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KILLER_CLOWN
06-01-2009, 04:12 PM
Banks run Congress, top Democrat says

John Byrne
Raw Story
Monday, June 1, 2009

It doesn’t take a rocket scientist to deduce that the banking and financial services industry has an outsized influence in Congress.

Wells Fargo, Citigroup and JP Morgan Chase each got bailouts of $25 billion in government bailouts last year. Morgan Stanley and Goldman Sachs got $10 billion apiece. And AIG, the mammoth insurer that lost billions in bad derivatives bets, has sucked in more than $170 billion.

Meanwhile, President Barack Obama is reticent about bailing out an American state — California.

Collin Peterson, Democratic Chairman of the Agriculture Committee, says he knows who to blame.

“The banks run the place,” Peterson told the New York Times in Monday’s editions. “I will tell you what the problem is — they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”

Peterson has introduced a bill to regulate derivatives trading — the pesky financial instruments that nearly brought down the US financial system. Derivatives involve writing insurance on various complex financial transactions, such as providing insurance to investors in the event of massive defaults on home mortgages.

But he says that Republicans have watered down his bill. He wants derivatives trading to take place on public exchanges — much like the New York Stock Exchange — rather than through private clearinghouses, which are managed by banks.


Obama Treasury Secretary Timothy Geithner, meanwhile, would prefer the transactions be monitored by the New York branch of the Federal Reserve. Bankers appear to prefer this option, given that the New York Fed has been lenient on them in the past.

Geithner has been criticized for his close relationships with banking industry executives. His proposal to regular derivatives traded through private clearinghouses mirrors that of the bank’s own proposals.

How much did President Barack Obama receive in contributions from those employed in the financial sector?

$69,823,872 if you include real estate, according to the Center for Responsive Politics. (Sen. John McCain got $60,605,254, with the total between the two exceeding $130 million).

The biggest donor to the presidential campaigns? The banks. Followed by lawyers and lobbyists, at $95 million. The banking and financial services industry have their own lobbyists, so the total donations of the industry are undercounted.

All told, according to the New York Times, financial sector employees gave $152 million in political donations from 2007 to 2008. Goldman Sachs, Citigroup, JP Morgan Chase, Bank of America and Credit Suisse gave $22.7 million and spent a combined total of $25 million on lobbying activities — in a single year.

And President George W. Bush’s largest individual donor employer in 2004? MBNA, the credit card behemoth that was bought up by — Bank of America.

Remarkably, though, it’s the secretive, private trading of derivatives — where those buying insurance have no idea what others are paying, and those buying bank stocks have no idea what they’re actually buying — that nearly brought the US financial markets to their knees.

“Peterson’s bill specifically bars derivatives trading in a clearinghouse regulated by the New York Federal Reserve, which he said in an interview ‘is a tool of the big banks’ that ‘wouldn’t do much’ to regulate the contracts,” the Times wrote. “Because the banks’ lobbyists persuaded some of his Republican colleagues to resist more sweeping changes, Mr. Peterson said, he has had to modify a bill he introduced that is similar to Mr. Harkin’s in calling for wide-ranging limits on derivatives.”

The banks have had their heyday in Congress in recent years. This year, they succeeded in preventing the Senate from passing a provision that would have allowed bankruptcy judges to unilaterally reduce the principal amount on mortgages. And in 2005, the massive “Bankruptcy Abuse Prevention” bill passed by Congress made it harder for consumers to file for bankruptcy

http://www.latimes.com/news/nationworld/nation/la-na-obama-cspan24-2009may24,0,3284994.story

http://www.nytimes.com/2009/06/01/business/01lobby.html?pagewanted=3&_r=1&partner=rss&emc=rss

http://www.opensecrets.org/pres08/sectorall.php?cycle=2008

http://www.theleftcoaster.com/archives/001307.php

http://rawstory.com/08/news/2009/06/01/banks-run-congress/

BucEyedPea
06-01-2009, 04:18 PM
A D would know. They have the Big Banks in their pockets.

BigChiefFan
06-01-2009, 04:20 PM
The UNited States of Wall Street.

petegz28
06-01-2009, 04:31 PM
The UNited States of Wall Street.

This.

Fuck the little man and his little business.

Brock
06-01-2009, 04:46 PM
Wow, no shit?

HonestChieffan
06-01-2009, 05:19 PM
petterson is a tool

Simplex3
06-01-2009, 05:22 PM
If the banks run Congress and the Democrats are clearly in complete control of both houses, what does that tell us?

Brock
06-01-2009, 05:25 PM
If the banks run Congress and the Democrats are clearly in complete control of both houses, what does that tell us?

That the only thing that's changed are the faces.

HonestChieffan
06-01-2009, 05:31 PM
Barney Frank.

banyon
06-01-2009, 06:00 PM
The Democrats have been a bunch of spineless sycophants on this for the most part.

KC native
06-01-2009, 07:39 PM
A D would know. They have the Big Banks in their pockets.

If the banks run Congress and the Democrats are clearly in complete control of both houses, what does that tell us?

The IB's and Banks own both parties. This isn't limited to D or R. Wall Street knows how to spread the wealth to get what they want.

petegz28
06-01-2009, 07:41 PM
The Democrats have been a bunch of spineless sycophants on this for the most part.

I wish more on your side of the isle would come to this realization.

KC native
06-01-2009, 07:41 PM
The Democrats have been a bunch of spineless sycophants on this for the most part.

I agree. I can't believe the crap that these fvckers who have run these companies into the ground and have depended on tax payer financing for their current existence still have their jobs and are allowed to give advice and negotiate with the government about what they are going to do or can do.

petegz28
06-01-2009, 08:13 PM
I agree. I can't believe the crap that these fvckers who have run these companies into the ground and have depended on tax payer financing for their current existence still have their jobs and are allowed to give advice and negotiate with the government about what they are going to do or can do.

Well of course the get to keep their jobs. Who else would be around to fire everyone else who did nothing wrong?

KILLER_CLOWN
06-02-2009, 10:26 PM
Bankers lobbied secretly to keep derivatives under Federal Reserve ‘oversight’ and away from real scrutiny

Aaron Dykes
Jones Report
June 2, 2009

“The banks run the place,” Rep. Collin Peterson cried out this week. The New York Times reports that he has a bill that would specifically ban derivatives from trading in a clearinghouse regulated by the New York Federal Reserve, which Peterson blasted as “a tool of the big banks.”

A “tool” because the nine biggest banks in the derivatives market– including JP Morgan Chase, Goldman Sachs, Citigroup and Bank of America– all met secretly to discuss how to use the lax regulation and institutional secrecy of the NY Fed to shield their credit-default swaps business from prying eyes and attempts at regulation, as the Times reports:

As the financial crisis entered one of its darkest phases in October, a handful of the nation’s largest banks began holding daily telephone sessions. Murmurs were already emanating from Washington about the need for a wide-ranging regulatory overhaul, and Wall Street executives girded for a fight.

Atop the agenda during their calls: how to counter an expected attempt to rein in credit-default swaps and other derivatives — the sophisticated and profitable financial instruments that were intended to limit risk but instead had helped take the economy to the brink of disaster.

What’s more, the banks formed a lobby– the CDS Dealers Consortium– only weeks after accepting TARP funds in October 2008 to protect its interests. Heading this effort is Edward Rosen, who previously helped fend off derivatives regulation. Rosen wrote and circulated a “confidential memo” to the ‘Treasury Department and leaders on Capital Hill’ making their agenda clear, the Times reported.

Rosen and his backers propose that derivatives be “traded in privately managed clearinghouses, with less disclosure,” according to the Times. The clearinghouse of choice for the big banks in Rosen’s CDS Consortium is ICE U.S. Trust, which is in turned regulated only by the Federal Reserve system.

Mr. Rosen’s confidential memo, dated Feb. 10 and obtained by The New York Times, recommended that the biggest participants in the derivatives market should continue to be overseen by the Federal Reserve Board. Critics say the Fed has been an overly friendly regulator, which is why big banks favor it.

Ironically, the Times notes, Treasury Secretary Tim Geithner, former president of the New York Federal Reserve, submitted a plan similar to Rosen’s, although Treasury officials stated the proposal was “independent.” Although Geithner vowed to make derivatives “more accountable”, critics say the emphasis on clearinghouses in the plan is a “major loophole” because ‘little disclosure would be required’ for any ‘customized’ swap.

It is clear that banks, who wanted their credit swaps to remain private, counted on the lack of transparency over Federal Reserve affairs to keep derivative affairs in the dark, thus enhancing their profit potential. It is further clear that Treasury Secretary Geithner intended to help them in that aim.

Senator Tom Harkin said the loophole “could be worth trillions and trillions of swaps,” blasting it as “a loophole big enough to drive a truck through.”

Derivatives are the bulk of the “toxic assets” TARP was set up to fight– and total an astounding $1.5 quadrillion in estimate.

REGULATING THE FEDERAL RESERVE

Bloomberg reported Friday that the “Fed’s Role in AIG May Be First Target of GAO Audit.” President Obama signed into law on May 20 a “Fed clause” giving the Government Accounting Office (GAO) the “power to examine the Federal Reserve’s emergency aid to specific companies, such as AIG, Bank of America Corp. and Citigroup Inc.”

The new law is designed to give the GAO access to records and people at the Fed’s Board of Governors in Washington as well as the 12 district banks, such as the New York Fed, which has been the government’s lead day-to-day supervisor of AIG.

Under what Bloomberg has called “war powers”, the Fed has issued “an unprecedented expansion of credit to nonbank financial firms… invoking emergency powers and doubling its assets the past year.”

The authority is notably only a half-measure. Bloomberg notes that it “doesn’t remove limits from a 1978 law that prohibits the GAO from peering into Fed activities involving monetary policy or discount-window loans to banks.”

Fed chairman Ben Bernanke stated he would have no objections to audits, so long as there was no examination of monetary policy. He stated clearly, “I certainly would resist any attempt to dictate to the Federal Reserve how to make monetary policy.”



Bloomberg makes a distinction from the “more intrusive” legislation introduced in the House by Ron Paul and in the Senate by Bernie Sanders. Those bills now have well over a hundred sponsors. Sanders was rebuffed by Ben Bernanke previously during TARP hearings after he demanded to know who the Fed lent money to and was told frankly, “No.”

Those bills, which haven’t made it past the initial stage of being introduced in Congress, would remove limits on GAO audits of the Fed and direct the agency to issue a report on the central bank by the end of next year.

Nevertheless, information about the meeting of the big banks shows that there is a desire to keep the Federal Reserve and its dealings quiet at a time when interest in the Fed’s actions is at an all-time high. Any move to bring accountability to that institution is positive, even if insufficient.

http://www.nytimes.com/2009/06/01/business/01lobby.html

http://www.bloomberg.com/apps/news?pid=20601068&sid=a.g.iJbCJq3U

http://www.prisonplanet.com/bankers-lobbied-secretly-to-keep-derivatives-under-federal-reserve-%e2%80%98oversight%e2%80%99-and-away-from-real-scrutiny.html