Bill Moyer's Journal - Interview with William Black

[GRG55]

If you missed this on PBS television it's worth having a look. There is nothing that is said in this interview that will be of any surprise to iTulip members. However this is the first completely unvarnished interview that I have seen by someone who is prepared to say these things in a public forum. Maybe I liked it because Black, who supported Obama during the campaign, expresses more than disappointment with his Administration's performance on this issue. Besides, how can you not like a guy who wrote a book by the title THE BEST WAY TO ROB A BANK IS TO OWN ONE...

William K. Black suspects that it was more than greed and incompetence that brought down the U.S. financial sector and plunged the economy in recession — it was fraud. And he would know. When it comes to financial shenanigans, William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, has seen pretty much everything.

[this is the link to Moyer's website with the video link. FRED can probably figure out how to imbed the video]

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teached economics and law at the University of Missouri — Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.


Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" — frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

[World Traveler]

VERY worthwhile... - Will policy shift be at state level??

Aa VERY worthwhile read. I just finished the transcript. He calls a spade a spade - FRAUD at the very highest levels of the Banking and Financial Elite. And how AIG was really about bailing out favored banks. And he goes into why the Obama Administration is refusing to clean it up in the open. It's the reason I've suspected, but it's good to see it confirmed by someone with his background.

"BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong....

WILLIAM K. BLACK: What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.

Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it....

WILLIAM K. BLACK: We need some chairmen or chairwomen--

BILL MOYERS: In Congress.

WILLIAM K. BLACK: --in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets.

BILL MOYERS: And we have to know that, in order to know what?

WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses...."

http://www.pbs.org/moyers/journal/04...anscript1.html

From Bloomberg:

Insurance regulators are looking at ways to shift from relying on Moodys and Standards and Poor for ratings, because so many insurance companies have been burned by the toxic waste they were sold by wall Street. Black does't hold out much hope for action in Washington at the moment. Will it happen at the state level???

"April 3 (Bloomberg) -- U.S. state insurance regulators may reduce their dependence on firms including Standard & Poor’s and Moody’s Investors Service, saying they are looking into ratings “shortcomings.” ...

The watchdogs are conducting their review after insurers’ portfolios were buffeted by downgrades to commercial mortgage- backed securities held to help back policies. Regulators currently rely on ratings assigned by S&P, Moody’s and other firms when calculating the amount of capital insurance companies must hold to protect against losses on CMBS and other so-called structured securities.

The potential that insurers will need more capital because of downgrades “is on our radar screen,” NAIC President Roger Sevigny said in an interview. New York Insurance Superintendent Eric Dinallo and Michael McRaith, director of insurance for Illinois, are heading the NAIC group, which was set up “for this very sort of thing,” Sevigny said..."

http://www.bloomberg.com/apps/news?p...hcc&refer=home

[ThePythonicCow]

Re: Bill Moyer's Journal - Interview with William Black

Good interview - thanks.

The stench is starting to reach the public's nostrils.

It's going to take some serious turnover in Washington, D.C. before we have leaders we can trust again.

[xela]

Re: VERY worthwhile... - Will policy shift be at state level??

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong....

A collapse induced by the fraudsters IMO, surely they would try very hard to get away in all the smoke...

[Shakespear]

Re: Bill Moyer's Journal - Interview with William Black

In trying to find out more about William Black I found this interesting thread

http://www.nakedcapitalism.com/2009/...al-stress.html

William Black: "There Are No Real Stress Tests Going On"

By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

More germane for the purpose of this post, Black held a variety of senior regulatory positions during the S&L crisis.He managed investigations with teams of examiners reporting to him, redesigned how exams were conducted, and trained examiners.

Via e-mail, he has confirmed our suspicions about the bank stress tests announced by Treasury Secretary Timothy Geithner: they simply cannot be adequate, given the number and experience of the staff, and perhaps as important, their relationship with the banks (see detailed comments below).

I also asked him about the fact that bank examiners examine banks (duh) and would not have much (any?) experience in the capital markets operations or sophisticated products that the big investment bank, now banks, participated in. Goldman and Morgan Stanley ought to be subject to these exams; Citi, JP Morgan, and Bank of America have large capital markets operations. These firms are where the biggest risks and exposures lie. Do the examiners what to look for in a even the low-risk operations, like repo desks, much the less derivatives and proprietary trading books? He agreed (as presented below) that it was a near certainty that this was beyond their skill level.

[GRG55]

Re: Bill Moyer's Journal - Interview with William Black

Good interview - thanks.

The stench is starting to reach the public's nostrils.

It's going to take some serious turnover in Washington, D.C. before we have leaders we can trust again.

Come Senators, Congressmen
Please head the call
Don't stand in the doorway
Don't block up the hall

For he that gets hurt
Will be he who has stalled
There's a battle outside
And it's ragin'

It'll soon shake your windows
And rattle your walls
For the times they are a-changin'

[Bob Dylan...for you younger folks out there...]

...He's not the same as you and me.
He doesn't dig poetry. He's so unhip that
When you say Dylan, he thinks you're talking about Dylan Thomas,
Whoever he was.
The man ain't got no culture,
But its alright, ma,
Everybody must get stoned...
[Paul Simon]

[GRG55]

Re: Bill Moyer's Journal - Interview with William Black

In trying to find out more about William Black I found this interesting thread

http://www.nakedcapitalism.com/2009/...al-stress.html

EJ's view would appear to be much the same...

http://www.itulip.com/forums/showthread.php?t=8427

[Supercilious]

Re: Bill Moyer's Journal - Interview with William Black

Yup . It's all a fraud and it was a fraud well designed from the beginning.
Gee!!! My tinfoil hat, I was very proud of, proved actually to be a fedora made of the finest hatters' plush...

[ThePythonicCow]

Re: Bill Moyer's Journal - Interview with William Black

Yup . It's all a fraud and it was a fraud well designed from the beginning.
Gee!!! My tinfoil hat, I was very proud of, proved actually to be a fedora made of the finest hatters' plush...

Ah - the contra-intelligent-design argument ;).

Some creationists seem to argue that there must be an Intelligent Designer, because the world is too elaborate to have "just happened" randomly.

Some anti-conspiricists seem to argue that there cannot be elaborate patterns of deceipt, fraud or theft because that would imply a deliberate and intentional conspiracy organized by an Central Designer on a scale too vast to be plausible, at least in secrecy.

What both parties miss, in my view, is that elaborate orderings and patterns can happen without explicit central control.

Allegations that this financial mess contains rampant fraud do not imply that it was well designed ab initio.

... on the other hand, a fine fedora, with its residue of lead, might be offer excellent protection from the radioactive fallout from Starving Steve's nuclear power plants ;).

[Rajiv]

Re: Bill Moyer's Journal - Interview with William Black

Here is a good article on the above interview by James r. Brett

On Friday Bill Moyers, acting almost as if he had just innocently returned from Mars, interviewed William K. Black, former senior bank regulator during the savings and loan debacle of the 1980s. The interview is a blockbuster and not to be missed. In it Mr. Black fires both barrels at the highest placed on Wall Street and their kin elsewhere. The implications from this interview should reverberate for the rest of the year and onward, but the essential question is whether President Obama can take advantage of the disclosures and accusations, or whether he will be buried by them. Black notes that as a result of the Great Depression and the S&L scandals, which as you will recall implicated five senators—the so-called Keating Five—laws were put in place to deal with the mistakes and misdeeds and outright frauds that periodically affect the finance sector in America. Black describes the nature of the deceits, the frauds, and the laws that were trashed to make it possible. At more than one point he says that we have laws on the books to deal with the situation, even this late in the aftermath. To be fair, it appears to me and to the rest of the country that these laws are inadequate by the simple test of whether they were or are able to be enforced. Obviously, they were not, and something has to be done about that matter of course.
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In a sense that is probably the most cutting irony in a hundred years, FDR's statement that we have nothing to fear but fear itself has now doubled back onto the White House itself where fear has created a public policy, a managerial and class fear that will surely wreak havoc among us and extend this crisis off into the distant future.

What Black and Moyers unaccountably missed in their interview amid all the accusations and exclamations of surprise and disgust was a cogent explanation for why the most powerful man on the planet is afraid to death of a collapse on Wall Street that implicates the very highest moguls in rampant fraud. They partially answered this question with the admission the President Obama truly believes that if it were widely known that J.P.Morgan Chase, Goldman Sachs, CitiCorp, Bank of America, Wells Fargo like Bear Stearns and Lehman Bros are insolvent and incapable of reviving themselves that the crash would be so loud and deep that the country would be thrown into utter chaos for years. I can understand Obama thinking this way when his advisers and predecessors all said or told him their own darkest fears. But, there is at least another side—even to the dark side—and that is whatever the damage is, it is finite, and the intellectual, financial, and moral resources of a nation are much, much greater than the problem.
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At Justice where Obama's next set of moves will begin, the coast is not yet clear. There is a minefield still in the Department and these fifth columnists must be routed out before any thorough investigation of the massive frauds can be safely and effectively undertaken. And, the FBI accountants must be be reassembled to deal with evidence strewn all over the country and into hidey-holes we can hardly imagine.
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Obama surely knows that Tim Geithner must soon go. He is a class enemy and an embarrassment to his role in government. The quiet Geithner keeps on Wall Street is not going to survive the accusations of Black on Moyers' program ... and the endless ideological yammering of the tantrum-pundits. Larry Summers, who is up to his eyelids in collusions must be removed immediately. Immediately! For the world and the nation, confidence in this administration is even more important than confidence in Wall Street.

[ThePythonicCow]

Re: Bill Moyer's Journal - Interview with William Black

Obama surely knows that Tim Geithner must soon go. He is a class enemy and an embarrassment to his role in government. The quiet Geithner keeps on Wall Street is not going to survive the accusations of Black on Moyers' program ... and the endless ideological yammering of the tantrum-pundits. Larry Summers, who is up to his eyelids in collusions must be removed immediately.

It's the Obama modus operandi. He associates boldly with outrageous characters, then cooly throws them under the bus if they become too controversial, thus seeming to (though not really) distance himself from the controversy of the day.

Meanwhile this circus side show is distracting us from the selling out of America to a new world order.

[metalman]

Re: Bill Moyer's Journal - Interview with William Black

Here is a good article on the above interview by James r. Brett

Obama surely knows that Tim Geithner must soon go. He is a class enemy and an embarrassment to his role in government. The quiet Geithner keeps on Wall Street is not going to survive the accusations of Black on Moyers' program ... and the endless ideological yammering of the tantrum-pundits. Larry Summers, who is up to his eyelids in collusions must be removed immediately. Immediately! For the world and the nation, confidence in this administration is even more important than confidence in Wall Street.

wrong. the dogs bark but the caravan moves on.

[ThePythonicCow]

Re: Bill Moyer's Journal - Interview with William Black

wrong. the dogs bark but the caravan moves on.

... even if the caravan driver decides to throw the subject of the dogs barking under the caravan's wheels, distracting the dogs with fresh meat.

[oddlots]

Re: Bill Moyer's Journal - Interview with William Black

Really great interview but something's bothering me... Reviving some clarity about fraud is good and righteous as this and Chris Whalen's latest scathing analysis of AIG demonstrates (linked here: http://www.itulip.com/forums/showthread.php?t=9183 ) ... but somehow I keep coming back to the invitation to it that the dollar standard offers. I just don't buy the assumption underlying analysis at this level: that the problem is "chicanery" and not that the playing field is skewed at the geoplolitical level via the reserve currency status of the dollar and that the logical trend is, therefore, for corporations to maximise their advantage insofar as they serve US interests. In this example it would mean selling US debt at - in US terms - highly inflated prices. "Mission accomplished" is earned here. I just don't entirely trust anyone (yet) who won't push the analysis to this (to me) logical conclusion.

[Mango]

Re: Bill Moyer's Journal - Interview with William Black

So Oddlots, that means what...that you take more of Michael Hudson's viewpoint and concern about these frauds? (Not that Hudson isn't concerned about them, though) But you see more of an institutional design to turn loose the dogs of chicanery as a tactic toward a more strategic end?