FedUpUSA

Archive for June 16th, 2010

By Karl Denninger

The same problem is why we have a spewing oil well in the Gulf.  MMS rubber-stamped well changes without engineering justification, which proved to be the proximate cause of the well control failure.  MMS’ job is to regulate, and instead they were polishing the knobs of BP executives who wanted a “faster and cheaper” solution to an engineering problem – irrespective of the fact that it was both less safe and, if the testimony yesterday is to be believed, in violation of good engineering standards for what was being done.

MMS approved the permit changes anyway.

This is no different than Greenspan retroactively lobbying to make legal a merger he approved knowing it was against the law, with that retroactive approval coming in the form of Gramm-Leach-Bliley and the destruction of the Glass-Steagall act.

It is no different than Hank Paulson going to the SEC and “asking” for the leverage limits to be removed from investment banks.

It is no different than the SEC and FBI refusing to investigate and prosecute massive securities and bank fraud in securitization markets.  Specifically, hundreds of billions of dollars in paper was sold claiming that every mortgage was taken with a good recordable deed held in trust, in when in fact many of them were endorsed in blank which is unlawful to hold in a trust in most states, including the states where most of those securitizations are filed!

It is no different from OTS conspiring actively with IndyMac bank executives to backdate deposits, thereby making the bank’s balance sheet look healthier than it really was.

And it is no different than Tim Geithner, Congress and others threatening FASB to force them to allow banks to literally lie about  current values of assets – that is, to claim “value” that does not, at present, exist.

The economic mess we are in now is not an accident, just as the BP blowout was not an accident.

Both occurred due to the willful and intentional misconduct of public officials who are immunized from prosecution and civil suit as a consequence of being government employees and despite now having the consequences of such failure in our faces we the people continue to refuse to demand that both sanction and a private right of recovery against said agencies and individuals be written into these regulatory statutes right now.

Until this changes there will be no effective “reform.”

Period.

This is quite surprising.  No, really, it is.  Hoocoodanode?

Is your representative one of the 8?  Follow the money.

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The Office of Congressional Ethics is investigating eight lawmakers who held fundraisers within 48 hours of a major House vote on a Wall Street reform bill or received substantial donations from business people with a financial stake in the bill, according to congressional sources and letters.

The probe is focused on whether the timing of accepting the campaign checks created an unacceptable appearance of a conflict, according to sources familiar with the investigation and letters sent by the OCE to lobbyists requesting information. The OCE’s spokesman declined to comment for this article, citing the ongoing nature of the investigation.

The office is scrutinizing five Republicans and three Democrats, a diverse group that includes a conservative, Rep. Jeb Hensarling (R-Tex.), and a liberal member of the Congressional Black Caucus, Rep. Melvin Watt (D-N.C.).

Seven of the eight members held fundraisers for their reelection campaigns on Dec. 9 or Dec. 10 — just before the House voted Dec. 11 in favor of a bill to make broad changes in how Wall Street and financial firms are regulated, according to a Washington Post analysis.

Rep. Tom Price (R-Ga.) held a “Finance Services luncheon” at the Capitol Hill Club on Dec. 10. On the same day, a lobby firm with financial clients, Davis & Harman, hosted a fundraising breakfast for Rep. Earl Pomeroy (D-N.D.) at its Pennsylvania Avenue offices.

Watt held a Dec. 9 fundraiser and soon after withdrew a proposal he had introduced to subject auto dealers to tougher regulations, according to congressional records. The fundraiser generated checks largely from finance groups, including Goldman Sachs and the Investment Company Institute. In an interview, Watt said he will answer the OCE’s questions and declined to comment on the investigation.

The House ethics manual instructs members to steer away from accepting campaign donations if the timing creates an unacceptable appearance of a conflict of interest.

The other members under review are Republicans John Campbell of California, Frank D. Lucas of Oklahoma and Christopher Lee of New York and Democrat Joseph Crowley of New York.

The Daily Bail