Saturday, October 23, 2010

Wall Street Looting And Washington Cover Ups – America’s Foremost Authority On Wall Street Fraud Is Hammering The Crooks Again


If it wasn’t already blindingly obvious that pervasive fraud was at the heart of the financial crisis and the ensuing foreclosure catastrophe, you would think that the latest news — that banks have routinely been lying their heads off in the rush to kick homeowners off the properties they fraudulently induced them to buy in the first place — would pretty much clinch it.

The fact that these mortgage frauds were overwhelmingly due to consciously fraudulent lending practices in which the CEOs of seemingly legitimate entities used accounting tricks as their “weapon of choice” to report higher profits and get bigger bonuses. (George A. Akerlof and Paul R. Romer got it right in the title to their 1993 article: Looting: The Economic Underworld of Bankruptcy for Profit.)

The ongoing massive cover up of losses on bad assets, particularly by the “too big to fail” institutions, which I call “systemically dangerous institutions” (SDIs). Those institutions, along with Federal Reserve Board Chairman Ben Bernanke and Congress (at the behest of the Chamber of Commerce and with no opposition from the Obama administration) in April 2009 forced the Financial Accounting Standards Board (FASB) to change the rules so that the banks do not have to recognize their losses unless and until they sell the bad assets. The implications of this cover up are large (and rarely reported)

The continued absence of effective regulation. It should be scandalous that Obama left in charge, or even promoted, the anti-regulators who permitted the Great Recession. The (failed) anti-regulator of Fannie and Freddie, for example, remains FHFA’s acting director. This is significantly insane as a matter of both economics and politics. (The administration doesn’t even seem to realize the issue of integrity.)

Wall Street criminals bilked society out of literally trillions and trillions of dollars in their housing scam.  And now that they have created the greatest fraud in history across every business they are engaged in, they are now ramping up the foreclosure crisis into the same type of assembly line looting that they used to create the housing mess by shoving masses of defrauded homeowners into the streets.  Apparently illegally, might I add. 

Where is the FBI?  The Justice Department?  The SEC?  The White House?   The Congress?  To turn a blind eye to fraud is to endorse it.  Our government endorses fraud.  Our government has destroyed the rule of law in the name of fraud, cover ups, corporatism and cronyism.  And without a rule of law, anything goes.   Anarchy.  

posted by TimingLogic at 8:30 AM

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