in Editorial , 147 references
I'm beginning to wonder.
Those of you who have followed my writings for the last two+ years know that I have often remarked "where are the cops?" and in fact more than once asked:
Is the government a policeman or a felon?
The latter is a dangerous question should the answer ever be determined to be the latter, as it would be an open declaration that there is no rule of law. It would instantly define the entire federal law enforcement apparatus, and those of the States and Localities that stood with the Federal Government, as nothing more than thugs with lots of guns.
That's not a good situation for what should be obvious reasons.
Out-of-control banana republic regimes usually wind up that way incrementally. Rarely does a madman come to power and simply seize the crown. Oh sure, it happens, but it nearly always incites immediate civil disorder and even open warfare, civil or (often) externally-promoted. When Saddam invaded Kuwait it did not take long before the world responded with lots of guns, bombs and planes, as just one example.
But the slow, gradual co-opting of a government from inside out is another matter. These sorts of regimes usually collapse of their own weight, but not before they take down huge swaths of the population with them, reducing them to squalor. Thus it happened in Zimbabwe, Argentina and countless others over the years.
Has it happened in the United States already, but the people simply haven't woken up? Two years ago, five, ten I would have instantly dismissed such a proposition as preposterous.
Now I'm not so sure.
Consider that we have had a group of people on Wall Street who were selling various security products that it is alleged they knew were worthless:
OK still have this vomit? a UBS employee wrote in September 2007 to a director, referring to a CDO with an investment-grade rating, according to the ruling.
Pursuit has established probable cause to sustain the validity of a claim that the UBS defendants were in possession of material nonpublic information regarding imminent ratings downgrades on the notes it sold to the plaintiffs, information UBS withheld from the plaintiffs, Superior Court Judge John Blawie wrote in a Sept. 8 opinion in Stamford, Connecticut.
This is a firm that still has a license for banking in the United States. It is the same firm that stood accused (and settled) with the IRS over alleged tax shelter abuses in which tens of thousands of Americans were knowingly helped and given safe haven in unlawfully evading US Income taxes.
Yet they hold a banking license and the privilege of clearing funds through US-Treasury sponsored and approved payment mechanisms, including FedWire and trade with (and are "regulated" by) The Federal Reserve in their US operations.
We have Goldman Sachs which has been accused in the media on multiple occasions of selling various subprime mortgage securities to clients while shorting them through other divisions of the firm; if this is a not a declaration of knowledge (or belief) that they're worth less than they were being sold for (if not "worthless" outright) I don't know what is.
Finally, in this same line of thought, we have Washington Mutual, which was what started The Ticker back in 2007: It disclosed in its 1st quarter earnings release of that year it was paying dividends not out of cash earnings but out of "capitalized interest" - that is, out of the increase in loan balances on OptionARMs. The problem with this is that Capitalized Interest is not money - it is a promise to pay in the future and in this case that promise was being made on an asset (homes largely in California) where their decline in value had already begun. It was clear to me at the time that this bank along with many others needed to be seized immediately to prevent an all-on systemic meltdown, and I said so in plain English.
They weren't and we did.
Next up we have this proposed FINRA rule:
FINRA is proposing to adopt NASD Rule 3310 (Publication of
Transactions and Quotations), NASD Rule 3320 (Offers at Stated Prices), IM-3310 (Manipulative and Deceptive Quotations) and IM-3320 (firmness of Quotations) as FINRA rules in the consolidated FINRA rulebook without material changes. The proposed rule change would combine NASD Rule 3310 and IM-3310 into FINRA Rule 5210 and would combine NASD Rule 3320 and IM-3320 into FINRA Rule 5220 in the consolidated FINRA rulebook.
This is rather arcane, but the gist of it is that apparently laws and regulations standing since 1939 and 1960, adopted to prevent the practice of disseminating a price (bid or offer) on a stock exchange that one does not intend to honor, have somehow been gamed by recent "technological innovations" (is this due to "High Frequency Trading"?) and thus requires restatement in a more-consolidated and more-airtight form.
Is not the substance of this announcement that in fact firms have been publishing bids and offers they have no intention of filling - that is, under the rules standing since 1939, people have been getting screwed due to "technical" violations of those regulations? More to the point, isn't offering to buy or sell something when you have no intention of actually doing so commonly defined in the law as FRAUD? If so, why is FINRA "tightening the rules" instead of the FBI referring evidence of current and past conduct to federal prosecutors and Grand Juries for the purpose of laying criminal indictments?
How in fact is this different in substance than claiming on one hand that a security is "a great investment" and on the other hand calling it "vomit"?
Now let's talk about Elizabeth Warren's grilling of Tim Geithner yesterday in Congressional Oversight Panel hearings; you can watch the entire thing on http://CSPAN.ORG if you wish, or wait for this weekend when I will have excerpts along with my own commentary on YouTube.
The key item here is this: Ms. Warren grilled Tim Geithner about the payments to AIG to "prevent default" but nowhere does she, or anyone else, ask how it is that the NY Fed and US Federal Reserve, both of which regulate these institutions, came to allow banks under their umbrella to enter into transactions with a firm - in this case AIG - that had no money to make good on its transasctions IN THE FIRST PLACE.
Is it not fraud to sell someone something that you can't possibly, on the pure mathematics, deliver on? I think so and there are rumors that there is now a grand jury looking into the matter.
Leave the grand jury aside for a moment: The Federal Reserve and Treasury's various "arms", including the FDIC, OTS and OCC, all had regulatory oversight over some part of these firm's dealings with AIG. For the investment banks the link was more limited than it was with traditional bank holding companies, but post Bear Stearns when investment banks were given access to the discount window The NY Fed and The Federal Reserve formally had supervisory access and control over these firms sufficient to discover and force an unwind of these transactions. Yet they did not, and remember, Geithner was in charge of The NY Fed at the time.
Neither institution did a thing even though nothing more than a cursory look at the liquid assets that AIG held and declared on their balance sheet and the size of its derivative book was sufficient to discern that their leverage ratios made it impossible for them to cover these bets should anything go wrong.
The regulators did not care.
It gets worse.
The Bush Administration went to court to block state laws that prohibited certain subprime lending practices, including but not limited to capping late fees and prohibiting prepayment penalities. Court decisions were handed down in 2004 that effectively voided state laws that, had they remained in force, would have prevented much of the subprime housing explosion - and a great deal of the bubble itself. These laws declared those practices contrary to the public interest and thus void.
The Federal Government sided with the purveyors of what State Legislatures stated in statute were fraudulent lending practices - and won through Federal Courts of Appeal, at which sit federally-appointed judges.
Read that again folks: Practices declared as a fraud upon the public by state legislatures in the form of formal statutes after public debate, resulting in the passage of state law, were ruled LEGAL by The Federal Government if undertaken by a federally-chartered bank, even if the entire transaction (both the bank's office AND the resident) were wholly inside a given state's lines.
There are other not-so-amusing tidbits surrounding apparent lawlessness in our government, such as the newly-surfaced piece on Canada Free Press in which it is disclosed that The Democratic Party nomination certification for our recent election sent to the states DIFFERED from the one signed at the convention, and was missing THE KEY ELEMENT to qualify both President Obama and Joe Biden: Certification that they were vetted and found elegible to hold their offices. Kooky? Coincidence? An accident? Maybe. Or maybe not. Read the Canada Free Press piece and look at the documents yourself - then decide. I did - the two DNC documents clearly came from the same place - the spacing and a typographical error are identical in both, but the one sent to at least some states is missing the essential certification.
And more importantly, why did nobody in the Democratic Party - anywhere, among the 50 states - raise hell about this and demand a proper certification of ballot qualification under penalty of perjury more than a year ago?
And now, in the last two days, we have two separate stories regarding ACORN in two separate cities. In both cases an independent filmmaker (and fabulous new muckraker!) showed up with an undercover video camera (nice job hiding that sucker!) along with a young lady, with him posing as a pimp and her as a prostitute. Their purpose? To see if ACORN could "help them" with getting loans, defrauding the IRS, and conspiring to bring into the country illegally underage girls for the purpose of prostitution!
Did ACORN throw them out of the office and/or call the authorities? No; they instead provided advice and assistance. Remember, ACORN is linked closely to our current President and was instrumental in his election.
ACORN has been accused of various voter fraud schemes in the past. They've been relatively immune to any sort of "real action" on this simply because when you send a bunch of people out into the field to collect voter reg cards and they come back with a few that have "Mickey Mouse" on them you can hardly claim a systemic intent to commit fraud unless you can find a smoking gun - someone who told them to go do that - and nobody has been able to.
But this is different. Now we have two different ACORN offices in two different cities in which essentially the same question was asked and the same advice given. On videotape.
Of course one office "immediately fired" the people involved, but the "isolated incident by a low-level employee" argument - which ACORN tried to run - went up in smoke this morning when the second tape surfaced.
How many more tapes are there?
How many more offices?
And how much of the media is complicit in hiding not just THIS scandal but all of the others?
From James O'Keefe this afternoon:
So far CNN has only reported on the breaking story on blatant ACORN CORRUPTION from angles that attempt to extricate the government funded community organizing enterprise from the extreme crime we caught on videotape.
First CNN pushed the false ACORN line that [t]his film crew tried to pull this sham at other offices and failed.
To set that record straight please check the Washington D.C. tape we dropped today at BigGovernment.com, which is also being aired on your cable news competitor with curiously higher ratings.
Now that ACORN lied to you, Jonathan Klein, what are you going to do?
Heres what I have noticed from your coverage: You brought in the damage control crowd to FRAME the story. Before even airing our damning Baltimore video. You know your audience would turn on ACORN if you showed them the evidence. So instead you put your competitors in journalism in the crosshairs instead of airing a blockbuster report making massive waves elsewhere.
You even trotted out shameless Clinton era apologist Joe Conason to challenge the ETHICS of our expose. Unreal.
What about the ethics of those at ACORN caught on tape trying to help create a brothel featuring illegal immigrant age range 13-15 from El Salvador?
What about the countless laws broken on tape from a group that stands to get billions from President Obamas stimulus package?
James, there is much more here than just an organization that appears to have had two different offices offer "help" in creating child prostitution rings with girls unlawfully brought here from El Salvador, and frankly, that you blew the door off the container from this angle, while refreshing, has only exposed the first little piece of rotten carcass inside that boxcar.
Lest you think I am launching a partisan attack in this piece, think again and read again. I am doing no such thing. The clear evidence of lawless behavior and willful disregard for the foundational principles on which this nation was built and became great has been evident in the actions of both Democrats and Republicans over the last decade.
What's worse, both parties and the mainstream media are unwilling to examine this issue from the top down except to the degree they can make political hay on the other side of the aisle, willfully turning a blind eye to the evil and outrageous actions of those who wear their own political badge - or who are willing to make a "campaign donation."
The fact of the matter is that it appears to this writer that we no longer have a Constitutional form of government in The United States.
No nation can have a strong, functional economy when the government either turns a blind eye to looting by certain favored groups and people or conspires in the theft and fraud itself.
No nation has the right to claim a legitimate government when it displays, on a non-partisan basis, blatant evidence of not only fraud but the willingness to sanction the abuse of children as sexual slaves. Worse, when such practices are exposed we have the State Prosecutor of Maryland threatening not those who handed out such advice but rather the people who exposed it!
No nation has the right to claim a legitimate government when it declares preempted and void anti-fraud laws passed by State and Local governments that are intended to, and in fact do, operate to protect the citizens from the practices of certain private institutions that said State Government has declared through due process of law fraudulent, abusive and predatory.
Our nation's legitimacy is literally on the edge of collapse, and if we lose that, we lose the rest - our economy, our government, and our nation.
Just exactly how far do our "leaders" think this will be allowed - if not by the citizens of The United States then by our creditors and commodity suppliers upon whom we are absolutely dependant - to go?