Author: Matt Browner Hamlin

http://holdfastblog.com

Occupy Wall Street Still Has Work To Do

Matt Taibbi looks at President Obama’s recent move to trade some requirements for financial disclosure under Sarbanes-Oxley in exchange for business support for his jobs plan. Taibbi:

If the financial crisis proved anything, it’s that Wall Street companies in particular have been serial offenders in the area of dishonest accounting and book-cooking. Sarbanes-Oxley is obviously no panacea, but removing it in exchange for a temporary, election-year job boost is exactly the kind of myopic, absurdly irresponsible shit that got us into this mess in the first place. For Obama to pull this in the middle of these protests is crazy.

Totally agreed. Taibbi goes on and gets at the real point: the work of Occupy Wall Street isn’t done yet:

If anyone thought OWS has already done its job, and Washington has gotten the message already, think again. They’re not going to change until the protesters force them to change, it seems.

There is much work to be done. Change is going to come when protesters force political and financial elites to change. The mere existence of this protest has dramatically shifted the tone of political conversations, but it certainly hasn’t lead to any spontaneous efforts to hold banksters accountable for breaking the economy nor lead Congress to pass job-creating legislation. As a result, it is critically important that the protests continue and the message of the occupiers continue to resonate out into the political world.

Obama, Romney, & Reporting Wall St Money

Yesterday there was a Washington Post story on how much money Obama and Romney have gotten from Wall Street which directly conflicted with a New York Times article earlier in the week. The Washington Post story reported that Obama has raised more money from Wall Street than all of the GOP candidates combined. The Times, on the other hand, reported that “Romney has raised far more money than Mr. Obama this year from the firms that have been among Wall Street’s top sources of donations for the two candidates.”

Mike Allen isn’t happy with the Post’s coverage of this. Today he takes a hard shot at the Post:

the Times story got the big picture right, by basing the analysis on contributions to the CAMPAIGNS rather than lumping in PARTY money, which has higher limits ($30,800 per year v. $2,500 per election). And Romney can’t raise party money. The Post could have won by explaining both ends of the telescope.
–PLAYBOOK BEST PRACTICES: Acknowledging complexity makes your story MORE interesting, not less. And the most sophisticated readers have seen what’s been written before, so you can’t pretend it doesn’t exist, or leave them scratching their heads.

But here’s the chaser, from yesterday’s Washington Post article:

“Put aside the DNC money, for example, and Obama’s numbers look much worse: just $3.9 million from the financial sector, compared with Romney’s $7.5 million.”

Before Allen starts talking about “best practices,” he should double check to make sure that the people he’s criticizing didn’t present exactly the facts that he’s demanding they present.

But more importantly, this is all very silly. The DNC exists to fundraise for the the President’s reelection. It is a temporary advantage for the President, as the Republicans don’t have a presidential candidate yet and the RNC can’t fundraise directly for that person until the nominee is set. Both the Times and the Post miss with their stories. The Times accepts the technically correct but functionally incorrect reality that DNC money is not the same as campaign money. The Post fails to recognize that the advantage is a temporary one and not particularly indicative of anything except a snapshot of where things are when the GOP doesn’t have a nominee.

The real crux of the matter is that Wall Street is giving tens of millions of dollars to both parties. When all is said and done, that number will probably be over $100,000,000. The people who broke our economy have completely captured both political parties and helped ensure that they are not held accountable for their crimes, while pushing for more bailouts for themselves, paid for on the backs of poor, working, and middle class Americans.

Crappy mortgage fraud settlement deal gets worse

There have been new reports of an evolved deal between Iowa Attorney General Tom Miller, the Obama Department of Justice, and the nation’s five largest banks regarding the 50 44 state investigations into robosigning and other fraudulent behavior by the banks. New developments include expanding the release beyond robosigning to cover fraudulent mortgage orgination as well. Professor Adam Levitin has a pretty definitive takedown of the various components of the deal that have been leaked.

One of the pieces of the deal, according to Shahien Nasiripour of the Financial Times, is to include about $2 billion for refinancing borrowers who are current but underwater.

About 150,000 borrowers could benefit from the refinancings, as the vast majority of US home loans are owned by investors and government-controlled mortgage giants Fannie Mae and Freddie Mac. By comparison, nearly 11m US borrowers are underwater, according to CoreLogic, a data provider. The average underwater homeowner owes $258,000 on his mortgage.

So the plan here is to help around 1% of homeowners who are underwater. That’s before we give any consideration to the administration’s horrible track record when it comes to actually implementing programs aimed at helping homeowners to their full capacity. Levitin thinks it will, at best, help around 60,000 homeowners.

And again, what are the states and the federal government giving up in exchange for a couple billion that will barely help any homeowners? Levitin:

now we learn that this settlement is going to include a release of origination fraud claims against the banks in exchange for an additional $2B-$4B. It’s Keystone Cops worse than Keystone Cops. For a while the AGs just looked incompetent in the settlement negotiations. But now it’s gone from incompetence to outright malfeasance. To contemplate a release of origination claims that have never been investigated for an additional $4B is so shocking that I have trouble finding genteel words to say about it. To paraphrase Rep. Elijah Cummings, “Is Tom Miller a chump?” Why on earth does he feel compelled to even discuss such a patently bad deal?] [Emphasis original]

It’s truly hard to capture how bad a deal this is on many levels. It’s a bad deal for homeowners, who aren’t going to get the help they need to keep their homes. It’s a bad deal for the rule of law, where yet again massive corporate criminality is swept under the rug (remember FISA in 2007-2008?). It’s a bad deal for investors, who will likely lose out by not having the knowledge that would come from attorneys general bringing civil suits in every state. It’s just a bad deal.

I’m not convinced that this will actually happen. We’ve heard about imminent deals coming out of the Miller talks for almost as long as they’ve been going on. Thanks to the leadership of AGs who care about their job responsibilities – people like Eric Schneiderman, Beau Biden, Catherine Cortez Masto, Lori Swanson and others – the odds of their being a deal is greatly reduced. But the fact that Miller and the Obama administration keep trying to give away more to get any deal for the banks is sickening. This won’t help anyone, that is, unless you think providing protections to keep bank executives rich and out of jail an important service of government.

Understanding the epidemic of Tibetan self-immolations

Nana Rolland has a piece in the Wall Street Journal which does a good job of contextualizing the political hopelessness Tibetans inside of Tibet are feeling, as evidenced by the nine self-immolations committed by young Tibetans since this spring.

Self-immolations can be seen as the tragic and desperate acts of people who do not know how to go on living. And indeed, the area around Kirti monastery, home to most of the Buddhist monks who have recently set themselves on fire, has been turned into a virtual prison. Its residents are deprived of all freedoms, including the right for the monks to be taught religion.

Rolland incorrectly states that the self-immolations have happened outside of Tibet. While they are outside of the Tibetan Autonomous Region, the TAR represents a small portion of Tibet. The Chinese government sliced other parts into majority Han Chinese provinces to diminish Tibetan political power and cultural identity.

But Rolland is right that these are political acts. Rolland writes, “it’s notable that before setting themselves ablaze, all of the nine Tibetan victims called for freedom, independence and the return to Lhasa of the Dalai Lama, regarded as the sovereign ruler of an independent Tibet.”

It’s hard to have any meaningful conception of the depths of hopelessness felt by these nine young Tibetans. Six were teenagers, three were in their twenties. There was undoubtedly a belief that the only way to achieve political change was through suicide. But even while it’s possible to write this, it’s cripplingly difficult to wrap my mind around what that actually meant for these martyrs.

To this point, the Chinese government’s response has been, as usual, to accuse the Dalai Lama of terrorism. A more sensible and serious response would be to loosen restrictions on Tibetans in Ngaba, especially those targeting monasteries and nunneries. Do I expect this to happen? No, of course not. Do I expect there to be more self-immolations? Sadly, at this point, I can’t imagine this epidemic suddenly coming to a halt.

Another Bank of America Bailout

Yesterday there were reports that Bank of America Corporation was going to move it’s Merrill Lynch derivatives unit, which is not insured, into Bank of America, which is insured by the FDIC. Early reports suggested that the Federal Reserve supports this move, while the FDIC opposes it. Quoted at The Big Picture, Professor Bill Black explains the process of what is happening and what it means to the public:

1.The bank holding company (BAC) is moving troubled assets held by an entity not insured by the public (Merrill Lynch) to the Bank of America, which is insured by the public
2. The banking rules are designed to prevent that because they are designed to protect the FDIC insurance fund (which the Treasury guarantees)
3. Any marginally competent regulator would say “No, Hell NO!”
4. The Fed, reportedly, is saying “Sure, no worries” by allowing the sale of an affiliate’s troubled assets to B of A
5. This is a really good “natural experiment” that allows us to test whether the Fed is protects the public or the uninsured and systemically dangerous institutions (the bank holding companies (BHCs))
6. We are all shocked, shocked [sarcasm] that Bernanke responded to the experiment by choosing to protect the BHC at the expense of the public.

At his own blog, Black adds, this this transfer would be “transforming (ala Ireland) a private debt into a public debt.”

Yves Smith notes that this development is a clear sign that “Bank of America is in trouble,” something she has been saying for quite some time now.

So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

Smith goes on:

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

It’s another bailout, happening with a gun to the taxpayers’ heads, though albeit somewhat after the fact. More importantly it’s a transfer of wealth from the public to the private with no input from the public.

#OccupyWallStreet’s inspiring donation and supply hub

NY1 has one of the most incredible and inspiring reports on the #OccupyWallStreet movement that I’ve seen. It’s about a large space – a former bank – donated by the United Federation of Teachers – that serves as the movement’s supply store room. It’s stocked with donations of food, medical supplies, clothing, and other essential items which are sustaining the occupation. The donations are coming in from all over the country and all over the world.

The donations coming in often include messages from the people sending them:

Occupiers said almost everything they receive is accompanied by a supportive note.

“Here are some cookies for the demonstrators. I’ll keep sending, as long as you keep protesting,” read Shan. “I’m a 69-year old retired journalist in Ohio who’s very much with you in spirit.”

One occupier told NY1 the notes they get with the supplies are like letters from the “frontline’s of America’s economic crisis.”

I’ve been at #OccupyWallStreet the last few days and had the privilege to see the inside of the storage space. The crew of volunteers who are organizing it and making it function are incredibly motivated by the donations they receive. What’s coming in is likely the lifeline which will allow the occupation to continue to into the cold New York winter.

If you want to send a donation of food, supplies, or anything else that you think the Occupiers will need to be sustained, you can mail donations to the Occupation. According to OccupyWallSt.org, the shipping address is:

The UPS Store
Re: Occupy Wall Street
118A Fulton St. #205
New York, NY 10038
Money orders only please, cannot cash checks yet. Non-perishable goods only. We can accept packages of any size. We’re currently low on food.

NYT editorial on Elizabeth Warren

The New York Times has an editorial in praise of Elizabeth Warren and her candidacy for Senate in Massachusetts. Interestingly (though also accurately) they highlight her ability as an effective messenger on the economy and class issues:

Democrats should not be cowed by conservative taunts that the speech advocated “collectivism,” and use this argument to push back against the Republicans’ refusal to raise the taxes of people who make more than a million dollars a year — sometimes far more. Senate Democratic leaders say they plan to employ poll-tested phrases like “Tea Party economics” and “Tea Party gridlock” in their campaign for a jobs bill and beyond. They would be better off listening to Elizabeth Warren.

I would hope that other Democrats do listen to Warren, though I’m less interested in them appropriating her messaging for its efficacy than adopting the ideology that stands behind the messaging. I don’t want to see a bunch of faux populist rhetoric from Democrats, but I do want to see politicians who are populist. I don’t think many incumbents are populists and I’m not excited by them trying to steal the thunder from those who are actually hearing the complaints of economically disenfranchised people and being responsive to them. That said, one of the supposed virtues of a Senator Warren would be her ability to bring this effective advocacy for the poor, working, and middle classes into an institution which his almost entirely captured by the wealthiest 1%. If the only way to bring conservative Democrats to a better place that gets better results is through cynical analysis of what is polling well, fine. But the existence of political success will be valuable only to the extent that the policies advocated in this messaging are enacted. And now does not seem like the right time to lie to angry voters about what you will or will not do for them.

A Victory for #OccupyWallStreet

Late last night, New York Mayor Mike Bloomberg and Brookfield Properties, the owners of Zuccotti Park, backed down from their attempt to evict #OccupyWallStreet. MoveOn shot a great video of the protesters getting the news and their reaction. #OccupyWallStreet put a statement out following the victory:

“We are winning and Wall Street is afraid,” said Kira Moyer-Sims, a protester from Portland, Oregon. “This movement is gaining momentum and is too big to fail.”

“Brookfield Properties is the 1%. They have invested $24 billion in mortgage-backed securities, so as millions face foreclosure and eviction due to predatory lending and the burst of the housing bubble that Wall Street created, its not surprising they threatened to evict Occupy Wall Street,” said Patrick Burner, an organizer with Occupy Wall Street from the Bed-Stuy neighborhood of Brooklyn. “But Brookfield and Bloomberg have backed down and our movement is only growing as the 99% take to the streets world wide to call for economic justice.”

This is a powerful movement and it is capable of bending huge corporations and powerful politicians to their will. This is just the beginning.