Comments
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
23 Responses to “Will the AGs Turn the US into a Banktocracy?”
Leave a Reply
You must be logged in to post a comment.
Shahien Nasiripour has an update on the talks between the big banks and the state attorneys general, with some rather worrying news: under the proposed settlement, the AGs are going to give the banks broad immunity from prosecution, despite the fact that they don’t really have a clue what the banks might have done wrong.
Some officials with experience sitting across the negotiating table with major banks say the government is making a critical miscalculation that jeopardizes the public interest by seeking a deal before amassing a credible threat of successful prosecution: In essence, they say, the government would give servicers a blanket pass for widespread alleged acts of fraud while extracting too little in return and operating from a relative position of weakness.
“I would never want to go into a negotiation without solid evidence of actual misconduct to hold as leverage over my counterpart,” said Neil M. Barofsky, the former special inspector general for the Troubled Asset Relief Program, which was crafted to bail out teetering banks. “It would also be very dangerous from a public policy perspective to waive all future claims as part of such a settlement if you do not have a good sense of the size, scope and severity of the underlying misconduct.”
According to sources familiar with the ongoing state and federal probes, state and federal officials have wasted months not digging into the details of the foreclosure crisis, yielding little of value in court and undercutting the lenders’ incentive to strike a settlement of greater benefit to homeowners and taxpayers.
The investigators have yet to gather many documents, conduct depositions or assemble tallies of aggrieved homeowners. They don’t yet have a good handle on the number of wrongful foreclosures, the amount of fraudulent documents filed in local courts or the volume of legal instruments processed by so-called “robo-signers,” the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.
“The evidence a prosecutor would use is not in the possession of the prosecution,” said one person familiar with the ongoing settlement talks.
This doesn’t really surprise me. A coalition of 50 AGs, not to mention a large number of disparate federal agencies, is never going to be particularly good at taking a focused look at wrongdoing in the banking industry during the financial crisis. The best they can hope for is to get a flavor of what the likely crimes were, and then try and extract as much as they can from the banks.
But the dangers here are obvious, especially to those of us who remember the story of Steve Rattner. Andrew Cuomo, if you recall, granted Rattner immunity from criminal prosecution in return for his testimony — and then regretted that deal later, when he found out much more about Rattner’s actions. It’s clearly in the banks’ interest to do a deal now, before a lot of detail comes out about what they did wrong; after all, this is a world where a single bad mistake can result in fine of hundreds of millions of dollars. Multiply that by thousands of mistakes and it’s easy to see why the banks would much rather pay a few billion dollars up front and put all that prosecution risk behind them.
If a deal isn’t done, aggressive AGs in New York and maybe a couple of other states could decide to start prosecuting cases individually — but the AGs don’t really have the resources to do that in all cases and against all banks, and most AGs don’t have the resources or even the inclination to do it at all. Which is why it’s important that they have all the information they can lay their hands on now, in the run-up to a global settlement. I’m already pessimistic that the settlement will actually achieve much of anything. And if it results in hugely valuable immunity for the banks, it might well be Wall Street which ends up the ultimate winner. Again.
bench craft company rip off in plain
bench craft company rip off flatout saw th
bench craft company rip off beans
benchcraftcompanyscam
bench craft company rip off flatout saw th
bench craft company rip off beans
bench craft company scam advark
bench craft company scam house of pain
bench craft company scam emotion
bench craft company rip off beans
bench craft company rip off concepts
bench craft company scam fisher
bench craft company scam emotion
bench craft company scam house of pain
benchcraftcompanyscam
bench craft company scam remotely
bench craft company rip off concepts
bench craft company scam paintly
bench craft company rip off satenday latters
Obama, Boehner Announce Agreement to Raise Debt Ceiling, Avoid <b>...</b>
ABC News' Z. Byron Wolf (@zbyronwolf) reports: It took the threat of economic collapse and a long, contentious negotiation -- and there will still be votes in Congress before it's truly done -- but lawmakers from both ...
Obama, Boehner Announce Agreement to Raise Debt Ceiling, Avoid <b>...</b><b>News</b> Corp. Names Andrea Zappia CEO of Sky Italia - The Hollywood <b>...</b>
He replaces Tom Mockridge who left the Italian pay TV service last month to become CEO of News Corp.'s U.K. newspaper group News International.
<b>News</b> Corp. Names Andrea Zappia CEO of Sky Italia - The Hollywood <b>...</b>Local <b>News</b> Reporter Shot with BB Gun During Live Segment
Leanne Suter, a reporter for KABC in Los Angeles, was shot in the hand with a BB gun yesterday while doing a segment on weather. We can't find video of the incident itself, but apparently Leanne is such a bad-ass that ...
Local <b>News</b> Reporter Shot with BB Gun During Live Segment
joeyfishface Says:
July 11th, 2011 at 10:02 pm
“Its a sad situation, and it appears that whatever hopes we may have had that the Attorneys General were not like the whores in Congress appear to be starting to fade. (At least NY and California AGs are showing some spine).”
Perhaps the AGs, Feds, Regulators, etc. knew damn well what they would find and can’t risk the fallout of possibly collapsing the market? Given that the Fed has little firepower left, maybe they figure it’s a necessary (albeit ugly) evil?
Or not.
uzer Says:
July 11th, 2011 at 10:10 pm
joeyff, do your powers of rationalization help you sleep?
champs2011 Says:
July 11th, 2011 at 10:54 pm
US 200 year chart history
http://gmbpost.com/investment-news/chart-sheer-marvel-200-year-history-of-us-growth/
Mike in Nola Says:
July 11th, 2011 at 11:09 pm
Why do you phrase the question as if we are not already a banktocracy?
Mark E Hoffer Says:
July 11th, 2011 at 11:24 pm
“Why do you phrase the question as if we are not already a banktocracy?”
Mike in H-town,
Good Q: !
Andy T Says:
July 11th, 2011 at 11:36 pm
“At least NY and California AGs are showing some spine.”
Not really. NY and CA just need the cash more … you just need to put out a little bit of work to strong arm the banks into paying you some money.
Bob is still unemployed Says:
July 11th, 2011 at 11:48 pm
From the quoted article:
Despite failing to marshal a strong case proving misconduct during the foreclosure crisis, the government is seeking to craft a settlement quickly, in the hopes that this will inject greater certainty into the financial system, stabilize home prices and add vigor to a flagging economy.
In my most humble opinion, if you want to inject greater certainty into the financial system, then you appropriately punish those who are responsible for crashing said financial system.
If you let those who have crashed the system off lightly (as this settlement appears to do), then you are sending the signal that the financial system will never be robust and reliable because crooks can easy scam the system and get way with little more than a wrist slap.
Those who swear to protect the financial system need to send the message, “do not mess with the financial system.
This proposed settlement sends the opposite message.
dsawy Says:
July 12th, 2011 at 12:13 am
Why would you think that the AG’s weren’t political whores like those in Congress?
Where do you think AG’s go when they get tired of being AG’s?
Links 7/12/11 « naked capitalism Says:
July 12th, 2011 at 5:32 am
[...] Will the AGs Turn the US into a Banktocracy? Barry Ritholtz (hat tip reader John M) [...]
wisedup Says:
July 12th, 2011 at 5:54 am
hey, wiseup you guys.
You think that anyone with any amount of capital is going to piss off the people who can make or break his future?
The AG’s are somewhat smarter than those who invested in Uncle Bernie, but not by much. They need the reassurance that what money they have can be magically enlarged – without risk if they are good little boys.
barbacoa666 Says:
July 12th, 2011 at 6:52 am
Our current ZIRP is a subsidy to banks. Unless I am mistaken, the SS and Medicare Trust Funds will earn lower rates of return due to ZIRP. So, in order for these trust funds to remain solvent, current and future American retirees must either pay higher taxes, see reductions in their SS checks, or retire later. So, in essence, the working people of America are being charged a back-door tax that is being used to float our zombie banks.
rktbrkr Says:
July 12th, 2011 at 7:10 am
(unemployed Bob)… This proposed settlement sends the opposite message.
Ditto Paulson’s pulpitizing about about “moral hazard” and then the Treasury and Fed proceed to punish predent savers to rescue and reward reckless risk takers.
I’m sure the states AGs are being pressured to be “team players”. CA and NY will be able to squeeze a lot out of them, CA was ground zero for bad behavior. I’m surprised FL,AZ,NV aren’t playing hardball too – grassroots politics overruling big banks lobbyists.
Anthony Says:
July 12th, 2011 at 7:18 am
more importantly, Europe is in meltdown mode.
Italian bonds moved 42bps in a day. That is an enormous move. That also means an enormous drop in the price of Italian bonds (in the range of 3%). Banks holding Italian bonds just saw the value of their assets go down a lot. Who thinks European banks are in such good shape that they can withstand declines in asset values? From an accounting perspective if the assets are categorized as ‘held to maturity’ a bank wouldn’t have to recognize the decline in value but that doesn’t change the reality that the value of their assets dropped.
This quickly become a self-fulfilling prophecy. Market participants know this so they stop transacting with each other. There’s an article in the WSJ about that very point (European banks are pulling back their exposure to each other).
This could get ugly fast.
HEHEHE Says:
July 12th, 2011 at 7:32 am
Government sanctioned fraud is all it was so now lets sweep it all under the carpet.
I have a tiny amount of sympathy for BAC and JPM simply because we don’t know the entire story re their taking over Countrywide and IndyMac – the institutions were the fraud was widespread. Were they really arm lengths deals that were willingly entered into or were the acquisitions forced down their throats ala Merrill and BAC by the Fed and Treasury? Btw what ever happened to Ken Lewis? He’s kind of disappeared ever since he accused Bernanke and Paulson of threatening him.
DC Says:
July 12th, 2011 at 8:03 am
[But Harris announced last week that the special unit will likely lose its investigative abilities, a consequence of a debilitating $71 million budget cut. Her office will lose the ability to follow up on open investigations ranging from foreclosure scams to "multi-million dollar corporate fraud," she said in a statement.
"It's all about their budgets," Senator Tom Coburn (R-Okla.) said last week about the state attorneys general and their settlement talks with the banks while rubbing his thumb against his fingers.
...
"We need a full-fledged investigation," said Alabama Republican Sen. Richard Shelby, the ranking member on the committee. "There's no substitute for a thorough investigation and finding of fact."]
—
Classic Republicanism from Coburn and Shelby. Just as with the SEC, FCC, FEC, etc., the goal is to starve the enforcers at the federal level and push that responsibility to the states. States of course are out of money and don’t stand a chance of making up the difference.
But these stalwarts of stupidity demand action! Investigation! What a reeking load of bullshit from self-righteous, corporation-owned senators-for-life who long since forgot what it’s like to be an “average American.”
Small Business Depression, Lack of Faith in Federal Government | Raw Finance Says:
July 12th, 2011 at 9:14 am
[...] what some sharp observers, like Barry Ritholtz, are terming a “Banktocracy” (see “Will The AGs Turn The US Into A Banktocracy?” at The Big Picture [...]
lambert Says:
July 12th, 2011 at 9:50 am
Can we avoid the “politicians are whores” trope? It’s insulting to whores. Thank you!
Julia Chestnut Says:
July 12th, 2011 at 10:06 am
Government of the corps, by the corps, for the corps. Now playing at a kabuki theater near you.
DeDude Says:
July 12th, 2011 at 10:08 am
@DC;
You are absolutely right. It is all about not having the resources to do the fight, because the GOPsters behind the door have slashed the budget. It is such an easy scam to get passed the idiots of this idiocracy. Why doesn’t/didn’t the gobinment do X !!! ??? – because you idiots voted for corporate sock puppets who cut the budget such that the gobinment does not have the resources to do X. When things go wrong the GOPsters can always come back and claim we don’t need to change anything because it was all the fault of gobinment (not enforcing current laws). Look at the joke of outrage about illegal immigrants. They had a law banning companies from hiring illegals, and then they had 100 people total in the only agency charged with enforcing that law – how could that go wrong.
Lugnut Says:
July 12th, 2011 at 10:53 am
let me translate the AG position: “We can’t be arsed to actually conduct a proper investigation on something so massive, so how about you guys just give us a whole bunch of money, since we need it; no one goes to jail, and we call it even? Sound like a plan?” Ptui.
I would just loooove to see any one of these so called news networks chasing down some of these AGs down the steps of their office buildings, stick a mic and a camera in there face ala Madoff, and ask why they’re offering payoffs in exchange for criminal prosecutions. Everyone points the fingers at the banks, but if the government offers no checks and balances for criminal behavior, or worse yet, leans towards what amounts to federal bribery for malfeance, whos really the worse actor in this play? The banks? I say the regulators and justice officials, as well as the Congressman who sell out for kleptocratic legislation bear equal top billing.
AHodge Says:
July 12th, 2011 at 10:54 am
a useful deal is possible
which would include punishment for foreclosure fee adding and lying
writing off second mortgages and
serious cramdowns and capital writedowns for banks and big pressure to short sale
but allowing cases where the house is vacant to go forward on inadequate docs
if the AGs want to do penalties and fines that are applied to writedowns and loan forgiveness?
i cant object, though its something the banks should do anyway
however if the AGs get little but a pot of tens of billions of penalties to farm out how they like?
they will be whores that a russian oligarch or chinese party official would have nothin to top
Bracton Says:
July 16th, 2011 at 5:32 pm
@AHodge:
money recovered by a state AG in a situation such as this goes to the state treasury, usually the general fund or a dedicated consumer protection fund. no state legislator or governor would let the state AG hand out the money himself.
@DeDude, @DC:
you hit the nail on the head in terms of resources available to a state AG. any enforcement action or civil litigation started against the banks, etc. would be hugely complicated, time-consuming, and expensive for a state AG’s office. california and new york can take the lead in a case like this because the respective AG offices are large, and there are attorneys in those offices with experience in financial regulation.
Senka Says:
July 26th, 2011 at 11:17 pm
Prosecuting Wall Street investment banks and their “geniuses” is not only a matter of democracy, but more importantly, it is about survival of America that we all love…and the only path for our kids’ future.
How did we become just one big hypnotized mass, even after the truth has been revealed? We’re walking around as if we’re mesmerized, not standing up, not demanding justice, still paying our mortgages to lenders who don’t even legally own them…
MA citizens stood up together on July 18th, demanding answers and justice- http://tinyurl.com/3qsu87x