Tag Archives: FCIC

Capitalism’s Defender Unknowingly Indicts the Banksters

Posted on April 13, 2015 by William Black | 4 comments

By William K. Black
Quito: April 13, 2015

Johan Norberg, of Cato, wrote a book in 2009 entitled Financial Fiasco. Norberg is an Austrian School economist and the author of In Defense of Global Capitalism (2001). As his 2009 book demonstrates, however, the quintessential global capitalists were preparing to blow up the global capitalist system in an orgy of “accounting control fraud” at the time he wrote his “Defense.”

He agrees that Fannie and Freddie were used by their controlling officers as accounting control frauds in order to enrich themselves through lush executive compensation. He aptly explains President Bush’s hypocrisy about Fannie and Freddie.

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Posted in William K. Black

Tagged accounting control fraud, banksters, FCIC, Great Financial Crisis, regulatory capture

How FCIC Spurned Its One Chance at Greatness

Posted on March 26, 2015 by William Black | Comments Off

By William K. Black
Quito: March 25, 2015

This is the third column in what I intended to be my three-part series about Citi’s most famous whistleblower, Richard M. Bowen, III. In this column I discuss Bowen and Citi’s senior (but not controlling) officers’ presentations before the Financial Crisis Inquiry Commission (FCIC). Upon further research I realize that a fourth column is required to bring in the related story of Bowen’s estimable colleague and fellow-whistleblower, Sherry Hunt. Hunt’s story is not simply important and necessary to understand the scandals of the Department of Justice (DOJ) and the SEC and Citi’s top managers the FCIC’s spurning its one chance at greatness – it also deserving of a movie. It’s too complex and rich to add it to this column. Hunt also deserves full length treatment devoted to her attempted service to Citi, her service to the Nation, and to DOJ’s and the SEC’s failure to act against any of Citi’s fraudulent officers despite her offering them up tied with a bow.

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Posted in William K. Black

Tagged banksters, Citi, FCIC, Richard Bowen

The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation

Posted on March 23, 2015 by William Black | Comments Off

By William K. Black
Quito: March 20, 2015

This is the first of three columns prompted by Richard Bowen’s interview this morning on Bloomberg. Richard Bowen, a Citi SVP, blew the whistle within Citi on Citi’s massive fraudulent sales of fraudulently originated mortgages, primarily to Fannie and Freddie. Even Attorney General Eric Holder now repeatedly labels these mortgages “toxic.” Had Citi’s leadership been honest, Bowen’s warnings could have substantially reduced the three fraud epidemics driving the financial crisis and Bowen would be one of Citi’s most senior leaders. No spoiler alert is required because even my readers who know anything about Bowen know how the story actually ended. Citi’s senior managers did not ignore Bowen’s warnings – they actively made the frauds he documented worse and they destroyed Bowen’s distinguished career in banking. Citi, Fannie and Freddie, and Treasury lost billions of dollars and Citi’s senior officers were made wealthy by the “sure thing” of the accounting control fraud “recipe.”

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Posted in William K. Black

Tagged banksters, Citi, fannie mae, FCIC, freddie mac, Richard Bowen

Two Sentences that Explain the Crisis and How Easy it Was to Avoid

Posted on July 9, 2013 by Stephanie Kelton | 16 comments

By William K. Black

Everyone should read and understand the implications of these two sentences from the 2011 report of the Financial Crisis Inquiry Commission (FCIC).

“From 2000 to 2007, [appraisers] ultimately delivered to Washington officials a petition; signed by 11,000 appraisers…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).

Those two sentences tell us more about the crisis’ cause, and how easy it was to prevent, than all the books published about the crisis – combined. Here are ten key implications.

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