Category Archives: William K. Black

Obama Imports and Immunizes Banksters Who Donate to the Democratic Party

By William K. Black
Bloomington, MN: December 17, 2014

President Obama and then Secretary of State Clinton decided that America has a critical shortage of banksters and decided to import some from Ecuador. The banksters showed their gratitude by showing the Democratic Party with “donations.” Sometimes a small story reveals the core truth of large public policy issues far better than the big overall story can. The New York Times has just published an article entitled “Ecuador Family Wins Favors After Donations to Democrats.” The short-version is that Obama has decided to give what amounts to asylum to a family from Ecuador after it made large campaign donations to Democrats.

“It was one of several favorable decisions the Obama administration made in recent years involving the Isaías family, which the government of Ecuador accuses of buying protection from Washington and living comfortably in Miami off the profits of a looted bank in Ecuador.

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UK Determined to Win the Race to the Bottom and Remain the Global Financial Cesspool

By William K. Black
Bloomington, MN: December 16, 2014

On June 20, 2012 the UK Commercial Secretary to the Treasury, Lord Sassoon of Ashley Park gave a speech to the British Bankers Association – the group the U.S. government (i.e., the FDIC) found to have helped organize the world’s largest price rigging cartel and fraud in the form of rigging Libor. The financial crisis occurred under the “new” neo-liberal Labour when its championing of the three “de’s” – financial deregulation, desupervision, and de facto decriminalization – combined with modern executive and professional compensation and the effective elimination of “joint and several liability” to make the City of London the most criminogenic environment in the world for financial “control frauds.” Naturally, the Tories have decided that the answer to this disaster is to double-down on Labour’s embrace of the three “de’s.” Indeed, the first words in Lord Sassoon’s prepared speech were “Thank you Philip [Hampton].”

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Can Anyone Transplant a Spine into Obama to Kill Citi’s Bailout Bill?

By William K. Black
Bloomington, MN: December 12, 2014

President Obama is a terrible negotiator and if Senator Warren and Representative Pelosi are unable to save him from himself he will effectively end his presidency as even an episodic force for good.  Yes, the Republican legislators will have more power in Congress next month.  Obama’s justification for supporting the odious omnibus budget bill is avoiding that danger.  No, the fact that the Republican will take control of both houses in January does not mean that Obama would be forced into approving an even worse budget bill next year.

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The Second Circuit Makes Sophisticated Insider Trading the Perfect Crime

By William K. Black
Bloomington, MN: December 10, 2014

We know that insider trading is an activity in which cheaters prosper. We know that Wall Street and the City of London are dominated by a fraudulent culture and we know that firm culture is set by the officers that control the firm. We know that the Department of Justice (DOJ) has allowed that to occur by refusing to prosecute any of the thousands of senior bank officers who became wealthy by leading the three most destructive financial fraud epidemics (appraisals, “liar’s” loans, and fraudulent sales of these fraudulently originated mortgages to the secondary market) in history. No one is surprised that Wall Street’s elites have also engaged in widespread efforts to rig the stock markets so that they can shoot fish in the barrel through insider trading. Unlike the three fraud epidemics, one DOJ office, the Southern District of New York, has brought a series of criminal prosecutions against these officers.

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New York City: Aggressive “Broken Windows” Policing but Carte Blanche for Banksters

By William K. Black
Kansas City, MO: December 6, 2014

New York City exemplifies two perverse criminal justice policies that drive many criminologists to distraction. It is the home of the most destructive epidemics of elite financial frauds in history. Those fraud epidemics hyper-inflated the housing bubble and drove the financial crisis and the Great Recession. The best estimate is that the U.S. GDP loss will be $21 trillion and that 10 million Americans lost their jobs. Both numbers are far larger in Europe. The elite “C Suite” leaders of these fraud epidemics were made wealthy by those frauds through bonuses that measured in the billions of dollars annually.

The most extraordinary facts about the catastrophic fraud epidemics, however, is New York City’s reaction to the fraud epidemics. Not a single Wall Street bankster who led the fraud epidemics has been prosecuted or had their fraud proceeds “clawed back.” Not a single Wall Street bankster who led the fraud epidemics is treated as a pariah by his peers or New York City elites. New York City’s elected leaders have made occasional criticisms of the banksters, but Mayor Bloomberg was famous for his sycophancy for the Wall Street banksters that made him wealthy. In 2011, Mayor Bloomberg attacked the “Occupy Wall Street” movement for daring to protest the banksters.

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The ECB and the NYT’s Obsession with Talking about Deflation

By William K. Black
Kansas City, MO: December 4, 2014

In the last two days, the New York Times’ website has published a blizzard of six article about deflation, several of them focusing on the European Central Bank (ECB). Collectively, these article mention the word “deflation” seven times and the word “inflation” 75 times. Collectively, the same articles contain the word “unemployment” 10 times and the word “unemployed” zero times. “Unemployment” is the word one uses to provide a statistic. “Unemployed” is the word one uses to discuss who is harmed and how they are harmed because they lose their ability to find a job.

The word “demand” is used only twice and both usages are in the context of oil prices rather than the eurozone’s grossly inadequate demand that already inflicted a second, gratuitous Great Recession and threatens to cause a third. The word “austerity” – the form of economic malpractice akin to bleeding a patient to make him healthy – is mentioned only twice and solely in the article on the Bank of England.

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Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him Too

By William K. Black
Kansas City, MO: December 4, 2014

“Yves Smith,” the nom de guerre (and plume) of the finance expert who created and runs the invaluable blog Naked Capitalism, wrote an introduction to a piece roughly 18 months ago that mentions me. The points she made in that introduction, including the reason she invoked my name, are important but the lapse of time since she wrote it teaches us another important lesson. Here is the introduction.

“One of the things that Matt Stoller has stressed that the possibility of reform is remote until breaks within the elites take place.

Jeffrey Sachs, Columbia professor and director of the Earth Institute at Columbia, is a controversial figure for his neoliberal stance on macroeconomics and his role in promoting the use of ‘shock therapy’ in emerging economies. But it is also important to recognize that criticism from a connected, respected insider has more significance than that of someone like Bill Black, who has made a career of taking on bank fraud but has never reached a top policy-making level.”

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The Wall Street Journal Still Refuses to Grasp Accounting Control Fraud via Appraisal Fraud

By William K. Black
Kansas City, MO: December 2, 2014

The Financial Crisis Inquiry Commission (FCIC) report described one of three epidemics of accounting control fraud that drove the financial crisis in these terms.

“Some real estate appraisers had also been expressing concerns for years. From 2000 to 2007, a coalition of appraisal organizations circulated and ultimately delivered to Washington officials a public petition; signed by 11,000 appraisers and including the name and address of each, it charged that lenders were pressuring appraisers to place artificially high prices on properties. According to the petition, lenders were ‘blacklisting honest appraisers’ and instead assigning business only to appraisers who would hit the desired price targets” [FCIC 2011: 18].

The FCIC Report then documents scale of this epidemic of loan origination fraud.

“One 2003 survey found that 55% of the appraisers had felt pressed to inflate the value of homes; by 2006, this had climbed to 90%. The pressure came most frequently from the mortgage brokers, but appraisers reported it from real estate agents, lenders, and in many cases borrowers themselves. Most often, refusal to raise the appraisal meant losing the client” [FCIC 2011: 91].

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How NPR Was Conned by Geithner into Censoring My Criticisms

By William K. Black
San Francisco, CA:  November 23, 2014

In December 2013 NPR interviewed me about one the great disgraces of the Obama administration – its refusal to prosecute either the officers or HSBC for laundering roughly $1 billion over the course of the decade for Mexico’s Sinaloa drug cartel.  The NPR story doesn’t name the cartel or inform the listener that it is one of the world’s most violent drug cartels, or that HSBC also routinely violated the money laundering laws on transactions involving tens of trillions of dollars, and covered up its numerous violations of U.S. sanctions on Iran and Burma.

The original NPR story presented my comments on Treasury’s opposition to brining criminal charges.  Those comments were subject to what NPR labeled a “clarification” which meant they were removed from the program.

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Dudley Do Wrong Rejects Being a “Cop” and Embraces “Foaming the Runways”

By William K. Black
San Fransisco, CA: November 22, 2014

William Dudley, the President of the NY Fed, is not a stupid man. He is, however, wholly unfit to be a regulator. He has now admitted that publicly. It is time for him to return to Goldman Sachs so that he can be replaced by someone expressly chosen to be a vigorous regulator who will embrace the most critical function of a financial regulator – to be the tough “regulatory cop on the beat.”

The story of Dudley’s ineptness has been mirrored by the New York Times’ inept coverage of the failures of one of the reporter Peter Eavis’ favorite sons on Wall Street. Eavis is a Brit with a B.A. in international history and politics. He has also been a pastor. He co-authored the epically incoherent column on the NY Fed’s most recent scandal, the leaking of confidential information by a NY Fed employee to a former NY Fed employee who had joined Goldman Sachs. I criticized that column in my November 20, 2014 article and provided some of the key missing facts and analytics.

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