Category Archives: L. Randall Wray

Why Money Matters

By L. Randall Wray*

Our Mission Oriented Finance conference explores how to direct funding toward what Hyman Minsky called “the capital development of the economy”, broadly defined to include private investment, public infrastructure, and human development. (See more here.)

But to understand how, we need to understand what money is and why it matters. After all, finance is the process of getting money into the hands of those who will spend it.

The dominant narrative is that money “greases” the wheels of commerce. Sure, you could run the commercial machine without money, but it runs better with lubricant.

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UPDATE: Bank of America Fined Another $16 Billion for Fraud

By L. Randall Wray

Bank of America just agreed to pay another $16 Billion fine for one of its frauds—selling trashy securities to its investors. Another day, another fraud exposed. No surprises there. This is so routine it barely deserves a headline.

According to Bloomberg, that raises the total it has agreed to pay for its mortgage lending frauds to $70 billion. Most of this is related to its purchase of Countrywide, where Mairone oversaw much of the fraud. See here.

BofA rewarded Mairone for creating Countrywide’s “Hustle” fraud by hiring her. So far that woman’s criminal expertise contributed toward mounting costs to BofA of $70 billion. Quite an accomplishment!

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IT’S OFFICIAL: TOO BIG TO FAIL IS ALIVE AND WELL

By L. Randall Wray

Thank heaven for Tom Hoenig, the only proven-honest central banker we’ve got. Yes, I know he’s moved on from the KC Fed to serve as Vice Chairman of the FDIC. He actually might do a lot more good over there, anyway.

In recent months, we’ve heard how Wall Street’s Blood-sucking Vampire Squids have reformed themselves. They no longer pose any danger to our economy. They’ve written “living wills” that describe how they’ll safely bury themselves without Uncle Sam’s help next time they implode.

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Setting the Record Straight One More Time: BofA’s Rebecca Mairone Fined $1Million; BofA Must Pay $1.3Billion

By L. Randall Wray

Now here’s Déjà vu all over again. You might remember the name Rebecca Mairone from a few years ago. She’s back in the news:

“Rebecca Mairone, formerly a top official at Countrywide Financial, has been named in an amended complaint filed earlier this month by Preet Bharara, the U.S. Attorney for the Southern District of New York, against Countrywide and its parent Bank of America. The suit alleges that Mairone, as chief operating officer for Countrywide’s Full Spectrum Lending division in 2007, set up a program dubbed the “High Speed Swim Lane,” or “HSSL,” or “Hustle,” to speed up the origination of mortgage loans, including increasingly shady subprime loans. The government claims the alleged Hustle ultimately cost its sponsored entities Fannie Mae and Freddie Mac more than $1 billion in losses.

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TRUSTEE BANKS SUED FOR $250 BILLION

By L. Randall Wray

Here’s another story in the continuing saga of Bankster fraud.

As I’ve argued since 2008, it is likely that all—or nearly all–of the residential mortgage backed securities (RMBSs) are fraudulent. The Banksters engaged in fraud at every link in the RMBS food chain.

They defrauded the borrowers. They forced the appraisers to commit fraud (pressured them to overvalue property). They conspired with ratings agencies to overvalue the RMBSs. They created MERS to destroy property records and to cheat local governments out of recording fees. They separated the promissory notes from the deed of trust, invalidating the lien. They hired BurgerKing Robo-signers to create forged documents. They lie in court, committing perjury. They steal homes from owners who don’t even have mortgages. And on, and on, and on. Their depravity knows no bounds.

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NEP’s Randy Wray on Thom Hartmann’s Show

Randy will be on Thom Hartmann’s show July 18th, 2014 at 1:00 pm Eastern time. You can catch Randy and Thom live on radio stations coast to coast…live on XM/Sirius satellite radio…simulcast LIVE on Free Speech TV on Dish Network, Direct TV, Comcast Cable, RCN, Cox Cable, Time Warner, Verizon Fios and over 200 independent community cable providers nationwide including Manhattan Neighborhood Network.

The audio and video are streamed LIVE on Thom’s website. Free Speech TV also streams the program LIVE on their website.

The program is also streamed LIVE (audio and video) on The Thom Hartmann Program app available for iPhone and iPad (free of charge on iTunes)

EGREGIOUS FRAUDSTER: INTRODUCING BOB RUBIN’S CITICORP

By L. Randall Wray

By now you’ve heard that Citigroup admits—yet again—that it engaged in fraud. Heck, it was the business model under Bob Rubin. If you want to blame three individuals for the Global Financial Crisis, only Larry Summers and Alan Greenspan deserve more credit than Rubin.

Together they “softened-up” Congress so that it would free the Banksters, and then he ran Citi into the ground as he sucked gazillions of dollars of executive compensation out of the bank. Like all the CEOs of the biggest banks, he oversaw fraud on a scale never imagined—let alone seen—in the history of the globe.

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DEBT-FREE MONEY: A NON-SEQUITUR IN SEARCH OF A POLICY

By L. Randall Wray

While we are on the topic of monetary cranks, I thought it might be useful to quickly address a cranky idea that often comes up in comments to my blogs and also during Q&A after presentations: so-called “debt-free money”.

The first time I heard it, my immediate reaction was “Say what?”, and the second was puzzlement at the non-sequitur.

I am not sure exactly which of the crank approaches explicitly adopt the notion, but it seems common to a lot of them. I’m not going to address any particular approach but instead will address only the idea that we can have a “money” that is not a “debt”.

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Something is Rotten in the State of Denmark: The Rise of Monetary Cranks and Fixing What Ain’t Broke

By L. Randall Wray

Horatio:  He waxes desperate with imagination.

Marcellus:  Let’s follow. ‘Tis not fit thus to obey him.

Horatio:  Have after. To what issue will this come?

Marcellus:  Something is rotten in the state of Denmark.

Horatio:  Heaven will direct it.

Marcellus:  Nay, let’s follow him.

 Hamlet Act 1, scene 4

Marcellus is right, the Fish of Finance is rotting from the head down. It stinks. As Hamlet remarked earlier in the play, Denmark is “an unweeded garden” of “things rank and gross in nature” (Act 1, scene 2).   The ghost of the dead king appears to Hamlet, beckoning him to follow. In scene 5, the ghost tells Hamlet just how rotten things really are.

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To Consolidate or Not To Consolidate, that is the Question (or maybe it isn’t)

By L. Randall Wray

This is another short post on MMT, a sort of follow-up to my post from a couple of days ago. There was an interesting response to various comments on my piece, which was posted up on Mike Norman’s website.

We got the typical: “oh you MMTers always want to consolidate the Fed and Treasury, but really the Fed is a private institution that is not a part of government”, and “in reality the Treasury cannot spend unless the Fed will allow it to spend, otherwise it must get tax revenue before it can spend”, and hence “really government spending is constrained by its revenue, just like a household or firm”.

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