Author Archives: William Black

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

Posted on August 22, 2014 | 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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Another Reason to Retire Sam Brownback: The Senate Subprime Car Loan Sleaze

Posted on August 21, 2014 | 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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Italian’s Apology for German Austerity Diktats Lasts 24 Hours

Posted on August 20, 2014 | 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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The WSJ’s Editorial Posing as “News” about Ecuador

Posted on August 19, 2014 | 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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DOJ Trains AUSAs to Chase Mice While Lions Roam the Campsite

Posted on July 21, 2014 | 7 comments

By William K. Black

In researching my series of articles on the critical omissions in Attorney General Eric Holder’s press release about the settlement with Citi I realized that I need to write multiple articles about the destructive role played by Benjamin Wagner. Holder made Wagner DOJ’s leader on mortgage fraud because Wagner was so willing to propagate the single most absurd, destructive, but so very useful (to the administration and the banksters) lie about mortgage fraud.

“Benjamin Wagner, a U.S. Attorney who is actively prosecuting mortgage fraud cases in Sacramento, Calif., points out that banks lose money when a loan turns out to be fraudulent. ‘It doesn’t make any sense to me that they would be deliberately defrauding themselves,’ Wagner said.”

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AG Holder: “The U.S. Announces the Indictment of Citigroup’s Senior Officers for Fraud”

Posted on July 18, 2014 | 4 comments

By William K. Black

The third omission from Attorney General Eric Holder’s press conference announcing the settlement with Citigroup of civil charges was the words “criminal” and “indictment.”  The
Department of Justice (DOJ) press conference had a scripted press release.

According to DOJ’s Statements there should have been Numerous Indictments

The DOJ press release contains the following statements that logically should have led to an indictment of a large number of Citi’s officers.  Holder states: “The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008.”  Citi “made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS.”  Holder’s press release called them “toxic mortgages.”  Holder emphasized the “strength of the evidence of the wrongdoing committed by Citi….”  Holder stated that Citi’s officers knowingly made false “reps and warranties.”

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AG Holder: “Thank you Fed and OCC”

Posted on July 17, 2014 | 3 comments

By William K. Black

The second omission in Attorney General Eric Holder’s press conference about the settlement with Citi was “Thank you Fed and OCC.” The Federal Reserve (Fed) and the Office of the Comptroller of the Currency (OCC) are Citi’s financial regulators. In my first installment in this series I explained Holder’s shameful failure at the press conference to thank Richard M. Bowen, III – the whistleblower who handed DOJ on a platinum platter what should have been its criminal case against a vast swath of Citi’s most senior leadership.

Holder’s Failure to Thank the Regulators

Holder also failed to thank the Fed and the OCC at the same press conference. He should have thanked them for their criminal referrals on Citi’s senior managers and their provision of irreplaceable expertise throughout the investigation. In particular, he should have praised examiners A, B & C, who the Fed and OCC detailed to the FBI so that they could serve as its in-house experts. By detailing examiners to work for the FBI they are able to receive “6 (e)” grand jury testimony and documents and explain their significance to the FBI and the prosecutors.

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AG Holder: “Thank you, Richard Bowen”

Posted on July 17, 2014 | 19 comments

By William K. Black

Those should have been the first four words of Attorney General Eric Holder at the press conference announcing the settlement with Citicorp.

This article is the first in a series of pieces discussing the critical omissions in Holder’s statement at that press conference.  These omissions explain why elite banksters now routinely control our largest banks and use their power to become wealthy through leading fraud epidemics, with impunity from the law, that cause the our financial crises.

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Two EU Finance Ministers Throw their Bosses and Nations Under the Bus

Posted on July 14, 2014 | 1 comment

By William K. Black

The finance ministers of Italy and Serbia have just publicly thrown their heads of state and their nations under the bus.  In a testament to the crippling effect of the belief that “there is no alternative” (TINA) to austerity, these finance ministers have insisted on bleeding economies that are in desperate need of fiscal stimulus.  Their pursuit of economic malpractice is so determined that they eagerly sought out opportunities to embarrass the democratically elected head of state in Serbia when he dared to support competent economic policies.

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John Cochrane’s Witch Hunt for Witch Hunters

Posted on July 12, 2014 | 7 comments

By William K. Black

John Cochrane is an economist at the University of Chicago.  The Wall Street Journal has just featured his op ed piece entitled “The Failure of Macroeconomics.”

I’ll focus on his foray into criminology as a component of economic growth. Cochrane’s column ignores the paramount role that the three epidemics of “accounting control fraud” played in hyper-inflating the bubble and causing the financial crisis – which cost over 10 million American jobs and a projected $21 trillion loss of production.  Instead, he claims that the economic recovery is weak because “Who wants to hire, lend or invest when the next stroke of the presidential pen or Justice Department witch hunt can undo all the hard work?”

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