Tuesday, January 6, 2015

Analysis/OpinionEric Holder didn't send a single banker to jail for the mortgage crisis. (theguardian.com) submitted 3 months ago by ShellOilNigeri

submitted by ShellOilNigeria
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[–]acog 1413 points  
Contrast this to the aggressive prosecutions for the Savings & Loan crisis:
The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. But even that understates the degree of prioritization, because we, the regulators, worked very closely with the FBI and the Justice Department to create a list of the top 100 — the 100 worst fraud schemes. They involved roughly 300 savings and loans and 600 individuals, and virtually all of those people were prosecuted. We had a 90 percent conviction rate, which is the greatest success against elite white-collar crime (in terms of prosecution) in history.
from here
[–]SolSearcher 629 points  
This reply should be higher. The fact that the American people have been force fed B.S. reasons why those involved in the 2008 crises can not be prosecuted is itself indicative of the blatant contempt the government has for its citizens.
[–]L00kBehindYou 59 points  
A great episode of "This American Life" just aired that sheds light on the regulatory capture that is present in Fed branch which regulates these banks:
[–]dildosupyourbutt 24 points  
Holy shit was this ever a good episode. Horribly depressing, but really very informative.
tl;dr: the regulators are a bunch of ass-covering, future-padding pussies who value some vague notion of "consensus" over correctness. Seriously, fuck those guys.
[–]CommonSense8102 2 points  
No matter how depressing something is, it's way better to accept it than live in a false-reality where you have closed your mind to anything that may not suit your views on life, or the way you'd LIKE the World to be. Way too many people feel that if something is too horribly depressing, they need to just scream that it's not true, because poor them if it is true. Life is tough, life is unfair, life is dictated by those that have lived before you and gained wealth and power. Accept it and work to change it. There's a ton of things people need to face as true if we ever want to actually change the way things are. Right now, most of it is a social taboo.
[–]IronPathologist 184 points  
The problem is a percentage of the subprime lending was fed by HUD and other programs, and the collapse went unmitigated due to the bipartisan repeal of Glass-Steagall. We can't have government actions look bad now, can we? Holder didn't have the guts to take bankers head-on for this, because, in part, the government had spent the last 15 years under Bush, Clinton, and bipartisan congresses legalizing a lot of their action.
[–]HeavyMetalStallion 552 points  
You can't prosecute bankers for lending money in a way that was completely legal and completely devoid of any fraud.
Proving fraud alone is very difficult. But in the Savings & Loan crisis and prosecution of ponzi-scheme people like Bernie Madoff, they can prove that in court with the FBI's help. That there was a clear intent to defraud people of their money.
This is not the case here. It's not the same event no matter how much you believe it is.
It's not a government conspiracy and it's not a corporate conspiracy (holy shit I may have made a lot of enemies with that statement). It's not like those big banks didn't lose lots of money during the crisis. THEY DID. Then to turn around and prosecute them for fraud when they didn't even try to defraud anyone and they abide by the laws while they lost tons of money during 2008 themselves. It's basically impossible to prove that to any jury unless you select anti-corporate ideologues as your jury panel.
Even if you made a law today claiming housing loans were "part of a scheme to commit fraud on innocent home owners", you can't retroactively prosecute them. Not to mention you'd have to throw a lot of home-owners in prison too for being part of the fraud.
The best argument you can make is that the rating agencies defrauded people but if they can prove they've been operating this way since the beginning as their policies suggest and that they had the right legal statements and disclaimers to their investors saying that there are no guarantees, then you are shit out of luck.
Grab the best prosecutor you can, you will not be able to do it.
Not to mention that Eric Holder prosecuted big banks (that even donated to Obama campaign) such as J.P. Morgan for record-breaking $13 billion. But of course no one remembers that because a banker wasn't put in a physical prison for a non-violent crime.
Oh hey, what happened to all those redditors saying that "too many non-violent criminals are in prison." So we should free all the non-violent drug-dealers but replace them with non-violent bankers?
edit: Even if you were to know for a fact that there are a few private bankers or investors who made huge profits in 2008 themselves. You would have to have an extraordinary amount of evidence to prove that those few helped create the situation of the 2008 crisis of such a massive global system with their meager money and that they are NOT just opportunists who saw an impending crisis and made opposite bets on housing as any smart investor with predictive abilities might do. Not to mention that every crisis has "someone who benefited" but it doesn't mean that they caused it.
It is simply more probable that there was a system of deregulation and lax laws that created a bubble and repealing of certain laws in favor of free trade, in favor of getting people affordable housing (a good intention), caused investors to lose their senses and assume the gravy train would keep giving and it simply just burst. A good mix of unregulated securities/derivatives that were being insured and betted against, caused an effect where when investors panicked and pulled out, the house of cards started falling and everyone tried to save themselves with no one actually "intending" this to happen. But this is unacceptable to the human mind. We always want someone to blame. But instead of blaming individuals, you should just blame the lax laws and encourage your politicians to create regulations that prevent such a repeat of history. That's the best you can ask for.
[–]heidgerken 81 points  
I think the response I'd like to see is that the politicians who were in oversight positions in congress and the senate get voted out. Perhaps nothing was illegal, but clearly they failed to manage things in the best interest of the country.
[–]HeavyMetalStallion 36 points  
Sure thing. That's a reasonable desire.
I would myself like to find out who exactly allowed regulations to be deregulated and allowed insurance companies to buy ratings to highly rate their bullshit security packages. But I know who they are. Alan Greenspan and the Bush administration; the Austrian school of economics and Ayn Randians like Greenspan; along with Clinton's lack of regulation and too much willingness to listen to "both types of economists". Greenspan was appointed by both Clinton and Bush and he helped formulate these policies.
Greenspan loves Ayn Rand and even after the crisis he continues to blame others including Republicans for abandoning Ayn Rand-style policies. He continues to blame "debt" and other nonsense that has nothing to do with it. So if you're looking for someone to blame, that's him. But he has many allies in the Tea Party so it's unlikely you can do much.
In September 2008 Joseph Stiglitz stated that Greenspan "didn't really believe in regulation; when the excesses of the financial system were noted, (he and others) called for self-regulation – an oxymoron."[74] Greenspan, according to The New York Times, says he himself is blameless.
In Congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. The New York Times wrote, "a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending. ... Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken." Although many Republican lawmakers tried to blame the housing bubble on Fannie Mae and Freddie Mac, Greenspan placed far more blame on Wall Street for bundling subprime mortgages into securities.
Blaming everyone but themselves and their irrational beliefs.
[–]Messisfoot 6 points  
Ah damn, I just sang your praise for you parent comment. But to blame Greenspan is foolish and a dangerous mind-set to promote anti-central banks.
I understand that Greenspan loves to dick-ride Ayn Rand. But his loose monetary policies during his tenure as chairman would be contradictory to all this Tea Party none-sense. But, at least from my understanding, Greenspan implemented this increase in the money supply due to the burst of the dot.com bubble. Though our (real) GDP returned to previous levels, unemployment never returned to its pre-2000 levels. The reason? The digital era had made so many jobs obsolete, he just never took this account.
What had happened was an increase of the natural rate of unemployment. But no one, including Greenspan, realized it. So they kept the interest rates low and tried to recover jobs that simply were not there anymore.
[–]McNerfBurger 9 points  
Your original point was so good...but it's almost like this one was written by a different person.
You're quick to blame Greenspan (who, on a side note, is loathed by any true fiscal conservative for his loose money policies and inevitable bubble creation..a trend that every subsequent Fed chair has continued), but you've ignored the effects Fannie/Freddie had by guaranteeing the FHA loans in the first place. This removed the risk from the investors since the debt was backed by the Feds. Why NOT try to bundle them up, leverage them, then sell them to the highest bidder? If things go sideways, the government has promised to pay for it.
You've also conveniently forgotten to mention the effects Dodd-Frank had, particularly how it (let's be generous) encouraged lenders to make risky loans to sub-prime borrowers. At the time this was to stop rich, racist, fat-cat bankers from denying loans to inner city minorities. Today it's labelled predatory lending. Funny how the left managed to spin that.
In any case, the reasons are many, but attempting to label this as some sort of failure of Austrian economics is pretty sort-sighted.
[–]EasyChief 7 points  
clearly they failed to manage things in the best interest of the country.
When was the last time they successfully managed ANYTHING in the best interest of the country?
[–]HeavyMetalStallion 7 points  
Well if you only read reddit, then everything is pessimistic and bleak and everyone is guilty and part of conspiracies.
It's a little harder to expand your sources of information beyond that because that's what everyone is offering to sell.
What sells on the internet (blogs, reddit submissions, social media) is bad news, witch hunts, sensationalism, and criticism. A fusion of cynicism and pessimism with good doses of conspiracies and condemnation.
[–]IronPathologist 10 points  
... I don't disagree here. I'm not claiming conspiracy - I'm claiming a poor record of claiming culpability, and Holder's lack of action and "not stirring up trouble". Start bringing people in for minor fraud charges, and you'll get to the bottom of the legal gaps in our system outside of the larger Act-of-Congress de-regulation problems.
The government de-regulated in a meaningful way, and banks took advantage, as they ought to have (since you know, shareholders). What never happened was any real recognition of general government fuckuppery - it was all "blame the banks", "death to the one percent", which works really well for your political campaign, but not so well in administering any sort of meaningful reform. Instead of demonizing banks to win elections, a more better-er way of doing things would have been a concerted Justice Department and Administrative effort to assess and fix the problem. We got not much of that if any.
[–]from_the_tubes 17 points  
completely devoid of any fraud
This is completely untrue. The article in OP even outlines several instances of fraud that were committed. But I'm not going to argue with you about that because I don't have time to scour the internet for all of the links I would need to really make that case, I'll just say that the systemic fraud that defined the financial industry during the sub-prime bonanza is fairly well documented, with many journalists having written about it extensively.
What I will argue is how easy it would be to implicate high ranking officials in criminal activity related to the financial crisis. If the DOJ really wanted to prosecute these individuals they could have done it in the way they got the guys in the S&L scandal, or virtually any narcotics prosecution: start at the bottom and work their way up the chain. Go after some low level branch employee with actual physical evidence of fraud, and get them to roll on their superiors, all the way to the top. It's incredibly naive to think that this happened purely at the bottom of the organizations, and no bank employee is going to jail to save his boss (unlike in gang prosecutions). These banks had legions of entry-level people falsifying origination documents, that alone would have been a fine place to start. There are plenty of internal memos and communications that would have corroborated their testimony.
All this about how hard it is to prove fraud is just nonsense meant to justify the two-tiered system of justice in America today.
[–]MMonReddit 25 points  
One of America's most prominent white-collar criminologists, a senior regulator during the S&L crisis, and creator of the term control fraud and control fraud theory disagrees with you:
I recently wrote my thesis on the interaction between the state and finance surrounding the financial crisis; there was undoubtedly a wave of control fraud that spawned it. People ask economists what went wrong and thus the dominant narrative of market failure is formed, but economists know very little about criminology. Luckily, some people are sane enough to take a multidisciplinary approach to it like Bill Black.
But not only did these bankers pull off a pretty much perfect crime (as Black details) but prosecution efforts were nil on the part of the Obama administration, which PBS's "Money, Power, and Wall Street" and PBS's "The Untouchables" outline in some detail. You say that
Not to mention that Eric Holder prosecuted big banks (that even donated to Obama campaign) such as J.P. Morgan for record-breaking $13 billion. But of course no one remembers that because a banker wasn't put in a physical prison for a non-violent crime.
Sociolegal scholars have recognized for a long time that the crimes of elites will be softened into regulatory violations rather than prison sentences, and this is predictably what occurred. Two factors do work in favor of your argument, though: the fact that the FIRE industries utterly dominate lawmaking with regard to their own areas and repeat player effects observed by Marc Galanter. Given the long history of criminality in the financial sector, it's easy to see that they've had adequate time to warp law through precedents and settlements. And in fact there's evidence that the major financial institutions act as what I guess you could call a "super repeat player" as they share their legal defenses in the industry.
Bottom line, if you look at this situation from a criminological viewpoint, everything that suggests criminality is there: the culture, the history of criminality, a wave of mortgage fraud passed through the securitization food chain, 80% of the time initiated by industry insiders, the financial crisis emanating from it, etc. I can expand on all this if you like.
[–]saywhaaaat 28 points  
It's not a government conspiracy and it's not a corporate conspiracy
Reminds me of this Don Draper quote: “I hate to break it to you, but there is no big lie. There is no system. The universe is indifferent.”
[–]tollforturning 5 points  
This is Don Draper being Don Draper, and the oversight is evident. The universe is also indifferent to you screwing your neighbor's spouse and getting away with it, but screwing your neighbor's spouse and getting away with it is definitely possible. Difference of scale but it renders my point.
[–]Philo_T_Farnsworth 19 points  
First, I want to say thanks for a well thought out and well articulated response. I have something I want to say here, and it's not a knee jerk reaction. I read your entire post and agree with many of the things you said.
However -
It's not like those big banks didn't lose lots of money during the crisis. THEY DID. Then to turn around and prosecute them for fraud when they didn't even try to defraud anyone and they abide by the laws while they lost tons of money during 2008 themselves.
I have one word for you - robosigning. There was demonstrable fraud happening during the banking crisis. I mean, I guess that the banks could say "well, there were so many things going on that we had no choice but to do that" but I don't really see that as a defense in this case.
There was malfeasance. Unfortunately, it seems like the only stuff you are likely to really be able to prove in court would come from the lower rungs of the bank.
I do not know how hard it would be to prove in a court of law that these smaller acts of fraud were part of a larger conspiracy, perpetrated by the CEO, the Board, Upper Management, or whomever we might want to point the finger at. I really don't know.
All I'm saying is that I disagree with you that fraud happened. There were many demonstrable cases of it. And using "but the banks lost money in the crisis too" seems to me to completely miss the point. Fraud or no fraud, that comment is a non-sequitur and has no bearing on the point you're making. It almost sounds like an apologist type of argument. I'm not saying that's what you're doing, I expect that may be unintentional on your part. I'm just pointing out that two wrongs don't make a right.
[–]surgeon_general 2 points  
I knew people in the mortgage brokering business, and in order to get all these people sub-prime loans, they regularly forged all of the most important documents. People who had no money and no jobs just had to pay extra, and tax returns, a job, and W2s were created for them.
From what I understand, the people in the banks purposely didn't check these documents with the IRS because no one cared about anything except for getting deals done so that everyone can get their fees.
I think that if anyone checked the documents that were submitted in order to get some of those sub-prime loans, they would find a ton of illegal fraud.
[–]Canonicald 25 points  
1) several top executives have emails showing that they knew the packaged mortgages were destined to fail. Granted we all have contributed to a financial market that feeds on high profits every quarter, but these banks leveraged money (our money) in massive ways and bet on the wrong side. They are at best incompetent and at worst criminally fraudulent.
2) whether you can prove it is a different story. Eric holder didn't put any one of the bankers up for criminal prosecution. Even if to lose and at least make these ceo's think that somehow they might get caught, it might've influenced the next generation of corporate greed
3) who gives a shit if the record fine was doled out. It doesn't represent a significant portion of their yearly profits and the CEOs didn't have to pay hardly any. That too got passed onto the consumer Therefore: the best I can hope for is these corporate fuckheads die of gonnorrhea
4) the equation of pot smokers and CEOs who defrauded millions of people, billions of dollars is a bit comedic. So I say yes! Put them in jail. The financial pain and stress they placed on countless middle and low income families in the US undoubdetly resulted in multitudes of downstream petty and larger crimes from people who had been burned by the system. The money is a small part of what the corporate greed destroyed
Source: Matt taibbi's new book The Divide
[–]Foltbolt 7 points  
1) Not all knew, and those that figured it out (Goldman Sachs) did so after it was far too late to prevent it from happening and were only able to avoid the worst of it specifically because not everyone had (Bear Sterns) so they could divest. The criminality of this knowledge is nonexistent. If you think an asset is overvalued, you sell it.
2) Or a failed trial just confirms to CEOs that they're untouchable. The charged CEOs then sue the government -- and win -- a defamation and wrongful arrest case, further humiliating the government.
3) Can't really argue this one.
4) Unfortunately, this is not how the law works, nor should anyone want it to work this way. If the rich elite could so manipulate the regulations that their businesses face, who would be abusing the ability to jail without due process?
[–]hoaxoner 14 points  
Sorry buddy, that isn't exactly true and mostly revisionist. Goldman sold the securities that they created and then went and shorted the exact same securities post sale.
There were plenty of instances of fraud that should have at least been investigated and they were not.
Fuck Holder
[–]SolipsisticEgoKing 5 points  
Thank you for writing this well thought out response. Now I can stop wasting energy thinking the bankers involved in the mortgage crisis need to be punished. The situation makes a lot more sense now. You did this community a solid with your analysis.
[–]Dirt_McGirt_ 4 points  
I can't believe such a sensible post has over 100 points. I would have guessed -50. Congrats, reddit.
[–]MMonReddit 5 points  
It's the line that a lot of economists have trotted out in response to it, and everyone, reasonably, listens to economists when there are financial disasters. But it's wrong. Economists know very little about white-collar crime, so why not ask a criminologist? Luckily, a highly prominent criminologist has weighed in on it. Please see my reply here.
[–]Must_Be_Said 25 points  
Holder doesn't even have the guts to tell a waitress that she brought him the wrong food.
[–]Schnort 16 points  
There was fraud, however, in how the mortgages were repackaged as bonds, which were then assessed for risk and resold with fraudulent risk assessments.
[–]clone822 8 points  
Or the Libor interest rate thing. That seems like evidence the banks are prone to collusion.
[–]bigmanchalada 2 points  
What would glass steagall have done to prevent this?
[–]trolleyfan 3 points  
Basically, after the Savings & Loan debacle, banks made it no longer illegal to do what they did.
[–]nigelmansellmustache 9 points  
Yep. I definitely recommend anyone interested to listen to one of the latest stories on This American Life.
About a fed investigator who was fired in 2012 for basically being too "mean" with Goldman Sachs. She was alarmed at how things worked so she started taking an audio recorder to work. The story features many recordings from meetings with her boss and with GS. It's fascinating and enraging to hear what goes on in the fed.
[–]88leo 11 points  
In other words Eric Holder is a failure.
[–]b0red_dud3 5 points  
Came into post just that. Even the same link. Bill Black was a great investigator. One of the jailed bankers, Charles Keating was so angry at him, he repolrted sent out memo saying 'get Black — kill him dead.'
That's one way to kill someone, I s'ppose. Dead.
[–]boogalymoogaly 5 points  
don't know why you got downvoted, the link (& Black's history/experience) pretty much sum why/how no one was prosecuted. guess it doesn't fit everyone's pre-existing prejudices. thx! very TIL (well, mostly bcuz i wondered, "hey, yeah, why DIDN'T anyone get prosecuted?!"). makes sense now.
[–]psychonator 467 points  
You don't bite the hand that bribes you.
[–]robertxlongo 10 points  
28 Million in 2008. Over 14 Million in 2012.
[–]Sex_Drugs_and_Cats 80 points  
More like you don't bite your own hand. The government has been thoroughly infiltrated by people whose primary allegiances are to the banks and to the global order of US-dominated free-market capitalism, who use debt and covert warfare (as well as overt militarism, as worst-case scenarios) to control any country without the means to fight back. We take their resources, we cripple their social programs, and we sell off their labor to corporations, who outsource jobs from regions like North America and Western Europe to places like Colombia, Indonesia, Nigeria, India-- extremely poor countries who we've already broken. And for those of you who, deep in your little heart of hearts, believe that this spread of US imperial capitalism helps these nations (that it "spreads democracy," or any of the other talking points)-- tell me then why 50% of the WORLD POPULATION makes less than $2 per day. Tell me why we usually install dictators, not democratic systems, in the nations we invade (it's because they will maintain their borders, protect resources that they sell to us cheaply, keep their people in line no matter how bad we make things for them, etc). Tell me why we assassinate those who aren't corrupted by our bribery. Tell me why the ex-prime minister of Iraq, who OUR invasion and OUR new government resulted in in 2006, helped to radicalize many Muslims against not only our government, but against the American people (they don't realize that we're being taken for a fucking ride ourselves, even if we don't see the brunt of the harm), and was a central figure in setting the stage for the rise of ISIS.
[–]NonViolentWar 69 points  
free-market capitalism
The phrase you're looking for is "crony capitalism." We don't have a free market.
[–]The_Parsee_Man 5 points  
Would it still be considered a free market when the government is for sale?
[–]PsychoWorld 9 points  
It would not be considered free market if the government has control over it&
[–]The_Parsee_Man 3 points  
But if the government is for sale, the actual control goes to whoever is willing to pay for it. So you could argue that control is just another market commodity. A manufacturer could buy up all the steel so that other companies can't use it or it could buy a law that prevents other companies from buying any steel.
[–]gilgril 5 points  
free-markets can't exist with an institution that has a monopoly on force, people will give money to that institution to benefit themselves
[–]The_Parsee_Man 6 points  
But without such an institution (i.e. government regulation), the first example will come to pass in one way or another (monopolistic control). If the end result is indistinguishable from a non-free market, it can't really be called free anymore.
So it seems to me a free market cannot exist in the real world, at least not on any large scale or for any great amount of time.
[–][deleted] 121 points  
Nice rant, too bad it's all either not true or irrelevant.
tell me then why 50% of the WORLD POPULATION makes less than $2 per day.
tell me why global poverty is half of where it was 20 years ago
Tell me why we usually install dictators, not democratic systems, in the nations we invade (it's because they will maintain their borders, protect resources that they sell to us cheaply
You mean nation states act in their own interests? Color me shocked.
Tell me why we assassinate those who aren't corrupted by our bribery.
Osama bin Laden was such a nice guy :'(. Unless you're getting into some kind of conspiracy shit here.
Tell me why the ex-prime minister of Iraq, who OUR invasion and OUR new government resulted in in 2006, helped to radicalize many Muslims against not only our government,
Nothing like a little reductionism. If conservatives are guilty of thinking Muslims are reason-free madmen who will kill us no matter what, liberals seem to think that Muslims are simple robots who would never do anything bad except in response to Western input. Muslims, including ISIS, have agency and make their own decisions.
This kind of bullshit makes /r/news unreadable.
[–]IronPathologist 18 points  
To be fair, his first point: "don't bite your own hand" probably has some merit. Let's see what Holder's Wall Street job looks like after he leaves. My guess is a multimillion dollar thumb up ass legal department position, but we'll see... he may have to become a boots-on-the-ground lobbyist!
[–]Abargarlas 18 points  
I don't think you really addressed any of those points with the stuff you just linked... especially that last link, no idea what that fucked up shit is about
[–]bag-o-tricks 3 points  
Many people have been forced to the cities and although they make more per day, their standard of living has dropped. They can no longer grow any of their food and in order to work in the urban manufacturing areas, the price to live near them is much higher than living in a rural setting. The measure of "dollars earned per day" is nuanced by a lot of things. More money doesn't always equal better standard of living.
[–]slumpywpg 18 points  
  1. Bin Laden was trained by the CIA to undermine Soviet spheres of influence in the middle east. He was also never a leader of a nation, so, no relevant point there whatsoever.
  2. your second link is broken. It's also completely irrelevant to what the OP was saying, so no.
  3. "The best estimates for global poverty come from the World Bank's Development Research Group"
Seems legit.
[–]SkeptioningQuestic 9 points  
He wasn't trained by the CIA, he along with the US helped fund the Mujahideen's fight against the Soviets who later became the Taliban and with whom Osama became good friends with. In fact, he funded the Taliban because he believed that true Islamic fighters shouldn't accept the help of western infidels.
[–]MangledStupid 7 points  
The US backed the Northern Alliance, they did not become the Taliban. The Northern Alliance actually went head up against the Taliban/Osama.
[–]Brettster 7 points  
Are you kidding me? You think italicizing "world bank" makes your point for you? Your post is indinguishible from parody.
[–]deletecode 2 points  
You didn't address his main point. You're bad at this.
[–]ge93 25 points  
tell me then why 50% of the WORLD POPULATION makes less than $2 per day
And how much were they making before the US started their global order? Poverty is the natural state of mankind, and the US supported the various free market reforms in the 90s that lifted hundreds of millions out of poverty.
[–][deleted] 7 points  
Make them put in 'free market reforms' to get loans, they go badly, so force them to sell off state owned assets to get more loans, now they're in a debt with fewer ways to repay it since industry is all private now and they're supposed to be cutting taxes. Or you can just invade a country to "fight terrorists" and sell off everything. If anyone says anything about that lump them in with the actual violent terrorists and fanatics and say they just hate freedom.
[–]Sex_Drugs_and_Cats 7 points  
That is absolutely untrue. Where did you hear that? Those are the kind of talking points that, if you actually look at unbiased statistical data, just don't begin to hold water. Do not ever mistake actions taken to advance capitalist agendas as a form of aid. There's only one capitalist agenda, and that is the accumulation of wealth: profit above all costs, whether human, social, or environmental.
Many of the countries we've invaded (both using the military and covertly, using what are called "economic hitmen" and the CIA) were invaded precisely because they elected a good leader who intended to better the conditions of his people. For instance, the original case of covert US imperialism was when we sent Kermit Roosevelt (of the CIA) into Iran. He singlehandedly brought down Mussadegh, who was a hero to the people and a champion of democracy-- and, vitally, who had recently announced that he wanted to charge more for oil than the foreign corporations had been buying it for so that the profits of oil could better the lives of the people. Nationalization of desirable resources (and especially oil or other fossil fuels) is a common, reoccurring reason for American retalliation, not because it was a bad policy for the people of the nation in question, but precisely because an increase in cost for the oil corporations means cutting into profits, whereas if we can debase their currency and have prices set by someone who is allegiant to our corporations, rather than the democratic will of his people, we can buy up all of their resources (oil) at incredibly low prices. Instead, we replaced him with the Shah, which is the path that led Iran from secular democracy to the nightmarish totalitarian Shia state it is today.
This is the same exact reason we took out the leaders of Ecuador, Panama, and Saddam Hussain in Iraq. When a leader refuses to be corrupted into accepting capitalist exploitation, they're either murdered or ousted in a CIA-backed coup. We trap countries into debt they can't repay through huge IMF loans, then we offer them a plan to pay it back by restructuring the loan to include "structural adjustment policies," which say things like "We get to build bases in your country, we get to buy your oil/minerals/whatever resources at extremely low prices, we get to bring in multinational corporations to use your labor for dirt cheap, etc." And any time a good socialist leader steps up, says "enough is enough," and attempts to nationalize resources to benefit the people, to pay for national development, infrastructure, transportation, social programs for the poor, and the like, to organize education and job training, to communalize land (so that a small nation can provide its own food-- because making them spend enormous amounts on inflated prices for foreign food just to feed the populace is one of the primary ways we keep these nations in debt)-- basically anything that actually uses their resources to benefit the people-- then we kill them and replace them with a (usually dictatorial) leader who will work with the corporations to sell out their country, which means taking on enormous debts (after we killed Jaime Roldos in Ecuador, for instance, their national debt went from about $200M to $16B). Once they're in debt they're ensnared, because we have leverage. We tell them they can either default and be in serious shit (which isn't even really an option on the global scene) or they can accept our terms (which often mean privatizing and selling utilities like water, housing, sewage, prisons, etc-- socially significant industries that it only makes sense to own publicly-- and selling them to our corporations, who will run them for profit, instead of to meet the needs of the people.
So, in direct response to your question, many of these countries once had a real shot at development. They had valuable resources, labor, and leadership who were interested in advancing the terrible social conditions that existed there. But once they start to develop (which threatens our corporate dominance), we stop them, the corporations come in, and we buy up all their resources for next to nothing. These resources are really a ticket to the first world; by nationalizing oil and natural gas and mining profits, by producing their own food, these nations can not only become self-sufficient, but they can gain a financial foothold in the world-- and the thing about left-wing leaders is that, instead of this financial gain going to the few corporate owners who exploit everyone else, they can actually be spent to improve the conditions of the people, which makes these leaders very popular, especially in Latin America, the Middle East, Africa, and other places where they are clearly desperately needed. Many of these third world countries that are rich with resources could have become first world if they had truly utilized the resources, instead of having them pilfered for profit. But once they're gone, all the people can do for a living is serve the corporations, who are their only alternative now that the high-paying socialist or nationalized jobs are gone. THAT is why in all of these dozens of CAPITALIST nations-- nations we've "brought democracy to," like Iraq, or those we intervened in before that was a phrase-- THAT is why they are in debt, impoverished, and why huge portions of the population make less than $2 per day in corporate wages.
This should make it obvious why so many huge corporations in America are outsourcing all their labor (which should be evidence that they doing give a flying fuck about America, "job creation," or providing for their employees. It should also make it obvious why it's total idiocy when members of Congress say "We've got to decrease wages/benefits/etc to be more competitive with labor overseas." To be truly competitive with capitalist Indonesia and capitalist Nigeria and capitalist India and de facto capitalist China, we'd have to give up every societal gain we've made over the last 200 years. We'd have to literally go back to a dollar or two per day. So I hope you see now that it's all hogwash. Those party lines and talking points are just what capitalists say to justify they're system of exploitation and abuse-- the system that perpetuates their privilege and allows them to live super-rich lives at the cost of millions of starving, impoverished people-- many of them, people who our government (or the other imperial capitalist governments) put into debt and poverty intentionally.
[–]ujorge 3 points  
"That is absolutely untrue. Where did you hear that? Those are the kind of talking points that, if you actually look at unbiased statistical data, just don't begin to hold water. Do not ever mistake actions taken to advance capitalist agendas as a form of aid. There's only one capitalist agenda, and that is the accumulation of wealth: profit above all costs, whether human, social, or environmental."
Of course, just look at what the Soviet Union did to the Aral Sea:
"Until the 1960s, the Aral Sea was fed by two rivers, the Amu Darya and Syr Darya, which brought snowmelt from mountains to the southeast, and local rainfall. But in the 1960s the Soviet Union diverted water from the two rivers into canals to supply agriculture in the region.
With the loss of water, the lake began to recede and its salinity levels began to rise. Fertilizers and chemical runoff contaminated the lake bed. As the lakebed became exposed, winds blew the contaminated soil onto the surrounding croplands, meaning even more water was needed to make the land suitable for agriculture, according to an Earth Observatory release.
The falling water levels changed the local climate, too. Without the lake water to moderate temperatures, winters became colder and summers hotter, the Earth Observatory said."
The Soviet Union as you may remember was known for its relentless promotion of free market capitalism...
[–]WarfRabbit27 3 points  
Saddam Hussein refused to be corrupted? What a great guy.
[–]rockidol 6 points  
So many unsourced claims.
[–]ninerdawg 148 points  
People tend to forget that issuing subprime loans wasn't just "not illegal", they were actually explicitly required by the federal government under both the 2000 and 2005 Affordable Housing Regulations HUD put out. Both the Clinton and Bush administration explicitly required banks (and Freddie and Fannie) to issue or buy subprime loans, and they had to buy/issue specific dollar amounts of these loans.
They haven't been charged because they did not break a law. In fact if somebody tried to charge them with something illegal, they would have an extremely strong defense that they were actually just complying with federal laws as written at the time.
Edit: thanks for the gold!
[–]Justice-Solforge 16 points  
In fact if somebody tried to charge them with something illegal, they would have an extremely strong defense that they were actually just complying with federal laws as written at the time.
In fact, they DID try to charge the people most knee-deep in the subprime mortgage losses and failed miserably. Both were acquitted. All this stuff in this thread being thrown around saying that the government didn't charge anyone or try to prosecute any wall street bankers is demonstrably false.
Source: http://www.nytimes.com/2009/11/11/business/11bear.html?_r=0
[–]Iamnotmybrain 6 points  
they were actually explicitly required by the federal government under both the 2000 and 2005 Affordable Housing Regulations HUD put out.
What specific regulations are you referring to? Below you mentioned "Notice of Proposed Rulemaking for the 2005 regulations" but that's not a reference to any specific rule. Every agency issues proposed rules in this manner (in fact, they aren't even rules until they've gone through the notice and comment procedure).
[–]alyon724 22 points  
One important detail that, for the most part, is left out on reddit...
[–]Frostiken 5 points  
Whenever people would complain about how the bankers should've been jailed, I liked to ask 'what crime do you charge them with?'. I stopped doing that because I never got a reply.
[–]Cockdieselallthetime 52 points  
Hey look the only person in this thread whose not a fucking idiot.
Bush went to congress 17 times and asked them to reign in on sub primes. He was told no. Other than that, you're right on.
[–]Iamnotmybrain 4 points  
This is nonsense. I assume you're repeating the notion that Bush went to Congress 17 times to alter GSEs policies.
The GSEs were relatively uninvolved with the subprime market (as compared to private label securitizers). In fact, during the housing boom, the GSEs lost considerable market share to these private label companies. It's bizarre that people, even with this knowledge, seem to think that GSEs were to blame even though the majority of subprimes never originated though a government program or were securitized by the GSEs. I guess people will believe anything just because they can't stand it when the government isn't at fault.
[–]altkarlsbad 12 points  
No law required them to bundle subprime loans, issue collateralized securities based on those subprime loans and then flat-out misrepresent the risk profile of those bundles to investors.
Anyone involved in that whole shitpile should certainly be investigated for fraud and potentially prosecuted. Pretty sure fraud would be provable for a bunch of these guys.
[–]Hillbilly-Bologna 10 points  
People from Moody's and S&P need to roast for giving AAA ratings to sub prime junk bonds.
[–]rlbond86 23 points  
This allegation comes up a lot, but it's basically untrue. Banks issued as many loans as possible, because there was literally no downside. They immediately sold them off to investors, leaving them with no risk (until everything collapsed and they were stuck holding assets that they couldn't sell anymore).
A common target of this bunk hypothesis is the Community Reinvestment Act, which is alleged to require subprime loans.
The Financial Crisis Inquiry Report (pdf warning) has a lot to say about the CRA and the misconception that these loans were mandated. Page 97 details that most subprime loans were not required by law. And Chapter 11 (The Bust) has in-depth analysis of what happened during the bust itself. The summary at the end of the chapter talks about Fannie and Freddie:
The Commission concludes that the collapse of the housing bubble began the chain of events that led to the financial crisis. High leverage, inadequate capital, and short-term funding made many financial institutions extraordinarily vulnerable to the downturn in the market in 2007.
The investment banks had leverage ratios, by one measure, of up to 40 to 1. This means that for every $40 of assets, they held only $1 of capital. Fannie Mae and Freddie Mac (the GSEs) had even greater leverage—with a combined 75 to 1 ratio. Leverage or capital inadequacy at many institutions was even greater than reported when one takes into account “window dressing,” off-balance-sheet exposures such as those of Citigroup, and derivatives positions such as those of AIG.
The GSEs [Fannie Mae and Freddie Mac] contributed to, but were not a primary cause of, the financial crisis. Their $5 trillion mortgage exposure and market position were significant, and they were without question dramatic failures. They participated in the expansion of risky mortgage lending and declining mortgage standards, adding significant demand for less-than-prime loans. However, they followed, rather than led, the Wall Street firms. The delinquency rates on the loans that they purchased or guaranteed were significantly lower than those purchased and securitized by other financial institutions.
The Community Reinvestment Act (CRA)—which requires regulated banks and thrifts to lend, invest, and provide services consistent with safety and soundness to the areas where they take deposits—was not a significant factor in subprime lending. However, community lending commitments not required by the CRA were clearly used by lending institutions for public relations purposes.
I am really sick of this myth getting thrown around, especially by conservatives. The facts clearly show that the banks made money off of these loans. So much so, that they had people lie about their incomes or employment just to issue them. If the banks were forced to make these loans against their will, why were they cooking the books to sell as many as possible? What motivation would they have to falsify clients' incomes?
[–]ninerdawg 18 points  
You have set up a straw-man argument. The CRA did not require subprime loans to be issued, and is never said it did. The HUD Affordable Housing regulations did, however. When HUD issued the Notice of Proposed Rulemaking for the 2005 regulations, they stated that to comply with rules, Fannie and Freddie would need to purchase a minimum of 40% of the subprime loans issued, assuming 2004 issuance rates. In their response to the PNR, Freddie explicitly said that the new rules would create "tension" between their obligations to be financially prudent and their obligation to comply with the rules. HUD replied by saying (and I am paraphrasing here) that Fannie and Freddie had a lot of financial resources and could easily absorb any possible losses. You can see the exchange in the November 22, 2004 Federal Register - sorry I don't have the exact page number handy. It is simply untrue to argue that the Feds didn't have a primary role (along with people in the private sector) in creating the mess.
[–]rlbond86 6 points  
It is simply untrue to argue that the Feds didn't have a primary role (along with people in the private sector) in creating the mess.
This assertion is simply unsupported by the report as well as economic analysis of the crisis. The report clearly says that Fannie and Freddie "followed, rather than led, the private sector" and that they "contributed to, but were not a primary cause of, the financial crisis."
Not only that, page 218 of the report shows the rates of delinquency of the GSE loans compared to the private sector. The GSE loans had significantly lower rates of delinquency.
The HUD affordable housing goals are also examined at length and shown to have only marginal contribution. Page 124: "Estimates by the FCIC show that from 2003 through 2006, Freddie would have met the affordable housing goals without any purchases of Alt-A or subprime securities, but used the securities to help meet subgoals," for example.
Page 183:
"From 1997 to 2000, 42% of GSE purchases were required to meet goals for low and moderate-income borrowers. In 2001, the goal was raised to 50%.Mudd said that as long as the goals remained below half of the GSEs’ lending, loans made in the normal course of business would satisfy the goals: “What comes in the door through the natural course of business will tend to match the market, and therefore will tend to meet the goals.”Levin told the FCIC that “there was a great deal of business that came through normal channels that met goals” and that most of the loans that satisfied the goals “would have been made anyway.”
The report goes on to state that these goals became 57% and Mudd complained that it was too high, "Yet all but two of the dozens of current and former Fannie Mae employees and regulators interviewed on the subject told the FCIC that reaching the goals was not the primary driver of the GSEs’ purchases of riskier mortgages and of subprime and Alt-A non-GSE mortgage–backed securities. Executives from Fannie, including Mudd, pointed to a “mix” of reasons for the purchases, such as reversing the declines in market share, responding to originators’ demands, and responding to shareholder demands to increase market share and profits, in addition to fulfilling the mission of meeting affordable housing goals and providing liquidity to the market."
Hempstead, Fannie’s principal contact with Countrywide, told the FCIC that while housing goals were one reason for Fannie’s strategy, the main reason Fannie entered the riskier mortgage market was that those were the types of loans being originated in the primary market.If Fannie wanted to continue purchasing large quantities of loans, the company would need to buy riskier loans. Kenneth Bacon, Fannie’s executive vice president of multifamily lending, said much the same thing, and added that shareholders also wanted to see market share and returns rise. Former Fannie chairman Stephen Ashley told the FCIC that the change in strategy in 2005 and 2006 was owed to a “mix of reasons,” including the desire to regain market share and the need to respond to pressures from originators as well as to pressures from real estate industry advocates to be more engaged in the marketplace.
Chapter 17 details Fannie and Freddie in depth, concluding:
The Commission concludes that the business model of Fannie Mae and Freddie Mac (the GSEs), as private-sector, publicly traded, profit-making companies with implicit government backing and a public mission, was fundamentally flawed. We find that the risky practices of Fannie Mae—the Commission’s case study in this area—particularly from 2005 on, led to its fall: practices undertaken to meet Wall Street’s expectations for growth, to regain market share, and to ensure generous compensation for its employees. Affordable housing goals imposed by the Department of Housing and Urban Development (HUD) did contribute marginally to these practices. The GSEs justified their activities, in part, on the broad and sustained public policy support for homeownership. Risky lending and securitization resulted in significant losses at Fannie Mae, which, combined with its excessive leverage permitted by law, led to the company’s failure.
Corporate governance, including risk management, failed at the GSEs in part because of skewed compensation methodologies. The Office of Federal Housing Enterprise Oversight (OFHEO) lacked the authority and capacity to adequately regulate the GSEs. The GSEs exercised considerable political power and were successfully able to resist legislation and regulatory actions that would have strengthened oversight of them and restricted their risk-taking activities.
In early 2008, the decision by the federal government and the GSEs to increase the GSEs’ mortgage activities and risk to support the collapsing mortgage market was made despite the unsound financial condition of the institutions. While these actions provided support to the mortgage market, they led to increased losses at the GSEs, which were ultimately borne by taxpayers, and reflected the conflicted nature of the GSEs’ dual mandate.
GSE mortgage securities essentially maintained their value throughout the crisis and did not contribute to the significant financial firm losses that were central to the financial crisis.
[–]ninerdawg 6 points  
You don't have to convince me that Fannie and Freddie were fundamentally screwed up organizations, with private sector goals and public backing. They clearly had bad managerial incentives and should not have been allowed to buy pooled loans like they did. On the other hand, HUD absolutely miss-used their authority to regulate Fannie and Freddie to treat their balance sheets as their own piggy bank to finance low income housing. My point is that the whole thing was screwed up, and that you simply cannot simply say "throw the bankers in jail" without throwing the people that created the regulatory environment that allowed the fiasco to happen in jail as well.
[–]corporaterebel 2 points  
Yes, but they cannot blindly accept fraudulent or inaccurate loan apps....which is exactly what they did. In fact, they encouraged it.
[–]goatman_sacks 1 point  
Fannie/Freddie had higher standards than most of the subprime loans out there, and were involved with less than 10% of the bad loans. But don't let your blaming poor people get in the way of that!
[–]renholderm 4 points  
I can't speak to Fannie and Freddie, but under no circumstances did the Bush or Clinton Administrations require, explicitly or implicitly, any bank to make subprime loans.
[–]immenotyou 92 points  
why would he? they're all campaign contributors for his boss...
[–]revengebestcold2 7 points  
President Goldman Sachs.
And Hillary has taken millions from them. She'll be their man in Washington.
[–]SlimLovin 7 points  
Former boss!
[–]StabbyDMcStabberson 6 points  
Not until a replacement's confirmed by congress.
[–]IronPathologist 3 points  
so... Holder is going to be in place until the end of the next administration, is what you're telling me.
[–]SuebianKnot 137 points  
Eric Holder has also justified the extra-judicial execution of American citizens, and continued giving guns at fire sale prices to Mexican Cartels which have been used to kill possibly thousands including American citizens, and lied to congress, and yeah fuck this guy.
[–]weewolf 30 points  
has also justified the extra-judicial execution of American citizens
have been used to kill possibly thousands including American citizens
At least he has been consistent.
[–]rms141 6 points  
Eric Holder also did not send a single Fannie Mae, Freddie Mac, or government official to jail for their larger roles in the mortgage crisis. Barney Frank still walks the streets a free man, as do the Clinton-era officials who, erm, "enhanced" the enforcement of the Community Reinvestment Act.
[–]frogphilosophy 7 points  
Yet he sent more than a few whistleblowers to jail.
[–]JustHereForTheBacon 9 points  
Eric Holder is a disgrace. Good riddance.
[–]MarkJolle 238 points  
To my understanding it would have been close to impossible to send anyone to jail, as no laws were broken. The actions made by major Wall Street firms and banks WERE reckless and WERE the result of wanton greed, but not illegal, and you can't prosecute retroactively for things that weren't illegal at the time.
[–]The_Parsee_Man 116 points  
You can't definitively say that no laws were broken when their activities were never thoroughly investigated. There was plenty of evidence of potential criminal activity at the time but it was never pursued.
The linked article goes into this:
And banks and lenders carried through that fraud to every level of the mortgage process. They committed origination fraud through faulty appraisals and undisclosed trickery.
They committed servicing fraud through illegal fees and unnecessary foreclosures.
They committed securities fraud by failing to inform investors of the poor underwriting on loans they packaged into securities.
They committed mass document fraud when they failed to follow the steps to create mortgage-backed securities, covering up with fabrications and forgeries to prove the standing to foreclose.
By the time the bubble collapsed, the recession hit and Holder took over the Justice Department, Wall Street was a target-rich environment for any federal prosecutor. Physical evidence to an untold number of crimes was available in court filings and county recording offices.
Financial audits revealed large lapses in underwriting standards as early as 2005. Provisions in the Sarbanes-Oxley Act, passed during the last set of financial scandals in 2002, could hold chief executives criminally responsible for misrepresenting their risk management controls to regulators.
Any prosecutor worth his salt could have gone up the chain of command and implicated top banking executives.
This article does a decent job of getting into more specifics:
[–]jfong86 15 points  
The difficult thing is that this wasn't accounting fraud, where you make up numbers and steal money - that's really easy to prosecute (e.g., your company bank statement shows $16, but you reported $50,000, boom - jail time). Bernie Madoff did exactly that and he got a life sentence.
These huge banks have huge legal/finance departments that double check everything they do to make sure its not illegal. All of their financial statements were audited by third parties. Basically they made a bad bet on something that was riskier than they (and everyone else) thought.
There's also the problem of subjectivity. What you consider to be "misrepresenting risk" or "poor underwriting" could be perfectly fine to another person. In hindsight, yeah it obviously looks bad, but before the crisis everything looked great, and that's what the banks reported. When the SEC and third parties audited their financial statements, no one complained. If they honestly thought everything was fine, and their auditors agreed, is that a crime? And if you think they were bullshitting, how can you prove it? You can't just go fishing around looking for someone to prosecute.
edit: and I'm referring to actual people like the executives. A lot of banks paid heavy fines. But if you want executives to go to jail, that's a lot harder.
[–]carbolicsmoke 6 points  
Exactly. Investor bought mortgage-backed securities because they did not expect a massive wave of home-mortgage defaults. And they believed this because the real estate market was hot and subprime mortgages in the past were good investments--not because investment bankers acted fraudulently.
[–]ShakeyBobWillis 2 points  
The sheer volume and breadth of it guarantees that nobody could argue they "in good faith" tried to make sure there was no fraud occurring in their investment vehicles and MBE's or in the mortgages themselves.
[–]sfsdfd 33 points  
Al Capone did a pretty good job of avoiding obvious grounds for prosecution, so they got him on tax evasion.
By contrast, Holder and Obama both took a "let's look forward, not backward" approach to the MBS scandal. It felt like a foregone conclusion that the priority was weathering the economic crisis - staving off a depression, keeping the TBTF banks afloat, and preventing a collapse of the dollar. Anything that might get in the way of addressing the immediate crisis, including justice, couldn't be contemplated. And by the time the crisis passed - well, let's all just move on.
On the one hand, justice doesn't happen in a vacuum, so it's important to acknowledge the realities of the situation. There's also the fact that Republicans started banging the war drum of "Obama's Fault" over the economy about 28 milliseconds after he was elected, so that didn't exactly help establish balanced priorities.
On the other hand - it's extremely troubling that the takeaway message from MBS is now: "the bankers exploited some loopholes, so we closed them." Because, well, guess what - there will always be loopholes in business law, for the same reasons there will always be bugs in software: complexity and perfection are impossible to achieve together. Segara's Fed recordings demonstrate that there is just no fear of the federal government, which has neither the leverage nor the motivation to regulate effectively.
This is a serious problem that Iceland doesn't have.
[–]Negro_Napoleon 26 points  
I won't doubt that there are some people who CAN be charged, but it would be damn near impossible to prove they actually broke the law as written at the time.
[–]ApprovalNet 19 points  
as no laws were broken
That's not true, several banks pled guilty to crimes and paid fines. Just no jail time.
[–]skintigh 6 points  
No, they settled for billions of dollars but were allowed to do so while admitting no wrongdoing, effectively fucking over any individual who wants to file a civil suit.
[–]ApprovalNet 9 points  
Incorrect, Credit Suisse and BNP Paribas have both recently plead guilty to felonies and paid fines. None of their execs have spent a day in jail.
[–]reckie87 4 points  
They plead guilty to something unrelated to the mortgage crisis. They were skirting sanctions against Iran, etc. The issue it that case is pin pointing the person who committed the crime. You cannot send a bank to jail, nor can you send a CEO because they were the CEO. For a person to be sent to jail you need to pin the crime directly to them. I am not certain if in this case they were able to identify the person or if they have jurisdiction over the person (These banks are foreign based so getting them here for prosecution can be tough).
[–]ApprovalNet 2 points  
You can easily go after the officials at a bank, whether it's the CEO or VP or someone lower level than that. You do an investigation, you figure out who committed the crime and who was in on it and you prosecute. Then you offer a get out of jail free card to whoever snitches. It's pretty fucking simple.
[–]LongLiveTheCat 10 points  
Oh, sure you could send people to jail, it just requires different tactics. You would need to treat them like they treated the mob, wire-taps on phones, surveillance, deep cover agents, and build a RICO case against the entire organization.
That's the only way you'd land big fish, but of course that shit would never happen. They insider trade constantly, they constantly commit frauds, it's just hard to prove because they don't write "Strategy Memo: Commit Extensive Fraud" and keep it in a file cabinet.
[–]witchsbrew 12 points  
As someone who works for a bank in the legal department, this is spot on. The higher ups don't ever personally sign off or get involved in the dirty work. There's a chain of command which creates a diffusion of responsibility and makes prosecution all but impossible.
[–]vacant_thoughts 11 points  
As someone who is familiar with the workings of a publicly traded company at the executive level this is incorrect. The CEO is ultimately legally on the hook for any wrong doing. Being at a publicly traded company the General Counsel, CFO, CEO, and a bunch of other executives down the chain all sign documents that certify the veracity of everything reported to the SEC and investors. The accounting and bundling practices that hid toxic assets in AAA packages was fraud. The banks knew they were in trouble which is why they were dumping the assets and betting against them. At a minimum they could hit the CFO, Legal, and CEO (including as far down the responsibility chains as they could get).
Upper management does NOT get claim "we didn't know" and get off the hook. Especially not at a publicly traded company. They allowed fraud to occur which negatively affected every share holder.
[–]MarkJolle 5 points  
Glad to have your support and that I have it essentially correct, but terrified that this is indeed how it works. Thanks for the insight.
[–]Kim_Jung-Skill 4 points  
Systematically the origin of this crisis and the actions were almost identical to the savings and loans scandal. After the savings and loans the Office of Thrift Supervision produced more than 30,000 criminal referrals and 1000 criminal convictions. There was a 90% conviction rate. Eric Holder filed 0 referrals. It's not that Holder couldn't get any convictions, he by any objective measure refused to try. Read anything by bill black and it will disabuse you of the notion that that the U.S.A. couldn't have done better, it simply refused to.
[–]MiguelGusto 21 points  
Gee, I wonder where he is going to work now that he is stepping down as AG?
[–]somedudegeekman 2 points  
Captain Obvious choice would be some kind of lawyer position at a lobbying firm...it never ends.
[–]ikilledtupac 51 points  
All the fuckers are on the same team, pretending to be against eachother.
[–]I5555 11 points  
They're all actors in the same troupe, and they're putting on a good show for everybody. Can't wait to see what wild tales they weave for us in their next act!
[–]NYArtFan1 6 points  
He, and the leadership in our country, are an absolute disgrace. Our system of justice is a sick joke. The largest case of fraud in human history, millions of financial lives destroyed, a middle class vanishing by the day, and the sociopaths who carried out the crash are doing better than ever.
I am ashamed of my country.
[–]WunderOwl 18 points  
Because most bankers exploited a broken system. Doing something morally wrong doesn't make it illegal.
[–]coolcool23 3 points  
One of the most important things I learned from my ethics class. Morality != legality. So many people forget that.
[–]Xatencio 26 points  
Holder has a mixed legacy: excellent on civil and voting rights
Really? What exactly has he done to deserve an "excellent" rating on civil and voting rights?
[–]MisterBadIdea2 8 points  
  • Aggressively enforced voting rights
  • Opposed voter ID laws
  • Refused to defend DOMA in court
  • Opted not to enforce mandatory-minimum-sentencing laws for drug offenses; longtime pursuer of drug sentencing reform
  • Backed lawsuits against states for failing to provide adequate legal representation to poor defendants
It's been a key focus of his entire tenure in office.
[–]ocshoes 3 points  
What's wrong with the voter ID laws that makes it notable? (I know literally nothing about them.)
[–]jas75249 4 points  
Bending to the will of Sharpton.
[–]Kirbinski 6 points  
Seems to be an awful lot of people mistaking our current system (crony corporatism) for free market capitalism.
[–][deleted] 5 points  
the entire reason i voted for obama was because i wanted to punish and reform the banks. that did not happen. i no longer have any confidence in the democrats to tackle financial reform and i therefore make my political decisions on other issues. i have been driven to the republicans as a result.
i wish there was a party that was interested in financial reform. unfortunately the banks are major campaign contributors and have apparently bought immunity from the law. we need to enact a new constitutional amendment that outlaws campaign contributions from companies. only citizens should have a say in our politics.
[–]rwingvr6 6 points  
One of the many reasons Obama's presidency is a fucking joke.
[–]helpmytiresflat 6 points  
People need to understand America doesn't really have this free market capitalism that we brag about. The US market is far from free. The US has this collusion between the state power and corporate money. You could call it fascism.
Obama was made into to someone he obviously isn't but we can't admit that because it would mean the lefts great black Messiah isn't. Also with Eric Holder being black he falls right into that narrative. Yes it is about race largely because the left made it that way.
Holder is another member of the revolving door club. Look at Jack Lou from citi whose now the treasurer.
These people are all the same, it's about power their is only one ideology at the top MORE. This country has been electing the same guy since Reagan and probably before. Oh Yea and this country is in a state of perpetual war.
Lastly voting is just begging for your money back. Well that was my internet rant for today.
[–]Memphians 26 points  
But at least a lot of politicians got some serious donations.
[–]Thomas_Becket 14 points  
He was looking out for his future employers.
[–][deleted] 10 points  
He was too busy running guns to cartels and race baiting.
[–]bull_god 4 points  
Eric Holder is a shill for the banking industry.
[–]ShellOilNigeria[S] 3 points  
Ha, try the entire U.S. government.
[–]Smurfboy82 25 points  
Eric Holder is an incompetent scumbag who should be sitting in a jail cell right now.
[–]PineCreekCathedral 10 points  
Eric Holder is an incompetent scumbag
He probably knew exactly what he was doing.
[–]starlord108 7 points  
eric holder is a failure.
[–]renderKat 6 points  
He is directly at fault for the deaths of hundreds of Mexicans including Americans. Not to mention Federal agents gunned down. Did everyone forget this guy allowed a certain sect of Mexican cartels because they are more nicer than the rest?
[–]Must_Be_Said 7 points  
Why would he? He's a crony for Obama and Obama is a crony for the rich that paid for his campaign and funnel bribes to him through things like book sales and future public speaking gigs.
[–][deleted] 9 points  
Were there any existing laws that were broken?
You can't send someone to jail for something that should be illegal, but isn't.
[–]ApprovalNet 4 points  
Yes laws were broken, but the banks were allowed to pay fines. No jail time.
[–]Fremen13 12 points  
Actual question: what did they do that was explicitly illegal?
My understanding of this was that they were doing things that were unregulated because they never existed before.
[–]quantumcoffeemug 8 points  
This is really the crux of it. There was fraud at the level of mortgage lenders, but the really big players' actions were technically legal, although outrageously immoral and hideously irresponsible. The real travesty is that even though these businesses deserved to fail, and the market was more than ready to punish them, that simply couldn't be allowed from a social perspective; and afterwards, banks used their political clout to defeat any attempts to break them up to the point where they could be allowed to fail in the future.
[–]Fremen13 2 points  
It wasn't social it was economic. If we let them crash then our economy wouldn't have a reliable (ironic right?) finance system.
My economics professors view was that we need a new economic system that isn't hostage to the financial sector.
[–]iwouldnotknow 6 points  
This article appeared in a British newspaper, guess why.
[–]turtleneck360 5 points  
Because MSNBC is touting Holder as a hero. I lean left but sometimes liberals make me puke.
[–]TypicalLibertarian 6 points  
But he is Obama's buddy. So I guess Reddit will let this slide.
[–]Armand28 3 points  
Congress should have been sent to jail for that one. Relaxing regulations and pushing banks to make loans to low income folks in return for votes is what got this whole ball rolling. "We'll let you ignore the equity rule as long as you make a % of your loans to low income borrowers" wasn't a good plan.
[–]coolshifts 3 points  
This is what happens when the laws are written by the organizations that they're supposed to regulate.
[–]uberpower 3 points  
Nor did Holder send a single politician or govt functionary to jail, afaik.
[–]13Man 3 points  
To what point does a Justice system demonstrate ineptitude or corruption that it's justified for the people to take justice into their own hands?
[–]noworthyicon 3 points  
The people of Iceland took matters into their own hands and jailed all their bankers. Iran hangs their crooked bankers. The US wouldn't dream of doing any of that stuff though, they'd miss Monday Night Football.
[–]fofoobar1 3 points  
who wants to bet he has a phat executive position at a financial institution as soon as he leaves office?
[–]Robiticjockey 3 points  
You get what you pay for. And Goldman Sachs invested a lot of money in both presidential candidates.
[–]Snortblort 3 points  
You folks haven't seen shit yet. Wait for the first Bail-In.
[–]FrigoCoder 3 points  
"Too big to oversee".
[–]Lepew1 7 points  
Holder has brought disgrace to the office of Attorney General. He has selectively enforced the laws of this nation, and acted in the role of political hack for the president. Yes, the president directed him to do this, but he should have had enough integrity to uphold his oath of office. He has been an unending source of scandal and obfuscation.
This president could really make amends for holding off an appointment until the next Congressional session, and picking a candidate who is apolitical and is roundly applauded for mastery of the legal system.
[–]tomdarch 4 points  
He hasn't nearly lived up to the high standards for professional conduct and avoidance of partisanship like so many of his predecessors, Alberto Gonzalez or Ed Meese being excellent examples!
[–]jlks 9 points  
I write this every week: Matt Taibbi of the Rolling Stone presented a scathing look at the banking industry dating back to the 1930s, dealing with the Bush family and others. Since then, and probably before, every US presidency has cozied up to banks, particularly Goldman Sachs, which doesn't give one shit about fairness, honor, or a stable society. I refer to Obama as Goldman Sachs the Eighth. Read Taibbi. I'm surprised he's alive.
Source: http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405
[–]Cockdieselallthetime 9 points  
He also refused to force the IRS to come clean and deliberately protected them from congress to obfuscate them from finding out the truth.
Also Fast and Furious.
Eric Holder is the most partisan piece of shit AG in the history of America.
[–][deleted] 6 points  
Eric Holder's Justice Department is a joke. His investigation into the IRS liberal political agenda was a joke. "We can't get you those emails. Could take years. Sry, LOL." He didn't even stop the Black Panthers from circulating wanted posters of Zimmerman, and ignored the $10,000 bounty they put on his head; no arrests.
What a giant fucking clown.
[–]JalapenoPeni5 11 points  
Banker apologists in this thread, please note that nobody was jailed when HSBC was caught laundering a trillion dollars for drug cartels and terrorists. That had nothing to do with the 2008 meltdown but really puts the lie to the idea that the bankers were not prosecuted for 2008 because they committed no crime - they aren't prosecuted when they DO commit crimes. You may now continue obfuscating and dissembling for the usury lobby.
[–]GOPWN 12 points  
This never gets answered around here: For breaking what laws, exactly?
[–]IronPathologist 6 points  
The law of popular opinion on reddit. What other laws are there?
[–]ShillinTheVillain 12 points  
If I had to choose between the two, I'd rather see Holder sent to jail first. They all deserve to go, but he's well ahead of the bankers when it comes to corruption and dereliction of duty.
What the bankers did was shitty, but much of it was legal thanks to the asinine legislative changes to banking and financial regulations made throughout the last 25 years.
[–]sfsdfd 7 points  
I'm sorry, I seem to have missed something - what did Holder have to do with deregulation? He's been with the Attorney General's office for most of his career, focusing on corruption cases - doesn't seem like he was anywhere near the key players in the decisions to deregulate the banking industry.
[–]gerryf19 2 points  
I could live with no one going to jail if safeguards had been put in place to ensure this was not going to happen again. This is why, even though i voted for obama twice, i will consider his a failed presidency. I can argue there were better ways to stabilize the economy,but still give him credit for cleaning the horrific mess he was left with, but to not fix the causes of the problem...that is where obama and his asmobistration failed utterly.
[–]_common_ 2 points  
No room in the prisons due to so many petty weed charges.
[–]Crackzilla89 2 points  
This should be no surprise. There's no justice in government.
[–]ScotchAndBItterness 2 points  
Well, they're democrat donors, so....
[–]Spike205 2 points  
There's a reason why he's taking a multimillion position after he steps down
[–]bloodguard 2 points  
It's going to be interesting to see who he gets his 8 figure wall street payback job from.
[–]icanhaztuthless 2 points  
Welcome to Monday, when it was announced he would work for JP Morgan / Chase
[–]phocasqt 2 points  
He also isn't going to jail. Instead he gets to step down.
[–][deleted] 2 points  
He didn't even bother to indict any...
[–]Daotar 2 points  
What did you expect him to do, his job?
[–]daveywaveylol2 2 points  
The title should read, "Government Regulator failed to send any of his bosses to jail"
[–]Icallbullcrap 2 points  
Why did this quickly get removed from front page?!?!
[–]ShyFlash 2 points  
He should stick with running guns
[–]mxzrxp 2 points  
that is because no bankers broke any laws!
the bankers get the laws changed before they FUCK the little guy, thought most would have known that by now!!!! But the bankers own the media too so many are unaware!
[–]robotjosh 2 points  
He wants to get a nice job in the banking industry after his current job.
[–]lifetaco 2 points  
Political contributions correlate with legislative output. I don't think money is 'the root of all evil', but it is the major factor behind deregulation and the votes supporting erosion of regulatory standards.
[–]pumpyourstillskin 2 points  
He should have jailed CEOs and owners of mortgage companies complicit in the mortgages.
Like Wendy Davis, who was both.
[–]LYL_Homer 2 points  
Nor did he send any Fed regulators.
[–]realfinkployd 2 points  
Which means he did exactly what he was appointed to do.
[–]writermanjim 2 points  
You say this as if you're surprised.
AG (Crime Boss) Eric Holder was in it WITH the "Big Bankers." As is Obama.
Congratulations Leftists. You've made it. Now you know what "Globalism" is really all about.
[–]DunebillyDave 2 points  
Land of the relatively free and home of the Billionaire Sociopath Boys Club. Fuckers are all in bed together. Sociopaths will always rise to the top - as long as the rest of humanity allows it. Same as it ever was. Same as it ever was. Same - as - it - ev-er - was.
[–]DolphinLundgren 2 points  
The Obama administration was flush with HUD and Fannie and Freddie personnel (see Rahm Emanuel, whom Obama protected from Freedom of Information Act requests with executive privilege). The other issue is that the subprime collapse was directly related to the cynical push to promote "diverse" home ownership by abandoning underwriting standards and providing impoverished or profligate hispanics and blacks with usurious mortgages. It doesn't look good to punish bankers who were just a few years prior being praised by members of the administration for pursuing progressive lending policies.
[–]chrissssssssssssssss 10 points  
He was probably too busy investigating the Trayvon Martin case. Priorities.
[–]IronPathologist 9 points  
It's a pretty tough job trying to prove that Zimmerman was white.
[–]RandyTomfoolery 7 points  
So can people who voted for Obama finally admit that he is a terrible leader?
[–]TungstenDuck 5 points  
Its almost like democrats and republicans are both bought and paid for. . . .
[–]DjKnivez 3 points  
how else would he get his new 77 million dollar position with jp morgan chase? http://dailycurrant.com/2014/09/26/eric-holder-takes-77-million-job-with-jpmorgan-chase/
[–]rafyy 2 points  
you do know that thats not real article right? thats satire.
[–]meye-username 2 points  
Well he was busy playing the race card.
[–][deleted] 3 points  
Holder is a complete piece of shit who sucked his way to the top. Whoever voted for Obama is the same way. Fuck you equally as hard.
[–]PilotTim 2 points  
Democrats pretend to care about the poor but don't, Republicans don't bother pretending. When will America realize nobody has the middle class intrests at heart. Only two ways to win an election. Through blind ignorant support of the uneducated or through the rich.
[–]TheLightningbolt 5 points  
This makes Eric Holder an accomplice to their crimes. I hope that a future administration prosecutes the bankers AND also Eric Holder for failing to prosecute the bankers. Bush's Attorney General should also be prosecuted, as well as any future AGs who refuse to prosecute the banksters.
[–]xlxcx 3 points  
Well he was too busy giving guns to the cartels, investigating potential hate crimes and bitching about white people. That takes up a lot of time you know! /s
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