to pay for lost wages, or for retirement, but the
companies continue to perform as of June 2009. Assuming a P/E of 6, which is close to
the all time low, and using an earnings value of $63.04 for the S&P 500 Index, we derive
an S&P 500 Index value of 378.

2. Earnings get halved; P/E stays constant: Earnings have been half of their current value
three times over the last 30 years – so it is entirely within the realm of possibility that
they could be halved once again. In the late 1970’s, early 1980’s and early 1990’s the
S&P 500 Index generated half the earnings per share that it did this year in 2009 dollars.
Using today’s P/E multiple of 16.08 results in an S&P 500 value of 506.

3. Earnings get halved; P/E ratios hit cycle lows: double trouble. If we combine these cases
where earnings are cut in half from today and the P/E ratio drops to a cycle low, it
implies an S&P 500 Index value of 189 (depression territory).

What about inflation? All three of the above scenarios are calculated using 2009 dollars. Doing so adjusts for the effects of inflationary periods over the last 109 years and allows for the historical comparisons we have discussed. As we mentioned, a stock price is based on pricing the future stream of a company’s profits. Over the long-term, inflation erodes the value of those earnings and with it the multiple that investors are willing to pay for them - ultimately lowering the value of stocks.
.
We find the similarity between the 2008 economic collapse and the 1929 economic collapse disturbing. Don’t get sucked in… the real economy is still struggling and the market has yet to reflect this. In 1932, the Dow Jones Industrial Average bottomed 90% below the September 1929 peak. The S&P 500 Index peaked in October 2007 at 1,576, and from our brief analysis above we can easily calculate a drop in the S&P 500 of as much as 88% from that peak using our ‘double trouble’ scenario. At the very least, under all of our scenarios it appears that the S&P 500 Index will test the March 2009 low of 666. Judging by the continued declines we are seeing in the real economy, we expect that test to happen sooner rather than later.

In our view, the only thing propping this market up is investor sentiment. Earnings have not
improved. Keep it simple, stupid - investing is and has always been about the real economy, and this market is ignoring the hard data. You can invest in sentiment if you want to, but as we have said before, we prefer to invest in real things.

[cjppjc]

Re: Obama admits Wall Street fraud?

Anyway . . . do you agree with my assessment that Obama was admitting fraud, and this will likely force widescale investigation into Wall Street malfeasance?

No. Things will proceed as they have before.

[raja]

Re: Obama admits Wall Street fraud?

I'm not going to continue to harp on this, but I have one final comment/question . . . .

I feel like I'm part of a Twilight Zone episode, where the guy wakes up one day and everyone is somehow . . . strange. :eek:

The President of the U.S. stands up in a national televised press conference and says, "They were peddling loans that they knew could never be repaid." He is admitting that there was widescale fraud on Wall Street, resulting in taxpayers losing trillions of dollars. But no one is saying anything, even here on iTulip.

Where are the headlines, "OBAMA ADMITS WALL STREET FRAUD CAUSED FINANCIAL CRISIS" or "FBI INITATES MASSIVE WALL STREET INVESTIGATION"

Here we are, heading into the next Great Depression, and our President points the finger at those responsible . . . but no one reacts????

So can someone please tell me what I'm missing here . . . .

Is what he said not an admission of fraud, and I'm just not understanding that?

Is it somehow generally understood that even though this might be fraud, it could never be proven, so what's the point of getting excited about it?

Is the world so corrupt that everybody except me knows it's hopeless to try and do something about it?

Have I really entered the Twilight Zone? :eek: :eek: :eek:

Jim, thanks for the tip on Karl Denninger.

[GRG55]

Re: Obama admits Wall Street fraud?

..."They were peddling loans that they knew could never be repaid."...

Yes, and consumers were taking loans they knew they could never repay, and regulators deliberately looked the other way...so who's most reponsible.

Every year for decades auto dealers, just as one example, sell cars on credit to people...and a certain percentage of those default resulting in repossession. The manufacturers, dealers, banks, economists, etc. all know this is going to happen. Does that make it fraud?

Is it Wall Street's fault that our elected and unelected representatives in government all over the world decided to shovel huge amounts of money in a desperate effort to "save the global financial system"? As anyone who has followed my posts will know I am no fan of the bankers and financiers...even less so given recent post-crisis behaviour...but it's our governments that provide the succor that enables it.

[Raz]

Re: Obama admits Wall Street fraud?

Yes, and consumers were taking loans they knew they could never repay, and regulators deliberately looked the other way...so who's most reponsible.

Every year for decades auto dealers, just as one example, sell cars on credit to people...and a certain percentage of those default resulting in repossession. The manufacturers, dealers, banks, economists, etc. all know this is going to happen. Does that make it fraud?

Is it Wall Street's fault that our elected and unelected representatives in government all over the world decided to shovel huge amounts of money in a desperate effort to "save the global financial system"? As anyone who has followed my posts will know I am no fan of the bankers and financiers...even less so given recent post-crisis behaviour...but it's our governments that provide the succor that enables it.

I give your post a BIG thumbs up!
Very well said, GRG55. Very well said.

[Jim Nickerson]

Re: Obama admits Wall Street fraud?

I'm not going to continue to harp on this, but I have one final comment/question . . . .

I feel like I'm part of a Twilight Zone episode, where the guy wakes up one day and everyone is somehow . . . strange. :eek:

The President of the U.S. stands up in a national televised press conference and says, "They were peddling loans that they knew could never be repaid." He is admitting that there was widescale fraud on Wall Street, resulting in taxpayers losing trillions of dollars. But no one is saying anything, even here on iTulip.

Where are the headlines, "OBAMA ADMITS WALL STREET FRAUD CAUSED FINANCIAL CRISIS" or "FBI INITATES MASSIVE WALL STREET INVESTIGATION"

Here we are, heading into the next Great Depression, and our President points the finger at those responsible . . . but no one reacts????

So can someone please tell me what I'm missing here . . . .

Is what he said not an admission of fraud, and I'm just not understanding that?

Is it somehow generally understood that even though this might be fraud, it could never be proven, so what's the point of getting excited about it?

Is the world so corrupt that everybody except me knows it's hopeless to try and do something about it?

Have I really entered the Twilight Zone? :eek: :eek: :eek:

Jim, thanks for the tip on Karl Denninger.

raja, I truly share your state of mind of being pissed off.

http://bloomberg.com/apps/news?pid=2...d=axtgl8Tzow4c

Mayors of Hoboken, Secaucus, Five Rabbis Arrested

Perhaps you saw that Bloomberg story. IIRC it said it was a long investigation, and heavens knows how long it will be before or if anyone will actually be prosecuted.

I have no remedial answers. My personal answer, which sucks, is to avoid spending time reading or listening to all this shit. Not doing that only makes me suffer.

[EDIT] my point with the article is not that something with enforcement is being done, but more that criminal activity amongst politicians is rampant, and my own cynicism is that it is just not in New Jersey.

[Mashuri]

Re: Obama admits Wall Street fraud?

Is what he said not an admission of fraud, and I'm just not understanding that?

I think it could more accurately be called an accusation of fraud and a flippant one at that. While I think the whole system is crooked as hell, a sound bite from a speech won't do much to stir the masses.

[raja]

Re: Obama admits Wall Street fraud?

Yes, and consumers were taking loans they knew they could never repay, and regulators deliberately looked the other way...so who's most reponsible.

Every year for decades auto dealers, just as one example, sell cars on credit to people...and a certain percentage of those default resulting in repossession. The manufacturers, dealers, banks, economists, etc. all know this is going to happen. Does that make it fraud?

Is it Wall Street's fault that our elected and unelected representatives in government all over the world decided to shovel huge amounts of money in a desperate effort to "save the global financial system"? As anyone who has followed my posts will know I am no fan of the bankers and financiers...even less so given recent post-crisis behaviour...but it's our governments that provide the succor that enables it.

As much as I respect your posts, I think you are very far off the mark with this one . . . .

Yes, many consumers took loans they knew they could never repay . . . so they lost their homes.
Wall Street fraudulently sold financial products . . . and what did they lose? They got billions in goverment aid and collected BIG bonuses. It was the retirees, pensioners and other investors that lost their life savings.

Where's your sense of perspective?

Yeah, regulators deliberately looked the other way . . . .
Does that mean that Wall Street's crimes are any less evil because they were enabled by other lawbreakers?

And, the auto thing . . . are you kidding me?
Wall Street misrepresents bad loans as good investments, therebye deceiving investors. Are car dealers deceiving these customers by fraudulently selling them bogus cars? So what if car customers can't pay back their loans? They weren't tricked into taking the loans. (In cases where they were actually tricked, the guilty dealers should be prosecuted for fraud just like the Wall Street profiteers).

The fact that the government shoveled out money in NO way mitigates Wall Street's fraudulent activities.

I hear you claim that you are no fan of the bankers and financiers, but you say, "so who's most responsible?", "does that make it fraud?", "is it Wall Street's fault?", "our governments provide the succor". You repeatedly attempting to diminish Wall Street's guilt by pointing out how others are also guilty. SO WHAT if others are guilty . . . let's prosecute them all.

Wall Street perpetrated fraud, Obama admitted it, now I WANT JUSTICE ! (I'm sounding a lot like Mega . . . good! He and I can take to the streets together when the time comes.)

[raja]

Re: Obama admits Wall Street fraud?

I have no remedial answers. My personal answer, which sucks, is to avoid spending time reading or listening to all this shit. Not doing that only makes me suffer.

Sorry to hear that it's unpleasant for you. If that's how I felt, I would probably do as you're doing.

In my case, I am energized . . . .
I have something kind of fighting spirit inside me that seeks to do battle with the "forces of evil". The civil rights movement was a clear-cut good-against-evil issue, and it was the last time I was politically involved. IMO, since then most causes have been murky, or not winnable.

Now, once again, there is a clear-cut cause that I can get behind. When I see people losing their retirement savings, being thrown out of their homes, being fired from their jobs -- mostly because greedy financial elites gambled using other people's money, enabled by greedy government officials -- I'm fired up . . . as you see.

[Jim Nickerson]

Re: Obama admits Wall Street fraud?

Sorry to hear that it's unpleasant for you. If that's how I felt, I would probably do as you're doing.

In my case, I am energized . . . .
I have something kind of fighting spirit inside me that seeks to do battle with the "forces of evil". The civil rights movement was a clear-cut good-against-evil issue, and it was the last time I was politically involved. IMO, since then most causes have been murky, or not winnable.

Now, once again, there is a clear-cut cause that I can get behind. When I see people losing their retirement savings, being thrown out of their homes, being fired from their jobs -- mostly because greedy financial elites gambled using other people's money, enabled by greedy government officials -- I'm fired up . . . as you see.

I am all for you and your efforts, hang in there.

[GRG55]

Re: Obama admits Wall Street fraud?

As much as I respect your posts, I think you are very far off the mark with this one . . . .

Yes, many consumers took loans they knew they could never repay . . . so they lost their homes.
Wall Street fraudulently sold financial products . . . and what did they lose? They got billions in goverment aid and collected BIG bonuses. It was the retirees, pensioners and other investors that lost their life savings.

Where's your sense of perspective?

Yeah, regulators deliberately looked the other way . . . .
Does that mean that Wall Street's crimes are any less evil because they were enabled by other lawbreakers?

And, the auto thing . . . are you kidding me?
Wall Street misrepresents bad loans as good investments, therebye deceiving investors. Are car dealers deceiving these customers by fraudulently selling them bogus cars? So what if car customers can't pay back their loans? They weren't tricked into taking the loans. (In cases where they were actually tricked, the guilty dealers should be prosecuted for fraud just like the Wall Street profiteers).

The fact that the government shoveled out money in NO way mitigates Wall Street's fraudulent activities.

I hear you claim that you are no fan of the bankers and financiers, but you say, "so who's most responsible?", "does that make it fraud?", "is it Wall Street's fault?", "our governments provide the succor". You repeatedly attempting to diminish Wall Street's guilt by pointing out how others are also guilty. SO WHAT if others are guilty . . . let's prosecute them all.

Wall Street perpetrated fraud, Obama admitted it, now I WANT JUSTICE ! (I'm sounding a lot like Mega . . . good! He and I can take to the streets together when the time comes.)

Your lack of objectivity is clouding your judgement. Go back and read my last post when you calm down. It is not a defense of Wall Street as you seem to think. There is plenty of blame to go around, and plenty of parties that need to share the responsibility for this catastrophe. Until that realization dawns on the voting masses no durable changes to the circumstances that led to this mess will occur.

[raja]

Re: Obama admits Wall Street fraud?

Your lack of objectivity is clouding your judgement. Go back and read my last post when you calm down. It is not a defense of Wall Street as you seem to think. There is plenty of blame to go around, and plenty of parties that need to share the responsibility for this catastrophe. Until that realization dawns on the voting masses no durable changes to the circumstances that led to this mess will occur.

I re-read your original post . . . I am calm . . . and I still see it the same way -- it missed the mark in all the ways that I stated.

Since you didn't get what I was saying the first time, I doubt that repetition will have any effect. But let me leave you with an analogy . . . .

It's as if you and I are walking down the street, and I say, "Look there's a robber who just murdered that grocery store owner. He dropped his gun in the excitement, so let's go grab him."

You say, "That grocery store owner probably overcharges the people in this poor neighborhood, and they don't have anywhere else to shop. And, we have to remember that there are other criminals in this area who commit crimes even more heinous than this. Also, don't forget that if it wasn't for our government, which wastes money through corruption, there would be a policemen around here to catch the murderer."

I reply in frustration, "If you're not going after him, I am . . . he just killed a man."

Are you defending Wall Street? Yes.
Not directly, but by saying that there are many parties who are culpable, you lessen Wall Street's crime by dilution. Not only that, of the other malfeasance you mentioned, two of the four instances are minimal compared to Wall Street's grand theft.

Our president has just admitted that Wall Street has committed fraud, leading to trillions of dollars being sucked out of taxpayers' pockets. People need to take action. Your post was not helpful.

As I said, I think it's unlikely that you will see it my way . . . but as you may have noticed, I am not daunted by unfavorable odds . . . .