Daily Archives: April 14, 2016

‘I have a conscience’: the Wall Streeters fighting for Bernie Sanders in New York

The financial industry looms large in the coming primary – and some bankers say they’ll push for the Vermont senator even if his policies could hurt their careers.

A few months ago, Democratic party leaders attended a meeting in New Yorkwith some of the titans of Wall Street, among them heads of brand-name hedge funds and top private equity firms. The gathering was billed not as the usual high-dollar fundraiser but as a bridge-building exercise in which powerful financiers could vent their opinions privately to Democratic bosses.

Two US senators who formed part of the Democratic delegation kicked off the meeting by inviting the financiers to air their concerns about party policy. One of the big name Wall Street figures stood up, proclaimed grandly that he was speaking on behalf of every financial person in the room, and then slammed into the Democratic lawmakers for having had the audacity even to consider disbanding a low-tax arrangement popular with hedge fund managers known as “carried interest”.

“That was startling to me,” said one of the other financiers present in the room that day. “Here was a gathering of Wall Street’s greatest minds and what were we discussing? Not how to generate more jobs or create an economy that works for everyone, but how to protect our vested interests and tax advantages.”

Let’s call the financier speaking here by the false name Frank. He is one of a rare and fascinating breed which Politico has dubbed Bankers for Bernie – high-profile Wall Street figures who, unlike most of their peers, are prepared to abandon pure self-interest and embrace the radical financial reforms espoused by Bernie Sanders.

Even Asher Edelman, one of the real-life templates for Gordon “greed is good” Gekko of the 1987 movie Wall Street, has joined the club, writing in the Guardianthat only Sanders is “committed to honest solutions” to the crisis of income inequality.

The fact that Frank – a prominent New York hedge fund manager – is only willing to talk to the Guardian anonymously itself tells a story. It’s not that he’s ashamed about his backing for Bernie – quite the contrary: he has openly canvassed for Sanders in Iowa and frequently goes out leafleting for him in New York City. Rather, Frank’s desire to keep his name out of the news was a reflection, he said, of the stultifying consensus within the New York financial world that Sanders’ proposals to rein in Wall Street and prevent another Great Recession are dangerous and must be rebuffed. He looks at his fellow hedge fund folk, and thinks to himself that “they have made so much money, yet all they want to do is preserve what they’ve got. It’s got so out of whack that virtually nobody is willing to think about the basic unfairness of income inequality or how to improve the economy.”

Read on.

Former UBS Trader Challenges Bar Over Libor Misconduct

LONDON — A former UBS derivatives trader said on Thursday that he would fight an effort by the Financial Conduct Authority of Britain to bar him from the financial services industry for misconduct related to the setting of a global benchmark interest rate known as Libor.

The trader, Arif Hussein, says the regulator ignored crucial evidence in the case and relied on information provided by UBS’s lawyers, who conducted an internal investigation into potential manipulation of the London interbank offered rate, or Libor.

Mr. Hussein has challenged the Financial Conduct Authority’s decision before the Upper Tribunal, an administrative court in Britain. The tribunal will determine whether the Financial Conduct Authority can proceed with the ban or direct it to reconsider the decision.

Read on.

Deutsche Bank Confirms Silver Market Manipulation In Legal Settlement, Agrees To Expose Other Banks

The full shocking letter can be read here:

silver20settlement20letter

Zerohedge:

According to Reuters, Deutsche Bank has signed a binding settlement term sheet, and is negotiating a formal settlement agreement to be submitted for approval by U.S. District Judge Valerie Caproni, who oversees the litigation. A Deutsche Bank spokeswoman declined to comment. Lawyers for the investors did not immediately respond to requests for comment.

As noted above, investors had accused Deutsche Bank, HSBC and ScotiaBank of abusing their power as three of the world’s largest silver bullion banks to dictate the price of silver through a secret, once-a-day meeting known as the Silver Fix.

None of this will come as a big surprise to readers, most of whom have been aware that this took place for years.

But wait there’s more.

In a curious twist, the settlement letter reveals a stunning development, namely that the former members of the manipulation cartel have turned on each other. To wit:

 
 

“In addition to valuable monetary consideration, Deutsche Bank has also agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement. In Plaintiff’s estimation, the cooperation to be provided by Deutsche Bank willsubstantially assist Plaintiffs in the prosecution of their claims against the non-settling defendants.”

 

Court Sides With Lenders in Prolonged Foreclosure Case

Daily Business Review –

The Third District Court of Appeal split 6-4 Wednesday when the full court revisited the application of the five-year statute of limitations in mortgage foreclosures with input from a national array of lending and consumer lawyers.

The state appellate court reversed itself after an en banc hearing in a case that pitted Deutsche Bank Trust Co. Americas against homeowner Harry Beauvais and Aqua Master Association Inc. in Miami Beach.

The bank requested a rehearing before the entire court after the Third DCA contradicted a Fifth DCA decision. The Third DCA now agrees with a Fifth DCA ruling that finds a missed mortgage payment after an initial failed foreclosure lawsuit starts a new five-year clock for filing suit.

– See more at: http://stopforeclosurefraud.com/2016/04/13/court-sides-with-lenders-in-prolonged-foreclosure-case/#sthash.6A7A7fZh.dpuf

FHFA makes it official: Principal reduction is coming

A day that many in the housing industry thought would never come is finally and actually here, as the FHFA is making official – widespread principal reduction is coming. In what it is calling a “final crisis-era modification program,” the FHFA announced Thursday that it will be launching a principal reduction program for some borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac. Click here to learn more.

The DOJ Lemon Award – Go Directly to Jail!

William K. Black, a professor of Economics and Law, UMKC, a former financial regulator and  author of The Best Way to Rob a Bank is To Own One,  and one  of our Bank Whistleblowers United (BWU) co-founders has decided we could “retire” our series of BWU Lemon Awards and permanently award  “a Lemon” award to the Department of Justice (DOJ).
In a recent Huffington Post blog, Black says “this current award is particularly close to our hearts because it involves the sworn testimony of one of our co-founders, Richard Bowen.”
I second his choice. What prompted this award were two recent revelations; one of which is the release by the National Archives of the Financial Crisis Inquiry Commission (FCIC) documents in which the criminal referrals that FCIC made to the DOJ were revealed.
You may recall I spoke of this and the National Archives release in previous posts and I addressed Citigroup’s senior leadership frauds, which were the subject of not one but two separate criminal referrals made by the FCIC; one of which was based solely on my testimony. Black points out, as did I, that to date, the mainstream press has ignored the referrals based on this testimony.
Regards,
Richard

On Thomas Jefferson’s Birthday, Here Are His Most Prophetic Statements

Born April 13, 1743…To celebrate Thomas Jefferson birthday, here are a small sample of some of his most prophetic quotes which are perhaps more relevant today than they have ever been in the history of the United States.

On liberty – Thomas Jefferson letter to Isaac Tiffany, April 4, 1819

Rightful liberty is unobstructed action according to our will, within the limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’;because law is often but the tyrant’s will, and always so when it violates the right of an individual.

On central banks – Thomas Jefferson letter to Albert Gallatin, June 22, 1803

This institution (Bank of the U.S.) is one of the most deadly hostility existing against the principles and form of our Constitution… an institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a  critical moment, upset the government.”

More on central banks – Thomas Jefferson letter to Albert Gallatin, June 19, 1802

The monopoly of a single bank is certainly an evil.

On printing money – Thomas Jefferson letter to John Taylor, May 28, 1816

The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

On the threat of banks – Thomas Jefferson letter to John Taylor, May 28, 1816

The system of banks which we have both equally and ever reprobated, I contemplate as a blot in all our (state) constitutions, which, if not corrected, will end in their destruction.”

On member of Congress owning stocks – Thomas Jefferson letter to Gallatin, June 22, 1803

My wish was to see both Houses of Congress cleansed of all persons interested in the bank or public stocks; and that a pure legislature being given us, I should always be ready to acquiesce under their deliberations, even if contrary to my own opinions; for I subscribe to the principle, that the will of the majority, honestly expressed, should give law.”

On the “bank mania” and “moneyed aristocracy” – Thomas Jefferson letter to J.B. Stuart, May 10, 1817

The bank mania is one of the most threatening of these imitations. It is raising on a monied aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding.

My favorite:

On banks as the biggest threat to liberty – Thomas Jefferson letter to John Taylor, May 28, 1816

If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers occupied. The issuing power of money should be taken from the bankers and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies.

On the dominion of banks – Thomas Jefferson letter to James Monroe, January 1, 1815

The dominion which the banking institutions have obtained over the minds of our citizens…must be broken, or it will break us.

h/t @RudyHavenstin

 

 

112 Former AGs Seek Pardon for Former Ala. Governor Don Siegelman

(CN) – One hundred and twelve former state attorneys general have asked President Barack Obama to pardon former Alabama Gov. Don Siegelman, who is close to completing a six-and-a-half year stretch in prison for bribery and obstruction of justice.
The bipartisan group says in a letter delivered to the White House on Wednesday that Siegelman’s conviction a decade ago is both “unjust” and “continues to eat away at the integrity of the justice system.”
“Many legal scholars as well as the public at large believe that the prosecution of Gov. Siegelman was a perversion of justice,” the letter says.
Siegelman was convicted in 2006 of charges that he sold a seat on a state regulatory board in exchange for a $500,000 donation that the governor purportedly wanted to use to further his goal of establishing a state lottery.
He was also convicted of trying to obstruct the investigation into those charges.
Since then, former attorneys general have been diligently working on the case. In 2008, 44 attorneys general prevailed upon the House Judiciary Committee to initiate a report on Siegelman’s trial and conviction. On the heels of that effort, 75 attorneys general wrote the office of the U.S. attorney general on the former governor’s behalf, and numerous legal briefs have been filed al lthe way up to the Supreme Court.

Read on.

Federal regulators investigating how Wall Street Journal’s ‘living wills’ story reported the day before the regulators officially announced their determinations

The Federal Reserve and Federal Deposit Insurance Corporation are investigating how the Wall Street Journal came to report that the two agencies were giving failing grades to some U.S. banks’ “living wills” the day before the regulators officially announced their determinations.

A Fed spokesman, Eric Kollig, confirmed on Wednesday that the U.S. central bank has asked its inspector general, its internal watchdog, to check how the news outlet was able to report on Tuesday that at least half of the eight biggest U.S. banks, including J.P. Morgan Chase, would receive “harsh verdicts” on their plans for handling a potential bankruptcy without a federal bailout.

The FDIC’s chairman on Tuesday night asked the agency’s acting inspector general, Fred Gibson, to investigate the leak to the Journal of the results of the living will determinations, spokeswoman Barbara Hagenbaugh said.

On Wednesday, the two regulators said they gave failing grades to the plans of five big banks, including J.P. Morgan, starting a long regulatory chain that could end with breaking up the banks.

The Journal’s story hit Twitter and its home page hours before the regulators officially posted their determinations early on Wednesday morning and as financial markets prepared for banks to release their quarterly earnings.

Read on.

New legislation would permanently bar using Fannie, Freddie g-fees for federal spending

For much of last year, Congress engaged in a fight over the potential use of funds raised from Fannie Mae and Freddie Mac’s guarantee fees to cover federal spending.

Specifically, the use of g-fee funds to pay for a portion of a massive transportation billwas the subject of significant debate and several Congressional maneuvers, eventually leading to the removal of a controversial “pay-for” — the mechanism which funds the bill — that would have significantly delayed scheduled cuts in g-fees.

Now, new legislation introduced this week in the House of Representatives would ensure that a fight over the use of g-fees to fund federal spending will never happen, by permanently banning the use of g-fees as budgetary offsets.

Read on.