Why LIBOR may be the biggest bank fraud ever and why we should be paying attention

from euronews...



matt taibbi...

The LIBOR manipulation story has exploded into a major scandal overseas. The CEO of Barclays, Bob Diamond, has resigned in disgrace; his was the first of what will undoubtedly be many major banks to walk the regulatory plank for fixing the interbank exchange rate. The Labor party is demanding a sweeping criminal investigation. Mervyn King, Governor of the Bank of England, responded the way a real public official should (i.e. not like Ben Bernanke), blasting the banks:

It is time to do something about the banking system…Many people in the banking industry are hardworking and feel badly let down by some of their colleagues and leaders. It goes to the culture and the structure of banks: the excessive compensation, the shoddy treatment of customers, the deceitful manipulation of a key interest rate, and today, news of yet another mis-selling scandal.

The furor is over revelations that Barclays, the Royal Bank of Scotland, and other banks were monkeying with at least $10 trillion in loans (The Wall Street Journal is calculating that that LIBOR affects $800 trillion worth of contracts).

The banks gamed LIBOR for two semi-overlapping reasons. As noted here last week, there were instances of Barclays traders badgering the LIBOR submitters to "push down" rates in order to fatten their immediate bottom lines, depending on what they were trading or holding that day. They also apparently rigged LIBOR downward in order to produce a general appearance of better health, essentially tweaking their credit scores a few ticks upward.

Most intriguingly, or perhaps disturbingly, there were revelations last week that Bank of England deputy Governor Paul Tucker had a conversation with Diamond at the peak of the crisis in 2008. The conversation reportedly left Diamond, and subsequently his traders, with the impression that the bank had carte blanche to rig LIBOR downward in order to help allay spiraling public fears about the banks’ poor financial health.
British officials, and Tucker individually, deny that Tucker gave Diamond permission to rig rates. But a report by British regulators did conclude that the two were talking about Barclays LIBOR submissions on October 29, 2008, and that as a result of that conversation, Diamond came away with a “misunderstanding.” The Daily Mail quotes the Financial Services Authority report:

However, as the substance of the telephone conversation was relayed down the chain of command at Barclays, a misunderstanding or miscommunication occurred.
This meant that Barclays’ submitters believed mistakenly that they were operating under an instruction from the Bank of England (as conveyed by senior management) to reduce Barclays’ Libor submissions.

That is explosive stuff. Members of Parliament will be grilling Tucker tomorrow about those events in what is sure to be a far more combative and entertaining legislative inquiry than the Jamie Dimon dog-and-pony show we just went through here in the states in recent weeks.

The implications of that part of the story should be particularly chilling to Americans, who in recent years have been party to a number of revelations about strange and seemingly inappropriate contacts between senior regulatory officials and big bankers during the heat of the crisis.

We know that American officials in 2008-2009 were extremely concerned about the appearance of weakness in the financial markets, so much so that they may have resisted pursuing criminal prosecutions against big banks, and we also know that they spent a lot of time commiserating with Wall Street figures before and during the crisis.

If Bob Diamond and Paul Tucker were having these talks about LIBOR, is it fair to wonder what else Hank Paulson and Lloyd Blankfein were talking about in the 24 discussions they had in the six days following the AIG disaster? When Paulson had a secret meeting with the entire board of Goldman Sachs in, of all places, his hotel suite in Moscow, in June of 2008? Or what other material nonpublic information was exchanged when Paulson met with a gang of hedge fund chiefs at the offices of Eton Park management in July 2008, and laid out for them a possible scenario for putting Fannie and Freddie into receivership?

[...]

This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

c'mon, house of cards... fall already...

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The increasingly corrupt banking industry and the multiple ways the U.S. Government continues to prop it up [UPDATE]

glenn highly recommends the following moyers & company youtube clip and, after watching it, i strongly concur...

If you can find 25 minutes or so this weekend, I can’t recommend highly enough this segment from this week’s Bill Moyers program, with Yves Smith and Matt Taibbi, discussing the increasingly corrupt banking industry and the multiple ways the U.S. Government continues to prop it up.

[UPDATE]

here's a link and a few paragraphs from matt taibbi's rolling stone article from 21 June...

[T]his just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America. The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from "virtually every state, district and territory in the United States," according to one settlement. And they did it so cleverly that the victims never even knew they were being ­cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.

In fact, stripped of all the camouflaging financial verbiage, the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business. What's more, in the manner of old mob trials, Wall Street's secret machinations were revealed during the Carollo trial through crackling wiretap recordings and the lurid testimony of cooperating witnesses, who came into court with bowed heads, pointing fingers at their accomplices. The new-age gangsters even invented an elaborate code to hide their crimes. Like Elizabethan highway robbers who spoke in thieves' cant, or Italian mobsters who talked about "getting a button man to clip the capo," on tape after tape these Wall Street crooks coughed up phrases like "pull a nickel out" or "get to the right level" or "you're hanging out there" – all code words used to manipulate the interest rates on municipal bonds. The only thing that made this trial different from a typical mob trial was the scale of the crime.

the scale of corruption is breathtaking...

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Matt Taibbi on the 2012 election: Two calculating centrists, fighting for the right to serve as figurehead atop a bloated state apparatus

just a short dose of reality from glenn...

Matt Taibbi has an excellent post on the 2012 presidential election, focusing on how boring and apathy-producing it is, particularly compared to the 2008 election, and how this threatens to undermine one of the prime purposes of American elections — distracting citizens’ attention from what is actually being done:

Meanwhile, Obama has turned out to represent continuity with the Bush administration on a range of key issues, from torture to rendition to economic deregulation. Obama is doing things with extralegal drone strikes that would have liberals marching in the streets if they’d been done by Bush. . . .

In other words, Obama versus McCain actually felt like a clash of ideological opposites. But Obama and Romney feels like a contest between two calculating centrists, fighting for the right to serve as figurehead atop a bloated state apparatus that will operate according to the same demented imperial logic irrespective of who wins the White House.

Then there’s one more thing – Obama versus Romney is the worst reality show on TV since the Tila Tequila days. The characters are terrible, there’s no suspense, and the biggest thing is, it lacks both spontaneity and a gross-out factor. In Reality TV, if you don’t have really sexy half-naked young people scheming against each other over campfires in the Cook Islands, you need to have grown men eating millipedes or chicks in bikinis drinking donkey semen. And if you don’t have that, you really need Sarah Palin.

This race has none of that. . . . The presidential race is always a great illusion, designed to distract people from the more hardcore politics in this country, the minutiae of trade and tax and monetary policy that’s too boring to cover. When the presidential race is a bad show, people might not have any choice but to pay attention to those other things. And this year’s version is the worst show in memory. It’ll be interesting to see how it plays out.

Digby dissents from that last point on the ground that political strategists and media mavens are adept at keeping interest levels high by manufacturing the appearance of meaningful conflicts: “It’s like one of those Housewife reality shows where everyone is obscenely wealthy and they create phony feuds and stage screaming fights and then magically become bffs the next season. It’s kind of a trainwreck that you can’t keep your eyes off of at first, but then you just end up falling asleep in front of the TV.”

and, lest we forget, this incredibly shallow, superficial reality show has been pushing its way onto our television screens and nagging us from every conceivable media outlet for the past 18+ months... beam me up, scotty...

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It's good to be a (Bank of America) banksta

at a time when bank of america is widely seen as one of the most voracious plunderers in the world, how can its ceo allow this to happen...? oh, wait... it's going in to his own pocket... well, how can the board of directors allow it to happen...? how can the shareholders allow it to happen...? how can we as citizens allow it to happen...?

Bank of America CEO Brian Moynihan's pay quadruples

In a year when Bank of America’s stock plunged 58% and the company announced plans to lay off 30,000 employees, chief executive Brian Moynihan’s compensation package more than quadrupled to nearly $8.1 million.

Here’s why: In 2011, the Charlotte, N.C.-based bank recorded $1.4 billion in profit after losing $2.2 billion the year before. So far this year, the stock is up more than 70%.

So although the bank’s compensation and benefits committee kept Moynihan’s salary the same at $950,000, he also landed $6.1 million in performance-reliant stock. Then there’s the $420,000 worth of tax and financial advice, along with use of the company’s aircraft, that’s also part of his package.

Along with various other components, Moynihan will have made nearly 317% more last year than the $1.9 million he pulled in during 2010, according to a BofA filing Wednesday with the Securities and Exchange Commission.

yes, that's the bank of america ceo collecting almost 4 times what he collected the previous year, the ceo who heads a bank about which matt taibbi says this...

Matt Taibbi: Bank of America Is a “Raging Hurricane of Theft and Fraud”

There are two things every American needs to know about Bank of America.

The first is that it's corrupt. This bank has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake.

The second is that all of us, as taxpayers, are keeping that hurricane raging. Bank of America is not just a private company that systematically steals from American citizens: it's a de facto ward of the state that depends heavily upon public support to stay in business. In fact, without the continued generosity of us taxpayers, and the extraordinary indulgence of our regulators and elected officials, this company long ago would have been swallowed up by scandal, mismanagement, prosecution and litigation, and gone out of business. It would have been liquidated and its component parts sold off, perhaps into a series of smaller regional businesses that would have more respect for the law, and be more responsive to their customers.

i guess it's time to revive my post from last november, an ows spoof on the Geto Boys’ 1992 song “Damn it feels good to be a gangsta”...

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Matt Taibbi: Bank of America - "Too Crooked to Fail"

from democracy now via common dreams...



in our present context, the crookeder you are, the more profitable and successful you are...

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Matt Taibbi - Another Hidden Bailout: Helping Wall Street Collect Your Rent

absolutely nothing in our legal, regulatory or financial systems is geared to assist ordinary people... they are entirely crafted by elected puppets to serve the interests of our super-rich elites who in turn make sure they can stay in office...

matt taibbi in rolling stone...

This is from the WSJ on Monday:

Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae...

While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs.

In con artistry parlance, they call this the "reload." That's when you hit the same mark twice – typically with a second scam designed to "fix" the damage caused by the first scam. Someone robs your house, then comes by the next day and sells you a fancy alarm system, that's the reload.

In this case, banks pumped up the real estate market by creating huge volumes of subprime loans, then dumped a lot of them on, among others, Fannie and Freddie, the ever-ready enthusiastic state customer. Now the loans have crashed in value, yet the GSEs (Government Sponsored Enterprises) are still out there feeding the banks money through two continuous bailouts.

One, they continue to buy mortgages from the big banks (until recently, even from Bank of America, whom the GSEs were already suing for sales of toxic MBS), giving the banks a permanent market for home loans.

And secondly, they conduct these quiet bulk sales of mortgages, in which huge packets of home loans are sold to banks at a "big discount."

By now we've come full circle. Banks create the loans, make money selling them off on the market at high prices, then come back and buy them again when they're low. When the GSEs are in the middle of this transaction, it makes mortgage lending a basically risk-free proposition: Banks get paid for creating home loans and they end up owning valuable property on the cheap, but in between, they offshore the market risk to a government entity and/or to the idiot individual who bought the home mortgage in the first place.

Even better, many of the banks/investors who buy these home loans back from Fannie/Freddie will rent out their properties instead of reselling them, which can vastly increase their revenue streams. From the WSJ:

Economists at Goldman Sachs estimate the annual yield on an investment on rental property nationwide averages about 6.3%, but can exceed 8% in cities that were hit hard during the housing bust, including Las Vegas, Detroit and Tampa. By contrast, mortgage bonds have average yields of just over 3%, and investment-grade corporate bonds are yielding about 3.5%, according the Barclays Capital U.S. Investment-Grade Index.

It gets better:

Warren Buffett, considered a sage investor and chief executive of Berkshire Hathaway Inc., said in an interview with CNBC-TV last month that he would buy up "a couple hundred thousand" single-family homes if he could do so easily, given the high yields on rental investments.

Another potential buyer, according to the article, is John Paulson, the pillaging hedge-fund billionaire who was behind Goldman's notorious "Abacus" deal (in which Goldman allowed Paulson to pack a portfolio full of loser mortgages he was shorting before those same mortgages were dumped on a pair of Euro banks).

So congratulations, America, your quasi-governmental housing entity is about to subcontract out mass-landlording/slumlording jobs to the likes of John Paulson and Warren Buffett, so that they can add to their bottom lines collecting rent payments in the middle of a nationwide housing slump.

bit by bit, every avenue of escape is being closed off...

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The candidate who raises the most money wins an astonishing 94% of the time in America & the 1% donors are remarkably tolerant - within limits

yep... this matt taibbi piece pretty well captures it...

[T]his 2012 race may be the most meaningless national election campaign we’ve ever had. If the presidential race normally captivates the public as a dramatic and angry ideological battle pitting one impassioned half of society against the other, this year’s race feels like something else entirely.

In the wake of the Tea Party, the Occupy movement, and a dozen or more episodes of real rebellion on the streets, in the legislatures of cities and towns, and in state and federal courthouses, this presidential race now feels like a banal bureaucratic sideshow to the real event – the real event being a looming confrontation between huge masses of disaffected citizens on both sides of the aisle, and a corrupt and increasingly ideologically bankrupt political establishment, represented in large part by the two parties dominating this race.

[...]

[The Iowa] caucus, let’s face it, marks the beginning of a long, rigidly-controlled, carefully choreographed process that is really designed to do two things: weed out dangerous minority opinions, and award power to the candidate who least offends the public while he goes about his primary job of energetically representing establishment interests.

If that sounds like a glib take on a free election system that allows the public to choose whichever candidate it likes best without any censorship or overt state interference, so be it. But the ugly reality, as Dylan Ratigan continually points out, is that the candidate who raises the most money wins an astonishing 94% of the time in America.

That damning statistic just confirms what everyone who spends any time on the campaign trail knows, which is that the presidential race is not at all about ideas, but entirely about raising money.

The auctioned election process is designed to reduce the field to two candidates who will each receive hundreds of millions of dollars apiece from the same pool of donors.

[...]

The 1% donors are remarkably tolerant. They’ll give to just about anyone who polls well, provided they fall within certain parameters. What they won’t do is give to anyone who is even a remote threat to make significant structural changes, i.e. a Dennis Kucinich, an Elizabeth Warren, or a Ron Paul (hell will freeze over before Wall Street gives heavily to a candidate in favor of abolishing their piggy bank, the Fed). So basically what that means is that voters are free to choose anyone they want, provided it isn’t Dennis Kucinich, or Ron Paul, or some other such unacceptable personage.

If the voters insist on supporting such a person in defiance of these donors – this might even happen tonight, with a Paul win in Iowa – what you inevitably end up seeing is a monstrous amount of money quickly dumped into the cause of derailing that candidate. This takes overt forms, like giving heavily to his primary opponents, and more covert forms, like manufacturing opinions through donor-subsidized think tanks and the heavy use of lapdog media figures to push establishment complaints.

And what ends up happening there is that the candidate with the big stack of donor money always somehow manages to survive the inevitable scandals and tawdry revelations, while the one who’s depending on checks from grandma and $25 internet donations from college students always winds up mysteriously wiped out.

h/t to glenn greenwald...

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Matt Taibbi - does getting filthy rich now equate with winning the full rights of citizenship?

matt discusses some of the ramifications of the passage of the national defense authorization act with its indefinite detention provisions...

On which side of the societal fence do you think the McCains and Grahams would put, say, an unemployed American plumber who refused an eviction order from Bank of America and holed up with his family in his Florida house, refusing to move? Would Graham/McCain consider that person to have the same rights as Lloyd Blankfein, or is that plumber closer, in their eyes, to being like the young Muslim who throws a rock at a U.S. embassy in Yemen?

A few years ago, that would have sounded like a hysterical question. But it just doesn’t seem that crazy anymore. We’re turning into a kind of sci-fi society in which making it and being a success not only means getting rich, but also means winning the full rights of citizenship. I hope I’m wrong, but I don’t see this ending well.

no... i don't see it ending well... not at all...

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Matt Taibbi confesses - he finally "gets" the Occupy movement

i've "gotten" it from the beginning... as soon as i started reading about it, i instantly understood where the protestors were coming from because it's exactly the same place i've been coming from for a very long time and have been despairing that i would ever see like-minded people stepping forward...

matt taibbi in rolling stone...

We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire. Everything from our pop culture to our economy to our politics feels oppressive and unresponsive. We see 10 million commercials a day, and every day is the same life-killing chase for money, money and more money; the only thing that changes from minute to minute is that every tick of the clock brings with it another space-age vendor dreaming up some new way to try to sell you something or reach into your pocket. The relentless sameness of the two-party political system is beginning to feel like a Jacob's Ladder nightmare with no end; we're entering another turn on the four-year merry-go-round, and the thought of having to try to get excited about yet another minor quadrennial shift in the direction of one or the other pole of alienating corporate full-of-shitness is enough to make anyone want to smash his own hand flat with a hammer.

If you think of it this way, Occupy Wall Street takes on another meaning. There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape. You fail to receive a few past-due notices about a $19 payment you missed on that TV you bought at Circuit City, and next thing you know a collector has filed a judgment against you for $3,000 in fees and interest. Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar. This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it's 10,000 feet down into a vat of razor blades that you can never climb out of.

That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.

yep, yep and yep... that's exactly what i want... something different... not just anything different, but something different that values people over money, compassion over selfishness, serenity over anger, and social justice over pay-to-play...

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People want Wall Street to give up its cheat codes

matt taibbi has a long and articulate breakdown at his rolling stone blog on the issues that are driving the continuing growth of the occupy wall street protests...

in this video clip, the moron he's sitting across from claims that the protestors are JEALOUS of the rich... HA...!



more...

And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.

We cheer for people who hit their own home runs in this country– not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.

That's why it's so obnoxious when people say the protesters are just sore losers who are jealous of these smart guys in suits who beat them at the game of life. This isn't disappointment at having lost. It's anger because those other guys didn't really win. And people now want the score overturned.

i've heard others say that taibbi is the heir to hunter thompson... not sure i'd agree but he's getting close...

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Is there a spark of hope coming from Occupy Wall Street...?

wouldn't it be loverly...?

from raw story...

Matt Taibbi: ‘Occupy Wall Street’ can spark movement, motivate change

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Why Obama keeps Geithner and why he's calling for a tax on millionaires... (Cue the progressive music) [UPDATE]

there's a lot of s*** hitting the fan with the publication of ron suskind's new book, Confidence Men: Wall Street, Washington, and the Education of a President... i've been reading various reviews and analyses but leave it to glenn to hit the nail on the head...

Geithner wasn't chosen and hasn't remained despite being "associated with the deregulatory policies of the past" and despite being the bankers' "man in Washington." He is empowered precisely because of those facts, as was pointed out even before Obama's inauguration. That Geithner and Summers were empowered after enabling the financial crisis through Wall Street subservience isn't a mystery; it's the explanation (And just by the way, replacing the word "despite" with the phrase "because of" is -- in general -- one of the most valuable tools for translating Washington propaganda into reality; here is an excellent example showing how that works, from the first paragraph of a New York Times article two weeks ago:

Documents found at the abandoned office of Libya’s former spymaster appear to provide new details of the close relations the Central Intelligence Agency shared with the Libyan intelligence service -- most notably suggesting that the Americans sent terrorism suspects at least eight times for questioning in Libya despite that country's reputation for torture.

Note how the paragraph instantly transforms from misleading nonsense into obvious truth simply by changing "despite" to "because of"; this repeatedly is an effective instrument for deciphering propaganda -- e.g., the U.S. continues to brutalize people in the Muslim world "despite" the fact that doing so produces more Terrorism and thus ensures Endless War.)

glenn also refers to the same matt taibbi piece i referenced in an earlier post...

I remember following Obama on the campaign trail and hearing all sorts of promises before union-heavy crowds. He said he would raise the minimum wage every year; he said he would fight free-trade agreements. He also talked about repealing the Bush tax cuts and ending tax breaks for companies that move jobs overseas.

It's not just that he hasn't done those things. The more important thing is that the people he's surrounded himself with are not labor people, but stooges from Wall Street.

glenn continues...

That's why -- after 2 1/2 years -- we suddenly see an outburst of "fighting for jobs" and, now, a call to raise taxes on the rich. He does that precisely because everyone -- especially the rich -- knows it will not and cannot happen. We're now formally in (re-)election season, so it's time again to haul out the progressive music. ... [N]one of this presages an actual change in how the government functions or, especially, on whose behalf it labors. That's precisely why he feels free to advocate such things without alienating his funding base. It's still the government of Tim Geithner and his bosses/owners; election season (combined with rising elite fear of social unrest) just requires a bit more pretense to obscure that fact.

glenn concludes his post with this all-too-sadly-true cartoon...



[UPDATE and BUMPED]

check out this reuters headline...

Obama deficit plan aimed at Democratic base

[...]

"I will not support any plan that puts all the burden on closing our deficit on ordinary Americans," Obama said. "We are not going to have a one-sided deal that hurts the folks who are most vulnerable."

With polls showing most Americans unhappy with his economic leadership, Obama's re-election hopes could hinge on his ability to convince voters that Republicans represent the rich, not the middle class. That was the main theme of his remarks on Monday, in which he repeatedly said all Americans must pay their "fair share" of taxes.

so, what am i supposed to do now...? after falling in love, accepting a proposal for marriage only to find that i hooked up with a spouse-beater and then taking my licks until i finally decided to leave the two-faced creep, do i now convince myself that it was all a misunderstanding and meekly return home...?

words ain't gonna bring me back, sweetie... trust me...

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Sigh... Matt, I agree with you... I don't believe him any more either...

matt taibbi...

Listening to Obama talk about jobs and shared prosperity yesterday reminded me that we are back in campaign mode and Barack Obama has started doing again what he does best – play the part of a progressive. He's good at it. It sounds like he has a natural affinity for union workers and ordinary people when he makes these speeches. But his policies are crafted by representatives of corporate/financial America, who happen to entirely make up his inner circle.

I just don't believe this guy anymore, and it's become almost painful to listen to him.

i've heard enough, seen enough and now just don't want to listen any more...

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The people who bought Obama the Oval Office are delighted with his performance

matt taibbi...

The popular take is that Obama is a weak leader of a weak party who was pushed around by canny right-wing extremists. Observers like pollster Sydney Greenberg portray Obama and the Democrats as a group of politically tone-deaf bureaucrats who fail because the public associates them with a corrupt government that benefits the rich and connected.

The Democrats, Greenberg argues, could change their situation by showing the public that they genuinely represent the interests of ordinary working people. In his piece, "Why Voters Tune Out Democrats," he offers a list of things Democrats could do to turn things around:

What should Democrats do?

The Democrats have to start detoxifying politics by proposing to severely limit or bar individual and corporate campaign contributions, which would mean a fight with the Supreme Court. They must make the case for public financing of campaigns and force the broadcast and cable networks to provide free time for candidate ads. And they must become the strongest advocates for transparency in campaign donations and in the lobbying of elected officials.

IF they want to win the trust of the public, Democrats should propose taxing lobbyist expenses and excessive chief executive bonuses and put a small fee on the sale of stocks, bonds and other financial instruments. By radically simplifying the tax code to allow only a few deductions, the Democrats would generate new revenue and remove the loopholes that allow special interests to win favorable treatment ...

I think everything Greenberg says is true -- except for the part about it being possible. His list of solutions would make sense as advice to a real political party.

But to a bunch of hired stooges put in office to lend an air of democratic legitimacy to what has essentially become a bureaucratic-oligarchic state, what good does such advice do? Would it have made sense to send the Supreme Soviet under Andropov or Brezhnev a list of policy ideas for enhancing the civil liberties of Soviet citizens?

The Democrats aren't failing to stand up to Republicans and failing to enact sensible reforms that benefit the middle class because they genuinely believe there's political hay to be made moving to the right. They're doing it because they do not represent any actual voters. I know I've said this before, but they are not a progressive political party, not even secretly, deep inside. They just play one on television.

For evidence, all you have to do is look at this latest fiasco.

The Republicans in this debt debate fought like wolves or alley thugs, biting and scratching and using blades and rocks and shards of glass and every weapon they could reach.

The Democrats, despite sitting in the White House, the most awesome repository of political power on the planet, didn't fight at all. They made a show of a tussle for a good long time -- as fixed fights go, you don't see many that last into the 11th and 12th rounds, like this one did -- but at the final hour, they let out a whimper and took a dive.

We probably need to start wondering why this keeps happening. Also, this: if the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions? When the final tally comes in for the 2012 presidential race, who among us wouldn't bet that Barack Obama is going to beat his Republican opponent in the fundraising column very handily? At the very least, he won't be out-funded, I can almost guarantee that.

And what does that mean? Who spends hundreds of millions of dollars for what looks, on the outside, like rank incompetence?

It strains the imagination to think that the country's smartest businessmen keep paying top dollar for such lousy performance. Is it possible that by "surrendering" at the 11th hour and signing off on a deal that presages deep cuts in spending for the middle class, but avoids tax increases for the rich, Obama is doing exactly what was expected of him?

damn... how badly i wish i didn't agree with matt... we are so-o-o-ooo screwed...

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Nobody goes to jail ... because the entire system set up to monitor and regulate Wall Street is fucked up

yeah... something finally grabbed me...

matt taibbi in rolling stone...

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

[...]

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.

and there ya have it...

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The great fleecing of the American taxpayer by Goldman Sachs is now official

the lede to matt taibbi's rolling stone article on goldman sachs...

From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again.

and just to be fair, here's megan mcardle's 10 july takedown of taibbi's article from the atlantic...

It's not that everything he says is wrong, but the bits that are true aren't interesting, and the bits that are interesting aren't true.

however, let's step away from spin and opinion for just a moment and focus on the reality of the just-announced second quarter profit declared by goldman sachs...

from today's nyt article...

Comfortably beating analysts’ forecasts, Goldman Sachs earned second-quarter net profits of $3.44 billion, or $4.93 a share, the bank announced on Tuesday.

The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue. They come just one month after it paid back its $10 billion in federal aid.

what's wrong with this picture...? we bail out the richest of the rich which then turns around and suddenly becomes immensely richer thanks to the largesse of us'ns, the american taxpayers...

full disclosure: personally, i don't care for matt taibbi... his one-man vendetta against "conspiracy theorists" has always seemed to me to be the near-hysterical rantings of someone who can't accept the remotest possibility that things aren't always what they seem... now that he's done a complete about-face and made hay out of his goldman sachs conspiracy theory, all i can say is that he's a hypocritical little shit... unfortunately, where goldman sachs is concerned, i think he's absolutely right, megan mcardle notwithstanding...

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"We've gone from being screwed to being fucked. [...] Both would-be presidents have already sold us out."

matt taibbi in rolling stone via alternet...

The truth is that the campaigns of both Barack Obama and John McCain are being inundated with cash from more or less exactly the same gorgons of the corporate scene. From Wall Street to the Big Oil powerhouses to the military-industrial complex, America's fat-cat business leaders know that the Animal House-style party of the last eight years that made almost all of them rich with bonuses, government contracts and bubble profits is about to come to an end, and someone is going to have to pay to clean up the mess. They want that someone to be you, not them, and they've spared no expense to make sure both presidential candidates will be there to bail them out next year.

They're succeeding. Both would-be presidents have already sold us out. They've taken the money and run -- completing the cyclical transformation of the American political narrative from one of monopolistic Republican iniquity to an even more depressing tale about the overweening power of corporate money and the essentially fictitious nature of our two-party system.

In layman's terms, we've gone from being screwed to being fucked. Who knows -- maybe Barack Obama will surprise us if he wins the election. But if you look at the money, it doesn't look good.

brother tim and i have been discussing our rapidly declining confidence in obama for several weeks now on our blogtalk radio show... i've heard a lot of people say that he's only doing what he has to do in order to be elected and that, once he's in office, he'll do what so desperately needs to be done because, after all, how could ANYONE in this day and age hope to be elected to the presidency by speaking and acting the truth...? lord help us, i would LOVE to believe that and, maybe, just maybe, it's true, but there's absolutely NOTHING in the last 50 years of american leadership that gives me any reason to be optimistic...

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Harry Reid, my senator and "one of the biggest pussies in U.S. political history"

not cuz i haven't been bombarding his email inbox, i can assure you...

Quietly, while Hillary Clinton and Barack Obama have been inspiring Democrats everywhere with their rolling bitchfest, congressional superduo Harry Reid and Nancy Pelosi have completed one of the most awesome political collapses since Neville Chamberlain. At long last, the Democratic leaders of Congress have publicly surrendered on the Iraq War, just one year after being swept into power with a firm mandate to end it.

Solidifying his reputation as one of the biggest pussies in U.S. political history, Reid explained his decision to refocus his party's energies on topics other than ending the war by saying he just couldn't fit Iraq into his busy schedule. "We have the presidential election," Reid said recently. "Our time is really squeezed."

There was much public shedding of tears among the Democratic leadership, as Reid, Pelosi and other congressional heavyweights expressed deep sadness that their valiant charge up the hill of change had been thwarted by circumstances beyond their control — that, as much as they would love to continue trying to end the catastrophic Iraq deal, they would now have to wait until, oh, 2009 to try again. "We'll have a new president," said Pelosi. "And I do think at that time we'll take a fresh look at it."

they are pretty pathetic, i must admit...

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Why does Alternet feel such a big need to shut down 9/11 discussion?

personally, i don't get it... it seems to me that there are way too many questions still surrounding 9/11, so why are there some people so heavily invested in discounting some questions but not others...? i think it's a shame to find a supposedly liberal, progressive, dedicated-to-free speech outlet like alternet stooping to questioning someone's right to ask intelligent questions and to demand comprehensive, truthful answers... however, i have noticed it's been a pattern with alternet, both with joshua holland in this article as well as with matt taibbi's screeds (here and here)...

[H]er comments on that day's show represented the worst of the left's conspiratorial tendencies; Rosie ran with the great intellectual fallacy that supports the 9/11 "Truth" movement: Anything not adequately explained by the official investigations into 9/11 are de facto evidence of an inside job...

that was bad enough, but then he has the nerve to define the debate for us...

What might have led to a challenging debate about the close ties between the Bush administration and terrorist financiers, or about the United States' unshakable relationship with the Saudi Royal family or the nature of our energy policy or the toll of American militarism emerged instead as an easily-refuted argument based, at the end of the day, on a talk-show host's knowledge about the melting point of steel.

don't define my debate for me, please... until i see a comprehensive, analytical, forensic report onthe twin towers, WTC-7 and the pentagon, i am going to continue to have some serious questions... what totally astounds me is why we haven't seen one...

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Endless war is a terminal disease

matt taibbi in rolling stone via alternet...

After four years of Iraq, we still can't talk about peace in public! This evil bullshit has been buried in the commercial media's descriptive campaign language seemingly forever by now, but it may be time -- in the wake of this Iraq disaster -- to start thinking about where it comes from and what effect it may have on the national psyche.

[...]

A country that feeds itself through the manufacture of war technology is bound to view peace, nonviolence and mercy as seditious concepts. It will create policies first and then people to fit its machines, finding wars to fight and creating killers to fight them. If that's true of us, and I think it is, our troubles won't be over even if someone brings the Iraq war to an end. We'll be treating the symptom and not the disease. And the reason our elections are a sham is that the disease is never on the table.

no argument here... i keep reading the blogs of my esteemed colleagues - markos moulitsas and john aravosis to name two - who repeatedly make this kind of statement: "i'm not against war, i'm against THIS war..." markos, in a lengthy front-page post, excoriated dennis kucinich for his pacifist views and for spouting new age jargon...

"Higher evolution of human awareness"? "Transform consciousness"? "Paradign [sic] shift"? What the hell is this crap? I expect this kind of crap out of Deepak Chopra (or Tom Cruise), not a serious presidential candidate.

[...]

Clearly, Kucinich resides in a higher plane of existence than I do. But my plane is on the planet earth. I want my president to reside here as well.

And by the way, the "Department of Peace" already exists. It's called the "U.S. Department of State".

i hold no brief for kucinich, but i, like matt, believe that the stranglehold the defense industry has on the u.s. and the resulting glorification of all things military, is most definitely a debilitating disease... pursuing an endless war, the undeniable objective of the bush administration, may well be a terminal one...

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