Yearly Archives: 2014

The WSJ Rages that Bank of America Was Sued for “Only” Committing a $9 Billion Fraud

Posted on August 26, 2014 by William Black | 3 comments

The Wall Street Journal is deeply upset that almost none of the banks and none of the banksters that became wealthy by leading the three epidemics of mortgage fraud that drove the financial crisis are being subjected even to prosecution-lite cases. The WSJ wants us all to know that “almost none” and “prosecution-lite” are both excessive. The WSJ rant demands that we bestow the thanks of a grateful nation to the banks and banksters that committed the frauds. This financial crisis is the first Virgin Crisis – conceived without sin in the C-Suites. This second column in my series on the WSJ rant responds to the WSJ’s claim that mortgage frauds that are “only” $9 billion in magnitude do not warrant even civil sanctions.

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Posted in William K. Black

Tagged accounting control fraud, bank fraud, banksters, mortgage fraud

The Wall Street Journal’s Choleric Rant about Cholera and Bank Fraud Epidemics

Posted on August 25, 2014 by William Black | 2 comments

By William K. Black

I wrote this column in Bogota, Colombia where I was presenting five talks at the Universidad Central’s economics conference, so I was struck by the title of a choleric rant by the Wall Street Journal entitled “Banking in a Time of Cholera.”

The WSJ’s title is a play on words on the title of a novel, “Love in the Time of Cholera,” by Colombia’s greatest writer, Gabriel García Márquez (“Gabo”). The novel is set in a city that appears to be based on Cartagena, the city famous for being looted repeatedly by pirates. In this first of several columns responding to the WSJ rant I discuss its failed literary allusions and tie these failures to some of the WSJ’s analytical and factual errors that render their rant risible.

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Posted in William K. Black

Tagged accounting control fraud, bank fraud, banksters, mortgage fraud

Bill Black Helps Defendants win “Unprecedented Acquittal”

Posted on August 23, 2014 by Stephanie Kelton | 11 comments

By Stephanie Kelton

I knew my colleague had been in Sacramento this summer, and I knew he was there to testify in a federal case involving mortgage fraud. But I didn’t know the details of the case. I didn’t know the defendants had been the homebuyers or that they were on trial for mortgage fraud. This morning, I learned these details and more in this story from the Sacramento Bee. The whole thing is astonishing, and I doubt anyone but Bill could have helped to persuade a jury that, in spite of all the evidence, the real fraudsters were the elite bankers who looked the other way, even as borrowers falsified loan applications.

The jurors heard shocking testimony from ‘control fraud’ expert William Black that regular people who got loans they were unable to pay back did not (defraud) the banks. The elite bankers commit the fraud while prosecutors look the other way and prosecute the wrong people.”

Go Bill!

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Europe’s Lousy Bank Loans Expose the “Recovery” Myth

Posted on August 22, 2014 by William Black | 3 comments

By William K. Black

One of the great lies of the financial industry is that it is the engine of Main Street’s growth. Giving the finance industry an enormous share of total business profits was supposed to super charge Main Street’s growth. It has never delivered on this promise. The truth is the opposite. The efficiency condition for a middleman like finance is that its size and profits should be minimized. Finance’s fraud epidemics blew up the world economy and devastated Main Street. Finance is a parasite that saps Main Street. The latest example of this comes in a New York Times article about European bank’s bad loans.

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Posted in William K. Black

Tagged accounting control fraud, austerity, bank fraud, fraud, Great Financial Crisis

Another Reason to Retire Sam Brownback: The Senate Subprime Car Loan Sleaze

Posted on August 21, 2014 by William Black | 1 comment

By William K. Black

When Sam Brownback was a Senator he carried water for the sleaziest of auto lenders – the subprime lenders that specialize in making “liar’s” loans. His successful mission was to carve out an exemption from the Dodd-Frank bill’s protection for borrowers. We had just seen the CEOs controlling similar home lending specialists lead the three mortgage fraud epidemics that blew up the global financial system. The bill’s drafters and President Obama strongly opposed the Brownback carve out, but Brownback’s brigade of auto lobbyists made road kill of their opponents.

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Posted in William K. Black

Tagged Brownback, kansas

Italian’s Apology for German Austerity Diktats Lasts 24 Hours

Posted on August 20, 2014 by William Black | 1 comment

By William K. Black

On August 13, 2014, the International New York Times printed an op ed by Beppe Severgnini attacking Matteo Renzi, Italy’s Prime Minister. Severgnini offered readers this classic question and answer.

“So why is Italy’s economy, the eurozone’s third largest, the only major one in Europe currently flatlining? Last week Istat, the national statistics bureau, reported that it had contracted in two successive quarters for the third time since 2007, plunging us into a triple-dip recession.

How did we pull that one off? Plenty of plausible explanations blame the feckless government of Silvio Berlusconi, or the acquiescent administrations of Mario Monti and Enrico Letta that followed, the latter two having imposed the European Union’s — or rather, Berlin’s — belt-tightening on a country needing to boost consumption and investment.

But blaming Brussels, or anyone else abroad, is wrong. The rest of Europe followed the German diktat, and yet Italy is the only one suffering.”

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Posted in William K. Black

Tagged Austerians, austerity

The WSJ’s Editorial Posing as “News” about Ecuador

Posted on August 19, 2014 by William Black | 4 comments

By William K. Black

Greetings from Bogota where I’m participating in an economic conference and teaching two class sessions.

Under the banner “Latin America News” the Wall Street Journal has poured out its pain that the people of Ecuador might reelect President Rafael Correa. The article is actually an editorial attacking Correa and the people of Ecuador for potentially voting to reelect Ecuador’s most successful President in the modern era.

The issue is term limits. I have always opposed term limits as an obstruction to democracy and competence. The U.S. had no presidential term limits for most of its history and the only president the population chose to elect to more than two terms was Franklin Delano Roosevelt – one of our greatest presidents. I am deeply thankful that our Nation had the great good sense to reelect FDR to four terms in office.

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Posted in William K. Black

Tagged correa, ecuador, WSJ

The Real Fiscal Responsibility Talk Show Pilot Project

Posted on August 15, 2014 by Joe Firestone | 21 comments

By Joe Firestone

This pilot project and the radio/video shows it will produce and place on the web is for everyone tired of hearing economic commentary from those who got everything wrong. For decades, the doctrine of “Fiscal Responsibility” interpreted as long-term deficit reduction and Government austerity has had a secure place in American politics. This doctrine is the economic equivalent of the medieval notion that patients must be bled to cure them of disease. And this truth is reflected in the economic history of the United States at least since 1976, when we first began to practice ideology-based austerity in its modern form by planning for deficit reduction and balanced budgets in order to decrease the debt-to-GDP ratio.

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21 Comments

Posted in Joe Firestone

Tagged Austerians, austerity, debt and deficits, expanded policy space, MMT, modern money theory, public purpose, REAL fiscal responsibility

WORLD without BANKS

Posted on August 12, 2014 by J.D. Alt | 37 comments

By J.D. Alt

Sometimes it helps, if you want to see and understand something more clearly, to imagine the world without it. I just finished a book (“Rethinking Money” by Benard Lietaer and Jacqui Dunne) that was so thoroughly confused—and confusing—about how the U.S. private banking system “creates our money” (but perversely refuses to create enough of it) that I felt an overwhelming need to try to clarify, in my own mind, what the private banking system actually is. That’s when I got the idea of imagining a world without private banks at all—and trying to see at what point, and for what purpose, they become useful or, perhaps, even necessary.

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Posted in J. D. Alt

Tagged banks

A New Demand for the US Climate Movement: One Million (Frequent) Electric Buses with Wifi plus Protected Bikeways, “Everywhere”

Posted on August 11, 2014 by Michael Hoexter | 8 comments

By Michael Hoexter

The US climate movement, in which I am active, has not to date been effective enough in getting serious climate action on the agenda of government leaders, especially on the federal level. This weakness is in part shared with the international climate movement more generally, though the level of climate denial both among political elites and among the general population in the US is unmatched in the world. With that denial comes resistance to climate action, though for a variety of reasons, no actions commensurate to the climate challenge have really been attempted by governments in the world, whatever the local level of resistance offered.

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