The Last Bastion Of A Dying Government

Dying Government

It’s political prosecution.

And coupled with it are gross internal violations of the law by the government itself.

Octonion I underscores how inflated grades during the credit boom contributed to more than $2.1 trillion in losses at the world’s financial institutions after home-loan defaults soared and residential prices plummeted. The U.S. is seeking penalties against S&P and its New York-based parent, McGraw-Hill Cos., that may amount to more than $5 billion, based on losses suffered by federally insured banks.

“During this period, nearly every single mortgage-backed CDO that was rated by S&P not only underperformed but failed,” Attorney General Eric Holder said yesterday at a news conference. “Put simply, this alleged conduct is egregious, and it goes to the very heart of the recent financial crisis.”

Uh huh.

And Moody’s and Fitch didn’t do the same thing?

Of course they did.

So why S&P?

Well, McClatchy says that Moody’s was dropped from the investigation in the summer of 2011 — right about the time S&P downgraded the US.

Investigator interest in Moody’s apparently dropped off around the summer of 2011, about the same time S&P issued the historic downgrade of the U.S. government’s creditworthiness because of mounting debt and deficits.

“After the U.S. downgrade, Moody’s is no longer part of this,” said the person familiar with the case, who demanded anonymity in order to speak freely about the matter.

Political prosecution is nothing new.  Nor is political “protection.”  We’ve seen so many examples since 2007, including Citibank which had its former Chief Risk Officer admitunder oath before the FCIC that it knew it was selling crap securities into the market along with myriad other examples, that trying to list all of them would run to thousands of examples.

Never mind that the Department of Just-us has said on the record that part of their consideration when it comes to filing criminal charges is whether there would be a market disruption should a given firm be charged.

This is a bald, public admission that if you want to commit murder you should first be employed by a big bank and then have them solicit it, since the firm won’t be prosecuted since it would “damage confidence” and other such twaddle.

In the meantime RBS is allegedly paying a “big” penalty for “manipulating LIBOR.”

Yeah, right.  Where are the criminal charges?

I’m not impressed.  More to the point, let us remember that Bernanke himself testified under oath before Congress in March of 2007 that problems in the subprime market were “likely to be contained.”  And he, along with the rest of the FOMC, was in possession of superior information.

Indeed, not only was the FOMC in possession of superior information let us not forget that in 2007 when the discount rate was cut the recently-released transcripts show that Tim Geithner was in fact communicating with banks about the impending cut despite his claim otherwise.

Was he prosecuted?  No, he was appointed Treasury Secretary.

Nor was Bank of America or Ken Lewis, its CEO at the time, prosecuted.  They were rescued instead.

Everyone is telling us these days that the economy and markets are “mended” and that we should all be buying stocks and “investing in America.”  The truth is something different — there is a cadre of robbers and they’re both on Wall Street and in the government itself.  They will not only use unfair competitive means to screw you, when push comes to shove they will use the government to come after with you with political prosecution should you not do things “their way.”

The facts are that there’s no reason for anyone to engage in entrepreneurial activity any longer.  It was bad enough in the 1990s when I ran MCSNet and we had telcos doing things that appeared to be blatantly illegal under long-standing tariff rules prohibiting discriminatory pricing — but we couldn’t get anyone interested in enforcing the law.

Now it’s far worse — both Egan Jones and S&P, who have had the audacity to tell the truth (even if S&P started doing so late) have both been attacked by the government where the power and revenue that S&P had in the first place came from a effective government monopoly grant that had, after any reasonable amount of consideration, no rational purpose in the first place.

I’d be disgusted with this but I’m well-beyond the point where any sort of act by our government surprises me any longer.  After turning a blind eye to massive money laundering along with supplying guns to Mexican drug gangs rather than prosecuting both nothing shocks me any longer.

As the fiscal singularity toward which we are accelerating becomes more-evident in the window expect even more lawless behavior by those in Washington.  While I still believe there is time for a peaceful rescue of what once was America, with each passing day that candle dims in the window of our nation.

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