Daily Archives: February 10, 2016

This Is Why the Fed Is Paying Interest to Big Banks

Federal Reserve Chair Janet Yellen ran into a bipartisan buzzsaw today over why the Federal Reserve is paying interest to banks on the trillions of dollars in reserves that they hold at the Fed. She tried repeatedly to supply the central bank’s reasoning but didn’t seem to make a dent.

“Please, please explain,” Representative Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, said at one point. Committee Chairman Jeb Hensarling (R-Texas) said the Fed’s interest-paying policy “can distort resource allocation and constrain economic opportunity.”

In the heat of a presidential campaign in which candidates from both parties are going heavy on the big banks, the Fed policy of paying them interest on their so-called excess reserves was bound to come in for extra scrutiny. Last year, Waters said, the Fed paid about $7 billion in interest to banks, including more than $100 million to Goldman Sachs and more than $900 million to JPMorgan Chase. And since the Federal Reserve’s board of governors voted in December to double the interest rate on those reserves to half a percent from a quarter percent, the payments will be even higher in 2016.

Read on.

Sanders’ Call to Rein In Wall Street, Artfully Clear (VIDEO)

By Donna Smith / Common Dreams

From Truthdig:

This piece first appeared on Common Dreams.

The issue of medical debt and bankruptcy has been a part of my life since I first discovered how many Americans are driven into bankruptcy by our for-profit healthcare system.  On July 17, 2007, I testified on a witness panel for the U.S. House Judiciary Committee as an American who went bankrupt while insured.  Sitting next to me on that witness panel was then Harvard Law Professor Elizabeth Warren, who was one of the co-authors of a groundbreaking study on medical debt and bankruptcy.  Neither one of us knew each other nor did we have any way to know we would follow our respective paths into this election cycle.  Despite a few subtle hints, U.S. Senator Elizabeth Warren (D-Mass.) has stayed out of the endorsement game so far.

Two years later, I would appear on Bill Moyers Journal where they were able to retrieve a bit of that congressional testimony about 10.34 minutes into this segment that aired on May 22, 2009.  From that momentous point in my life forward, I have kept up with Sen. Warren’s career, especially on the topics of interest to me.  So when I recalled another time I heard Sen. Warren discuss issues related to bankruptcy law, I was taken by her clarity about what happens when representing Wall Street interests becomes more important than doing what is right for large numbers of Americans who have been devastated financially by health crises, medical debt and bankruptcy.

During Elizabeth Warren’s own appearance on Bill Moyers Journal, she describes in vivid detail one time when Wall Street influence appeared to have caused Bernie’s primary opponent, then Sen. Hillary Clinton, to change her position on bankruptcy law in a very significant way.  Before she was a U.S. senator representing New York, Hillary knew the bankruptcy law would hurt people like me and millions of Americans.  Hillary changed her mind after being elected to the Senate.  If the influence of the financial service industry wasn’t a factor in that change of position, then perhaps another explanation will be forthcoming.  Let me be very clear, this appearance by Warren was years ago and well before anyone could have envisioned a Bernie run at the presidency.  The video seems to confirm the sort of influence peddling Wall Street does and just how accurate Bernie’s reflections are in 2016 about and what is at stake.

Lobbyists, Consultants Fret Over Bernie Sanders Victory

Bernie Sanders won an overwhelming victory in the New Hampshire Democratic presidential primary, capturing nearly every demographic group and 60 percent of the vote. The insurgent democratic socialist from Vermont, however, was not celebrated in some quarters of Washington, D.C., as a number of lobbyists and business political consultants took to Twitter to complain.

Tony Fratto, the co-founder of Hamilton Place Strategies, a political consulting firm that has previously represented a variety of Wall Street interests including recent work to promote the Trans-Pacific Partnership trade agreement on behalf of large corporations, tweeted in disapproval of Sanders’ rhetoric against the excesses of Wall Street:

Read on.

On side note: Tony Fratto was Deputy Assistant and Deputy Press Secretary to former United States President George W. Bush.

Goldman Sachs subsidiary buys massive non-performing loan portfolio from Fannie Mae

Fannie Mae announced Wednesday that it selected the winning bidders in its latest sale of non-performing loans, with a subsidiary of one of Wall Street’s biggest names among the winning bidders.

The total sale included four pools of loans that total $1.32 billion in unpaid principal balance spread across 6,540 loans.

The winning bidder for two of those pools, representing 2,068 loans that carry an unpaid principal balance of $418,414,683, was MTGLQ Investors, L.P., a “significant subsidiary” of Goldman Sachs.

According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

Read on.

This NY Post newspaper headline for Wednesday says it all

We have a long way to go to determine the nominees for Democratic and Republican nominees:

HSBC Sued Over Drug Cartel Murders After Laundering Probe

Families of U.S. citizens murdered by drug gangs in Mexico sued HSBC Holdings Plc, claiming the bank can be held responsible for the deaths because it let cartels launder billions of dollars to operate their businesses.

The lawsuit brings fresh scrutiny to the Mexican activities of HSBC, which in 2012 paid $1.9 billion to resolve a criminal investigation into whether it violated U.S. sanctions laws and laundered at least $881 million on behalf of drug cartels.

HSBC said it would fight the claims in the lawsuit, filed Tuesday in federal court in Brownsville, Texas.

The new case recounts a series of murders in 2010 and 2011 in horrific detail, arguing that the bank should be held to account for them under the U.S. Anti-Terrorism Act.

Read on.

 

Hillary Clinton Wall Street speech attendee says Clinton sounded ‘like a Goldman Sachs managing director’

Very interesting…

The Week:

Before Hillary Clinton was railing on big banks in a race for the Democratic presidential nomination against notoriously anti-Wall Street candidate Sen. Bernie Sanders (I-Vt.), she was getting paid by the big banks to give talks. Now, those private talks are threatening to make a second — and very public — appearance as the push grows for Clinton to release transcripts.

While some argue that the remarks are nothing but the “boilerplate, happy talk that highly paid speakers generally offer to their hosts,” others worry that Clinton’s speech, if released, could easily be taken out of context by Sanders, who has already been slamming her for her Wall Street connections.

According to one attendee at Clinton’s October 2013 speech to Goldman Sachs executives and tech industry leaders, Clinton’s remarks then were a far cry from what she’s saying on campaign trail now. “It was pretty glowing about us,” the attendee told Politico of the speech. “It’s so far from what she sounds like as a candidate now. It was like a rah-rah speech. She sounded more like a Goldman Sachs managing director.” Clinton, Politico reports, got $225,000 for the talk, during which she not once criticized Goldman or Wall Street over the financial crisis.

While the question of whether the release will happen remains up in the air, the attendee at Clinton’s 2013 speech is pretty confident it won’t. “It would bury her against Sanders,” the attendee told Politico. “It really makes her look like an ally of the firm.”

Read the full story over at Politico. Becca Stanek