As a Real Estate Agent specializing in short sales and foreclosures, I know first hand how devastating this market can be to scores of hard working Americans. As Realtors and as consumers, I think it's important to know the latest foreclosure developments. Here are some of the lesser known stories, not typically covered by the major media. Each title is a link that will take you to the original post:
The nation’s top six banks—Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs—paid out $144 BILLION in bonuses and compensation this past year, making 2011’s payday the second highest on record for these six firms.
Just half of the banks’ bonus and compensation pools would be enough to write down the principal on all underwater mortgages in the country. (video provided at the bottom of this post)
The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.
These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.
In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
And, why–in heaven’s name–would congress want to take on more risk when they can keep millions of people in their homes by simply reducing the principle on their mortgages to the present value of the house?
Did you catch that? Taxpayers are going to get slammed for another $750 billion. That’s nearly as much as Obama’s American Recovery and Reinvestment Act (ARRA), the fiscal stimulus that added 2 percent to GDP and kept unemployment from rocketing to 13 percent. Bernanke wants to throw that same amount down a Wall Street sinkhole.
While foreclosure rates hit a four-year low in 2011, the early signs for 2012 don’t look good when it comes to housing, as banks have begun to work through a backlog of foreclosures that were delayed by the foreclosure fraud scandal. In fact, the New York Federal Reserve anticipates that 3.6 million foreclosures will occur in the next two years, piling on to the 1 million in 2010 and the 800,000 last year. “The ongoing weakness in housing has made it more difficult to achieve a vigorous economic recovery,” said New York Fed President William Dudley. “Housing has inhibited economic activity through a number of channels.” ____
The Democratically-controlled Senate on Thursday overwhelmingly passed an enormous $662 billion defense bill, including a provision that would give the military the responsibility to indefinitely detain suspected terrorists, even if they are American citizens caught on U.S. soil. Despite a vow from President Obama that he would veto the bill if it still contained the dangerous detainment provision, the Senate blocked not one but two attempts to strip it from the legislation, ultimately passing the bill in a 93-7 vote.
The upper chamber granted presidential authority to detain American citizens indefinitely without evidence or trials. As one lawmaker pointed out, this flagrantly defies the Constitution. http://bit.ly/NDAA3
Feinstein was able to include a largely symbolic amendment which states that “nothing in the bill changes current law relating to the detention of U.S. citizens and legal aliens,” but this measure is meaningless according to Republican Congressman Justin Amash, a fierce critic of the bill. “Some have asserted that Sen. Feinstein’s amendment, S Amdt 1456, protects the rights of American citizens and preserves constitutional due process. Unfortunately, it does not. It’s just more cleverly worded nonsense.” http://bit.ly/NDAAscrewed4
The reason the compromise amendment worked is that it leaves the question of domestic military detention open, leaving the matter for Supreme Court to resolve should a future president decide to assert the authority to detain a US citizen on American soil. http://bit.ly/NDAAscrewed
The only “silver lining,” if one can call it such, is that the military isn’t forced to detain American citizens without trial, it’s merely allowed to. The Senate has officially declared the entire United States to be a battleground. And you and I are potential enemies. http://bit.ly/NDAAscrewed5
“The detention mandate to use indefinite military detention in terrorism cases isn’t limited to foreigners. It’s confusing, because two different sections of the bill seem to contradict each other, but in the judgment of the University of Texas’ Robert Chesney — a nonpartisan authority on military detention — “U.S. citizens are included in the grant of detention authority,” http://bit.ly/NDAA9
Amnesty International: The new National Defense Authorization Bill (S1867) presented to the Senate by the Armed Services Committee is such a disaster for civil liberties and human rights it is difficult to know where to begin. http://bit.ly/NDAA4
The ACLU: "The bill is an historic threat to American citizens and others because it expands and makes permanent the authority of the president to order the military to imprison without charge or trial American citizens," said Christopher Anders, ACLU senior legislative counsel. "The final amendment to preserve current detention restrictions could turn out to be meaningless and Senators Levin and Graham made clear that they believe this power to use the military against American citizens will not be affected by the new language. This bill puts military detention authority on steroids and makes it permanent. If it becomes law, American citizens and others are at real risk of being locked away by the military without charge or trial. http://bit.ly/ACLUonNDAA
I guess we can now end the wars, since they can't hate us for our freedoms anymore!
Yes, Americans Will Be Targeted As Terrorists Under the NDAA - Dark Politricks http://bit.ly/rBhHex
The U.S. Senate is considering the unthinkable: changing detention laws to imprison people — including Americans living in the United States itself — indefinitely and without charge. The ACLU petition: http://bit.ly/uNaKsM
The Senate will be voting on a bill that will direct American military resources not at an enemy shooting at our military in a war zone, but at American citizens and other civilians far from any battlefield — even people in the United States itself. http://bit.ly/t7egus
This bill is over 600 pages long, and even according to its sponsors, covers a wide variety of issues. Something as important and unique as criminal justice should not be part of a military authorization bill, but should be the subject of its own bill: http://bit.ly/twwNKA
Is Guantanamo forever? The Senate contemplates a bipartisan bill to make permanent the failed system of indefinite detention: http://bit.ly/vIseRQ
Secret Bill To Be Voted On Today Would Allow The Military To Sweep Up US Citizens At Home Or Abroad: http://read.bi/vnp2sc
The language contained in sections 1031, 1032, and 1033 operates to create a dangerous framework certain to curtail civil liberties and hamstring effective policing. As written, these sections establish indefinite detention, military custody, and a “national security waiver” prohibiting certain transfers from Guantánamo Bay: http://bit.ly/vk7fcW
There's a problem: Within this year's NDAA bill are problematic new provisions that could allow the U.S. military to capture and indefinitely detain American citizens, even here on U.S. soil. Senator Udall's petition: http://bit.ly/uTLYhz
As the Occupy protests grow with each passing day, the threat to the 1% is growing as well. It is no wonder that our government, who is a decades long supporter of the police state as both a profit center and business model, has tried to slip this legislation through. http://bit.ly/vL3uSL
The National Defense Authorization Act for Fiscal Year 2012 is mind-bogglingly unconstitutional, especially Sections Sections 1031 and 1032. It's unconscionable. http://bit.ly/t3ythO
Recent efforts to militarize our justice system and reimpose the use of torture during interrogation are ill advised. They can only further erode the safety of American citizens. In addition, this plan rejects the best advice of U.S. military and intelligence professionals. http://bit.ly/uxrlvu
This bill gives the president the authority to indefinitely imprison American citizens without a court hearing, both domestically and abroad. Senate Bill 1867 is bringing the battlefield to the homeland. Alex Jones, radio host of The Alex Jones Show, tells us what this could mean for America's future. http://bit.ly/tdPxyq
The NDAA is so expansive in scope & dangerous in nature that it makes the PATRIOT Act look like the Bill of Rights. http://bit.ly/rsrNpc
According to Republican South Carolina Senator Lindsay Graham, the bill will “basically say in law for the first time that the homeland is part of the battlefield.” http://bit.ly/vVcYWB
"I'm very, very, concerned about having U.S. citizens sent to Guantanamo Bay for indefinite detention," said Sen. Rand Paul (R-Ky.), one of the Senate's most conservative members. http://huff.to/tItjaQ
I was arrested with this fine man yesterday morning. This is Captain Lewis and November 17th also happens to be his Birthday.
We all sang him Happy Birthday as we stood in our cuffs waiting to be booked for peacefully protesting. We all greeted him with cheers for joining the movement.
He said that we, meaning all of us who have been involved in Occupy Wall Street these last two months, were the ones who deserved the applause because our strength and courage to stand up for what we believe in inspired him. Ah, what a beautiful day!
Today is Occupy Wall Street Day of Action. It is happening all over the world. Thousands upon thousands of protesters have taken to the streets expressing their discontent with the rule of the 1% and their puppet governments. There has been a lot of police violence already and more is expected to ensue throughout the day. Here are the LIVE STREAM from everywhere. Make sure you switch the chat from global when you tune into an occupation, so you can see the chat for that particular location: http://www.occupystream.com/
Responding to homeowner complaints, Nevada has become the first state in the nation to make illegally repossessing a home a felony, and may send bankers to jail for doing such. The new law was enacted after tens of thousands of homeowners complained to lawmakers about their homes being foreclosed without proof of ownership. Nevada Makes Illegal Foreclosures Felony
Last Tuesday, exactly a week ago today, I saw images I will never forget. At first glance, one might think he's watching a violent revolution unfold in some third world country. Surely, this is not the United States of America, or is it?
The Occupy Wall Street Movement is not against Wall Street. It is only against Wall Street Corruption. In particular, the Wall Street corruption of the Wall Street Banksters.
In 1999, Congress repealed the The Glass-Steagall Act, which was put in place right after the great depression to protect against the predatory Banking practices that facilitated the great depression and it worked beautifully for all those years. In its place, Congress enacted The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, which effectively made predatory lending legal, thereby creating the basis for the subprime home mortgage crisis that cost taxpayers trillions of dollars: http://bit.ly/YesGlassSteagall A year later, Congress drove the final nail in our Financial coffin, with the enaction of The Commodity Futures Modernization Act of 2000) which gave the wall street banksters carte blanche to launch the mortgage backed derivatives schemes, in essence legalizing wall street gambling: http://bit.ly/WeGotScrewed
Last year, The Supreme Court ruled that corporations are people - Citizens United http://bit.ly/NoCitizensUnited . The implications of allowing corporations to contribute unlimited amounts of money secretly and without any regulation, in essence insured their stronghold on our government, by not only lobbying, but now having full blessing to straight out BUY the elections. Last year's elections were the most expensive mid term elections in America's history and 2012 promises to be the most expensive election EVER, with Obama's campaign budget at over a BILLION dollars, the most expensive presidential election EVER! Anyone who thinks that in this type of environment we could have anything remotely similar to a Democracy is probably under the spell of Fox and Rush Limbaugh and completely delusional...
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Unfortunately, most Americans don't know the truth, thus they believe the corporate media lies. Only a handful of huge corporations own all the media, so what you get when you watch the so called News, are obfuscations of the truth.
Here is a list of independent and foreign media, for those who want to know what's really going on: http://on.fb.me/AlternativeMedia
Here is a great book I strongly recommend reading. I urge you to read it. It will shed light on everything I mentioned and you will see what I see and you will understand why I am so supportive of this most important movement:
Also, here are three very good movies to watch in order to get more understanding on the heist perpetrated on the American people by the Banksters. This too, will help you understand how grave our situation is and why we desperately need this movement:
"When plunder becomes a way of life for a group of men, they create for themselves, in the course of time, a legal system that authorizes it, and a moral code that glorifies it.” – Political economist Frederic Bastiat, The Law [1850]
“I used to think of Wall Street as a financial center. I now think of it as a crime scene.” – Filmmaker Danny Schecter, Plunder (2009)
Our Congress today is a forum for legalized bribery. One consumer group using information from Opensecrets.org calculates that the financial services industry, including real estate, spent $2.3 billion on federal campaign contributions from 1990 to 2010, which was more than the health care, energy, defense, agriculture and transportation industries combined. Why are there 61 members on the House Committee on Financial Services? So many congressmen want to be in a position to sell votes to Wall Street.
We can’t afford this any longer. We need to focus on four reforms that don’t require new bureaucracies to implement. 1) If a bank is too big to fail, it is too big and needs to be broken up. We can’t risk another trillion-dollar bailout. 2) If your bank’s deposits are federally insured by U.S. taxpayers, you can’t do any proprietary trading with those deposits — period. 3) Derivatives have to be traded on transparent exchanges where we can see if another A.I.G. is building up enormous risk. 4) Finally, an idea from the blogosphere: U.S. congressmen should have to dress like Nascar drivers and wear the logos of all the banks, investment banks, insurance companies and real estate firms that they’re taking money from. The public needs to know.
Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly. Free advice to the financial services industry: Stick to being bulls. Stop being pigs. http://www.nytimes.com/2011/10/30/opinion/sunday/friedman-did-you-hear-the-one-about-the-bankers.html?_r=1&src=recg
Every American should watch this interview (Transcript below):
BILL MOYERS: Welcome to the Journal.
For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you're about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s.
WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud.
BILL MOYERS: Bill Black was in New York this week for a conference at the John Jay College of Criminal Justice where scholars and journalists gathered to ask the question, "How do they get away with it?" Well, no one has asked that question more often than Bill Black.
The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.
Now Black is focused on an even greater scandal, and he spares no one — not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname "banksters."
Bill Black, welcome to the Journal.
WILLIAM K. BLACK: Thank you.
BILL MOYERS: I was taken with your candor at the conference here in New York to hear you say that this crisis we're going through, this economic and financial meltdown is driven by fraud. What's your definition of fraud?
WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have.
BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you're saying here, that it was in the boardrooms and the CEO offices where this fraud began?
WILLIAM K. BLACK: Absolutely.
BILL MOYERS: How did they do it? What do you mean?
WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.
BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?
WILLIAM K. BLACK: Yes.
BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?
WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.
BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me?
WILLIAM K. BLACK: Well, that's exactly what hasn't happened. We haven't looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that's exactly what happened. Where would you look? You'd look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what's called Alt-A, liars' loans.
BILL MOYERS: Yeah. Liars' loans--
WILLIAM K. BLACK: Liars' loans.
BILL MOYERS: Why did they call them liars' loans?
WILLIAM K. BLACK: Because they were liars' loans.
BILL MOYERS: And they knew it?
WILLIAM K. BLACK: They knew it. They knew that they were frauds.
WILLIAM K. BLACK: Liars' loans mean that we don't check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won't check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets.
BILL MOYERS: You think they really said that to borrowers?
WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans.
BILL MOYERS: Ninja?
WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification.
BILL MOYERS: You're talking about significant American companies.
WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle.
BILL MOYERS: Which company?
WILLIAM K. BLACK: IndyMac specialized in making liars' loans. In 2006 alone, it sold $80 billion dollars of liars' loans to other companies. $80 billion.
BILL MOYERS: And was this happening exclusively in this sub-prime mortgage business?
WILLIAM K. BLACK: No, and that's a big part of the story as well. Even prime loans began to have non-verification. Even Ronald Reagan, you know, said, "Trust, but verify." They just gutted the verification process. We know that will produce enormous fraud, under economic theory, criminology theory, and two thousand years of life experience.
BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?
WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you're talking about was created out of things like liars' loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That's why it's toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined."
BILL MOYERS: So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention.
WILLIAM K. BLACK: Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars' loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste.
BILL MOYERS: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme.
WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn't even get into the front ranks of a Ponzi scheme...
BILL MOYERS: But you're saying our system became a Ponzi scheme.
WILLIAM K. BLACK: Our system...
BILL MOYERS: Our financial system...
WILLIAM K. BLACK: Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, "Triple-A."
BILL MOYERS: Is there a law against liars' loans?
WILLIAM K. BLACK: Not directly, but there, of course, many laws against fraud, and liars' loans are fraudulent.
BILL MOYERS: Because...
WILLIAM K. BLACK: Because they're not going to be repaid and because they had false representations. They involve deceit, which is the essence of fraud.
BILL MOYERS: Why is it so hard to prosecute? Why hasn't anyone been brought to justice over this?
WILLIAM K. BLACK: Because they didn't even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the Savings and Loan crisis, right? Even while the institutions were reporting they were the most profitable savings and loan in America, we knew they were frauds. And we were moving to close them down. Here, the Justice Department, even though it very appropriately warned, in 2004, that there was an epidemic...
BILL MOYERS: Who did?
WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn't let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis.
BILL MOYERS: You talk about the Bush administration. Of course, there's that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they're going to slash, cut business loose from regulation, right?
WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the...
BILL MOYERS: That's right.
WILLIAM K. BLACK: They're the trade representatives. They're the lobbyists for the bankers. And everybody's grinning. The government's working together with the industry to destroy regulation. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.
BILL MOYERS: But I can point you to statements by Larry Summers, who was then Bill Clinton's Secretary of the Treasury, or the other Clinton Secretary of the Treasury, Rubin. I can point you to suspects in both parties, right?
WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what's called commercial banking from investment banking. That's the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn't. She tried to do the right thing to regulate one of these exotic derivatives that you're talking about. We call them C.D.F.S. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can't regulate. And it's this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle.
BILL MOYERS: What did AIG contribute? What did they do wrong?
WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him... we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us?
BILL MOYERS: And why...
WILLIAM K. BLACK: How mad is this?
BILL MOYERS: What is your explanation for why the bankers who created this mess are still calling the shots?
WILLIAM K. BLACK: Well, that, especially after what's just happened at G.M., that's... it's scandalous.
BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?
WILLIAM K. BLACK: There are two reasons. One, they're much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they're outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, ‘contracts, sacred.' But the other element of your question is we don't want to change the bankers, because if we do, if we put honest people in, who didn't cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.
BILL MOYERS: The cover up?
WILLIAM K. BLACK: Sure. The cover up.
BILL MOYERS: That's a serious charge.
WILLIAM K. BLACK: Of course.
BILL MOYERS: Who's covering up?
WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.
These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...
BILL MOYERS: What do you mean?
WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator.
BILL MOYERS: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this.
TIMOTHY GEITHNER: I've never been a regulator, for better or worse. And I think you're right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.
Overwhelmed by regulation! It wasn't the absence of regulation that was the problem, it was despite the presence of regulation you've got huge risks that build up.
WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to regulate. That was his mission statement.
BILL MOYERS: As?
WILLIAM K. BLACK: As president of the Federal Reserve Bank of New York, which is responsible for regulating most of the largest bank holding companies in America. And he's completely wrong that we had too much regulation in some of these areas. I mean, he gives no details, obviously. But that's just plain wrong.
BILL MOYERS: How is this happening? I mean why is it happening?
WILLIAM K. BLACK: Until you get the facts, it's harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts.
BILL MOYERS: What facts?
WILLIAM K. BLACK: The facts about how bad the condition of the banks is. So, as long as I keep the old CEO who caused the problems, is he going to go vigorously around finding the problems? Finding the frauds?
BILL MOYERS: You--
WILLIAM K. BLACK: Taking away people's bonuses?
BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now.
WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.
BILL MOYERS: In other words, they could have closed these banks without nationalizing them?
WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.
BILL MOYERS: And that's a law?
WILLIAM K. BLACK: That's the law.
BILL MOYERS: So, Paulson could have done this? Geithner could do this?
WILLIAM K. BLACK: Not could. Was mandated--
BILL MOYERS: By the law.
WILLIAM K. BLACK: By the law.
BILL MOYERS: This law, you're talking about.
WILLIAM K. BLACK: Yes.
BILL MOYERS: What the reason they give for not doing it?
WILLIAM K. BLACK: They ignore it. And nobody calls them on it.
BILL MOYERS: Well, where's Congress? Where's the press? Where--
WILLIAM K. BLACK: Well, where's the Pecora investigation?
BILL MOYERS: The what?
WILLIAM K. BLACK: The Pecora investigation. The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation?
What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we've got a double tragedy. It isn't just that we are failing to learn from the mistakes of the past. We're failing to learn from the successes of the past.
BILL MOYERS: What do you mean?
WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, "You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue." And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan.
BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
WILLIAM K. BLACK: Absolutely.
BILL MOYERS: You are.
WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong.
BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks?
WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We've seen how horrific AIG -- and remember, they kept secrets from everyone.
BILL MOYERS: A.I.G. did?
WILLIAM K. BLACK: What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.
Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.
BILL MOYERS: Even though Goldman Sachs had a big vested stake.
WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.
BILL MOYERS: Yeah, like a conflict of interest, it seems.
WILLIAM K. BLACK: Massive conflict of interests.
BILL MOYERS: So, how did he get away with it?
WILLIAM K. BLACK: I don't know whether we've lost our capability of outrage. Or whether the cover up has been so successful that people just don't have the facts to react to it.
BILL MOYERS: Who's going to get the facts?
WILLIAM K. BLACK: We need some chairmen or chairwomen--
BILL MOYERS: In Congress.
WILLIAM K. BLACK: --in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets.
BILL MOYERS: And we have to know that, in order to know what?
WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses.
BILL MOYERS: So, you're saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?
WILLIAM K. BLACK: That's right. And it's particularly a crisis that brings this out, because then the class of the banker says, "You've got to keep the information away from the public or everything will collapse. If they understand how bad it is, they'll run for the exits."
BILL MOYERS: Yeah, and this week in New York, at this conference, you described this as more than a financial crisis. You called it a moral crisis.
WILLIAM K. BLACK: Yes.
BILL MOYERS: Why?
WILLIAM K. BLACK: Because it is a fundamental lack of integrity. But also because, if you look back at crises, an economist who is also a presidential appointee, as a regulator in the Savings and Loan industry, right here in New York, Larry White, wrote a book about the Savings and Loan crisis. And he said, you know, one of the most interesting questions is why so few people engaged in fraud? Because objectively, you could have gotten away with it. But only about ten percent of the CEOs, engaged in fraud. So, 90 percent of them were restrained by ethics and integrity. So, far more than law or by F.B.I. agents, it's our integrity that often prevents the greatest abuses. And what we had in this crisis, instead of the Savings and Loan, is the most elite institutions in America engaging or facilitating fraud.
BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker's income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right?
WILLIAM K. BLACK: Right.
BILL MOYERS: It was relatively a handful of people.
WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don't prosper. So, instead of being bad for capitalism, it's what saves capitalism. "Honest purveyors prosper" is what we want. And you need regulation and law enforcement to be able to do this. The tragedy of this crisis is it didn't need to happen at all.
BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself?
WILLIAM K. BLACK: There's a saying that we took great comfort in. It's actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, "It is not necessary to hope in order to persevere."
Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That's facially nuts. That's our current system.
So stop that current system. We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they've had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker.
BILL MOYERS: William Black, thank you very much for being with me on the Journal.
As the thousands of Occupy Wall Street protesters were making their way through the Brooklyn Bridge, police barricaded the bridge and started arresting everybody. Hundreds have been arrested already and it looks like they have many more to go. They just arrested a mother and child. This is shameful! I can't believe this is my country!
See for yourself. The transmission fades in and out, but here is the live feed. If the live feed goes out, they usually play videos and interrupt those when they establish connection with the live feed again. Please share this live feed. People need to know.
"In other words, three of the nation's largest financial institutions had made more bad bets than they could afford to pay off."
"It's legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell."
"It would have been illegal during most of the 20th century under the gaming laws, but in 2000, Congress gave Wall Street an exemption and it has turned out to be a very bad idea."
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Anyone with more than a casual interest in why their 401(k) has tanked over the past year knows that it's because of the global credit crisis. It was triggered by the collapse of the housing market in the United States and magnified worldwide by the sale of complicated investments that Warren Buffett once labeled financial weapons of mass destruction.
They are called credit derivatives or credit default swaps.
As correspondent Steve Kroft first reported last fall, they are essentially side bets on the performance of the U.S. mortgage markets and some of the biggest financial institutions in the world - a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and bonds and mortgages.
I am going to bed now, but before I do, I have to say: 9/11 impacted me for a long time. I wore black for months in sign of respect for my brothers and sisters who perished in that tragic event. I have witnessed the darkest days in America's history in the past decade, with gross infringements upon our Liberties: The Patriot Act, executive rendition, Homeland Security, TSA.
My heart also goes out to the victims of the wars started as a result of 9/11. Entire populations displaced, maimed or killed. Depleted uranium altering an entire region for an eternity (or at least a few thousand years). They say we lost a million Iraqis and over seventy thousand American soldiers and I'm not sure if that's true, but what I do know, is that a single human being is too many to lose in a war that benefits no one, but a few powerful corporations...
I am also sad to see so much hate being waged against our Muslim American brothers and sisters. Several foundations have spent over $42Million to engender that hate. We are a nation full of diversity and acceptance for other cultures. How could we become so narrow minded in a single decade?
The wars are ongoing still. In Baghdad, we built the largest Embassy ever erected by any country on the face of this planet. It looks like we're staying there for good. The Trans-Afghanistan pipeline won't be finished until 2014 and then we'll need to guard it. It looks like we're staying there also.
Meanwhile, I sell foreclosures for a living and I negotiate with banks on short selling people's homes. My clients are doctors, lawyers, financial planners, engineers and other working folks. They have done everything they were told to do; they played by the book: they got an education, worked hard and used leverage to invest in Real Estate. Suddenly, the rug was pulled out from under and their lives destroyed by a national financial catastrophe, and while I argue with the banks on their behalf over a pittance, the likes of Goldman Sachs are now poised to profit from our government's wholesaling these foreclosed homes. This, after they caused the financial ruin in the first place!
I go to bed tonight with the same heavy heart I felt ten years ago. So sad for the victims jumping out of windows or pulverized at the Trade Center, the passengers of the ill fated planes and the Pentagon accounting office workers who perished that day. We lost a lot on September 11, 2001, but have we lost our way?
9/11/11On the anniversary of 9/11, I present these wise words.It is called “The Greatest Speech Ever Made” and it is a poignant reminder of the important:
I'm sorry but I don't want to be an Emperor - that's not my business - I don't want to rule or conquer anyone. I should like to help everyone if possible, Jew, gentile, black man, white. We all want to help one another, human beings are like that.
We all want to live by each other's happiness, not by each other's misery. We don't want to hate and despise one another. In this world there is room for everyone and the earth is rich and can provide for everyone.
The way of life can be free and beautiful. But we have lost the way.
Greed has poisoned men's souls - has barricaded the world with hate; has goose-stepped us into misery and bloodshed.
We have developed speed but we have shut ourselves in: machinery that gives abundance has left us in want. Our knowledge has made us cynical, our cleverness hard and unkind. We think too much and feel too little: More than machinery we need humanity; More than cleverness we need kindness and gentleness. Without these qualities, life will be violent and all will be lost.
The aeroplane and the radio have brought us closer together. The very nature of these inventions cries out for the goodness in men, cries out for universal brotherhood for the unity of us all. Even now my voice is reaching millions throughout the world, millions of despairing men, women and little children, victims of a system that makes men torture and imprison innocent people. To those who can hear me I say "Do not despair".
The misery that is now upon us is but the passing of greed, the bitterness of men who fear the way of human progress: the hate of men will pass and dictators die and the power they took from the people, will return to the people and so long as men die [now] liberty will never perish...
Soldiers - don't give yourselves to brutes, men who despise you and enslave you - who regiment your lives, tell you what to do, what to think and what to feel, who drill you, diet you, treat you as cattle, as cannon fodder.
Don't give yourselves to these unnatural men, machine men, with machine minds and machine hearts. You are not machines. You are not cattle. You are men. You have the love of humanity in your hearts. You don't hate - only the unloved hate. Only the unloved and the unnatural. Soldiers - don't fight for slavery, fight for liberty.
In the seventeenth chapter of Saint Luke it is written " the kingdom of God is within man " - not one man, nor a group of men - but in all men - in you, the people.
You the people have the power, the power to create machines, the power to create happiness. You the people have the power to make life free and beautiful, to make this life a wonderful adventure. Then in the name of democracy let's use that power - let us all unite. Let us fight for a new world, a decent world that will give men a chance to work, that will give you the future and old age and security. By the promise of these things, brutes have risen to power, but they lie. They do not fulfil their promise, they never will. Dictators free themselves but they enslave the people. Now let us fight to fulfil that promise. Let us fight to free the world, to do away with national barriers, do away with greed, with hate and intolerance. Let us fight for a world of reason, a world where science and progress will lead to all men's happiness.
The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.
These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.
In the process, these investors will instantaneously become the largest improved realestate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
On Wednesday, the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD) and the U.S. Treasury Department issued a Request for Information (RFI) concerning the disposition of the inventory of foreclosed homes owned by the federal government.
An RFI is ostensibly a way for the federal government to get input from the private sector on how to accomplish the goals laid out in the request. But that's really just a facade, as the RFI was structured by the investors to begin with.
In reality, the RFI is a way for the members of Congress to find out if they can get away with bulk-selling these homes to privatecompanies without incurring the wrath of their constituents, taxpayers and former owners of the properties.
Assuming taxpayers don't push back, the next step will be to issue a Request for Proposals (RFP). The RFP will be the bid and plan for these homes by investors.
The way to keep taxpayers from pushing back is to structure the RFI so that the real intention, the bulk sales, is masked by feel-good goals, such as stabilizing neighborhoods and increasing the supply of rental properties.
As intended, the mass media are playing their part in classic style. Every major newspaper in the U.S. has run articles discussing the plan as a rental conversion, allowing readers to assume that Fannie, Freddie and HUD will be renting the properties directly to families who need housing. And although there is an allowance for these kinds of rentals, it is a minor political facade to the obvious true goal of bulk-sale privatization of these homes.
The investors in this program have been waiting for this opportunity since the portfolio of homes owned by HUD began to spike in 2007, when foreclosures surged first in the "Rust Belt," principally Ohio and Michigan.
Since then, of course, the systemic collapse of housing has engulfed all of the major urban coastal regions of the U.S., as well as Phoenix and Las Vegas, and caused the homes owned by Fannie Mae and Freddie Mac, which are now under the direct control of the U.S. Treasury Department, to spike as well.
Even before this crisis occurred, HUD, i.e. the U.S. government, was the largest improved real estate owner in the world, because of its portfolio of foreclosed homes, which is classified as "real estate owned" (REO). The entire massive HUD REO Portfolio is quietly managed by a handful of private firms already, a group listed as Management and Marketing Contractors.
These M&M companies are principally owned by and employ former high-ranking government officials from the various germane agencies -- the Treasury, HUD, FHA and others. And they will provide the necessary access to the current government employees who are tasked with bringing this program to fruition. Once the privatization is complete, those government employees will move from their positions, and many will take up new employment at one of the M&Ms or the new vulture funds.
I am not currently aware of any way for retail investors to participate in this process.
It is probable, however, that once the privatization has occurred and the properties are generating rental income for the investors, the initial investors will cash out by forming real estate investment trusts (REITs), real estate operating companies (REOCs) or limited partnerships (LPs) that will be made available to retail investors.
A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation's worst financial criminals.
by: Matt Taibbi
Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.
That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.
Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records – "including case files relating to preliminary investigations" – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term "Orwellian," devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or "Matters Under Inquiry" – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission's internal website. "After you have closed a MUI that has not become an investigation," the site advised staffers, "you should dispose of any documents obtained in connection with the MUI."
Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.
The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission's records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission's improprieties.
As a federally protected whistle-blower, Flynn is not permitted to speak to the press. But in evidence he presented to the SEC's inspector general and three congressional committees earlier this summer, the 13-year veteran of the agency paints a startling picture of a federal police force that has effectively been conquered by the financial criminals it is charged with investigating. In at least one case, according to Flynn, investigators at the SEC found their desire to bring a case against an influential bank thwarted by senior officials in the enforcement division – whose director turned around and accepted a lucrative job from the very same bank they had been prevented from investigating. In another case, the agency farmed out its inquiry to a private law firm – one hired by the company under investigation. The outside firm, unsurprisingly, concluded that no further investigation of its client was necessary. To complete the bureaucratic laundering process, Flynn says, the SEC dropped the case and destroyed the files.
Much has been made in recent months of the government's glaring failure to police Wall Street; to date, federal and state prosecutors have yet to put a single senior Wall Street executive behind bars for any of the many well-documented crimes related to the financial crisis. Indeed, Flynn's accusations dovetail with a recent series of damaging critiques of the SEC made by reporters, watchdog groups and members of Congress, all of which seem to indicate that top federal regulators spend more time lunching, schmoozing and job-interviewing with Wall Street crooks than they do catching them. As one former SEC staffer describes it, the agency is now filled with so many Wall Street hotshots from oft-investigated banks that it has been "infected with the Goldman mindset from within."
The destruction of records by the SEC, as outlined by Flynn, is something far more than an administrative accident or bureaucratic fuck-up. It's a symptom of the agency's terminal brain damage. Somewhere along the line, those at the SEC responsible for policing America's banks fell and hit their head on a big pile of Wall Street's money – a blow from which the agency has never recovered. "From what I've seen, it looks as if the SEC might have sanctioned some level of case-related document destruction," says Sen. Chuck Grassley, the ranking Republican on the Senate Judiciary Committee, whose staff has interviewed Flynn. "It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law.
Inside Job: 
in sign of respect for my brothers and sisters who perished in that tragic event. I have witnessed the darkest days in America's history in the past decade, with gross infringements upon our Liberties: The Patriot Act, executive rendition, Homeland Security, TSA. 
Assuming taxpayers don't push back, the next step will be to issue a Request for Proposals (RFP). The RFP will be the bid and plan for these homes by investors.
