Inside the Biggest Bank Failure in American History

—By Gavin Aronsen

| Mon Jun. 11, 2012 10:02 AM PDT

 

The Lost Bank

By Kirsten Grind
SIMON & SCHUSTER

The collapse of Washington Mutual, which the Federal Deposit Insurance Corporation placed in receivership in 2008 near the outset of the Great Recession, was the largest bank failure in US history. Yet in comparison to the crashes and bailouts on Wall Street, it received little in-depth coverage outside its Seattle hometown. Reporting for a small paper in nearby Puget Sound, Kirsten Grind, who now writes for the Wall Street Journal, followed the story meticulously and was named a Pulitzer finalist for her troubles. The Lost Bank, out this week, is the culmination of her award-winning work.
Packaged as a narrative tragedy, the book tells the story of WaMu's adept transition to a publicly traded company under CEO Lou Pepper in 1983, successor Kerry Killinger's failed attempt to establish the "Wal-Mart of banking" to cater to Main Street, and a last-ditch three-week effort after Killinger's ouster that failed to convince the feds to save the company. Along the way, WaMu's down-home sensibilities and the "frugal is sexy" work ethic that steered the bank back to profitability through the savings and loan debacle succumbed to the allure of the subprime bubble.
  READ MORE
 

What if we were drone targets?

Anti Krogian terrorist target 34th and 8th Ave Starbucks
Target locked,  fire when ready...

Letters to the editor, June 13

Several recent articles have described how our president and his committee decide which people are terrorists and who should be attacked by a drone aircraft ("Death by drone a disturbing trend," Editorial, Insight, June 10).
Many have been murdered. At least one was an American citizen, which counters the idea that a person is presumed innocent until proved guilty at a trial. Isn't it an act of war when a government of one country kills people in another country ?
Let us imagine a time in the future when another country also has drones. That country decides that a citizen of this country is opposed to its government and is therefore a terrorist.
It sends its drone to San Francisco and blasts the alleged terrorist as well as several others who happen to be in the coffee shop at that moment. How will we react, knowing that this is a routine action by our government?
Burt Rodgers, Walnut Creek

We'll rue the day

Scarcely less troubling than the opacity of the process by which drone-death targets are chosen is the administration's arrant flouting of the sovereignty of the several countries recipient of these unbidden attacks. The day likely will come, as it did concerning nuclear weaponry, when mastery of this latest technical marvel will not be ours alone, and we will rue this unfortunate precedent.
Richard Boyce , San Francisco    READ MORE

 

KKK Chapter Wants to Adopt-a-Highway. Will Georgia Let Them?

A fascinating legal battle is brewing in Georgia over a mile-long piece of road.

From the Atlanta Journal-Constitution:

The Georgia Department of Transportation is reviewing the May 21 request filed by International Keystone Knights of the KKK in Union County and are set to meet with lawyers from the state attorney general’s office today to decide what to do.

The application — which covers a one-mile stretch of Route 515 in the Appalachian Mountains near the North Carolina border — has placed Georgia officials in a bind. A lengthy legal battle took place in Missouri after that state sought to ban an effort by the KKK to adopt a road there. Missouri eventually lost, with courts holding that the First Amendment prevented the state from denying an applicant because it disagreed with their viewpoint.

Georgia officials could be forced to choose between approving the application in Union County, denying it and facing a likely legal fight or sidestepping the problem by ending the state’s 23-year-old Adopt-A-Highway program, where participants volunteer to beautify state highways in exchange for road signs advertising their efforts.

            READ MORE

Twisted: PSU Officials Thought Not Reporting Sandusky Was The "Humane" Thing To Do

Graham Spanier

It’s sort of hard to believe that folks could have behaved even more poorly in the events surrounding the coverup of former Penn State football coach Jerry Sandusky’s alleged sexual abuse and assault of children he met through his Second Mile charity. But as his trial is underway, it appears my beliefs have been confounded: Pennsylvania’s attorney general is now suggesting that former Penn State vice president Gary Schultz kept a file on Sandusky, and that in emails between him and former Penn State president Graham Spanier suggest that university officials thought it would be more “humane” not to report Sandusky than to report him. The full report from a local CBS station is here:



There’s a debate to be had about whether it makes sense for universities to build enormous sports edifices in their midst and to become reliant on the revenue they provide. But if they’re going to make that decision, I think we can all agree that for those institutions to survive, university administrators need to distinguish between athletic programs and the people who run them. And while I want to see the full text of the emails, the idea that not reporting Sandusky would have been the “humane” thing seems grotesque in a way that would be almost impossible to justify even in context, and reflects a profound failure of judgement.  



There’s a debate to be had about whether it makes sense for universities to build enormous sports edifices in their midst and to become reliant on the revenue they provide. But if they’re going to make that decision, I think we can all agree that for those institutions to survive, university administrators need to distinguish between athletic programs and the people who run them. And while I want to see the full text of the emails, the idea that not reporting Sandusky would have been the “humane” thing seems grotesque in a way that would be almost impossible to justify even in context, and reflects a profound failure of judgement.  READ MORE

How Wall Street Hustles America's Cities and States Out of Billions

Many powerful interests have jumped at the opportunity to use the crisis to eviscerate what’s left of the welfare state.

June 12, 2012

We all know that America’s cities and towns are in the throes of a deep financial crisis. And are told, over and over, what’s supposedly behind it: unreasonable demands by grasping state and municipal workers for pay and pensions. The diagnosis is a grotesque cartoon. Many of the biggest budget busters are on Wall Street, not Main Street.

In a country as big and locally diverse as the U.S., any number of wacky pay and pension schemes are likely to flourish, though some of the most outrageous turn out to cover not workers, but legislators.  But overall state and local pay has not been growing faster than in the private sector for equivalent work for many years now. 

What has driven cities and towns to the brink is not demands from their workforce but the collapse of national income and the ensuing fall in tax collections. Or, in other words, the Great Recession itself, for which Wall Street and the financial sector are principally to blame. But many powerful interests have jumped at the opportunity to use the crisis to eviscerate what’s left of the welfare state, roll back unionization to pre-New Deal levels, and keep cutting taxes on the wealthy. The litany of horror stories that now fills the media is ideal for their purposes.  READ MORE

Why Conservatives Wrongly Blame Single Moms for the Disastrous Failures of the Right-Wing Economic Model

"Broken homes" are irrelevant when there are so few well-paid jobs with decent benefits.

June 12, 2012

We should view lower-income single moms as heroes. Most of them make enormous sacrifices to raise their kids -- trying to balance work and parenthood in a society that offers them very little support. Many are forced to forego opportunity to advance, working multiple jobs just to scrape by. But too often, they're villified – blamed not only for failing to “keep their man,” but also for America's persistently high poverty rate and dramatic inequality.

The idea that the decline of “traditional marriage” is the root cause of all manner of social problems is especially prominent on the political Right. Serious research into the causes of wealth and income inequality has not been kind to the cultural narratives conservatives tend to favor, but they nonetheless persist because such explanations have immense value for the Right. They offer an opportunity to shift focus from the damage corporate America's preferred economic policies have wrought on working people – union-busting, defunding social programs in order to slash taxes for those at the top and trade deals that make it easy for multinationals to move production to low-wage countries and still sell their goods at home – and onto their traditional bogeymen: feminism, secularism and whatever else those dirty hippies are up to.

The single mother, especially the black or brown single mother, plays an outsized-role in this discourse. A compelling body of research suggests that economic insecurity leads to more single-parent “broken homes,” yet the Right clings tirelessly to the myth that the causal relationship is the other way around.   READ MORE

Witness: Sandusky treated me like a ‘girlfriend’

Ex-coach McQueary testifies 'no doubt' he saw Sandusky having sex with young boy

Updated at 6:49 p.m. ET: Michael McQueary, a former assistant football coach at Penn State University, testified Tuesday that he had "no doubt" that he saw Jerry Sandusky having sex with a young boy in the team's showers.

Visit msnbc.com for breaking news, world news, and news about the economy

Mike McQueary arrives at court to testify in the child
sexual abuse trial of former Penn State University
assistant football coach Jerry Sandusky in Bellefonte,
Pa. (Gene J. Puskar, Associated Press / June 12, 2012)

 McQueary, 37 — a key witness in Sandusky's child sexual abuse trial but one whose testimony has been characterized as varying and hard to reconcile — was on the prosecution's witness list but hadn't been expected to testify until Wednesday at the earliest.

Sandusky, 68, the former longtime defensive coordinator at Penn State, denies all 52 counts alleging that he abused 10 boys over 15 years. Two grand jury reports accused him of having used his connection to one of the nation's premier college football programs to "groom" the boys, whom he met through his Second Mile charity for troubled children, for sexual relationships.

  READ MORE

George Zimmerman's wife arrested, charged with perjury

Seminole County jail mugshots of George Zimmerman
and his wife, Shellie Zimmerman. (Seminole County
jail, Seminole County jail / June 12, 2012)

By Jeff Weiner, Orlando Sentinel

10:01 p.m. EDT, June 12, 2012

At her husband's bond hearing, Shellie Zimmerman was asked repeatedly about money. Among the questions: How much did the couple collect in donations through George Zimmerman's website?
"Currently, I do not know," Shellie Zimmerman replied. She and other family members described their financial situation as dire. Judge Kenneth Lester granted George Zimmerman $150,000 bond on the second-degree-murder charge he faces in the death of 17-year-old Trayvon Martin.

But prosecutors say Shellie Zimmerman spent the days before that April hearing shifting tens of thousands of dollars out of her husband's account, then deliberately lied to the judge.

On Tuesday, she was arrested on a perjury charge and booked into John E. Polk Correctional Facility. It's the same jail her husband has called home since the deception was revealed earlier this month, leading the judge to revoke his bond.

"The prosecutor sent a strong message that you have to tell the truth in court because it is the whole basis of the American judicial system," said Benjamin Crump, an attorney for Trayvon's family, after learning of the new arrest.

In an affidavit, prosecutors revealed new details about Shellie Zimmerman's alleged efforts to hide money from the court.  READ MORE

VA Climate Change Report Left Out Terms Like "Climate Change" for Fear of GOP Backlash

Earlier this year the state of Virginia paid $50,000 for a study on the potential effects of climate change and sea level rise on the state's coastline.

Only one problem: The report's authors weren't allowed to use terms like "climate change" and "sea level rise" because state lawmakers feared a backlash from the state's Republicans and Tea Partiers.

The Virginian-Pilot reports:

[Lawmakers] discovered that they could not use the phrases "sea level rise" or "climate change" in requesting the study, in part because of objections from Republican colleagues and also for fear of stirring up conservative activists, some of whom believe such terms are liberal code words.

On its website, for example, the Virginia tea party described the proposed "sea level rise" study this way: "More wasted tax dollars for more ridiculous studies designed to separate us from our money and control all land and water use."

Liberal code words, eh? What about "recurrent flooding," the phrase used in the report in place of "sea level rise"?   READ MORE

7 States That Ban Atheists From Holding Public Office

States with laws on the books barring atheists from holding public office: Arkansas, Maryland, Mississippi, Pennsylvania, South Carolina, Tennessee, and Texas.

Surprised or no? 

By Lauren Kelley | Sourced from AlterNet

Posted at June 11, 2012, 6:53 am

  FROM THE SITE

Members of Senate Banking Committee Will Question Their Top Donor: JP Morgan Chase

Of the 22 members on the Congressional hearing charged this week with questioning JPMorgan CEO Jamie Dimon over his bank’s $2 billion trading loss, 7 members, including the Chairman and a ranking member, have JPMorgan as one of their top five political contributors.

As AlterNet reported, Tim Johnson, the Senate Banking’s chair, has JPMorgan as his single largest contributor (from 2005-2010). But there’s more to the story. Six other members on the supposed watchdog committee enjoy sizeable contributions from JPMorgan as well (numbers from 2007-2012), totaling $351,582.

They include:

• - Richard Shelby (R-AL) — $72,950 (Ranking Member)
• - Jack Reed (D-RI) – $29,850
• - Robert Corker (R-TN) – $61,000
• - Michael Crapo (R-ID) — $33,982
• - Jon Tester (D-MT) – $45,000
• - Mark Warner (D-VA) – $108,800

What’s more alarming, the entire Congressional panel is fraught with political donations from the “Securities and Investment” industry. The grand total? $13,423,762.

  READ MORE

The Real Reason Apple Can't Make Your iPhone in America

China has essentially recruited our business leaders to fight against our own government.

June 11, 2012

The following is an adapted version of a speech delivered at Netroots. 

We used to make things here, and then came free trade and then China opened up, and we moved a lot of manufacturing there, especially electronics. We say Apple here, because Apple is the most obvious, and because the supposed values of Apple conflict dramatically with what we now know about the working conditions of the people who make their products. But we mean ALL OF THEM.

We used to think that China got so much business because labor was cheap. The elites, benefiting from that, said take advantage of the low prices, and our workers can move on to better, more productive pursuits.

Of course, intentionally undercutting the wages of our own workers was bad enough. And using that as a wedge to break unions was bad enough. But the story of our trade deal with China is much worse than that.  READ MORE

Banks Booting Families and Leaving Homes to Rot: A Tour of Blighted Homes in Los Angeles

Photo Credit: Melissa Chadburn

Los Angeles has an ordinance that fines banks for leaving foreclosed homes in disrepair. So why are so many of them blighted, dragging down whole neighborhoods?

June 11, 2012

These enormous economic shifts imprint people at an incredibly deep level. We feel it. When we wake up in the morning. We are going through the pain of this one. We are having our lives changed by this one.  We take with us through our days the big sack of worry for our kids with this one. It’s on our streets. You see it in the overgrown lawns and boarded-up windows of some of those bank-owned homes.

There’s a loss. A deep loss of trust. And it stays even when the DOW is up. Even when the tickers are going and there’s hopeful news on the radio about the housing market. We are suffering a kind of punishment from this recession. From all the terrible lies that came before. This is what remains. Distrust. Fear. Worry.

We know the foreclosure crisis began with the lies. The banks gave home loans to anyone with a pulse, provided they had another sucker institution lined up to buy the loan. How did they make these loans in the first place? By committing every kind of lending fraud imaginable—particularly by entering fake data on home loan applications magically turning minimum wage janitors into creditworthy wage earners.  READ MORE

24-Year-Old Gets 3 Life Terms in Prison for Witnessing a Drug Deal: The Ugly Truth of Mandatory Drug Sentencing

Clarence Aaron is serving three life terms for a small-time college cocaine deal, another victim of heinous mandatory drug sentencing laws.

June 11, 2012

Want to get the latest on America's drug & rehab culture? Sign up for The Fix's newsletter here.

This is a simple truth: the United States is the only country in the first world that imposes life sentences to teenagers for small-time, non-violent drug offenses. In fact, the American legal system does so with alarming regularity, spending $40 billion a year to lock up hundreds of thousands of low-level dealers. The practice began when Ronald Reagan declared a "War on Drugs" in 1986, and has spread steadily since then. The following year, Congress enacted its federal mandatory sentencing guidelines, which automatically buried tens of thousands of low-level, non-violent drug offenders in the belly of the beast for decades—even for multiple life terms. Just ask Clarence Aaron, inmate number 05070-003.

At the age of 24, Aaron was sentenced to three life terms for his role in a cocaine deal. That's effectively three times the sentence imposed upon Faisal Shahzad, who tried to set off a car bomb in Times Square in 2010. Aaron was a student and football player at Southern University in Baton Rouge. He'd never been arrested. In 1992, he made the mistake of being present for the sale of nine kilograms of cocaine and the conversion of one kilo of coke to crack. Aaron would have earned $1,500 for introducing the buyer and seller. He never actually touched the drugs.

Though his role was minor, Aaron received the longest sentence of anyone involved in the conspiracy when he refused to cooperate with authorities. His case gained national attention in 1999, when he appeared in "Snitch," a PBS Frontline documentary about prisoners serving long sentences after refusing to turn informant.  READ MORE

How Urban Outfitters Peddles Ironic Conservatism, Hipster Racism and Other Terrible Values

Every company uses consumers to sell products, but Urban Outfitters' way of doing so feels especially slimy.

June 11, 2012

Urban Outfitters is the kind of place where you see a lot of young, idealistic progressive types both browsing the racks and standing behind the cash register. Young Republicans, not so much; for khaki pants, bow ties and pin-striped blazers, you’re better off heading to Brooks Brothers.

In 2008 the company sold all kinds of Obama T-shirts, including one that featured the now-famous Shepard Fairey illustration of the Democratic candidate, and no one batted an eye. College kids and hipsters wanted Obama T-shirts! Many of them would probably buy one today.

Which raises the question: Why on earth is Urban Outfitters now selling T-shirts featuring Mitt Romney?

There are a few reasonable explanations for why the Urban Outfitters Romney tees exist, actually. For one thing, Urban Outfitters (which also owns Anthropologie and Free People) is owned by a far-right conservative, Richard Hayne. All that youthful, vaguely hippie-feeling merchandise in his stores? 

That’s just a way to make some dough – dough that Hayne, in turn, gives to right-wing politicians like Rick Santorum. For Hayne, the young people and lefties who shop in his stores are just chumps to whom he can sell $69 peace-sign tank tops while supporting conservative politics.

  READ MORE

Joseph Stiglitz: The Price of Inequality

Noble Prize winning, and highly influential, economist Joseph Stiglitz explains why our economic system is failing most Americans.

June 11, 2012

What happened to America, land of opportunity? In his new book, which hit the shelves yesterday, Nobel Prize-winning economist Joseph Stiglitz takes up that burning question. Taking a long, hard look at the global specter of inequality, Stiglitz describes what causes it, why the trend endangers our future and what to do about it. Stiglitz begins by describing the broader failures of our economic system and how these failures have led to a widespread sense of unfairness and reduced opportunity for most of us. [Reprinted from The Price of Inequality by Joseph Stiglitz. Copyright © 2012 by Joseph Stiglitz. With the permission of the publisher, W.W. Norton & Company, Inc.]

The failure of markets

Markets have clearly not been working in the way that their boosters claim. Markets are supposed to be stable, but the global financial crisis showed that they could be very unstable, with devastating consequences. The bankers had taken bets that, without government assistance, would have brought them and the entire economy down. But a closer look at the system showed that this was not an accident; the bankers had incentives to behave this way.   READ MORE

5 "Stand Your Ground" Cases You Should Know About

Gary W. Green/Orlando Sentinel/Zuma

A mentally disabled man killed at Taco Bell, a stabbing death over car radios, and more aftermath from the radical gun law now in 25 states.

— By Suevon Lee, ProPublica

| Mon Jun. 11, 2012 3:00 AM PDT

This story first appeared on the ProPublica website. For related coverage, see MoJo reporter Adam Weinstein's piece on how the NRA and ALEC pushed Stand Your Ground nationwide, and use this interactive map to track the gun law's rapid spread since 2005.
 
The Stand Your Ground law is most widely associated with the February 26 shooting death of Trayvon Martin, an unarmed 17-year-old killed in Florida by George Zimmerman, a neighborhood watch captain who claimed he was acting in self-defense.

But as a recent Tampa Bay Times investigation indicates, the Martin incident is far from the only example of the law's reach in Florida. The paper identified nearly 200 instances since 2005 where the state's Stand Your Ground law has played a factor in prosecutors' decisions, jury acquittals, or a judge's call to throw out the charges. (Not all the cases involved killings. Some involved assaults where the person didn't die.)

The law removes a person's duty to retreat before using deadly force against another in any place he has the legal right to be—so long as he reasonably believed he or someone else faced imminent death or great bodily harm. Among the Stand Your Ground cases identified by the paper, defendants went free nearly 70 percent of the time.    READ MORE 

  See How Quickly "Stand Your Ground" Spread Nationwide 

2011 New Hampshire, North Carolina, Pennsylvania, and Wisconsin join the list. Nationwide, between 2005 and 2010, justifiable homicides by civilians using firearms doubled in states with the laws, while falling or remaining about the same in states lacking them.   READ MORE

The Internet now has 340 trillion trillion trillion addresses

The IPv6 launch has expanded the number of Internet
addresses to 340 undecillion.

By David Goldman @CNNMoneyTech June 6, 2012: 9:13 AM ET

NEW YORK (CNNMoney) -- One of the crucial mechanisms powering the Internet got a giant, years-in-the-making overhaul on Wednesday.

When we say "giant," we're not kidding. Silly-sounding huge number alert: The Internet's address book grew from "just" 4.3 billion unique addresses to 340 undecillion (that's 340 trillion trillion trillion). That's a growth factor of 79 octillion (billion billion billion).

If it all goes right, you won't notice a thing. And that's the point.
The Internet is running out of addresses, and if nothing were done, you certainly would notice. New devices simply wouldn't be able to connect.

To prevent that from happening, the Internet Society, a global standards-setting organization with headquarters in Geneva, Switzerland; and Reston, Va., has been working for years to launch a new Internet Protocol (IP) standard called IPv6.

IP is a global communications standard used for linking connected devices together. Every networked device -- your PC, smartphone, laptop, tablet and other gizmos -- needs a unique IP address.

With IPv6, there are now enough IP combinations for everyone in the world to have a billion billion IP addresses for every second of their life.   READ MORE