Elizabeth Warren on the banksters of Wall Street and the LIBOR scandal

July 20, 2012

Posted by AzBlueMeanie:

Elizabeth Warren, who chaired the TARP Congressional Oversight Panel from 2008 to 2010 and established the Consumer Financial Protection Bureau, weighs in on the LIBOR Scandal today. Libor fraud exposes Wall Street's rotten core:

The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system.

The London interbank offered rate is a benchmark for a range of interest rates, and the misdeeds making headlines have to do with how those rates are set. If insiders can manipulate the basic measurement of a loan — the interest rate — there is rot at the core of the financial system.

The British financial giant Barclays has admitted to manipulating the rate from 2005 to at least 2009. When the bank made a bet on the direction in which interest rates would turn, the Barclays employees who submit data for calculating interest rates would fake their numbers to help Barclays traders win the bet. Day after day, year after year, bet after bet, Barclays made money by fixing bets for its own traders.

We don’t know who else was fixing bets. Other big banks, including some of the largest in the United States, are under investigation. Barclays doesn’t appear to have acted alone, and it is clear that its fixes weren’t secret deals by rogue traders. Traders put requests to manipulate the rates in writing and even joked about delivering champagne to those who helped them.

Wanker Bankers And The LIBOR Scandal: The Financial System is Systemically Corrupt

July 20, 2012

Posted by AzBlueMeanie:

I have been trying to find some good easy to understand reporting on the LIBOR scandal that most readers who have never even heard of LIBOR before now can follow and understand why this is yet another major financial scandal by wanker bankers, the masters of the universe who are "our betters."

The brilliant writers at The Daily Show did my work for me in the two video segments below the fold.

But first a brief primer from Ezra Klein Wonkbook: The financial system was systemically corrupt:

If you haven’t been following the Libor scandal, read Dylan Matthews’ great primer. But if you refuse to do even that, here it is in a few sentences: Libor is the rate at which banks lend to each other. It’s considered a measure of how safe the financial system is. As such, many banks use it as a benchmark to set the rate on the consumer debt you and I buy — they start with the Libor rate and then they add on whatever they think our risk is. But there’s something odd about Libor: It’s a rate the banks report themselves. And, in recent weeks, we’ve found out Barclays was lying about it.

In recent days, however, we’ve found out that it wasn’t just Barclays lying about it. Everybody was lying about it. Citigroup was lying about it. German banks were lying about it. We know a number of banks — though we don’t know exactly who — are talking to the feds about a settlement. We know HSBC, Deutsche Bank and JPMorgan Chase are being investigated.

On Wednesday, Lloyd Blankfein, CEO of Goldman Sachs, was asked about Libor. “The biggest impact is once more undermining the integrity of a system that has already been undermined substantially. There was this huge hole to dig out of in terms of getting trust back and now it’s that much deeper.”

Remember when Ronald Reagan said “trust, but verify”? Well, we’ve spent the last few years verifying. And when it comes to the financial system, the lesson is not to have too much trust.

Romney’s vs. Obama’s tax plans in one chart

July 20, 2012

Posted by AzBlueMeanie: H/t to Ezra Klein Romney’s and Obama’s tax plans, in one (new and improved) chart: Naomi Robbins, who specializes in good graphs, says there’s a problem with [our eralier] chart. “What bothers me is that over half (5 of 9 data points) of the horizontal axis provides data on twenty percent of … Read more

Boston Globe: Romney kept reins at Bain

July 20, 2012

Posted by AzBlueMeanie:

The Boston Globe today reports on the role of Willard "Mittens" Romney at Bain Capitol from 1999-2002. Busted! Romney kept reins on Bain, bargained hard on severance during absence:

Romney has said in financial disclosure statements that he “was not involved in the operations of any Bain Capital entity in any way” after Feb. 11, 1999. But he was still legally the CEO, with numerous duties and obligations that were his alone, until early 2002.

Interviews with a half-dozen of Romney’s former partners and associates, as well as public records, show that he was not merely an absentee owner during this period. He signed dozens of company documents, including filings with regulators on a vast array of Bain’s investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm’s future without him, according to his former associates.

Indeed, by remaining CEO and sole shareholder, Romney held on to his leverage in the talks that resulted in his generous 10-year retirement package, according to former associates.

“The elephant in the room was not whether Mitt was involved in investment decisions but Mitt’s retention of control of the firm and therefore his ability to extract a huge economic benefit by delaying his giving up of that control,” said one former associate, who, like some other Romney associates, spoke only on condition of anonymity because they were not authorized to speak for the company.

Rep. Grijalva responds to L.A. Times investigative report on Romney’s foreign investors

July 20, 2012

Posted by AzBlueMeanie:

Yesterday I posted about the the Los Angeles Times investigative report, Bain Capital started with help of offshore investors [snippet]:

The first outside investor in Bain was a leading London financier, Sir Jack Lyons, who made a $2.5-million investment through a Panama shell company set up by a Swiss money manager, further shielding his identity. Years later, Lyons was convicted in an unrelated stock fraud scandal.

About $9 million came from rich Latin Americans, including powerful Salvadoran families living in Miami during their country's brutal civil war.

* * *

Romney faced unusual complications when he launched Bain Capital, a spinoff of Bain & Co., the Boston consulting firm he joined when he graduated from Harvard Business School.

At the time, U.S. officials were publicly accusing some exiles in Miami of funding right-wing death squads in El Salvador. Some family members of the first Bain Capital investors were later linked to groups responsible for killings, though no evidence indicates those relatives invested in Bain or benefited from it.

Romney has said he checked the foreign investors' backgrounds. His campaign and Bain Capital declined to provide specifics.

Congressman Raúl Grijalva issued the following statement in response to the Los Angeles Times report:

For Immediate Release

July 19, 2012

Washington, D.C. – Rep. Raúl Grijalva released the following statement today in response to this morning's Los Angeles Times article examining the funding sources Mitt Romney used to start Bain Capital.

"Today's Los Angeles Times investigation into where Mitt Romney got his money to start Bain Capital convinced me, and I imagine everyone who read it, that he needs to come clean about his finances. We now know that he built his fortune thanks to murky foreign donors who routed their money through Panamanian and Swiss accounts that helped obscure their sources. Among those early donors were British financiers later convicted of fraud and an expatriate Salvadoran group with family ties to paramilitary death squads. Mr. Romney may try to convince us there’s nothing to see here. After reading this story and other recent revelations about his past, I don’t think anyone believes him.