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What's keeping megabank execs out of jail? Fear.

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LawBeefaroni
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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

Scuzz wrote:John Stewart did his opening last night on the JP Morgan Fine. He did a pretty good job of showing the hypocrisy of the bitching people are doing over the fine. He pulled up footage and quotes from various people showing that JP Morgan knew what they were buying (and how the CEO had put $25b aside for a possible fine) and how analysts thought the deal was a great deal for JP Morgan at the time regardless of the BS problems.

He does a pretty good job of putting Cramer and several CNBC financial analysts in their place.
It's still a great deal for JPM, despite the B&S problems and the fine.

JPM shares are 30% higher today than when they bought BS in May 2008. After weathering the collapse of late 2008.
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Re: What's keeping megabank execs out of jail? Fear.

Post by Scuzz »

LawBeefaroni wrote:
Scuzz wrote:John Stewart did his opening last night on the JP Morgan Fine. He did a pretty good job of showing the hypocrisy of the bitching people are doing over the fine. He pulled up footage and quotes from various people showing that JP Morgan knew what they were buying (and how the CEO had put $25b aside for a possible fine) and how analysts thought the deal was a great deal for JP Morgan at the time regardless of the BS problems.

He does a pretty good job of putting Cramer and several CNBC financial analysts in their place.
It's still a great deal for JPM, despite the B&S problems and the fine.

JPM shares are 30% higher today than when they bought BS in May 2008. After weathering the collapse of late 2008.
That was Stewart's point. He had highlights of CNBC and Fox Financial analysts saying what a travesty the fine was to JPM and how the NYTimes had no idea what they were talking about.
It was a rare night when Stewart was on target.

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Re: What's keeping megabank execs out of jail? Fear.

Post by malchior »

Scuzz wrote:
LawBeefaroni wrote:
Scuzz wrote:John Stewart did his opening last night on the JP Morgan Fine. He did a pretty good job of showing the hypocrisy of the bitching people are doing over the fine. He pulled up footage and quotes from various people showing that JP Morgan knew what they were buying (and how the CEO had put $25b aside for a possible fine) and how analysts thought the deal was a great deal for JP Morgan at the time regardless of the BS problems.

He does a pretty good job of putting Cramer and several CNBC financial analysts in their place.
It's still a great deal for JPM, despite the B&S problems and the fine.

JPM shares are 30% higher today than when they bought BS in May 2008. After weathering the collapse of late 2008.
That was Stewart's point. He had highlights of CNBC and Fox Financial analysts saying what a travesty the fine was to JPM and how the NYTimes had no idea what they were talking about.
It was a rare night when Stewart was on target.
Last night was a fine episode - I thought he was blisteringly accurate - showed the complete hypocrisy over in the financial press and then went on to get a racist douche to self-immolate. It was a good night for them.

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Re: What's keeping megabank execs out of jail? Fear.

Post by Pyperkub »

Taibbi weighs in, and given what we've seen above the only surprises are about the extent of how easy they are getting off, on the order of maybe 10 cents on the dollar of potential real liability:
First of all, the settlement, as the folks at Better Markets have pointed out, may wipe out between $100 billion and $200 billion in potential liability – meaning that the bank might just have settled "for ten cents or so on the dollar." The Federal Housing Finance Agency alone was suing Chase and its affiliates for $33 billion. The trustee in the ongoing Bernie Madoff Ponzi scandal was suing Chase for upwards of $19 billion.

Obviously, those plaintiffs may never have gotten that kind of money out of Chase. But just settling the mere potential of so much liability has huge value for the bank. It's part of the reason the company's share price hasn't exactly cratered since the settlement was announced.

Moreover, the settlement is only $9 billion in cash, with $4 billion earmarked for "mortgage relief." Again, as Better Markets noted, we've seen settlements with orders of mortgage relief before, and banks seem to have many canny ways of getting out of the spirit of these requirements.

In the foreclosure settlement, most of the ordered "relief" eventually came in the form of short sales, with banks letting people sell their underwater houses and move out without paying for the loss in home value. That's better than nothing, but it's something very different than a bank working to help families stay in their homes.

There's also the matter of the remaining $9 billion in fines being tax deductible...
About what you expect...
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Re: What's keeping megabank execs out of jail? Fear.

Post by Pyperkub »

malchior wrote:Judge dismisses bulk of LIBOR lawsuit claims. :doh:

Another good one. The banks pretty much get caught red handed committing widespread fraud...the governments of multiple nations fines them...yet there is not enough basis for a lawsuit to go forward. Ok, cool.
Fannie May filed LIBOR manipulation suit today against many of the same culprits:
Fannie Mae sued nine major banks Thursday for allegedly causing the mortgage finance giant at least $800 million in losses by rigging a financial benchmark used to set rates on trillions of dollars in mortgages, credit cards, loans and financial derivatives.

Widening an international legal battle over the manipulation, Fannie Mae accused the banks of "pervasive" manipulation of the London Interbank Offered Rate to favor their own trading.

The lawsuit targets U.S. banks JPMorgan Chase, Bank of America and Citigroup, along with global banks Barclays, UBS, Royal Bank of Scotland, Deutsche Bank,Credit Suisse and Rabobank.
Freddie Mac's lawsuit from March is still ongoing as well:
In its complaint, Freddie Mac points out two ways that the artificially lower rates cost it money. First, the company hedged is mortgage positions by buying swaps on the fixed-rate mortgages it held so that it received floating-rate payments. When Libor was pushed down by the banks, Freddie Mac received lower payments from the swaps.

The company also bought the swaps from a number of banks that participated in setting Libor. That has led the firm to include claims for breach of contract, as Freddie asserts that any manipulation violated the terms of the agreements to receive payments.

In addition, Freddie Mac held a large portfolio of mortgage-backed securities with floating interest rates. The lower the rate, the less it received in interest. Homeowners may have benefited from the manipulation in Libor by paying less interest on their mortgages, but Freddie Mac received less income on these financial instruments.
There are three ways to not tell the truth: lies, damned lies, and statistics.

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Re: What's keeping megabank execs out of jail? Fear.

Post by Pyperkub »

Maybe not getting off so easily, as there may be some probation violations occurring...
It would be the Wall Street equivalent of a parole violation: Just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave.

A mixture of new issues and lingering problems could violate earlier settlements that imposed new practices and fines on the banks but stopped short of criminal charges, according to lawyers briefed on the cases. Prosecutors are exploring whether to strengthen the earlier deals, the lawyers said, or scrap them altogether and force the banks to plead guilty to a crime.

That effort, unfolding separately from a number of well-known investigations into Wall Street, has ensnared several giant banks and consulting firms that until now were thought to be in the clear.
Who took the cookie from the coo-oo-ookie jar?...
There are three ways to not tell the truth: lies, damned lies, and statistics.

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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

No one will go to jail though. Banks will pay a fine but those making the decisions to cheat will remain free.


Steven Cohen is still a free man, right?
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Re: What's keeping megabank execs out of jail? Fear.

Post by Pyperkub »

Huzzah! Taibbi's back on the beat. Maybe one bank exec will go to jail (of course, it's probably the whistleblower):
Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations....

...This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.

And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. "I could be sued into bankruptcy," she says. "I could lose my license to practice law. I could lose everything. But if we don't start speaking up, then this really is all we're going to get: the biggest financial cover-up in history."
A few weeks later, in early 2007, she sent a long letter to another managing director, William Buell. In the letter, she warned Buell of the consequences of reselling these bad loans as securities and gave detailed descriptions of breakdowns in Chase's diligence process.

Fleischmann assumed this letter, which Chase lawyers would later jokingly nickname "The Howler" after the screaming missive from the Harry Potter books, would be enough to force the bank to stop selling the bad loans. "It used to be if you wrote a memo, they had to stop, because now there's proof that they knew what they were doing," she says. "But when the Justice Department doesn't do anything, that stops being a deterrent. I just didn't know that at the time."
There are three ways to not tell the truth: lies, damned lies, and statistics.

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Re: What's keeping megabank execs out of jail? Fear.

Post by GreenGoo »

Well at least it was a victimless crime.

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Re: What's keeping megabank execs out of jail? Fear.

Post by El Guapo »

...fear of this battle station.

[That's what I hear in my head whenever I see this thread title]

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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

Well, that was uplifting.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: What's keeping megabank execs out of jail? Fear.

Post by Rip »

GreenGoo wrote:Well at least it was a victimless crime.

Kinda the opposite. There are countless victims, many of whom don't even realize they were victims.

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Re: What's keeping megabank execs out of jail? Fear.

Post by Isgrimnur »

thatsthejoke.jpg

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Re: What's keeping megabank execs out of jail? Fear.

Post by Rip »

Isgrimnur wrote:thatsthejoke.jpg
Too lazy to find an actual picture to mock me? I feel so slighted.....

:P

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Re: What's keeping megabank execs out of jail? Fear.

Post by Rip »

Here.

Image

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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

Rip wrote:Here.

Image
He never said that. What a terrible gif.


I say, I keep pitchin em and you keep missin em.

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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

That's a joke, son. A flag waver. You're built too low. The fast ones go over your head. Ya got a hole in your glove. I keep pitchin' 'em and you keep missin' 'em. Ya gotta keep your eye on the ball. Eye. Ball. I almost had a gag, son. Joke, that is.
I made a funny son and you’re not laughin
Jack Pot jack pot. That’s a joke son, don’t ya get it?

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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

She's a damned hero and she'll probably be bankrupted for it.
By the time the working group was set up, most of the applicable statutes of limitations had either expired or were about to expire. "A conspiratorial way of looking at it would be to say the state waited far too long to look at these cases and is now taking its sweet time investigating, while the last statutes of limitations run out," says famed prosecutor and former New York Attorney General Eliot Spitzer.

It soon became clear that the SEC wasn't so much investigating Chase's behavior as just checking boxes. Fleischmann received no follow-up phone calls, even though she told the investigator that she was willing to tell the SEC everything she knew about the systemic fraud at Chase. Instead, the SEC focused on a single transaction involving a mortgage company called WMC. "I kept trying to talk to them about GreenPoint," Fleischmann says, "but they just wanted to talk about that other deal."

The following year, the SEC would fine Chase $297 million for misrepresentations in the WMC deal. On the surface, it looked like a hefty punishment. In reality, it was a classic example of the piecemeal, cherry-picking style of justice that characterized the post-crisis era. "The kid-gloves approach that the DOJ and the SEC take with Wall Street is as inexplicable as it is indefensible," says Dennis Kelleher of the financial reform group Better Markets, which would later file suit challenging the Chase settlement. "They typically charge only one offense when there are dozens. It would be like charging a serial murderer with a single assault and giving them probation."

...

She gave Elias and his team detailed information about everything she'd seen: the edict against e-mails, the sabotaging of the diligence process, the bullying, the written warnings that were ignored, all of it. She assumed that it wouldn't be long before the bank was hauled into court.

Instead, the government decided to help Chase bury the evidence. It began when Holder's office scheduled a press conference for the morning of September 24th, 2013, to announce sweeping civil-fraud charges against the bank, all laid out in a detailed complaint drafted by the U.S. attorney's Sacramento office. But that morning the presser was suddenly canceled, and no complaint was filed. According to later news reports, Dimon had personally called Associate Attorney General Tony West, the third-ranking official in the Justice Department, and asked to reopen negotiations to settle the case out of court.
In today's America, someone like Fleischmann – an honest person caught for a little while in the wrong place at the wrong time – has to be willing to live through an epic ordeal just to get to the point of being able to open her mouth and tell a truth or two. And when she finally gets there, she still has to risk everything to take that last step. "The assumption they make is that I won't blow up my life to do it," Fleischmann says. "But they're wrong about that."
And wouldn't you know it, she's a Canadian. I'm kind of crushing.


Jamie Dimon is still a shitbag, too.
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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

Oh, and in case it isn't obvious, Holder is still afraid.
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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

LawBeefaroni wrote:Jamie Dimon is still a shitbag, too.
According to FoxNews, he's an American Hero who was unfairly punished for doing us all the favor of buying Bear Sterns. :)
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

http://www.bloomberg.com/news/2014-09-3 ... -line.html

I don't know about uncovering jail stuff but I also read this today, where a Fed investigator for Goldman Sachs was fired for hurting GS' feelings. (It had nothing to do with her findings that GS were breaking conflict of interest regulations established by the Fed)

“No” means anything negative: I disagree. You are wrong. You didn’t do what you said you would. You’re late and wasted my time.

This is central to why Carmen Segarra was fired from the New York Federal Reserve, the dirty laundry from it all now scattered about Wall Street’s front yard for all the neighbors to see. Beyond the other elements to the conflict that resulted in the termination of a woman who did the job she was hired to do, but didn’t do it the way Jennifer Aniston would have done it, lies human nature.

It’s now human nature to play nice. Above all, be nice. It will be referred to as being “professional” or being “collegial.” We’d always thought that risking screwing something up because of a preoccupation with hurting someone’s feelings was being unprofessional.
Besides, that wasn’t the case with Segarra. In the anecdotes at the heart of her saga, notably the dispute over whether Goldman had a companywide conflict-of-interest policy that met the New York Fed’s (supposed) standards, she knew her job. She was a trained expert in compliance, and she said Goldman’s didn’t cut it.

But her bosses didn’t like the discomfort her results produced. Her findings weren’t, well, nice.

“It’s not like Goldman doesn’t know what an adequate policy contains, she says,” Jake Bernstein writes for Pro Publica, recounting Segarra’s confrontation with her boss. “They have proper policies in other areas.”

“But can’t we say they have a policy?” her boss asks her in one recording. You can hear a little whine that says, “Can’t you be nice?”

Funny, then, that the day this all broke, last Friday, Goldman issued a new conflict-of-interest policy that prohibits investment bankers from trading individual stocks and bonds.

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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

RunningMn9 wrote:
LawBeefaroni wrote:Jamie Dimon is still a shitbag, too.
According to FoxNews, he's an American Hero who was unfairly punished for doing us all the favor of buying Bear Sterns. :)
Yep, bold and heroic. He got Bear Stearns for $2/share, 97% of which was collateralized by mortgages JPM held (in a so-called no-recourse loan). So essentially $0.06 per share.

If they had offered that same deal to the general public, $2/share, who wouldn't have taken it? No? Now imagine that you could collateralize 97% of it with the negative equity in your mortgage and they can't call your mortgage due. $0.06/share and pay your mortgage--for Bear Stearns.
Last edited by LawBeefaroni on Sat Nov 08, 2014 12:46 pm, edited 1 time in total.
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Re: What's keeping megabank execs out of jail? Fear.

Post by malchior »

Every time I see one of these stories I think to the pitchforks thread and then think to myself -- not that I believe in violence to solve political/societal issues - but these guys are really pushing whether it seems justified or not. It is crazy that this level of corruption is out there in the open - and no one really cares...

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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

I was talking to a guy about this the other day. According to him, the fault for all of this lies with the individuals that obtained and defaulted on these mortgages. They shouldn't have taken out the mortgage.

And while it is true that as a matter of personal finance - individuals accepting bad mortgages that they couldn't afford is not what led to this crisis.

Companies buying these shitty mortgages, in some cases AFTER THEY WERE ALREADY IN DEFAULT, and then packaging them up while lying about what they were - is what turned this into a complete clusterfuck.

Nope, it's all the fault of the people that got talked into shitty mortgages that are to blame. Jamie Dimon is a saint for bailing us out by buying Bear Sterns and WaMu or whoever else they bought.

He's the worst. :)
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: What's keeping megabank execs out of jail? Fear.

Post by GreenGoo »

RunningMn9 wrote:I was talking to a guy about this the other day. According to him, the fault for all of this lies with the individuals that obtained and defaulted on these mortgages. They shouldn't have taken out the mortgage.

And while it is true that as a matter of personal finance - individuals accepting bad mortgages that they couldn't afford is not what led to this crisis.

Companies buying these shitty mortgages, in some cases AFTER THEY WERE ALREADY IN DEFAULT, and then packaging them up while lying about what they were - is what turned this into a complete clusterfuck.

Nope, it's all the fault of the people that got talked into shitty mortgages that are to blame. Jamie Dimon is a saint for bailing us out by buying Bear Sterns and WaMu or whoever else they bought.

He's the worst. :)
Lol. Ask him how an individual with poor financial management skills can bring the whole country into recession. Then ask him what would happen if he defaulted on his credit card. Then ask him how he thinks defaulting on his credit card would bring the country to its knees.

Listen, I think personal responsibility is paramount. I both shake my head and laud LM for sticking with his mortgage and fulfilling his obligations despite being so deep under water the pressure should have killed him long ago. It truly is amazing. Of course he managed to stay employed. If they had shit canned him he would have defaulted, strong personal responsibility ethos or no. And that's with a decent, lower risk mortgage than what we're talking about.

Back when I was furious with one of the big little guys (they're gone now, I can't think of their name. A household name anyway) for spending their bailout money on fulfilling their contractual obligations on bonuses for their execs instead of remaining solvent (they were bought out at a steal before going under), I mentioned my anger to a wife of one of their execs. She patronizingly began to explain to me that their not really bonuses, but how execs get paid, like that was news to me, a poor simple minded < 1%er. Since I didn't want to go hulk smash, I ended the conversation immediately.

Sounds like you're up against someone who has looked into the situation only far enough to find a convenient answer that they like, and that's all there is to it. Fun.

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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

Yeah, he is completely impervious to anything that doesn't reinforce the answer he is sure that he is correct about.

I tried to explain that is if a predatory lender talked me into a loan (our outright lied on the application to clear the underwriter), and I ended up defaulting - then that's the consequences that the predatory lender took on when they sold me the mortgage.

Without the shenanigans that went on, me defaulting on my mortgage hurts whoever is holding the mortgage. It was only after assholes like Chase figured out a way to buy them, lie about what they bought, and then sold them to everyone else (via their pensions, etc.).

Nope. NIVM loans!!!
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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RunningMn9
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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

And of course, Democrats relaxing mortgage standards in the late 90s. And Democrats encouraging irresponsible levels of home ownership. Of course.

He cannot comprehend that while those things led to a housing bubble that popped, those aren't what led to the credit market seizing, outside of the fact that these friggin criminals used the housing bubble to commit their crime.

Housing bubbles don't kill economies. Shithead criminals that use housing bubbles to commit fraud kill economies.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: What's keeping megabank execs out of jail? Fear.

Post by GreenGoo »

Yep.

Hulk smash.

I'd still like to slap those who knowingly took < than interest mortgages, but they're so far down the list that my arm would be too sore to smack them by the time I got to them.

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Re: What's keeping megabank execs out of jail? Fear.

Post by Isgrimnur »

Not everyone in the world is smart enough or willing to peel back the curtain when someone promises them that all their dreams can come true.

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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

Isgrimnur wrote:Not everyone in the world is smart enough or willing to peel back the curtain when someone promises them that all their dreams can come true.
No excuses (for them). According to this guy. If you aren't smart enough to understand the terms of your mortgage, you shouldn't have one. Again - not terrible advice when it comes to personal finance.

Just totally irrelevant when it comes to why credit markets seized.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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LordMortis
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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

RunningMn9 wrote:
Isgrimnur wrote:Not everyone in the world is smart enough or willing to peel back the curtain when someone promises them that all their dreams can come true.
No excuses (for them). According to this guy. If you aren't smart enough to understand the terms of your mortgage, you shouldn't have one. Again - not terrible advice when it comes to personal finance.

Just totally irrelevant when it comes to why credit markets seized.
That makes no sense. The people who walked away understood the terms. That was precisely why they walked away. The terms of my mortgage were: if I didn't then pay the government would kick me out my house and the bank would take possession and tank my credit. That was the deal. Defaulting is part of the deal. And that was the so many people took when the market tanked. Even if all of the mortgagers defaulted, the banks should have come out ahead getting both the principle paid so far and interest and the house valued at what it was appraised for.

But it's not illegal to default on your loan and get your house repossessed nor should it be. It's so not illegal that if the bank thinks you're a risk, then you pay higher interest even though they get your house if you default. It's so not illegal that if the bank can't secure enough money from you up front, they charge you insurance against defualting even though they get your house if you default. The bank needs to do due diligence on the lendee and more importantly the property when they agree to give you money and secure your home as terms for non payment. Notice how when the banks could no longer package shitty loans and could no longer encourage overpaying for houses they stopped giving money out, even when the Fed literally gave them free money with the expressed intent of loaning it out. And they didn't loan money from QE, it took strong arming and nearly two years of effort from the Obama administration to actually get them to use the Making Homes Affordable money to help underwater mortgagers refinance. Even though I was eligible Citi refused and sold my mortgage to IBM who also refused. It took Obama going to Quicken loans to set things right in 2012 before a bank would deal with me. (Of course by then refinancing no longer made sense.)

Now groupthink defaulting is a shitty thing to do and was a catalyst for exacerbating the crash but the cause was overvaluing of homes which meant getting people into homes they didn't care about with too much of their incomes at stake (the banks fault).

If your associate is to lay proximate blame in anyone other than the banks then I'd blame the Carter administration and their idea that every one should own a home, encouraging government, bank, and individual toward that end.

Image

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

I'll be he's dyed in wool republican and would have no problem blaming Carter. :D

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GreenGoo
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Re: What's keeping megabank execs out of jail? Fear.

Post by GreenGoo »

I...tried to follow along and while I agree with various specific statements, I'm not sure what your thesis is or how you draw the conclusions I think you do from the statements you made.

This could be a communication issue on my end. I'll try again tomorrow after some sleep

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Zarathud
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Re: What's keeping megabank execs out of jail? Fear.

Post by Zarathud »

My mom is able to survive with very little income because she owns the home where we grew up. The old neighborhood has become rather run-down, but it's her old house so she'll decide whether the work is necessary to keep it livable. It may have lost a great deal of value since the boom, but she never looked to it as an income-producing asset.

Your house is the only asset that's useful when it's losing value. Whether you're locked into a mortgage or rent, you're going to pay. The only question is where you are 30 years from now. If you own, the mortgage will eventually be fully paid so it's easier to float the taxes and repairs. Home ownership was never intended to be a money-maker, but a nest egg.

President Carter didn't sell people on flipping houses and loans, or mortgages that could never be repaid. That bubble started in 1995 when President Clinton signed into law banking deregulation widely supported in Congress after the 1994 Republican Revolution. The deregulation only accelerated during President G.W. Bush's administration, which allowed the lending risk to be sold off to investors in mortgage-backed securities.
Last edited by Zarathud on Tue Nov 11, 2014 12:29 am, edited 1 time in total.
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RunningMn9
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Re: What's keeping megabank execs out of jail? Fear.

Post by RunningMn9 »

I think you misspelled Clinton. Wasn't the deregulation something that occurred in the late 90s?
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: What's keeping megabank execs out of jail? Fear.

Post by LawBeefaroni »

LordMortis wrote:
Now groupthink defaulting is a shitty thing to do and was a catalyst for exacerbating the crash but the cause was overvaluing of homes which meant getting people into homes they didn't care about with too much of their incomes at stake (the banks fault).
Enlarge Image
It wasn't the overvaluing of homes. Well, it was and it wasn't. Homes were overvalued by 20%, 50%, hell, let's go nuts and say 100% in some cases. So a $200K mortgage on a $100K home is a $100K loss. The system can handle that. What it can't handle is JPM or whoever repackaging that $100K loser and selling it at face value to someone else and then buying insurance (naked CDSs) from AIG against what they no longer held. AIG gets bailed out, JPM gets paid for the speculative insurance they bought against the turd sandwich they sold to someone else, the homeowner defaults, and the pension plan gets fucked. So it was less the overvalued homes, and more the overvalued mortgages that were repackaged and re-rated by Standard and Poors (among others) as stable and solid. It was the reselling of these and the subsequent selling of credit default swaps against them as speculative vehicles.

It was turning $100K of bad mortgage into $1M of bad securities and derivatives.

LordMortis wrote:If your associate is to lay proximate blame in anyone other than the banks then I'd blame the Carter administration and their idea that every one should own a home, encouraging government, bank, and individual toward that end.
I think the blame is on lawmakers who saw fit to let banks guard the henhouse for decades.
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Re: What's keeping megabank execs out of jail? Fear.

Post by Pyperkub »

With fraudulent AAA ratings to play a huge game of hot potato with - make no mistake about it, it took fraud at all levels to make this happen.
There are three ways to not tell the truth: lies, damned lies, and statistics.

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Re: What's keeping megabank execs out of jail? Fear.

Post by Zarathud »

That reminds me of one business deal 10 years ago where I asked what happened if the large commercial bank wasn't able to release a massive amount in escrowed funds after a deal closed. The answer? If the bank couldn't deliver the escrow, the client would have much more concern about the U.S. economy than just their deal. We had to assume the bank wouldn't fail, or the economics of the international business deal couldn't work.
"If the facts don't fit the theory, change the facts." - Albert Einstein
"I don't stand by anything." - Trump
“Bad men need nothing more to compass their ends, than that good men should look on and do nothing.” - John Stuart Mill, Inaugural Address Delivered to the University of St Andrews, 2/1/1867
“It is the impractical things in this tumultuous hell-scape of a world that matter most. A book, a name, chicken soup. They help us remember that, even in our darkest hour, life is still to be savored.” - Poe, Altered Carbon

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LordMortis
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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

Where did we leave off on this?

http://www.nytimes.com/2015/05/14/busin ... .html?_r=1
For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.

But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity. Most if not all of the pleas are expected to come from the banks’ holding companies, the people said — a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.

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Trent Steel
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Re: What's keeping megabank execs out of jail? Fear.

Post by Trent Steel »

LordMortis wrote:Where did we leave off on this?

http://www.nytimes.com/2015/05/14/busin ... .html?_r=1
For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.

But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity. Most if not all of the pleas are expected to come from the banks’ holding companies, the people said — a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.
Fraud City.

:grund:
18-1™ & 2-0

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LordMortis
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Re: What's keeping megabank execs out of jail? Fear.

Post by LordMortis »

AIG sues the Government for harsh treatment and wins... but gets nothing for its troubles.

http://www.nytimes.com/2015/06/16/busin ... .html?_r=1

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