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Too big to jail ought to mean too big to exist. Don't dare rob a bank or run drugs across the border, or you're sure as hell going to prison. But if you're a megabank which might take down our economy, by all means feel free to break the law with a slap on the wrist.

Too Big to Jail: Big Banks Can Finance Terrorists and Walk Away Scot-Free:

HSBC receives get-out-of-jail-free card in a real-life game of Monopoly.

The New York Times reports this week that megabank HSBC has escaped criminal prosecution for money laundering that probably funded terrorists and narcotics traffickers. Why? Because regulators and prosecutors were petrified that an indictment would undermine the entire financial system. The Times quotes anonymous government sources who confessed fears about bringing formal charges because doing so would be a "death sentence" for the bank. So they let it off the hook.

That’s right, HSBC is officially above the law. Too-big-to-fail has become too-big-to-prosecute.

A year-long investigation found that the British banking giant had blown right past federal laws by laundering billions of dollars from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma. A Wednesday Times article serves up vivid passages about the shady goings-on, including HSBC officials working closely with Saudi Arabian banks linked to terrorist organizations. According to the report, "the four-count criminal information filed in the court charged HSBC with failure to maintain an effective anti-money laundering program, to conduct due diligence on its foreign correspondent affiliates and for violating sanctions and the Trading With the Enemy Act."

In a statement, the bank said it “will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect.” HSBC apologized and promised never, ever to do it again, scout’s honor.

I’m pretty sure I know what would happen to me if I stole a loaf of bread from the corner store. But a big bank can act as financier to freaking terrorists and never worry about things like jail. Funny how a corporation is a person until it breaks the law. Read on...

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From this Monday night's The Young Turks on Current TV, Crooks and Liars managing editor Tina Dupuy, Turk's regular Ben Mankiewicz and Color of Change's Rashad Robinson discuss whether the Obama administration is finally going to crack down on the banks and whether we see newly appointed RMBS co-chair Eric Schneiderman or Treasury Secretary win out that battle.

Tina and Ben were hopeful we might finally see something finally be done. Robinson reminded the viewers that without pressure from progressive groups, we might not have finally seen President Obama finally make some moves towards some accountability. And Cenk wasn't so optimistic after the stalling and lack of accountability we've seen so far.

For more on that, here's Taibbi's take over at Rolling Stone -- A Victory for the Public on Foreclosures?.

Dave Dayen has more on whether we might see Schneiderman and this working group accomplish anything -- Schneiderman’s RMBS Working Group: Resources, Jurisdiction and Will.

And from C&L here's more on the pressure that's been put on the Obama administration to act from Mike Lux -- Word of the Day: Accountability and from Ken Quinnell -- AFL-CIO's Trumka Joins Chorus Calling for Investigation of Banks.

Next topic for the panel was the recent article at Politico -- Death of bipartisanship has killed the Washington deal. As they all noted, Republicans gave up on bipartisanship a long time ago and progressives haven't had too many real victories in quite some time given how far our politicians on all sides of the aisle have moved to the extreme right.

And one final note, C&L has been in talks with Current TV about Tina doing some correspondent work for them this election season and possibly covering CPAC next week. If you'd like to get a chance to see more of Tina on Current, send them a note and let them know how you feel.

You can contact them at feedback@current.com
or @current on Twitter.

Thanks everyone and we'll keep you posted!

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By now most people have seen Rep. Joe Walsh's aggressive tirade where Walsh was bullying his constituents while spouting right-wing lies about banking regulation. He appeared this Wednesday to try to explain his behavior on Fox's Your World with Neil Cavuto and blamed it on too much coffee and an empty stomach.

Even Cavuto didn't look like he was buying it during this softball interview and told him it looked like he was scaring the other people in the video and suggested that maybe next time he holds one of these meetings with voters he should make sure he eats something first and switch from coffee to Prozac.

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If it sounds unusual to hear the head of a country's central bank speak so positively about the protests going on around the world now it's probably because it is. Mark Carney though is one of more reform-minded of the central bankers (somewhat equivalent to the role Ben Bernanke plays as the head of the Federal Reserve). Carney was notably the target of a profanity-laced tirade by Jamie Dimon (CEO of JP Morgan Chase) last month at a meeting of world bankers and officials. Dimon said the new rules discriminated against American banks and called the new capitalization rules "anti-American".

Mark Carney - a former Goldman Sachs Co. investment banker himself – is being pushed by Canada to head the G20's Financial Stability Board, a position that would put him even more at odds with people like the "business-as-usual, now-move-along" Jamie Dimons of this world who'd just as soon keep the casino open forever.

via The Globe and Mail:

The Occupy Wall Street demonstrations and other expressions of frustration with the global economic and financial system highlight the need for policy makers to show they are serious about forcing change, Bank of Canada governor Mark Carney says.

In a television interview, Mr. Carney acknowledged that the movement is an understandable product of the "increase in inequality" – particularly in the United States – that started with globalization and was thrust into sharp relief by the worst downturn since the Great Depression, which hit the less well-educated and blue-collar segments of the population hardest.

"You’ve had a big increase in the ratio of CEO earnings to workers on the shop floor,’’ Mr. Carney said, according to a transcript of the interview with Peter Mansbridge of CBC News, parts of which aired on Friday evening. "And then on top of that, a financial crisis.’’

But Mr. Carney – a former Goldman Sachs Co. investment banker – suggested that while he understands the frustration, some of it is rooted in an overly pessimistic view of policy makers’ resolve to make it harder for financial firms to take the sort of risks that led to the meltdown of 2008 and the brutal recession that followed.

“There’s a frustration with policy and a frustration that, `are things going back to business as usual,’’’ Mr. Carney said in the interview. ``If I may say, that is not going to happen, but I can understand the frustrations.’’

Demonstrations like the Occupy Wall Street protests, which will hit Canadian cities this weekend, are a “democratic expression of views’’ and “entirely constructive,’’ Mr. Carney said.

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A soldier returns home on leave from Iraq to find out his father's house has just been auctioned off the same day.

Change.org have been following this story closely for the past couple of months. Their online petition to stop the foreclosure now has 122,830 signatures.

Video and story from KTVZ in Oregon.

BEND, Ore. -- It was a bittersweet, even ironic "homecoming" day for Bend resident Tim Collette who's home is in foreclosure. His son, Aaron, arrived back home on leave from a tour of duty in Iraq. But hours earlier, his house was sold back to the bank.

Specialist Aaron Collette has been serving in Iraq for the past couple years, and Tuesday evening, his plane touched down in Central Oregon. It was a heartwarming reunion as family and friends greeted him at the Redmond Airport.

------snip-------

Collette missed two mortgage payments, then, for months, paid a trial modification. Now, he faces upwards of $20,000 in penalties. He said looking back, his bank never had any intention of modifying his loan.

"It's an unreachable thing, because it's not really there," said Collette. "They're telling you about it, it's like the 'carrot.' It's unattainable, because it's not really there."

Chase Bank won't comment on Collete's situation because of privacy laws.

Collette's suggestion to other homeowners with mounting bills -- hire an attorney.

"Everything that they are doing is to put you down the path that has one conclusion, foreclosure," said Collette.

Oregon Senator Jeff Merkley is on the hunt to help homeowners like Collette keep their homes. Back in May, the Democrat introduced a bill to require banks and other mortgage servicers to create a single point of contact for borrowers. The hope is homeowners won't get tangled in a sea of red tape and confusion when calling about loan modifications.

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Matt Taibbi has a new article on Rolling Stone on the recent hearings in the U.S. Senate and whether or not Goldman Sachs executives should be facing criminal trials or not in the wake of ongoing investigations into their part in the financial meltdown we went through a few years ago. CNN decided to bring in the Atlantic Monthly's Wall Street apologist Megan McArdle to debate Taibbi on Your Money.

I'm no financial expert and a lot of this stuff is over my head, but McArdle's arguments to me here seemed to be that all of these laws are just too terribly difficult to understand, therefore it's too difficult to figure out if they did anything wrong and to prosecute them, but the people they were selling these toxic assets to should have known better and understood what they were buying. Looks like a classic case of blame the victim to me.

FDL's TBogg weighed in on the segment here -- McBambi vs. Taibbzilla (Updated).

Mark Ames at AlterNet took her apart in this article -- Anti-Government Ideologue Megan McArdle's Amnesia About Her Privileged, Govt.-Funded Upbringing.

AlterNet's Chris Lehmann was critical of her glib dismissal of Taibbi's earlier reporting on Goldman Sachs here -- Matt Taibbi's Great Squid Hunt.

And Eric Salzman went into some specifics on why he disagreed with that same article of McArdle's -- Matt Taibbi Gets His Sarah Palin On in his post here -- Taking Megan McArdle Apart - Part II.

So for any of you wonks on the financial industry out there, if you take issue with any of the articles I posted here, I welcome the input, because I'm not an expert on the financial industry and don't claim to be. That said, from a layman's perspective, what she did during this interview sure looked like a whole lot of apologizing for Goldman Sachs' behavior to me and exactly what CNN expected to get from her by bringing her on to counter Taibbi.

Transcript via CNN below the fold.

Continue reading »

From Sen. Bernie Sanders -- Sanders vs. Gregg:

Sharply contrasting views of the role of Wall Street in American society were staked out in a Senate floor debate over a major overhaul of financial regulations. In an exchange that extended over two days, Senators Bernie Sanders and Judd Gregg clashed over their competing visions of big banks and federal regulation of the financial industry. The progressive independent and a conservative Republican from neighboring states that share a border shaped by the Connecticut River debated how best to avoid the kind of financial fallout that plunged the economy into a severe recession in the fall of 2008.

Sanders Op-Ed: Real Wall Street Reform:

In my view, the real and transformational financial reform we need must include the following elements:

Break Up Huge Banks The four major U.S. banks – Bank of America, Citigroup, JPMorgan Chase and Well-Fargo – issue two-thirds of the credit cards in this country, write half the mortgages and collectively hold $7.4 trillion in assets, about 52 percent of the nation’s estimated total output last year. Incredibly, despite all of them being bailed out during the Wall Street meltdown because they were “too big to fail,” three of them (Bank of America, JPMorgan Chase, and Wells Fargo) are now bigger than before the bailout. But this is an issue which goes beyond the danger of “too big to fail” and future taxpayer liability. We must break up these behemoths because of the incredible economic power they exert on the economy through their concentration of ownership and enormous competitive advantages.

Financial Institutions Must be Integrated Into the Real Economy At a time when we are in the midst of a major recession, it is insane that our largest financial institutions continue to trade trillions in esoteric financial instruments which makes Wall Street the largest gambling casino in the world. We need to create a financial system which invests in the real economy, and helps create millions of new jobs by providing small and medium businesses with the credit they desperately need. We also need investments to rebuild our manufacturing sector, transform our energy system and create modern transportation and infrastructure systems. We don’t need banks pushing home mortgages on people who can’t afford them. We don’t need huge amounts being “bet” on whether housing securities go up or down or what the price of oil will be six months from now.

National Usury Legislation Major financial institutions have, in many ways, become nothing less than loan-sharking operations. Today, millions of Americans who pay their bills on time are now forced to pay 25 or 30 percent interest rates. That is not only obscene but, according to every major religion, immoral. Banks cannot be allowed to engage in usury and charge outrageous interest rates. We must cap interest rates for private banks at the same level as we do for credit unions – 15 percent except under exceptional circumstances.

Transparency at the Federal Reserve The Federal Reserve cannot continue to operate in almost total secrecy. During the bailout, large financial institutions received trillions of dollars in zero or near-zero interest loans. Who received those loans and under what terms? The Fed isn’t telling. Did some of them turn around and, in a mammoth welfare scam, invest that Fed money in government treasury bonds at 3 percent or 4 percent interest rates? The Fed refuses to say. It’s time we had transparency at the Fed so that the American people know what our central bank is doing.

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(h/t David)

Paul Krugman repeated his criticisms of Republicans he made last week and hit Mitch McConnell for his lie that resolution authority is setting the banks up for future bailouts.

Krugman: Anyone who says we need to be bipartisan should bear in mind that for the last several weeks Mitch McConnell, the Senate Minority Leader had been trying to stop reform with possibly the most dishonest argument ever made in the history of politics, which is the claim that having regulation of the banks actually bailing out the banks and that basically the argument boiled down to saying what we really need to do to deal with fires is abolish the fire department, because then people will know that they can't let their buildings burn in the first place, right. It's an incredible... so anyone who says bipartisan doesn't include the Senate Minority Leader.

Here's more from Krugman's column on the topic The Fire Next Time:

On Tuesday, Mitch McConnell, the Senate minority leader, called for the abolition of municipal fire departments.

Firefighters, he declared, “won’t solve the problems that led to recent fires. They will make them worse.” The existence of fire departments, he went on, “not only allows for taxpayer-funded bailouts of burning buildings; it institutionalizes them.” He concluded, “The way to solve this problem is to let the people who make the mistakes that lead to fires pay for them. We won’t solve this problem until the biggest buildings are allowed to burn.”

O.K., I fibbed a bit. Mr. McConnell said almost everything I attributed to him, but he was talking about financial reform, not fire reform. In particular, he was objecting not to the existence of fire departments, but to legislation that would give the government the power to seize and restructure failing financial institutions.

But it amounts to the same thing.

Now, Mr. McConnell surely isn’t sincere; while pretending to oppose bank bailouts, he’s actually doing the bankers’ bidding. But before I get to that, let’s talk about why he’s wrong on substance. Read on...

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Steve Benen got this one exactly right. As he noted after Mitch McConnell flew off to have a closed door meeting with the Wall Street elites and Candy Crowley asked him what was said at those meetings "the conservative Kentuckian was evasive -- imagine that -- and instead of answering the questions, he talked about scrapping the legislation altogether".

It's like deja vu all over again -- Democrats tackle a pressing national issue, negotiate with Republicans in good faith, craft a reasonable, middle-of-the-road legislative package that deserves bipartisan support, lobbyists tell Republicans to kill it, and McConnell voices his support for killing the legislation and going "back to the drawing board."

Is it me or does this sound familiar?

No, it's not just you Steve. He's exactly right. The Democrats can scrap the liquidation fund the Republicans are carping about and the Republicans will still find another reason not to support it. They are not negotiating in good faith and no one should take them seriously if they pretend they are. Hell, McConnell couldn't even bother to wipe the smirk off of his face during this interview.

McConnell's hackery is every bit as bad as that from Mike Johanns on Washington Journal the other day. They're both reading off of the same script when it comes to running the financial markets out of the United States, as if one, these companies aren't already spread out all over the globe with their operations, and two if another country wants to let them trash their economy by allowing them to be unregulated, then go. At least it won't be the American tax payers that are on the hook if they crash and burn. Sadly the C-SPAN callers did a better job of calling bulls**t on Johanns than Crowley did with Mitch McConnell.

Transcript via CNN below the fold.

Continue reading »

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Chris Dodd looks like he's finally had about a belly full of the GOP and their obstructionism. The Democrats need to say the hell with bipartisanship and just pass a good bill instead. Dare the GOP to filibuster it. It looks like Blanche Lincoln is actually willing to get derivatives regulated so who knows, maybe we'll get something with some teeth passed. It's long overdue.