Posts Tagged ‘Wall Street’
“Total moral surrender”: Broken justice system on Wall Street
Matt Taibbi relentless coverage of Wall Street malfeasance turned him into one of the most influential journalists of his generation, but in his new book, “The Divide: American Injustice in the Age of the Wealth Gap,” Matt Taibbi takes a close and dispiriting look at how inequality and government dysfunction have created a two-tiered justice system in which most Americans are guilty until proven innocent, while a select few operate with no accountability whatsoever.
ELIAS ISQUITH tells Salon about Geithner’s excuses, Piketty’s success and Nixon’s cronies this MAY 20, 2014:
Salon sat down last week with Taibbi for a wide-ranging chat that touched on his new book, the lingering effects of the financial crisis, how American elites operate with impunity and why, contrary to what many may think, he’s actually making a conservative argument for reform.
The interview can be found below, and has been lightly edited for length and clarity.
Matt Taibbi (Credit: AP/Louis Lanzano)
So, what is “The Divide”?
The book is really just about why some people go to jail and why some people don’t go to jail, and “the divide” is the term I came up with to describe this phenomenon we have where there are essentially two different criminal justice systems, one that works in one way for people who are either very rich or working within the confines of a giant systemically important institution, and the other system that works in another way for people who are without means. And that’s what the book is about.
A point you make in the book, though, is that the justice system is starting to treat people who aren’t poor or part of a marginalized group with a level of brutality we tend to think is only reserved for the oppressed.
I made a conscious decision to start the book with the story of Abacus Federal Savings bank, which is this little bank in Chinatown.
The people who run that bank were not poor. They weren’t even what you would typically classify as members of the victim class … But why was that bank prosecuted and why was Goldman Sachs or Chase not prosecuted?
What I was trying to get at was, in this new reality, [legal authorities] consider it not feasible to go after companies of a certain size, and [Abacus] is how small you have to be now to be targeted …

The French mathematician Pascal wrote: “All afflictions of mankind is his feeling restless in a room: He never learns to be at rest. Man sincerely thinks that he is seeking rest and repose periods, but in fact he is after agitation.” It is like life abhors the void; it is as keeping in restful position is tantamount to worthlessness.
Maybe idleness is mother of all vices; but it is certainly that idleness is mother of all virtues: How else could you meditate, voluntarily inhale deeply, exhale slowly, reflect on your past achievement and plans, comprehend your limitations, capabilities, and potentials, setting up future action plans, revisit serious talks that passed you by, regain courage and the will to go forward?
Forced work and unhappy and unsafe workplace are excellent excuses to running away from pressing responsibilities at home, to delegating important responsibilities, to faking being too busy to listen and deliver on promises. Is working for salary an excellent way out to earning some money to be freer in taking better decisions for better quality products, services, and taking longer leisure quality time?
Let me clarify how I comprehend class structure in capitalist system in order to drive my point through. The lowest class is represented by 20% of the downtrodden or daily workers. When a government claims that unemployment has reached say 10% it means that the lowest middle class is suffering most of the unemployment rate.
For example, if we say that at least 70% of the “working people” are from the middle class (divided among the lower, middle, and upper) middle classes and that 70% of the middle class are represented in the lower middle class section then, about 4.9% of the unemployed are from the lower middle class (for example: 70%*70%*10%). The other 5.1% of the unemployed are constituted from all the other classes (excepting the 10% of the richest class that hoard 50% of the wealth of the nation: Its amassed wealth works for the richest class)
When a government starts drastic cut in the budget (except the military: It goes without sayin) it affects primarily the lower middle class, since the 20% of downtrodden are already suffering at the bare minimum and cannot contribute to taxes. Actually, the class of the downtrodden feels helpless and waits for the middle class to begins marching revolts to join it and scare the richest class and their political, security forces, legal, and law institutions for a short while. When unemployment jumps to 20% that affects 10% of the lower middle class then, serious problems await the power-to-be in capitalist systems: This number of 10% of unemployed lower middle class is a critial turning point for serious revolts.
It is to the advantage of most of the citizens in capitalist society that unemployment increases to beyond 20% for serious reforms to be considered and enacted in forms of laws and financial institutions control, restrictions, and constraints.
Are you being pressured to forced labor? If you are not a teenager and think that you have skills then, would you work for McDonald and invite your kids to eat deadly food? If you hate to lie and scam people then, would you work for Wall Street? If you cannot suffer selling products and services that you don’t believe in because they are of low quality or unsafe to use then, would you work as a salesman for such a company?
First, do you know what kinds of moral values and ethical conducts that best represent your spirit and would make you happy to noticing their applications around you and in your neighborhood? Would you take sometime to learn and select the work you enjoy doing and stop this harassing fleeing exercises? Would you mind getting organized around clear laws that equalize opportunities and fairness in employment?
US government forging the dollar
Posted July 26, 2010
on:International financial institutions, backed by the US government, created vast operations of fraudulent mortgage schemes as witnessed since 1990. First, the Saving and Loans banks were “saved” by Bush Sr. infusing $500 billions with tax payers money. The mortgages were estimated to have 100% probability of losing their entire values. The federal government and the Saving and Loans banks knew what they were doing. The two powers knew that homeowners would never be able to pay the interest. Then, a new scheme was invented called “re-financing”
Those junk mortgages were re-sold on the world market and packaged “as sure as treasury bonds”. This re-packaging scheme was called “derivatives” (as drifting money operations). James Kenneth Galbraith, professor at the university of Texas, labeled these schemes as “identical to forging money, no more no less”
First, the tax payers (the honest hard-working citizens) paid for the saving and Loans banks in 1990, then they re-paid these fraudulent “faked money” mortgages in 1997, and then, after the Big Financial Crash. Over one trillion dollars covered the fraudulent operation under the knowledge and ascent of the successive US Administrations.
The US government have been forging dollars since Nixon uncovered the dollars that was seemingly supported by gold reserves. It is not over. The forging of dollars is going strong and private investors are being scammed every day.
Every time, the US Treasury states that the US economy is strong; when the federal Reserve governor states that the financial state is stable; when the president states during the State of the Union that the US status is strong and secure then, you may say that the government is still forging dollars.
The dollars is disseminated by political pressures; because the US Administration controls the “World bank” and the “International Monetary Fund”; because the US aircrafts carriers roams all oceans and seas.
Wall Street is going strong and hiring. Over new 160,000 jobs were opened by Wall Street that covers 20% of the budget of the State of New York and 12% of the City of New York.
China: the main Capitalist partner to the US (January 11, 2009)
“Communist” China is the largest accumulator of dollars with a reserve of two trillions or two third of its GNP. With such a reserve China is currently the main capitalist partner to the USA; China has interest that the dollar does not devalue, that its currency the Yuan does not increase in value which would make Chinese products less competitive, and that the financial system does not break down. “Communist” China is catching up quickly on Japan for the purchase of Treasury Bonds, a way of lending the US the needed cash to resume a Capitalist financial policy. China is not only the factory of the world but also the prime banker to the US.
The Chinese Wen Jiabao PM stated after the financial crash of Wall Street: “We have got to unite. In these difficult times, China has joined the USA. We believe that our financial rescue will aid at stabilizing the economy and world financial system and thus, preventing a major chaos. I believe that cooperation is indispensable”. China is expecting full cooperation of the US in erecting a new Capitalist system and it has more muscles than the European Union in enforcing the re-structuring of the financial system that would guarantee its investments in the USA that amount by the trillions of dollars.
Many of Chinese investments in the USA are in the red after the crash. The US multinationals that China invested heavily in have been saved with Chinese influx; Fannie Mae and Freddie Mac were saved too. Lehman Brothers was not spared for reasons. The Bush Junior Administration had selected Lehman Brothers to artificially increase oil prices to $150 through speculation in order to hurt the ever voracious China in oil demands. China reacted vigorously. The world financial system was rotten and China demanded to cooperate in the timing of the crash if the US wanted China to stabilize the financial system after the crash. Lehman Brothers was the sacrificial messenger of the impending financial crash.
The financial strength of the US was based on the dollars as the universal currency in world economical exchange. Bretton Woods (in New Hampshire) agreements in 1944 on the financial rules consecrated the pivotal power of the dollars; the British economist John Maynard Keynes tried hard during this conference to create a new world currency the “Bancor” but the US imposed its hegemony. Since then “the US administrators could decide what they wanted and it was up to the rest of the world to pay up the deficit”; Treasury Secretary John Connally stated it clearly “The dollar is our currency, but it is your problem”.
In 1960, the French President De Gaulle denounced the “exorbitant privilege of the dollars”. Since the 1980’s investment capitals have been going into the USA and then the US multinationals would re-invest the borrowed capitals wherever they desired; 90% of US Treasury Bonds are purchased by foreign States. Nixon was very comfortable de-linking the dollars from the value of gold and the world had to go along with whatever the US Administrations thought was beneficial to the US regardless of the ultimate danger that exposed the world financial system.
Consequently, States opted to save the surpluses of their dollar in “Sovereign Funds” meant to purchase foreign companies and enhance the flux of technology and know how and the latest management and financial methods. In one decade, the weight of the dollars in the reserve of world exchange has decreased from 71% to less than 61%. Still, the currencies of the EU, China, and Japan are not that widely used and adopted to counterweight the power of the dollar in trade exchange; but the center of gravity is clearly shifting toward China.
President Elect Barak Obama wants to re-invigorate US economy with major State investment (with Chinese cash); he must be closely cooperating with the Chinese on the amount and ways of re-launching the US economy.
Note: The Chinese regime was mute on the atrocities committed in Gaza; apparently, China is not hot on matter of human rights and crimes of wars and does not want to open the Pandora Box of its own horror stories.
The largest and best planned scheme in history: executed by the worst cowards of all (December 22, 2008)
The USA Administrations knew for three decades that they were no longer producing any real value-added economy and the US politicians had no guts to tell the American people the hard facts; that getting back to work harder on producing stuff that people need to buy is a must. The FED, the Treasury and all the US multinational financial institutions knew the theory of Money Trade Cycle; that when the trend of inflation is continuously on the rise then the outcome is a financial crisis. The theory established that businesses and economy follow a pattern of upswings and downturns, and if the government refrains from meddling with the normal interest rates of doing business then the market economy based on real value-added economy will adjust to the changes but there was no real economy in the first place.
The FED knowingly, through political pressures, kept lowering the interest rates below the healthy level of a normal market economy which generated inflation rates that could no longer be controlled or stabilized. The FED, the Treasury and the cartel of multinational financial institutions overextended credits through traditional fiduciary media and then through new financial gimmicks (secondary and tertiary worthless paper money) to resume world financial market hegemony that could not lead but to crisis.
What you hear from the talking heads that the real problem was lack of financial monitoring and control by the Federal government and the financial institutions is pure lies; all the financial institutions knew about the real problem and the inevitable financial crash. The Bush Junior Administration, in cooperation with the financial multinationals and the Financial Times, decided unilaterally and without a UN resolution, for a pre-emptive war on Iraq. The rationale for that catastrophic decision was that the military expense will generate many folds in profit through the control of oil distribution and blackmailing the neighboring Arab rich sovereign funds of the potential threat of Iran. The Arab rich States were no fouls of that strategy but they went along as mere small oligarchic and monarchic States with no national identity.
By the summer of 2006, the US was losing the war in Iraq and in Afghanistan and its prestige was bottoming worldwide. The US needed one last gamble to iron out its image and give the illusion of a force to be reckoned with and the power to reconstruct the world. The hasty invasion of Israel of Lebanon in July 2006 was meant to claim total victory over Hezbollah and make Iran cower in order not to face direct confrontation with the US. A victory was to announce to the world that the “Greater Middle East Strategy” was successful. The July War turned out to be a total disaster and a debacle to Israel, even after extending the war for 33 days against the will of the world community.
In August 2006, the normal scheme of siphoning in the sovereign funds of the oil rich States and the small stock investors had reached a plateau. It reached a plateau because the investors realized that a crisis is in the offing and the scheme could not function normally unless the same level of increase in junk paper investment is maintained.
The US Administration and the financial multinationals realized that all is lost and it was time to decide on the timing for the financial crash. It was normal to leave the timing to the final stages of the Presidential election campaign. If the Democrat were favored by the US citizens then a psychological shock might decide them to shift to the Republican Party at Election Day.
In the meantime, oil prices were fictitiously raised to unprecedented level for two purposes: first, the highest consumers of oil such as China, Japan, and the European Union States would refrain from purchasing at such a high price and second, the US would be accumulating oil reserve for the imminent period, since the US is not paying in hard currencies but in worthless paper transactions with Saudi Arabia.
The FED, the Treasury and the cartel of multinational financial institutions purposely engineered the crisis and they triggered the timing. The timing was perfect: since no more foreign financial rescue is coming in then the financial rescue will happen under duress from all rich States. The motto was: either you caught up under duress or you will all have to suffer a global economic recession.
The code name for the precise timing of the financial crisis was: artificial oil price reaching $120 per barrel; the messenger was the multinational financial brokerage firm Lehman Brothers. All the members in the cartel of the financial multinationals received the order to activate the countdown for the Wall Street crash; they sold out their shares to invest in anything that has real value. The little people who invested their life savings in stocks paid the price.
The US consumers were enjoying low priced items imported from China and the manufacturing bases were exported overseas to benefit from cheap manpower and limited legal constraints. Trillions of dollars were injected to extend the illusion for the US citizens to resume their lavish spending on consumerism, new gas guzzling cars, stocks, and overvalued Real Estates. The world had already experienced a vivid advance taste of financial crisis in 1989 in the south-east Asian markets, Japan and Latin America. The fundamental problem was tackled by the Asian States and they worked harder to producing value-added economy. The successive US Administrations and politicians had no guts to tell the American people the hard facts, that a recession is as sure as the sun rises, and that getting back to work harder on producing what people need to buy is a must.
The world lauded the US for its timely energetic reaction of rounding up 700 billion dollars to rescue the failing commercial banks. Wrong; the package was already decided upon before the crash and the bold figure of 700 billions dollars was psychologically marketed as covering the 60% of the unsolvable Real Estates: the US people would gladly preserve its homes and pay for it. The trick is this package is a first installment and other packages are waiting in the queue pending the appropriate political conditions.
Well, financial rescue came from everywhere but this didn’t stop recession anyway. How can you stop recession when the USA is not producing any value that people are ready to purchase? The worst part is that President Obama is not willing to challenge the US citizens with the hash facts, at least not for a long time to come.
The US people has preferred the lax attitude since the Reagan Administrations; most of the US citizens wanted to believe in an illusory wealth assuming that the worldwide acceptance of the dollars as the currency of choice is more than sufficient to keeping the illusion. The hard facts are in; tackling decades of myopia and dependence on the hard work of the other people has to be grabbed by the horns. The world recession is the making of the lazy, faint hearted US people who failed, in their cockiness, to recall what made them a great nation!
Blood all over the floor (December 8, 2008)
It is 1952 and General Douglas Mac Arthur was saying “Our relative decline, our incapacity to conserve our resources, the vertiginous growth of our national debt, and the weight of our financial engagements are putting our next generations at risk”.
It is 1972 and the inflation was rampant; the Midwest farmers were in high debt and Latin America was in acute debt. President Carter order the FED chairman Paul Volcker to contain inflation.
Volcker invited the Wall Street Journal executives for lunch and asked them “When blood is all over the floor, would you guys support my policy?”
The executives did not hesitate and they were affirmative.
The US returned to a strong dollar policy.
The Midwest farmers sold their farms at peanut prices and Latin America experienced blood shed for half a century, such as genocides, dictatorship, military coups, facilitating the investment of the US multinationals, destroying the equatorial forests, and barbarically excavating raw material mines in Chili and Peru and so on.
The US has been indebted for over half a century at the expense of over two billion people living under the survival level. I have a simple question:
And the question remains|:”why the US should not experience blood on the floor?”
In the nineties, many books were published warning that the premises and practices of “mondialization, or globalization” are volatile and highly flammable.
For example, Danny Roderick (1997), in his “Has globalization gone too far in its way?”, stated that
1. First, eliminating regulations on commerce and investment was premature;
2. Second, that there was lack of fairness in the practices among the developed and under-developed States.
3. Third, that the US and European quality standards were being forced on States that cannot produce according to the satisfaction of the western nations; that was an excellent excuse for outsourcing and relocating factories in countries with cheaper manpower; the consequence was that all these products could not be exported but into States with the same quality standards.
What would happen if these markets stopped importing?
All the products that are not fit for inner commerce would have to be sold as scrap.
4. Fourth, the coverage of social guarantees was exhausted in the under-developed States and the population left to mend for themselves. The Establishments in the US mocked these warnings since “History has reached an end” and the US economic model was in for ever.
The unemployed in the US have no where to go to die within their family members.
In China, millions of the little people are being forced back into their remote villages. To do what?
Most probably the Chinese out of work in sweat shop factories would die away from urban eyes and far from the media.
The US people have been in debt for a decade to cover all kind of charges because their earnings in the last two decades were lowered constantly while 1% owns one fifth of the US wealth.
I have a simple question “why those blood sucker billionaire capitalists should not have their blood spattering on the floor?”