This global financial fraud and its gatekeepers

Protesters outside a Bank of America annual
shareholders' meeting in Charlotte, North Carolina.
Photograph: Jason Miczek/Reuters

The media's 'bad apple' thesis no longer works. We're seeing systemic corruption in banking – and systemic collusion
 Naomi Wolf  guardian.co.uk, Saturday 14 July 2012 10.47 EDT

Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers' fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters' list of demands.
But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week's headlines make such a conclusion, sadly, inevitable.

The New York Times business section on 12 July shows multiple exposes of systemic fraud throughout banks: banks colluding with other banks in manipulation of interest rates, regulators aware of systemic fraud, and key government officials (at least one banker who became the most key government official) aware of it and colluding as well. Fraud in banks has been understood conventionally and, I would say, messaged as a glitch. As in London Mayor Boris Johnson's full-throated defense of Barclay's leadership last week, bank fraud is portrayed as a case, when it surfaces, of a few "bad apples" gone astray.   READ MORE

In DocX Case, Robo-Signing Forgery Charge Hits Top Executive

For the first time since the start of the robo-signing crisis, a senior executive has been indicted on criminal charges of forgery and faces jail. The forgery charges against a mortgage processing executive come as the nation's largest banks attempt to close the books on a civil investigation into widespread document fraud and could spark further federal criminal cases.

A grand jury in Missouri handed up the 136-count indictment late last week charging Georgia-based DocX -- a subsidiary of the massive mortgage processor Lender Processing Services -- and its founder and former president Lorraine O. Brown, with forgery. The indictment alleges that DocX employees fabricated signatures on hundreds of real estate documents, some used in foreclosures.

"This is the first time any grand jury in the country has indicted a corporation or a high-level executive at a corporation for 'robo-signing,'" Missouri Attorney General Chris Koster told The Huffington Post. "The grand jury is alleging that the documents have false signatures on them, that the notarizations are fraudulent and that it was all done with an intent to deceive. If that’s true, it makes the [foreclosure] documents forgeries."

A lawyer for DocX did not immediately return a call seeking comment. A lawyer for Brown told The New York Times she intended to plead not guilty and had no criminal intent.

The indictment stands in sharp contrast to the settlement shaking out over so-called "robo-signing" allegations between the state attorneys general and five of the nation's largest banks. So far, more than 40 states have agreed to what could amount to a $25 billion settlement with Citigroup, Bank of America, Wells Fargo, JPMorgan Chase and Ally Financial over allegations they forged documents and incorrectly foreclosed on homeowners.  READ MORE

Bernanke's Obfuscation Continues: The Fed's $29 Trillion Bail-Out Of Wall Street

Posted: 12/14/11 09:07 AM ET

Since the global financial crisis began in 2007, Chairman Bernanke has striven to save Wall Street's biggest banks while concealing his actions from Congress by a thick veil of secrecy. It literally took an act of Congress plus a Freedom of Information Act lawsuit by Bloomberg to get him to finally release much of the information surrounding the Fed's actions. Since that release, there have been several reports that tallied up the Fed's largess. Most recently, Bloomberg provided an in-depth analysis of Fed lending to the biggest banks, reporting a sum of $7.77 trillion. On December 8, Bernanke struck back with a highly misleading and factually incorrect memo countering Bloomberg's report. Bloomberg has largely vindicated its analysis.

Any fair-minded reader would conclude that Bernanke's memo to Senators Johnson and Shelby and Representatives Bachus and Frank is misleading. One could even conclude that it is not just a veil of secrecy, but rather a fog of deceit that the Fed is trying to throw over Congress.
He argues that the sum total of the Fed's lending was a mere $1.2 trillion, and that it was spread across financial and nonfinancial institutions of all sizes. Further, he asserts that the Fed never tried to hide the bail-outs from Congress. Both of these assertions fly in the face of the facts available (as the Bloomberg response makes clear).

As Bernanke notes, analyses of the bail-out variously put the total at $7.77 trillion (Bloomberg) to $16 trillion (GAO) or even $24 trillion. He argues that these reports make "egregious errors," in particular because they sum lending over-time. He also claims that these high figures likely include Fed facilities that were never utilized. Finally, he asserts that the Fed's bail-out bears no relation to government spending, such as that undertaken by Treasury.

All of these assertions are at best misleading. If he really believes the last claim, then he apparently does not understand the true risks to which he exposed the Treasury as the Fed made the commitments.
  READ MORE

The Size of the Bank Bailout: $29 Trillion

Bankers Are Using the Eurozone Crisis to Wage Warfare on Working People and Seize Control of Governments

Wages and living standards are to be scaled back and political power shifted from elected government to technocrats governing on behalf of big banks and financial institutions. December 19, 2011 This piece was first published in Frankfurter Allgemeine Zeitung The easiest way to understand Europe’s financial crisis is to look at the solutions being proposed to resolve it. They are a banker’s dream, a grab bag of giveaways that few voters would be likely to approve in a democratic referendum. Bank strategists learned not to risk submitting their plans to democratic vote after Icelanders twice refused in 2010-11 to approve their government’s capitulation to pay Britain and the Netherlands for losses run up by badly regulated Icelandic banks operating abroad. Lacking such a referendum, mass demonstrations were the only way for Greek voters to register their opposition to the €50 billion in privatization sell-offs demanded by the European Central Bank (ECB) in autumn 2011. READ MORE

Our Capitalist System Is Near Meltdown

The Wall Street Crash of 1929. (photo: file)

The ailing euro is part of a wider crisis. A 1930s-style crash threatens us and our financial partners. Collective action is the only solution. ighty years ago, faced with today's economic events, nobody would have been in any doubt: we would obviously be living through a crisis in capitalism. Instead, there is a collective unwillingness to call a spade a spade. This is variously a crisis of the European Union, a crisis of the euro, a debt crisis or a crisis of political will. It is all those things, but they are subplots of a much bigger story: the way capitalism has been conceived and practised for the last 30 years has hit the buffers. Unless and until that is recognised, western economies will be locked in stagnation which could even transmute into a major economic disaster. Simply put, the world has trillions upon trillions of excessive private debt financed by too many different currencies whose risk is allegedly mitigated by even more trillions of financial bets which in aggregate do not minimise the systemic risk one iota. This entire financial edifice, underwritten by tiny amounts of capital, has been created over three decades backed by the theory that markets do not make mistakes. Capitalism is best conceived and practised, runs the theory, by hunter-gatherer bankers and entrepreneurs owing no allegiance to the state or society.

This is nonsense.READ MORE