Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

[LargoWinch]

"Lehman is a story in large part of fraud" - Black

"When people cheat you cannot as a regulator continue business as usual" - Black

"We sent two people to be on site at Lehman..." - Black

"The FED leverage as a creditor was simply not used" - Black


Runtime: 8min.

[Diarmuid]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Thanks Largo

Black speaks a lot of sense imo. No need for legislation, just the will to prosecute and enforce, but then that might mean some of the old boys in the club would get caught up in the enforcement and additionally would not provide a causative for further centralization.

[doom&gloom]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Thanks Largo

Black speaks a lot of sense imo. No need for legislation, just the will to prosecute and enforce, but then that might mean some of the old boys in the club would get caught up in the enforcement and additionally would not provide a causative for further centralization.

This is a video that NEEDS to me seen by every American right before the election.

[oddlots]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Needs to be on the main page.

There is a trancsript of his comments here:

http://fdlaction.firedoglake.com/201...an-bankruptcy/

Most impressive thing I've seen since Markopolos testified.

[Milton Kuo]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Attached is the paper that Dr. Black evidently sent to the committee prior to the hearing. This paper goes into greater detail on the subjects he covers in the six minutes or so he was given to speak.

[Rajiv]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Here is a two part interview with Bill Black (Text - not video nor audio)

The Great Global Bank Robbery, Part 1

The following exclusive interview with William K. Black is a Joint Venture between New Deal 2.0 in the USA and MMNews in Germany.

PART ONE: THE BUBBLE & HERR HENKEL

Recently I conducted an interview with economist James K. Galbraith and asked him at the beginning:

What caused the crisis?(i)

Mr. Galbraith mentioned “white-collar criminologists”:

“This group had the experience of what happened in the Savings and Loan crisis of the 1980’s, when certain patterns of behaviour, which are relatively standard in criminal financial activity, were very clearly present. These patterns re-emerged in the early 2000’s in the Enron, Worldcom, and Tyco scandals, and they were re-emerging again in the housing sector. To these people it was entirely obvious that a massive problem was developing.”(ii)

Mr. Black, you are a white-collar criminologist. Can you describe for us these “certain patterns of behaviour, which are relatively standard in criminal financial activity” and explain why they occurred?
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The Great Global Bank Robbery, Part 2

PART TWO: ECONOMIC WARFARE

Mr. Black, Lehman Brothers, founded in 1850, failed in September of 2008. What broke its neck after all those years?

The bankruptcy examiner conducted an investigation of Lehman Brothers. The report reveals that Lehman Brothers was engaged in large scale accounting and securities fraud by failing to recognize losses so large that it had failed as an enterprise. Lehman’s senior executives sought to cover up its failure with a series of very large ($50 billion) quarter end REPO transactions. Curiously, the report puts no emphasis on the underlying fraud that drove the fraud concentrates on the second-stage REPO cover up.

What are your thoughts on Goldman Sachs facing serious difficulties with the SEC related to fraud? Is this what you get when you do “God’s Work on Earth”?
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[ThePythonicCow]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Bill Black is good - thanks for posting that, Rajiv.

I like this tidbit from The Great Global Bank Robbery, Part 2:

Mr. Black, can you put the crisis we’re going through into an international perspective?

Finance has become a parasite in most developed nations. It is supposed to serve the “real economy as an “intermediary.” Its function is to move capital to its most valuable use at the lowest possible cost. Instead, it creates massive bonuses and crises when it works badly. When it works “well” it misallocates capital and funds speculative attacks on commodities and national currencies. It is particularly harmful to workers in Europe and the U.S. None of this requires any conspiracy. Finance is not run in the interest of financial firms. It is run in the interests of the senior officers that control the financial firms. They simply maximize their income (often through accounting control fraud). They enter into tactical coalitions, but they have no permanent alliances. They are not loyal to the nation or the firm. They represent the closest thing to “homo economicus” - the rational, selfish, ethics-free, and wealth-maximizing economic agent that neoclassical economists imagined. As authors in the triumphal book about market economies (Moral Markets) conclude, “homo economicus is a sociopath.” Increasingly, our most elite business leaders (and this gives them great political power as well) are sociopaths. This is a recipe for recurrent, intensifying crises and increasing inequality.

Emphasis added by ThePythonicCow.

Such an oligarchy of sociopaths cannot stand. Black does not comment, and obviously I do not know, but I suspect we're going to have to go through a decade or two of hell to restore some moral balance to the major institutions of our civilization.

[Milton Kuo]

Re: Bill Black's at House Financial Services hearing on Lehman Bros. failure Apr. 20, 2010 (8min.)

Black's repeated uses of the phrase, "business as usual" is particularly relevant considering the following story about Goldman Sachs employees selling something they know is garbage:

Thomas Montag, the former head of sales and trading in the Americas at Goldman Sachs Group Inc., called a set of mortgage-linked investments sold by his firm “one shi**y deal,” according to an excerpt from internal e- mails released today by Senate lawmakers.
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[A] Goldman trader responsible for managing Timberwolf later characterized the day that the CDO was issued as “a day that will live in infamy,” according to part of an e-mail released by the panel.

"Business as usual?" Merrill Lynch's collapse and eventual takeover by Bank of America occurred exactly because regulators allowed "business as usual" to continue after the Internet stock bubble. Anyone remember what Henry Blodget was accused and found guilty of?