Taibbi calls Mayor Bloomberg Marie Antoinette

[seanm123]

I nominate Matt Taibbi for the Pulitzer Prize for Commentary



http://www.rollingstone.com/politics...103?print=true

[lektrode]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

I nominate Matt Taibbi for the Pulitzer Prize for Commentary



http://www.rollingstone.com/politics...103?print=true

and the best part/line is when he offers Hizonah the same 'salutation' - in the final paragraph - as i used on a prev post on the OWS topic: thank you matt, couldnt've said it better mesself...

[*T*]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

I would love to see Taibi write an FT editorial piece.

[mooncliff]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

Yes, punchline at the end is a punch.

Amazing how some people can take something and twist it into a plausible, but completely wrong, narrative. And nothing is wrong with me, but everything is wrong with you. And that's that.

[Slimprofits]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

Taibbi is great and this is yet another piece that smashes the CRA lie to bits and pieces, but does it matter?

There are millions of American citizens that believe, not think, believe that the CRA and Jimmy Carter were responsible for the Global Financial Crisis. They are the footsoldiers for FIRE.

[Milton Kuo]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

There are millions of American citizens that believe, not think, believe that the CRA and Jimmy Carter were responsible for the Global Financial Crisis.

This includes some iTulip members, too, unfortunately.

[don]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

Matt Taibbi

I’m getting a number of letters, mainly from conservatives and libertarians, who seem to think that my response to Mike Bloomberg's "It's not the banks' fault" rant means I "don’t believe in personal responsibility."

Apparently, people feel that by explaining how the banks profited from tfhe explosion of subprime home loans, I’m somehow letting the ordinary homeowner who over-borrowed off the hook.

But the question was never, Do ordinary homeowners share any blame for the crisis? The question, as implicitly posed by Bloomberg, was, Is it true that the banks had NO blame for the crisis?

We can all argue about how big of a slice of the blame pie should be doled out to other actors – the irresponsible homeowner, the corrupted ratings agency analyst, the sleeping regulator, the do-gooder liberal congressman, etc. – later on. But what the mayor said, and Wall Street flacks have been saying for years, is that the banks shouldn’t eat any of that pie, and that they only made those loans because they were forced to, by Barney Frank and Franklin Raines and other such liberal meddling kids.

So let’s examine that for a minute.

For one thing, we know, because of investigations like Carl Levin’s inquiry into Washington Mutual and its subsidiary Long Beach, that these banks were often well aware that fly-by-night lenders like Countrywide and Long Beach were committing fraud on a massive scale – and bought their loans anyway, knowing they could still sell them off on the secondary market.

In 2005, for instance, Washington Mutual did an internal audit of two of Long Beach’s biggest offices, one in Downey, California, and one in Montebello, California. They found that 53 percent of the Downey loans involved some type of fraud, while the number in Montebello was 83 percent. The internal investigation drummed up the usual litany of unsafe financial sexual practices, using white-out to disguise low income levels, cutting and pasting info from good borrowers onto the loan applications of less worthy applicants, and so on.

So you know what WaMu did about all that fraud they found? Zip.

The company overrode its auditors and sold those phony loans off into the market anyway. And internally, they did nothing to change lending practices. WaMu did a follow-up investigation in 2007, and found the fraud rate at Montebello was still 62 percent.

So forget about the banks being dragged, kicking and screaming, to take on even legitimateloans for unworthy, overextended homeowners. Not only did the banks willingly take on every conceivable real home loan, government-backed or not – they even wanted the fraudulent loans, the loans that were not just likely to fail but virtually guaranteed to fail.

Why? Because they could. Because they were making huge profits hawking these bad loans to third-party customers who didn’t know what they were buying.
But here's the real kicker: when the banks milked the Countrywides and Long Beaches dry, and ran out of real people with pulses to lend homes to, they went out and made derivative copies of those "unworthy" lenders supposedly forced upon them by Barney Frank, and sold thosecopies off on the secondary market.

In other words, they were so "reluctant" to give that Oakland janitor a house that once they had his loan on their books, they promptly Xerox-copied him in the form of synthetic derivatives (essentially, bets on his home loan) and sold him off in five, ten, fifteen different directions. Janitor takes out home loan, bank tells two friends, and those friends tell two friends, and so on, and so on. The banks sold every one of those endlessly-replicating little squares and made cold hard cash each time.

You remember that notorious Abacus deal that Goldman Sachs was involved with, the one in which a pair of European banks, the Dutch bank ABN-Amro and the German Bank IKB, lost a billion dollars buying a portfolio of designed-to-fail mortgage-backed instruments hand-picked by a short selling billionaire named John Paulson?

Well, that portfolio that Goldman and Paulson dumped on those two banks was not, in fact, a portfolio of real subprime home loans. It was a synthetic CDO – a giant package of bets on subprime home loans.

Mike Bloomberg wants you to believe the banks didn’t want anything to do with those unworthy borrowers. Yet in reality, the banks not only went to every conceivable length to take on the home loans of those subprime borrowers, they actually invented new technology to make clones of those Barney Frank debtors.
And there were thousands upon thousands of those synthetic deals, meaning each and every one of those deadbeat subprime borrowers have been Xeroxed by the banks fifty or a hundred times over, and are flying around the globe to this day as toxic assets.

Nomi Prins pointed out in her book It Takes a Pillage that we could have paid off every subprime loan in America at the start of the crisis for about $1.4 trillion dollars. But the bailouts ended up being four, five, perhaps as much as ten or twelve times that size.

Why? Because we weren’t paying off the underlying loans of those subprime, personal-responsibility-deficient homeowners. We were paying off the banks' bets on those loans. We were adopting all those clones they made.

Anyway, there's is a massive gap between making a bad decision with one’s personal finances and committing criminal fraud in billion-dollar amounts. Morally, the two acts are not even in the same universe.

Homeowners who took on those bad loans did so for a variety of reasons. Some were coaxed into adjustable-rate loans when they qualified for fixed-rate loans, for the simple reason that the ARM loan garnered a bigger commission for the seller. Others were told by their brokers that if interest rates went up, or they couldn’t make their payments, they could just sell their homes, or come back to the same broker for a refinance.

Some were flat-out defrauded, like the prison guard in Massachusetts I interviewed who was told he was buying a fixed-rate loan, and only found out (from Goldman subsidiary Litton) that he’d been sold an ARM when rates went up -- right around the time his wife developed cancer, incidentally.

And, yes, there were others who were just dumb and irresponsible, and still others who never even intended to live in their homes and simply bought properties with no cash down as a speculative gamble.

But from what I’ve seen, most foreclosures involve ordinary people with jobs who bought houses when the economy was good, but are caught now in the triple death-trap of an underwater home, rising costs of living, and declining wages and opportunity. And as far as personal responsibility goes, those people who bought that home-ownership ticket, if they missed payments, they’re all taking the foreclosure ride right now.

What we have on the other hand, however, is a bunch of financial companies who consciously created huge volumes of bad loans, dumped them on retirees and foreigners and union stiffs, then doubled down on the problem by creating mountains of new liabilities based on those bad loans via synthetic derivatives. Then, when it all blew up, they came to us and asked us to buy the whole pile at full retail prices, clones and all.

Which we did, flooding them with bailout cash. This allowed them to instantly jack their annual bonus pools back up into the $150 billion range while the rest of the country waited out mass unemployment and a foreclosure epidemic.

So these people created giant masses of these defective loans, pumped the global system full of toxic debt, asked for the biggest government handout in history when it all went wrong, then walked away in the end even richer than before, forcing the rest of us to deal with their messes.

It baffles me that people can look at that behavior and still think it’s individuals in foreclosure who need to be lectured about "personal responsibility."

A lot of people had to make bad decisions for the crisis to happen. People had to buy houses they couldn't afford. Ratings agencies had to give AAA ratings to junk securities. Regulators had to be asleep at the wheel. The GSEs had to lower their standards and provide billions of dollars of government-backed financing for dicey home loans. Nobody is denying that all of those things played roles in the crisis.

But the main driving factor was the simple fact that banks were able to make trillions of dollars selling defective products. You take away that simple market-driven reality, there's no bubble and no crash, no matter what people like Michael Bloomberg say.

www.rollingstone.com/politics/blogs/taibblog/one-last-note-on-michael-bloomberg-20111105#ixzz1cwZMViDK

[oddlots]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

Brilliantly put. Taibbi gets any sharper and he'll shred his suit.

The finance sector should be happy their heads aren't on pikes. The idea that anyone should feel sorry for hurting their feelings is absolutely obscene. How about their taking some "personal responsibility" for their crimes!

And you know, just to prove I'm not anti free-enerprise, perhaps their shareholders should be allowed the front-row at the gallows.

[Spartacus]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

I nominate Matt Taibbi for the Pulitzer Prize for Commentary



http://www.rollingstone.com/politics...103?print=true

I wonder if Mr. T. has been offered "well remunerated opportunities" at dinner parties. Or other "favours" from well endowed whatever he's into - boys, girls, Philipino hermaphrodites ...

I'm assuming the "offers" would be very vague, and not traceable to any institution, just in case Mr. T. decided to write an expose on those extending the offer.

[Kadriana]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

The finance sector should be happy their heads aren't on pikes. The idea that anyone should feel sorry for hurting their feelings is absolutely obscene. How about their taking some "personal responsibility" for their crimes!

I just thought that should be repeated.

[lektrode]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

I just thought that should be repeated.

...
And you know, just to prove I'm not anti free-enerprise, perhaps their shareholders should be allowed the front-row at the gallows.

+1
tho i was thinking more along lines of this:


Place du Carrouse

[don]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

incentives galore coming for OWS . . .


Matt Taibbi



Mitt Romney addresses the "Defending The American Dream Summit" organized by the conservative Americans For Prosperity (AFP) foundation in Washington, DC.


David Brooks, the [gratuitous insult deleted], wrote this this morning entitled "Mitt Romney, the Serious One." In it, he explained how Romney’s recent decision to unveil a plan for reforming the entitlement system "demonstrates his awareness of the issues that need to define the 2012 presidential election."

Romney grasped the toughest issue – how to reform entitlements to avoid a fiscal catastrophe – and he sketched out a sophisticated way to address it.

So we had a giant financial crash in 2008 that necessitated a bailout costing a minimum of nearly $5 trillion and perhaps ultimately costing $10 trillion more, we have foreclosure crisis with more than million people a year losing their homes, and we have a burgeoning European debt disaster that threatens to devastate the global financial system – and the chief issue facing the country, according to Brooks and the Times, is reforming the entitlement system?

The column goes on to throw bouquets on Romney’s plan to semi-privatize Medicare and Social Security. Romney’s ideas are not as draconian as Paul Ryan's, but they do pave the way for Wall Street’s ultimate goal – full privatization of Social Security and Medicare.

Think about what such reforms might mean. Your typical Medicare/Social Security recipient might already have been ripped off three different ways in this era.

He might have been sold a crappy mortgage or a refi by a Countrywide-type firm (which often targeted the elderly). He might then also have unwittingly become an investor in such mortgages and seen the value of his retirement holdings devastated (many of the banks sold their crappy mortgage-backed securities to state pension funds).

Lastly, if he paid taxes, he saw part of his tax money go to pay off the bets the banks made against these same mortgages.

So now that Wall Street has ripped off this segment of society three times, it makes all the sense in the world that Mitt Romney – a former Wall Street superstar who was a chief architect of the modern executive-compensation-driven corporation – is coming back and telling us that we need to cut their Medicare and Social Security benefits in order to defray the cost of the previous three scams.

(Actually, it makes sense. If we don’t cut health care and retirement benefits for old people, how can we pay for the carried-interest tax break that allows private equity guys like, well, Mitt Romney to keep paying 15 percent tax rates?).

There’s another aspect to all of this that boggles the mind.

We’ve just witnessed an episode of industry-wide financial mismanagement that surely has no parallel in history. From Lehman Brothers to AIG to Goldman and Morgan Stanley (which in 2008 needed the unprecedented emergency granting of a commercial bank charter to avoid bankruptcy) to Citigroup (which needed a $25 billion bailout and $300 billion in federal guarantees to survive) to Bear Stearns (dead) and Merrill Lynch (dead) and so on, virtually every single one of America’s leading financial institutions from the last decade is either already out of business or functionally insolvent and living off government life support and cheap cash from the Fed.

Even leaving aside the fact that most of them are facing mass litigation for fraud, dishonest accounting, and/or systematic perjury (for robosigning financial documentation), they’ve all proven their complete and utter incompetence to do their ostensible jobs, i.e. the care and stewardship of money.

For instance, the top five investment banks in the country sought to remove capital requirements in the middle of the last decade, and all of them instantly jacked their debt-to-equity ratios above 20-1, some of them going as high as 33-1 or 35-1. Of those five investment banks, three (Bear, Lehman, and Merrill) went out of business during the crash, and the other two (Goldman and Morgan Stanley) required massive government aid to survive.

The commercial banks have not been much better, with two of the biggest (Wachovia and Washington Mutual) imploding thanks to bad investment decisions and three of the biggest survivors (Bank of America, Wells Fargo, and Citigroup) recently facing downgrades.

The recent downgrades, incidentally, were widely seen as Wall Street’s way of making two interlocking judgments about these big banks. One is that their accounting is so fucked up and dishonest that it simply cannot be believed, leading to widespread expectation that one or more of them will ultimately collapse. The other is that when they collapse, the government may no longer be able or willing to completely bail these companies out. The downgrades were spurred by vague fears that implementation of new reforms via Dodd-Frank will make it harder to get bailouts.

So the mere hint that these banks might be denied future bailouts caused a company as massive as Bank of America to be downgraded to just above junk status. That means, in other words, that without the implicit promise of government aid, Wall Street considers these banks to be junk or below-junk businesses. Evaluated purely on their own merits, without the implicit attachment to the taxpayer, these companies actually have negative trustworthiness.

And these are the people we want managing the nation’s Social Security accounts?

If there wasn’t such a very real chance that this could happen, it would be worth laughing about, but unfortunately it’s no joke. It’s a testament to the tenacious idiocy of our national media that an idea like Social Security privatization could continue to be publicly contemplated, in the wake of a disaster on the scale we’ve just gone through.

Advocating the turning over of Social Security management to Wall Street after the 2008 crash is a little like asking Paris Hilton to pilot Air Force One, or tabbing Charlie Sheen to manage the inventory of a hospital pharmacy – completely nuts, but to David Brooks, that makes Mitt Romney the “serious” candidate.

http://www.rollingstone.com/politics...#ixzz1dDtaeOf2

[don]

Re: Taibbi calls Mayor Bloomberg Marie Antoinette

Taibbi interview . . .


He’s author of a new book – Griftopia: Bubble Machines, Vampire Squids and the Long Con That is Breaking America.

“This book is useful for somebody who is a beginner with how Wall Street works. You want to understand about what went wrong before 2008,” Taibbi said.

“I walk people through what happened with mortgages, what the fed’s role was in creating the mortgage bubble, the commodities bubble. What happened in the commodities markets, why gas prices rose in the summer of 2008.”

“Instead of making it wonky and full of economic verbiage, I wrote it like a true crime story. I wrote it for the complete neophyte so that you would come away understanding many of the new fraud schemes on Wall Street, where there was an explosion of new financial instruments that were misused, often criminally, by people on the street.”

“Griftopia translates as a thieve’s paradise. It’s a paradise for grifters. That’s the thesis of the book – modern Wall Street is set up in such a way that it’s basically a no lose proposition for dishonest financial companies. They have virtually no regulation, they have created this vast taxonomy for extremely complicated fraud and theft schemes. And then they have this additional benefit of having a built in insurance system where if everything goes wrong, if they make bad investment decisions, or if they gamble the wrong way, they have either the Fed or the taxpayer bailing them out.”

“It is designed to show people that this is like a casino where the house always wins. And that’s why it’s a thieves paradise.”

When Taibbi claims that the federal government could have prosecuted the mortgage based securities fraud, he relies on a trio of former government insiders – former SEC chief accountant Lynn Turner, former SEC whistleblower Gary Aguirre, and University of Missouri Kansas City Law Professor William Black.

“Also, New York Attorney General Eric Schneiderman is definitely sniffing around Goldman and the other too big to fail companies,” Taibbi said. “There are Attorneys General who are bailing out of the foreclosure settlement from California to Minnesota.”

Are there going to be prosecutions on the securitization front?

“They have to first stop the foreclosure settlement,” Taibbi says. “Those two things go hand in hand.”

“It would relieve these companies from widespread civil liability at the very least. And there is talk that it is also going to encompass criminal liability, which would wipe out all of those potential prosecutions.”

“If they do that deal, the Schneiderman-type investigations will be stillborn.”

If there is a deal, there will be some kind of criminal settlement that would preclude any further prosecution?

“Yes,” Taibbi says. “That’s the expectation. How broad that settlement is going to be and what it will preclude nobody really knows yet.”

“Everyone assumes that there is going to be a waiver of civil liability. But whether it will also encompasses criminal liability, nobody knows. But there is some concern that it would.”

“After these various Occupied Wall Street protests, many members of Congress became interested in the issue. There are some people in the Progressive Caucus in the House who are trying to get the Attorneys Generals together, to try to get more people than Schneiderman and Kamala Harris in California to drop out of the settlement talks or make more demands.”

“The protests are having an effect in that sense. At least some of the elected officials are hearing what the people are saying. And they don’t want to be perceived as having not done something to stop another handout to the banks. That is my impression.”

Did you find any evidence that there are people at the Justice Department who wanted to prosecute but then there was a political call not to prosecute?

“There is definitely talk and gossip that there was an effort, a collaboration between the Justice Department and maybe the Treasury Department in the early days of the Obama administration,” Taibbi says. “There was a lot of fear about going after the big banks at a time when the markets were unsteady. And maybe some prosecutions were avoided out of some concern that it might cripple the economy. There is a lot of sentiment out there that something like that occurred.”

“Whether or not you are ever going to prove that is something else entirely.”

For the complete transcript of the Interview with Matt Taibbi, see 25 Corporate Crime Reporter 43, November 7, 2011