Tag Archives: banksters

Let’s End Politico and Deal Book’s “Competition in Sycophancy”

By William K. Black

Politico has joined Deal Book in a “competition in sycophancy.”  The contestants are competing to see which can author the most extreme version of a fantasy meme in which heroic Wall Street “banks” are oppressed by “Washington.”  I had not believed that any “serious” journalist could compete with Andrew Ross Sorkin’s Deal Book in pounding this meme.  Ben White, Politico’s economics reporter, has become my dark horse favorite in the race to the bottom of the “serious” business press with his whitewash entitled “How Washington beat Wall Street.”

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What Would It Take To Get Andrew Ross Sorkin To Call For Jamie Dimon To Resign?

By William K. Black

I have concluded that the journalists who write for the New York Times’ “Deal Book” are incapable of embarrassment or introspection.  I have waited in vain for Andrew Ross Sorkin to make a New Year’s resolution to make 2014 a fresh start.  There are scores of Deal Book article that drive a white-collar criminologist and a (real) financial regulator to despair.  I focus here on one article by Sorkin on October 14, 2013 entitled “The Bloodlust of Pundits Swirls Around Jamie Dimon” that exemplifies how much harm Deal Book does because of its pandering to the elite financial CEOs who became wealthy from the frauds that drove the crisis, its ethics-free approach to financial fraud, and its analytical ennui.  Deal Book could be a national asset, but it is a net liability.  This first installment discussing their “Bloodlust” article analyzes Sorkin’s use of the world “bloodlust.”

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The NYT Implies that Not Prosecuting JPMorgan Proves DOJ’s Vigor

By William K. Black
(Crossposted at Benzinga.com)

 

No one expects Andrew Ross Sorkin’s slavish “Deal Book” lackeys to demand that the elite Wall Street bankers whose frauds drove the financial crisis be imprisoned, but the slavishness to the banks revealed when major news stories emerge continues to irritate if not surprise.  A recent embarrassment can be found here.

The “Deal Book” Spinmeisters

The context of the NYT article was the expected settlement between DOJ, various states, and JPMorgan.  The spin comes fast and hard, which would be great in cricket (or quarks) but, sadly, exemplifies the national paper of record’s “Deal Book” devotional pages.  The “Deal Book” shows that cricket masters can impart very different spins.  The first substantive paragraph’s spin is to minimize JPMorgan’s fraud.

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Will the Chilean People Save the U.S. by Electing Michelle Bachelet?

By William K. Black

For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.  John: 3:20

The effort by corporate CEOs to dominate the global economy and global government is reaching the end-game stage.  Corporate CEOs view government and democracy as their gravest threats and are constantly seeking to discredit and hamstring government and democratic decision-making.  CEOs are particularly eager to discredit, destroy, or capture regulation and they have enlisted enormous support in both major U.S. parties and many of the world’s dominant parties for these efforts.  President Obama has continued and made worse the effort of President Bush to betray our nation, our democracy, and our people through the secret, draft Trans-Pacific Partnership (TPP) agreement.  In this first column on TPP I explain that while there is no realistic chance of convincing Obama to repudiate the TPP, there is a chance that the people of Chile will save our democracy and our national sovereignty.

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How to Prosecute the Elite Bank CEO that Led the Frauds that Drove the Crisis

By William K. Black

Step one: Understand the three “control fraud” epidemics that drove the crisis.

Control fraud occurs when the person that controls a seemingly legitimate entity uses it as a “weapon to defraud.”  In finance, accounting is the “weapon of choice.”  Lenders engaged in accounting control fraud display the four “ingredients” of the fraud “recipe.”

  1. Grow massively by
  2. Making loans at a premium yield that are so bad that they will produce losses
  3. Employing extreme leverage and
  4. Providing only trivial allowances for loan and lease losses (ALLL)

The recipe produces three “sure things.”  The lender will report record profits in the near term, the controlling officers will promptly be made wealthy through modern executive compensation, and the firm will suffer catastrophic losses.  The recipe is also an ideal means to hyper-inflate a financial bubble in real estate, which can delay loss recognition for many years.  Minor variants on this recipe drove the savings and loan debacle and the Enron-era frauds.

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Bank Failures are “Inconceivable” under the Latest Neoclassical Fantasy

By William K. Black
(Cross posted at Benzinga.com)

Only theoclassical economics constantly recycles variants of its worst ideas that have proven disastrous when they have influenced policy.  Other fields advance because they embrace the scientific method.  Theoclassical economists repeat their worst errors because they embrace anti-governmental dogmas that blind them to the inherent weaknesses of the corporate form and limited liability.  This represents a dramatic regression in understanding from over 200 years ago when classical scholars like Adam Smith were warning that corporations were inherently criminogenic and likely to produce what we now label “control frauds.”

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Sorkin’s Paradox: Elite Bank Officers are “Worse” than “Repugnant” but Never Criminal

By William K. Black

This is the third installment in my Sorkin Saga.  The saga was prompted by Andrew Ross Sorkin’s (ARS) video in which he “outed” himself as the leader of an undercover effort by the journalists of the New York Time’s “Dealbook” and CNBC to discover and “out” the “criminal element” among the elite bankers.  Here is the key passage from his video.

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.  And while things happened that were upsetting and frustrating and unethical and immoral sadly, it may not have been criminal.”

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The Divine Right of Bankers: Sorkin Proves Baroness Orczy Correct

By William K. Black

In yesterday’s column I discussed the fact that Andrew Ross Sorkin (ARS) of the New York Times and CNBC has unmasked himself in a video entitled “Two Myths and One Reality” as the scourge of Wall Street who had worked tirelessly for five years to find the “criminal element” that caused the financial crisis.

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.”

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Andrew Ross Sorkin Unmasks as Leading Occupy Wall Street’s (Three Star Restaurants)

By William K. Black

Andrew Ross Sorkin (ARS), long believed to be the sycophants’ sycophant who composes his odes to elite bank CEOs from his perch at the New York Times and CNBC has unmasked himself in a video entitled “Two Myths and One Reality.”

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.”

ARS revealed in his video that he has posed as the modern-day leader of the League of the Scarlet Pimpernel, the undercover group of English aristocrats, led by an English baronet (“one to command, and nineteen to obey”) who saved French aristocrats from the Great Terror.  The twist is that ARS’ League is composed of financial journalists who pose as sycophants and that the modern-day French aristocrats are the elite bankers whose misconduct caused the Great Recession.  The purpose of ARS’ deception was to lure the elite bankers into admitting their misconduct so that they could be held accountable rather than aiding French aristocrats’ efforts to escape accountability.  ARS was the anti-Scarlet Pimpernel, the aristocrat posing as the friend of the aristocrats in order to “find that criminal element.”

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Why do Conservatives Oppose Prosecuting Elite Corporate Frauds?

By William K. Black
(Cross posted at Benzinga.com)

There are at least four principles that virtually all conservatives purport to support – except when the potential defendant is socially elite.  I have written previously about two of these principles on several occasions – the need for accountability and “broken windows” theory that calls for the prosecutors to make the prosecution of even minor street crimes a high priority if they have, even indirectly, a material effect on the community.

The third principle is that it is vital to punish in order to deter crime.  Gary Becker, the very conservative Nobel laureate in economics, emphasized this point (again, in the context of street crime).  Under Becker’s theory of crime our current practices of allowing elite banksters to become wealthy through leading the “sure thing” of accounting control fraud with immunity from the criminal laws will predictably lead to new, larger epidemics of fraud that will continue to cause our recurrent, intensifying financial crises.  It is rare, however, to find a prominent conservative who is demanding a priority effort to prosecute the elite bank officers who ran those frauds.  I know of no conservative member of Congress publicly making that demand today.  Senator Chuck Grassley has previously criticized the Obama administration’s failure to prosecute elite bankers.

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