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Sen. Al Franken made a rare national media appearance on Lawrence O'Donnell's show on MSNBC this Monday evening to discuss his participation in the SEC's roundtable on credit rating industry reform this Tuesday.

Back in 2010, with bipartisan support, Franken managed to get his Restore Integrity to Credit Rating Amendment passed, which cleans up the credit rating system by making sure a bank or financial institution can't shop around for a credit rating agency that will game the system for them.

From Sen. Franken's press release when the amendment first passed back in 2010: Credit Rating Agency Reform:

The inherent conflicts of interest in Wall Street's current pay-to-play credit rating system were one of the greatest contributing factors to the economy's collapse. Right now, banks choose which credit rating agencies will rate the quality of their stocks, bonds, and other financial products, resulting in the agencies giving away undeserved top ratings to countless sub-par financial products in order to attract business.

The Senate Permanent Subcommittee on Investigations recently revealed examples of Wall Street financial institutions negotiating higher ratings from credit rating agencies for its sub-par products. Of the AAA-rated subprime-mortgage-backed securities issued in 2006 alone, 93% have been downgraded to junk status.

Sen. Franken's Restore Integrity to Credit Rating Amendment cleans up the credit rating system by making sure a bank or financial institution can't shop around among credit rating agencies to get a product's initial rating. The bipartisan proposal creates a board, overseen by the Securities and Exchange Commission, which will assign credit rating agencies to provide initial ratings in order to eliminate inherent conflicts of interest. Senator Franken's proposal passed the Senate by a 64 to 35 vote, and the final bill passed into law requires that the SEC study the problem. If the SEC does not develop an alternative mechanism to address the conflicts of interest problem, Senator Franken's proposal will go into effect.

Here's more on the SEC meeting this week: Sen. Franken to Speak at SEC’s Roundtable on Credit Rating Industry Reform:

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You know how you can tell an attack ad from Democrats is working? The right wing and our corporate media start telling you to knock it off. CNN's Howard Kurtz gave the viewers of The Situation Room a preview of what we can expect on his show this Sunday and surprise, surprise, it's a big healthy dose of false equivalencies and pretending he's concerned about that nonexistent "liberal media" being seen as carrying water for the Obama campaign.

Sorry Howie, but telling the truth about Bain Capital and actual journalism and asking Romney to let people see his tax returns is not the equivalent of Fox noise running a recording of Rev. Jeremiah Wright in an endless loop. And the only types that are going to be "concerned" about that perception are Villager hacks like yourself, the Romney campaign and the right wing media at Fox, hate talk radio, right wing blogs and a whole bunch of outlets that are going to do their best to give cover to Mitt Romney, as you just did here.

Kurtz also throws out that right-wing canard that President Obama wasn't scrutinized by the press when he ran against Hillary Clinton in the primary last time around. I think Howie's been spending too much time paling around with Sean Hannity, because that's the type of crap we hear on his show night after night on Fox.

Lauren Ashburn, who appeared with Kurtz is exactly right, and it's the Romney campaign's fault for not seeing that this was going to be coming and being better prepared for how to deal with questions about his time at Bain. You know Kurtz is over the top when even Wolf Blitzer is telling him he's surprised by what he's saying and had to point out to him that if you're going to run for President, everything's fair game and Romney's using his business background as his "credential for running and saying he's going to fix the economy," not that it made most of the rest of this segment and Blitzer's comments any less hackish as well.

All of them poo-pooed the Romney's obvious race baiting at the NAACP, calling it a "conspiracy theory." Yeah, that's a "conspiracy theory" just like The Southern Strategy is a conspiracy theory, or in other words, it's not. Republicans have been race baiting to win elections for ages now, whether any of these birds wants to admit it or not.

Transcript below the fold.

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After discussing the House Republicans and their ridiculous game with insisting that they vote on this balanced budget bill that's never going to become law, Andrea Mitchell ask Rep. Tom Price about the Republicans decision to keep the SEC from doing their job by making cuts to their funding and if they're essentially handcuffing the SEC.

Price denies it of course and rather than follow up and call him out for it, Mitchell just gives him a pass and ends the interview.

Think Progress has more on the subject here -- House Republicans Propose Deep Cuts To Financial Regulators, Effectively Blocking Financial Reform:

When Congress approved a continuing resolution in March to keep the government funded, it did not include additional money for the Securities and Exchange Commission or the Commodity Futures Trading Commission to implement the Dodd-Frank financial reform law. The two agencies, which were given important new responsibilities under Dodd-Frank, have already had to restrict some activities, delay implementation of various aspects of the law, and put off hiring personnel to fill key new positions policing Wall Street and the nation’s biggest banks.

The budget that the Obama administration proposed yesterday included boosts for both the SEC and the CFTC, as well as a proposal to allow the CFTC to begin collecting fees to raise additional revenue. In fact, under the budget, the CFTC would receive an 82 percent funding boost (to $308 million), as it has the vast new task of overseeing the derivatives market.

However, House Republicans have made it quite clear that they have no intention of giving the regulators any additional money. In fact, their proposed continuing resolution for the remainder of the fiscal 2011 year (which ends in October) explicitly cuts funding from both the SEC and CFTC: [...]

This is essentially an attempt to repeal Dodd-Frank through the backdoor, by simply making it impossible for the regulators to implement and enforce the law. As Michael Ettlinger and Adam Hersh noted, this is only inviting another devastatingly expensive financial crisis, in the name of modest savings in the short-run:

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I'm not sure how many of you have seen these ads, but with monitoring cable news for the site, I see them constantly on MSNBC and CNN. I just have to ask if they're so hard up for advertising dollars that they need to be running ads from an Alex Jones promoted scam artist who's been fined a million and a half dollars by the SEC? And better yet, he's also apparently World Net Daily's financial columnist as well.

WorldNetDaily's financial columnist faces $1.5 million SEC sanction:

Yesterday, we highlighted how WorldNetDaily financial columnist Porter Stansberry bragged that he's ready to flee the country at a moment's notice with most of his wealth to a locale "that doesn't have any ties to America." We did some looking into Stansberry's background and found a large sanction against him from the Securities & Exchange Commission. [...]

In 2007, the SEC ordered Stansberry and his company to pay $1.5 million in restitution and civil penalties, stating that, according to an August 10, 2007, Baltimore Sun article (retrieved from Nexis), Stansberry's company "acted in reckless disregard for regulations when it published Stansberry's unbelievable claims without a shred of confirmation." The parent company, Agora, was not held liable. [...]

In September 2009, the Fourth U.S. Circuit Court of Appeals upheld Stansberry's SEC sanction, stating that securities fraud is not protected speech and "[p]unishing fraud, whether it be common law fraud or securities fraud, simply does not violate the First Amendment."

Stansberry has popped up on occasion in more mainstream news outlets. Barron's touted him as "highly regarded" and "remarkably prescient" in July 2008; a February 2009 Associated Press article cited Stansberry, as did a separate February 2009 USA Today article.

None of these articles mentioned Stansberry's SEC fine. Unsurprisingly, WorldNetDaily hasn't either. Quite the contrary: When his column began in December 2009, WND claimed it was "introducing readers looking for sound, reality-based investment information to the respected financial research outfit Stansberry & Associates."

How does "sound, reality-based investment information" mesh with a $1.5 million SEC sanction for selling "unbelievable claims without a shred of confirmation" to investors? That's something WND (and Stansberry) should explain.

Maybe MSNBC and CNN can explain why they're promoting him as well.

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Rick Sanchez talked to CNN's Ali Velshi and Rolling Stone's Matt Taibbi about the Senate hearings in Carl Levin's subcommittee on the Goldman Sachs fraud case brought by the SEC. Matt made this great point on why the derivatives market needs to be regulated:

TAIBBI: No, I was just saying, with the derivatives, at the very least, I think we have to have a system where all of these things are traded and cleared on regulated, open exchanges.

Imagine what the stock market would look like if nobody knew what the price of any of the stocks were? And that's kind of exactly where we are with derivatives right now.

...This stuff is all traded in the dark and the big whales in the ocean, like Goldman Sachs, are the ones that make all the money because they have more information than everybody else.

And that's a situation that we really need to correct here. And that's what this bill hopefully is going to address.

I hope so too but I'm not holding my breath. The Republicans and their buddy Ben Nelson seemed determined to slow walk this just like they did the health care bill.

Taibbi has a new article at Rolling Stone -- The Feds vs. Goldman which Sanchez mentioned during the interview.

On the day the Securities and Exchange Commission filed suit against Goldman Sachs for securities fraud, shares in the company plunged 12.8 percent, closing at $160.70. The market, it seemed, was finally passing judgment on a decade of high-stakes Wall Street scammery that left America threatening Nigeria, Indonesia and Belarus on the list of the world's most corrupt economies.

A few days later, Goldman announced its first-quarter numbers. Profits were up 91 percent, to a staggering $3.4 billion.

Compensation and bonuses soared to $5.5 billion, up from $4.7 billion in the first quarter of 2009. Battered in the press, Goldman was raking up on the bottom line. So investors once again leapt into Goldman's arms, pushing the stock as high as $166.50, not far from where it was even before news of the SEC suit broke.

Goldman isn't dead – far from it. But this new SEC suit officially places it at the center of a raging national discussion about the hopelessly f**ked state of American business ethics. As a halting, first-step attempt at financial regulatory reform makes its way toward a vote in the Senate, the government has finally thrown open the door and let a few of the rottener skeletons tumble out. Read on...

Transcript of the CNN interview below the fold.

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Well, it looks like someone's been reading Crooks and Liars again, like Keith's staff. That said I'm glad to see at least one person in the media is talking about the games the Republicans are playing rather than chasing after the pornography story. As Karoli pointed out:

On a weekend where negotiations are moving ahead to get to a vote on financial regulation Monday, Issa's latest effort to manufacture scandal is just a cynical ploy to manipulate public opinion. It's a little like the "death panel" controversy, or the "Goldman Sachs gave more money to Obama than anyone else" controversy. The goal is to turn public opinion away from efforts to rein in what is completely out of control, water it down more than it is already, and pay off the Republican paymasters of Wall Street.

Keith and Ezra Klein discussed the hearings Carl Levin is holding taking a look at the ratings firms -- Former credit-rating firm executives say they were told to cut corners:

Former officials at the nation's major credit-rating companies told a Senate panel Friday that a pressure-cooker culture fostered by top executives encouraged them to cut corners so their firms could handle an exploding volume of deals and keep raking in profits during the bubble years.

The testimony backs the findings of a probe by the Senate Permanent Subcommittee on Investigations. The probe concluded that these firms used outdated models, gave high ratings to flimsy investment vehicles and waited too long to downgrade those investments in part because they were unduly influenced by their Wall Street clients and their own quest to make more money.

Investors relied on the ratings companies to impartially gauge the risk of complex deals tied to home mortgages. But the firms failed to do that, and the ensuing downgrade of hundreds of mortgage-backed securities in mid-2007, "shocked financial markets," and "the financial crisis was on," said Sen. Carl M. Levin (D-Mich.), head of the Senate panel.

Financial regulatory overhaul legislation before Congress aims to increase oversight of the ratings industry to prevent such a collapse in the future. Read on...

Dylan Ratigan talks to Simon Johnson and The New York Times' Gretchen Morgenson about whether the fraud on Wall Street extends far beyond Goldman Sachs and whether we're going to see more suits from the SEC.

You can read Simon Johnson's latest post at The Baseline Scenario on why we need to Break up the Banks here:

The biggest banks in the United States have become too big – from a social perspective. There are obviously private benefits to running banks with between $1 trillion and $2.5 trillion in total assets (as reflected in today’s earnings report), but there are three major social costs that the case of Goldman Sachs now makes quite clear.

1) The megabanks have little incentive to behave well, in terms of obeying the law. There is fraud at the heart of Wall Street, but these banks have deep pockets and suing them is a daunting task – as the SEC is about to find out. The complexity of their transactions serves as an effective shield; good luck explaining to a jury exactly how fraud was perpetrated. These banks have powerful friends in high places – including President Obama who still apparently thinks Lloyd Blankfein is a “savvy businessman”; and Treasury Secretary Geithner, who is ever deferential.

2) The people who run big banks brutally crush regular people and their families on a routine basis. You can see this in two dimensions

A. They are not inclined to treat their customers properly. They have market power in particular segments (e.g., new issues or specific over-the-counter derivatives) and there are significant barriers to entry, so while behaving badly undermines the value of the franchise, it does not destroy the business. Talk to some Goldman customers (off-the-record; they don’t want to bite the hand that hurts them). Lloyd Blankfein still claims that the client comes first for Goldman; most of their clients are surprised to hear that. Read on...

And you can read Gretchen Morgenson's posts at the NYT's here.

It was nice to see the talking point that if these mega-banks were broken up it would make us less competitive and harm employment in the United States. As both Johnson and Morgenson noted the big banks are not loaning to small businesses and breaking them up would actually improve that situation. Simon Johnson pointed out how these large institutions are hurting the rest of the American business sector.

This problem should have been addressed right after the Wall Street meltdown. I still can't believe it's taking this long for our politicians to finally look like they're willing to do anything at all about it. Pitiful. Pitiful and inexcusable. I don't want to be repeating a Republican talking point, but I honestly think this should have been priority one, before the health care debate. The Democrats frittered away the time frame where the public would have been clamoring on their side and the Republicans would have had a harder time acting the way they are now. They also have allowed our financial system to sit at risk for all this time with nothing being done about it.

I would love for someone in the Democratic leadership explain why they weren't pushing this through at the same time or before the health care bill and why it's taken this long to finally be voting on what's come out of Dodd's committee.

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Dylan Ratigan talks about the decision by Tim Geithner to keep details of the AIG bailout secret. More from Reuters--New emails show AIG mulled bank payment disclosures:

The New York Federal Reserve Bank actively worked with bailed out insurer AIG to build a case against disclosing details of AIG's payments to banks just days after the insurer considered making them public, documents released late on Saturday showed.

Lawyers for the Fed bank, which had taken over a pool of AIG assets as part of a $180 billion government bailout of the insurer in 2008, advised that AIG maintain a "confidential treatment request" from the Securities and Exchange Commission, according to emails provided by Rep. Darrell Issa, a U.S. lawmaker probing the matter.

A separate batch of emails made public earlier this month showed that New York Fed had advised AIG not to disclose the payments in a securities filing in late 2008.

The email traffic has raised questions about the role of Treasury Secretary Timothy Geithner, who ran the New York Fed at the time of the AIG bailout and the insurer's payment of some $62.1 billion to banks to liquidate credit default swaps it had sold to them.

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From CNN's Your Money, it looks like the S.E.C. is as feckless as ever with reigning in these crooks. Matt Taibbi has much more over at his blog True/Slant.

ROMANS: All right. This is the ticker where each week we take you beyond the headlines. Shawn Tully is editor at large at Fortune and Matt Taibbi is a contributing editor with Rolling Stone. Let's be blunt, Matt is not a beloved figure on Wall Street these days which stems from articles like the one out in this week's Rolling Stone entitled "Wall Street's Naked Swindle." You can pick it up for all the details.

But let's examine a few of the overall themes. You say Wall Street is designed to rip off the middle class and you make the case that our economy is currently so screwed up, actually that's not the word you use, imagine a word by mistake on "SNL" and that is the word you meant. Screwed up that the rich are running out of things to steal. What's worse is that Matt argues that no one, not the S.E.C., the Federal Reserve, or the Treasury Department is making any real effort to punish the culprits.

For starters, who specifically are the culprits and why aren't they being punished?

MATT TAIBBI, CONTRIBUTING EDITOR, ROLLING STONE: Well in the story that I looked specifically at two cases, Bear Stearns and Lehman Brothers and what happened in those companies and what I found is that there was a kind of bear raid that had been happening to smaller firms in years previous to the Bear and Lehman episodes where there was sort of a pattern of credit default swaps.

People who were buying, naked short selling of these stocks, rumors being spread in the media. This was always happening in the smaller companies and hedge funds and predatory, you know, sellers were doing this to small companies.

In this instance, they did it to Bear Stearns and Lehman Brothers. There was a massive amount of undelivered shares and obvious evidence of naked short selling and manipulation in these instances. It was clear that they had run out of smaller companies to do this to.

ROMANS: So who did it?

TAIBBI: Well that's the problem. We don't know. This data is available to the S.E.C., it is a relatively simple matter to find out who was doing all this naked short selling but they haven't released the data and a year and a half later, they haven't made any progress in an investigation at all.

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Keith has the run down on United Health Group's Stephen Hemsley who's leading the charge against health care/insurance reform and who was recently sending employees armed with talking points to attend protests and town halls. First up, his campaign donations from OpenSecrets: United Health Group Contributions to Federal Candidates:

House

Total to Democrats: $138,700

Total to Republicans: $100,500

Senate

Total to Democrats: $71,500

Total to Republicans: $58,300

Next we have the lawsuit they settled just one week before President Obama took office. Health insurer accused of overcharging millions:

One of the nation’s largest health insurers has agreed to pay $50 million in a settlement announced today after being accused of overcharging millions of Americans for health care.

The New York attorney general’s office launched an investigation after receiving hundreds of complaints about Oxford Insurance and its parent company, UnitedHealth Group, which claims to rely on “independent research from across the health care industry” to determine reimbursement rates. In actuality though, it relies on Ingenix, a research firm owned by UnitedHealth Group.

New York Attorney General Andrew Cuomo says Ingenix has been manipulating the numbers so insurance companies pay less. In a just-released report, he contends that Americans have been “under-reimbursed to the tune of at least hundreds of millions of dollars.” Although UnitedHealth Group and Oxford Insurance were the only entities investigated, other major insurers use Ingenix, including Aetna, CIGNA and WellPoint/Empire BlueCross BlueShield.

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