12/22/2011 archive

Another slap on the wrist by the government for the banks that caused the housing bubble and the crash that sank the economy world wide with unregulated derivatives and credit default swaps:

The Department of Justice has announced a $335 million settlement with Countrywide, the former subprime mortgage giant now subsumed into Bank of America, on claims of housing discrimination.

   The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom.

   A department investigation concluded that Countrywide had charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. It also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received prime loans, the department said.

   The pattern and practice covered the years 2004 to 2008, before Countrywide was acquired by Bank of America.

   “The department’s actions against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for discrimination,” Attorney General Eric H. Holder Jr. said. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin.”

I’m waiting for someone to hold financial institutions accountable for discrimination against every one of its customers, by defrauding them and destroying the residential home mortgage market. That’s obviously not going to happen here.[..]

Here’s the settlement agreement, and once again you see that Countrywide doesn’t have to admit wrongdoing for their crimes.

But the Department of Justice and the Securities and Exchange Commission will enthusiastically pursue the one agency that didn’t cause the crash but just inherited it, at tax payers expense:

The walls have closed in over the past couple weeks on mortgage giants Fannie Mae and Freddie Mac. The SEC charged former CEOs and executives at the companies with fraud. California Attorney General Kamala Harris sued them for imformation (sic)in a wide-ranging fraud investigation. And now we learn that the FBI is investigating them[..]

If Fannie and Freddie are guilty of misleading investors, they deserve to pay the penalty. And yet, I do sense more enthusiasm to go after these government sponsored enterprises than to go after the private banking firms which were far more responsible for subprime. This feeds a false narrative that government somehow caused the financial crisis by forcing lending to poor people. Fannie and Freddie followed the market in subprime and did not originate it.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Gail Collins: Housebound for the Holidays

Right now, you are probably asking yourself: What exactly is going on with Congress? What’s all this yelling about a tax increase? Also, are they shutting down the government again? Because I was really planning to spend my Christmas camping out in a national park.

Good news! Congress did not shut down the government this month. It was sort of dancing around the idea, but the country has grown so inured to this kind of behavior that nobody paid any attention.

Then our lawmakers moved on to a crisis over the payroll tax, unemployment compensation and Medicare. On which they totally dropped the ball.

Robert Reich: The Defining Issue: Not Government’s Size, but Who It’s For

The defining political issue of 2012 won’t be the government’s size. It will be who government is for.

Americans have never much liked government. After all, the nation was conceived in a revolution against government.

But the surge of cynicism now engulfing America isn’t about government’s size. The cynicism comes from a growing perception that government isn’t working for average people. It’s for big business, Wall Street, and the very rich instead.

In a recent Pew Foundation poll, 77 percent of respondents said too much power is in the hands of a few rich people and corporations.

Twist as the president’s supporters might with the “look over here” tactic, the National Defense Authorization Bill (NDAA) does not change any existing law that Barack Obama has interpreted to mean he has the power to throw your sorry butt in prison anywhere in the world for as long as he chooses. Or he can just declare you a terrorist without providing evidence and have you executed without due process. Ignoring the Authorization to Use Military Force (AUMF) that was recently renewed giving the president the authority to send in the military to fight that ubiquitous enemy “terror”, the Obama loyalists, keep pointing to section 1022 of the NDAA, the section that makes military detention presumptive for non-citizens but doesn’t foreclose military detention of US citizens, while completely ignoring section 1021, the section that affirms the President’s authority to indefinitely detain people generally. As Marcy Wheeler at emptywheel points out while the NDAA does not authorize indefinite detention for American citizens, it does not foreclose the possibility either:

The NDAA doesn’t do anything to exempt Americans from indefinite detention. And the reason it doesn’t-at least according to the unrebutted claims of Carl Levin that I reported on over a month ago-is because the Administration asked the Senate Armed Services Committee to take out language that would have specifically exempted Americans from indefinite detention.

   The initial bill reported by the committee included language expressly precluding “the detention of citizens or lawful resident aliens of the United States on the basis of conduct taking place within the United States, except to the extent permitted by the Constitution of the United States.”  The Administration asked that this language be removed from the bill. [my emphasis]

So the effect is that (as Lawfare describes in detail) the bill remains unclear about whether Americans can be detained indefinitely and so we’re left arguing about what the law is until such time as a plaintiff gets beyond the Executive Branch’s state secrets invocations to actually decide the issue in court.

Nor did the amendment from Sen. Diane Feinstein clarify that point either, in fact, she may have codified it. So the only recourse is for some poor fool to have his civil liberties abrogated and try to fight in court without being allowed access to lawyers or courts. Those are some hurdles. Scott Horton, contributing editor at Harper’s magazine and New York attorney known for his work in human rights law and the law of armed conflict, discussed this with Keith Olbermann:

Constitutional expert and George Washington University law professor, Jonathan Turley, appeared on C-Span with his take on this discussion. He made it very clear that Obama says that he can assassinate American citizens living on U.S. soil:

(starting at 15:50):

President Obama has just stated a policy that he can have any American citizen killed without any charge, without any review, except his own. If he’s satisfied that you are a terrorist, he says that he can kill you anywhere in the world including in the United States.

Two of his aides just … reaffirmed they believe that American citizens can be killed on the order of the President anywhere including the United States.

You’ve now got a president who says that he can kill you on his own discretion. He can jail you indefinitely on his own discretion [..]

I don’t think the the Framers ever anticipated that [the American people would be so apathetic]. They assumed that people would hold their liberties close, and that they wouldn’t relax …

h/t Washington’s Blog

How quickly the president’s defenders forget Anwar al-Awlaki. Marcy points to the contortions of the law that Obama used to justify his assassination and then issued a “secret memorandum” which was conveniently “leaked” to New York Times reporter Charles Savage:

And, as Charlie Savage has reported, the legal justification the Administration invented for killing an American citizen in a premeditated drone strike consists of largely the same legal justification at issue in the NDAA detainee provisions.

           

The 2001 AUMF, which purportedly defined who our enemies are (though the NDAA more logically includes AQAP in its scope than the 2001 AUMF)

           

Hamdi, which held the President could hold an American citizen in military detention under the 2001 AUMF

           

Ex Parte Quirin, which held that an American citizen who had joined the enemy’s forces could be tried in a military commission

           

Scott v. Harris (and Tennesee v. Garner), which held that authorities could use deadly force in the course of attempting to detain American citizens if that person posed an imminent threat of injury or death to others

   In other words, Obama relied on substantially the same legal argument supporters of the NDAA detainee provisions made to argue that indefinite detention of American citizens was legal, with the addition of Scott v. Harris to turn the use of deadly force into an unfortunate side-effect of attempted detention.

There is no question that the Obama administration, by signing the NDAA, believes that it has the broad power to indefinitely detain and assassinate American citizens and guarantees that the next president will too.

The late George Carlin said it several years ago, “this country is circling the drain“.  

Have I mentioned yet that banksters are stupider than you and I?

About the only way they can find to make money is to borrow it from Central Banks at low or non-existent rates of interest and lend it back to governments at significantly higher rates.

This is why Modern Monetary Theory is so appealing.  Why not just cut out the bloodsucking middlemen?

Oh, in theory they lend that money to producers of goods and services.  In fact, not so much.  Take for instance the European Central Bank’s outstandingly “successful” auction.

Where will the ECB’s billions go?

Felix Salmon, Reuters

Dec 22, 2011 09:50 EST

Norris’s bullishness is based on what you might call the Sarkozy trade – the idea that a huge amount of the ECB’s new lending will end up being invested in Eurozone government debt. He calls it “an obvious, virtually risk-free, option” for the banks who borrowed ECB funds.

…

(T)he prudent course of action, for Europe’s banks, is to use this ECB money to pay down their own debts. Doing so would address a big funding risk, and would also help derisk their balance sheets in the eyes of the world and of Basel.

The big question, then, is how long the ECB is going to be doing this kind of thing. If this operation is a signal to the market that the ECB will be the lender of last resort to European banks for at least the next couple of years, then the banks don’t need to worry so much about their own financing needs and can lock up the funds in two- or three-year government bonds as Norris and Sarkozy anticipate.

…

If I were running a European bank, I’d fill up on ECB lending now, when it’s plentiful, because you never know for sure when that limit might be reached. That’s what happened yesterday. But I’d definitely think twice before turning around and lending it all back out again to Italy or Spain. Yes, that trade is a profitable one. But the one thing that European banks need more than anything else right now is liquidity. Profits come second.

So the 2 choices on the table right now are stealing money using the ‘Carry Trade’ to extort it from governments and calling that ‘profit’ OR simply using it to write off the Trillions of crap they already have on their bloated, insolvent books.

Eurocrats

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 22 is the 356th day of the year (357th in leap years) in the Gregorian calendar. There are nine days remaining until the end of the year.

On this day in 1808, Ludwig von Beethoven’s 5th Symphony makes its world premier in Vienna.

Also premiering that day at the Theater an der Wien in Vienna were Beethoven’s Piano Concerto No. 4 in G major, Op. 58, and the Symphony No. 6 in F major, Op. 68-the “Pastoral Symphony.” But it was the Fifth Symphony that, despite its shaky premiere, would eventually be recognized as Beethoven’s greatest achievement to that point in his career. Writing in 1810, the critic E.T.A. Hoffman praised Beethoven for having outstripped the great Haydn and Mozart with a piece that “opens the realm of the colossal and immeasurable to us…evokes terror, fright, horror, and pain, and awakens that endless longing that is the essence of Romanticism.”

That assessment would stand the test of time, and the Fifth Symphony would quickly become a centerpiece of the classical repertoire for orchestras around the world. But beyond its revolutionary qualities as a serious composition, the Fifth Symphony has also proven to be a work with enormous pop-cultural staying power, thanks primarily to its powerful four-note opening motif-three short Gs followed by a long E-flat. Used in World War II-era Britain to open broadcasts of the BBC because it mimicked the Morse-code “V” for “Victory,” and used in the disco-era United States by Walter Murphy as the basis for his unlikely #1 pop hit “A Fifth Of Beethoven,” the opening notes of Beethoven’s Fifth Symphony have become a kind of instantly recognizable musical shorthand since they were first heard by the public on this day in 1808.

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a redneck sort of place, and just zoom onto my previous posts to understand a bit about it.

Every family has certain traditions that they keep for whatever holiday that they hold dearest.  When I was little, it was Christmas because my mum loved it so much.  Here and here are some references to her.

As I sit here around 6:30 AM on Wednesday the 21st of December, less than a day from the solstice (thank goodness, as the short days are sort of getting to me), I recollect on what we used to do for Christmas.

This is sort of a stream of consciousness account of what I remember, a gemisch of recollections from when I first can remember to when I was older, and even with a bit of more recent history.  That is not typical of my pieces here, but after all, it is Christmas.