Deep Capture: How a cabal of corrupt traders, reporters and lawyers looted freely on Wall Street

Deep Capture.com ^ | Feb. 2009 | Patrick M. Byrne

[Jack Black]

In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.”

His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea.

[Jack Black]

Finally, some realy reporting. This is a LONG article that reads like a Gresham novel. So weird it is obviously true. Connects all the dots: from Milken to Cramer to various mob families.

This is what we are bailing out a trillion dollars at a time.

[jackibutterfly]

You forgot “politicians”.

[Neidermeyer]

downloadable in PDF format! http://www.deepcapture.com/wp-content/uploads/2008/06/deepcapture-the-story-v1.pdf

[Kansas58]

EXACTLY!

Politicians CREATED this mess!

ACORN protested at banks that did not OK risky loans.
ACORN took banks to court, to block mergers, based on the refusal of the banks to approve risky loans.
The Community Reinvestment Act, pushed by Fannie and Freddie and ACORN, gave ACORN the right to sue in court, based on lending practices.

Government CAUSED this problem!

Government wrote the rules. (With the help of ACORN)

Obama, as an ACORN attorney, helped shove those rules down the lenders throats.

[eleni121]

Add politicians and those MORONS we pay to monitor the players -— where the heck were they?

The federal trade commission the FBI etc etc - both external and internal watchdogs.

Or do we have a cabal of traitors working within our govt like those Jack Bauer deals with on “24”?

[tcrlaf]

Look ANYWHERE in this financial crisis, and you’ll find a DEMOCRAT, or a DEMOCRAT FINANCIER, lining thier pockets and enabling corruption...

Democrats ran Citi, Chase, Morgan, Lehman, Fannie, Freddie, Countrywide, etc,etc... ALL gave big money to DEMOCRATS and Democrat K Street Lobbyists.
FIVE BILLION DOLLARS, IN FACT!

Democrats Maddoff and Stanford stole BILLIONS, and gave MILLIONS to Democrats.
DEMOCRAT Joe Cassano lost FIVE HUNDRED BILLION DOLLARS at AIG’s London Office.

DEMOCRATS Reich, Rubin, Gorlick, Raines, and Pritsker were the original architects of the Sub-prime fiasco, and massive bank consolidations!

Dodd, Reid, Frank, Ragell, Biden, Kerry, etc,etc, ALL DEMOCRATS, blocked ANY attempts at Mortage Reform, calling it RACIST, while getting sweet deals from those banks for themselves...

Jackson and Sharpton, DEMOCRATS AGAIN, staged PROTESTS anytime ANYONE dared to try and stop these idiot mortgages!

DEMOCRATS were scooping away cash in WHEELBARROWS from all of the inner-city MORTGAGE FRAUD!!!

Does ANYBODY get it, yet?

[Lurker]

For later.

[tcrlaf]

“The federal trade commission the FBI etc etc - both external and internal watchdogs.”

And both conduits to MUCH higher paying jobs as minions for the Democrat masterminds of this mess, if you just played ball.

[HuntsvilleTxVeteran]

Oscar Brand's “Three Prominent Ba$tards”

The Banker, the Broker and the Washington Joker.
**
It fits so well!

[Brad from Tennessee]

[DEMOCRATS were scooping away cash in WHEELBARROWS from all of the inner-city MORTGAGE FRAUD!!!]

When G.W. Bush took office in 2001 Fannie Mae and Freddie Mac were likely insolvent. More than 40 percent of the mortgages they owned were subprime loans. This time-bomb was created in 1994 when Bill Clinton and HUD Secretary Cuomo expanded federal lending regulations to include high-risk borrowers who fit the demographic profile of Democrat voter. Fannie Mae's board was stacked with former Clinton staffers to help hide growing financial problems at the company resulting from Clinton/Cuomo policy:

FALSE SIGNATURES AIDED FANNIE MAE BONUSES, FALCON SAYS

By Kathleen Day and Terence O'Hara
Washington Post Staff Writers
April 7, 2005

Fannie Mae employees falsified signatures on accounting transactions that helped the company meet earnings targets for 1998, a “manipulation” that triggered multimillion-dollar bonuses for top executives, a federal regulator said yesterday.

Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight, said the entries were related to the movement of $200 million in expenses from 1998 to later periods. The result of the changes was an increase in Fannie Mae's 1998 earnings per share and the release of a $27.1 million bonus pool for senior executives.

Fannie Mae reported paying the following executive bonuses in 1998: chairman and chief executive James A. Johnson received $1.932 million; Franklin D. Raines, chairman-designate, received $1.11 million; Chief Operating Officer Lawrence M. Small received $1.108 million; Vice Chairman Jamie S. Gorelick received $779,625; Chief Financial Officer J. Timothy Howard received $493,750; and Robert J. Levin, an executive vice president, received $493,750.

(scroll down on link)

http://www.washingtonpost.com/wp-dyn/articles/A32845-2005Apr6.html

Gorelick left Fannie Mae after four years with $26 million. Raines left with $50 million.

From 7-16-08 WASHPOST:

[. . .Raines settled charges brought by the Office of Federal Housing Enterprise Oversight by agreeing this spring to pay $2 million and forfeiting $22.7 million in stock and other benefits. And though none of it will come out of his pocket — the payment was covered by insurance — he has not emerged unscathed. He and his wife of more than 25 years, Wendy, are separated. . .]

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071502827.html

[rawhide]

bump

[eleni121]

You are soooo right in bringing that aspect of the problem to our attention.

Even worse than the behemoth of the “elected” part of the federal govt (our emasculated useless and vain elected reps) is the entrenched unionized bureacracy which, like a monstrous octopus, is seeking to devour us all.

[rightinthemiddle]

bump

[Jack Black]

The corruption is so deep that it is unfathomable. Every critical institution is part of it. Wall Street, banks, brokerage houses, regulators, reporters, politicians.

New York and Wall Street are a pox on America. The Fed is a virus that is destroying the host (us).

Something more than tea parties is going to be needed to shake this off.

[Jack Black]

You forgot “politicians”.

I said 'mob families' and didn't want to be redundant ! :-)

[Jack Black]

For your ping list.

[Jack Black]

maybe of interest to “shifflist” in so far as Schiff is the main person publically calling those involved liars and theives to their face. (Well Max Keiser too)

[longtermmemmory]

bump

[Liz]

......exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The WSJ, Fortune, CNBC, and The NYT......

[mick]

You got that right, Jack.

A La Lanterne !!

[Aria]

Bastards....behind our backs they’re ripping off all of us and to our faces they’re pretending to be for the “little guy”.

I wish the RNC wasn’t so inept!

[Liz]

Don't forget greedy, opportunistic politicians. Obama's $4.3 trillion bailout is dwarfed by the $9 trillion in personal wealth Americans have lost since the start of the Bear Market 14 months ago.......

Cong "Buy Me" Dodd is the best friend the lending industry's money can buy.....Dodd's pals got blank checks for bonuses, Caribbean junkets, Super Bowl parties, office remodeling, and M&A's....in return for known AND UNKNOWN perks for Dodd.

While the banking/lending industry was showering Dodd with millions in campaign donations and VIP mortgages, Dodd was opening credit markets to unworthy borrowers; thanks to Dodd, Countrywide and other lenders made a killing on subprime mortgages......er, make that "affordable housing".....

That ill-fated move created the housing bubble, the Wall Street meltdown, and our economic calamity, necessitating (first) the $700B TARP, and next the trillion dollar stimulus......(and counting).

===============================================

WHO LED US DOWN THE DISASTROUS ROAD TO TRILLION DOLLAR BAILOUTS?

ANGELO MOZILO then-chairman and chief executive of Countrywide Financial. The biggest American sub-prime mortgage lender, was a step away from bankruptcy when Bank of America paid billions to settle investigations by various attorney generals for Countrywide's mis-selling of risky loans to thousands who could not afford them.

Mozilo ran a "VIP programme" that provided loans on favourable terms to influential figures including Christopher Dodd, chairman of the Senate banking committee, the heads of the federal-backed mortgage lenders Fannie Mae and Freddie Mac (that taxpayers were forced to bailout) , and former assistant secretary of state Richard Holbrooke (now in Obama's admin).

CONG CHRIS DODD Since June, Sen Chris Dodd (D-Conn) has faced an ethics inquiry over allegations that he received preferential treatment on two mortgages in 2003 from Countrywide Financial. And then came the dramatic financial meltdown last month, placing Dodd at the center of a controversial $700 billion financial rescue plan.

As a member and later chairman of the Senate Banking Committee, Sen. Dodd shoulders a good deal of the blame for the collapse of the national housing market, the subprime-mortgage-market meltdown and the convulsions on Wall Street which is costing taxpayers billions.

SOURCE: TWENTY FIVE POPLE AT THE HEART OF THE MELDOWN
http://www.guardian.co.uk/business/2009/jan/26/road-ruin-recession-individuals-economy

=======================================

Reams of legislation Dodd has written or advocated affecting the housing, lending, insurance and securities industries have drained hundreds of billions out of the economy, ballooned the federal debt, cost tens of thousands of people their jobs and driven hundreds of thousands of homeowners into foreclosure, bankruptcy or both.

For his efforts, Sen. Dodd has been rewarded in the 2008 election cycle alone with $7.65 million in campaign contributions (he took in $11.7 million in all) from the securities, insurance, real-estate and commercial-banking industries. With $165,400, Sen. Dodd also tops the list of members of Congress who took campaign cash from Fannie Mae and Freddie Mac since 1989. Sen. Barack Obama, the self-styled agent of change, is a distant second at $126,000....

SEN DODD'S CAMPAIGN CONTRIBUTORS

Citigroup, $310,294;
SAC Capital Partners, $282,000;
United Technologies, $263,400;
AIG, $224,678;
Bear Stearns, $205,600;
St. Paul Travelers, $205,400;
Royal Bank of Scotland, $203,750;
Goldman Sachs, $175,600;
Morgan Stanley, $155,000;
Credit Suisse, $154,550;
Merrill Lynch, $134,950;
The Hartford, $94,350;
Bank of America, $91,300;
JPMorgan Chase, $129,150;
USB, $101,900;
Hartford Finance Services, $101,500
Lehman Brothers, $128,400;
KPMG, $113,100;
General Electric, $108,250;
Deloitte Touche, $108,000

How does Angie Mozilo get into his $170,000
Lamborghini with Dodd in his back pocket

[Liz]

Let The Inquisition Start With Barney Frank
Investor's Business Daily
3/6/09
FR Posted by FreeManN

Congressman Barney Frank (D-Mass) says he wants some of those responsible for our current financial meltdown to be prosecuted. And we couldn't agree more. First up in the court dock: Cong Barney Frank (D-Mass).

Even by the extraordinarily loose standards of Congress, it takes some chutzpah for someone such as Frank to suggest that he'll seek prosecutions for those behind the housing and financial crunch and for what he called "a strongly empowered systemic risk regulator."

Frank was Fannie Mae and Freddie Mac's point man in Washington. For Frank, perhaps more than any single individual in private or public life, is responsible for both the housing market mess and subsequent bank disaster. And no, this isn't partisan hyperbole or historical exaggeration. (Excerpt) Read more at ibdeditorial.com ...

===========================================

Lawmaker Accused of Fannie Mae Conflict of Interest
By Bill Sammon, Deputy Managing Editor,
FOX News, Washington
October 03, 2008

WASHINGTON -- Unqualified home buyers were not the only ones who benefited from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s. So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

"It’s absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane? "If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he’s gay. It’s the quintessential double standard."

A top GOP House aide agreed.

"C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws."

Frank’s office did not immediately respond to requests for comment. Frank met Moses in 1987, the same year he became the first openly gay member of Congress. "I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."

The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses "helped develop many of Fannie Mae’s affordable housing and home improvement lending programs."

Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.

Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants.

In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.

Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank.

Clinton now blames such Democrats for planting the seeds of today’s economic crisis. "I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac," Clinton said recently.

SOURCE http://www.foxnews.com/printer_friendly_story/0,3566,432501,00.html

[spodefly]

BTTT

[jackibutterfly]

Oh. Gotcha! :-)

[TigerLikesRooster]

Ping!

Thanks Jack Black.

[LomanBill]

 

The man on W's mind in the above was Roland Arnall, "Godfather of Subprime" and W's ambassador to he Netherlands.

 

I always figured W got burned by Arnall like the rest of the victoms of Arnall's pirate Sub-prime armada - which sailed out of Long Beach.

 

The Democrats may have opened the barn-door, but it was Arnall and company who "revolutionized" the mortgage industry.

 

 

[jellybean]

Atlas Shrugged ping by request.

This is long, but worth reading: The Story of Deep Capture

[sweetiepiezer]

Thanks for posting...

We need to clean house big time.

[Jack Black]

I’ll certainly never watch Cramer in quite the same light.

[WVKayaker]

Gresham could only dream of this web of deceit...

I wondered how I was able to buy Xerox for $4 in 2001. It had been trading at $81-85, and got hit with lawsuits, which were later found wanting.

I made lots of money. Wish I still had it (money, that is!). Zero has hurt me bad, and now I find that it is ALL a sham.

Whodathunkit?

(ATTN: FoodLion shoppers- Buy 7 frozen Tombstone Pizza for $1.99 each this week, with FL card! Cheap snack for those Glenn Beck get-to-gathers!)

[IamConservative]

Compelling reading. Any thoughts as to how credible this is? There seems to be too many names, details and corroborative facts for it to complete fantasy.

Wonder if the unscrupulous traders cover any of their shorts? I’d imagine some wise to the game legally ride the wave down and cover, the greedy don’t.

I’d like to know more about the DTCC..