Claire McCaskill: Synthetic CDOs Are Not Like Corn

One of the highlights of today’s hearing on Goldman Sachs (aside from my Senator saying “shitty deal” over and over, was Claire McCaskill’s insistence on referring to Goldman Sachs’s Synthetic CDOs as gambling. (She did this earlier with another of the Goldman execs, after which John Ensign defended his state’s biggest industry, pointing out that everyone knows the odds are gamed to make sure casinos win, whereas with finance, the House keeps changing the odds after bets have been placed.)

But don’t worry. Lloyd Blankfein tells us none of this is immoral.

New Pecora: Financial Crisis Inquiry Commission Discussion Thread

Alright, this is a hot button issue and folks seem to want a place to chat on the proceedings in the Financial Crisis Inquiry Commission with the Masters Of The Universe.

It is live on CSPAN and here is a web link to streaming CSPAN coverage.

Discuss away!!

Obama Appoints Fox To Evaluate Terror Watchlist Henhouse

fox-and-chicken-richardson-300x288Barack Obama, doing his best to make Dick Cheney’s questions about leadership look rational, has assigned John Brennan to conduct the Administration’s ballyhooed investigation into the claimed failure of the terrorist watchlist program in the Christmas Fruit Of The Loom Bomber incident.

What’s wrong with this picture? Throw a dart in any direction and you will find something.Politico gives the unsettling details:

President Barack Obama promised a “thorough review” of the government’s terrorist watch-list system after a Nigerian man reported to US government officials by his father to have radicalized and gone missing last month was allowed to board a Northwest Airlines flight to Detroit that he later tried to blow up without any additional security screening.

Yet the individual Obama has chosen to lead the review, White House counter-terrorism adviser John Brennan, served for 25 years in the CIA, helped design the current watch-list system and served as interim director of the National Counterterrorism Center, whose role is under review.

In the three years before joining the Obama administration, Brennan was president and CEO of The Analysis Corporation, an intelligence contracting firm that worked closely with the National Counterterrorism Center and other US government intelligence, law enforcement and homeland security agencies on developing terrorism watch-lists.

“Each and every day, TAC makes important contributions in the counterterrorism (CT) and national security realm by supporting national watchlisting activities as well as other CT requirements,” the company’s Web site states.

According to financial disclosures forms released by the White House, Brennan served as president and CEO of TAC from November 2005 until January 2009, when Obama named him to the White House terrorism and homeland security job. The disclosures show that Brennan reported earning a $783,000 annual salary from the Analysis Corporation in 2008. ….

One former senior intelligence official told POLITICO it is “unsavory to see Obama put Brennan in charge of a review of this matter since it is possible that NCTC or TAC could have failed in their responsibilities.”

Oy. “Unsavory”? Ya think? This is akin to a law school final exam where you try to identify all the conflicts of interest in the given situation. But there is not enough time to hit them all. Do not fret, the crack White House ethics team has looked at Brennan and determined Read more

NYC DA Morgenthau Blasts Feds On Financial Investigations

imagesThe Wall Street Journal has a fascinating and free ranging interview of New York City District Attorney Robert Morgenthau in today’s edition. Morgenthau, as you may know, is the real live template for the original DA on NBC’s Law & Order, Adam Schiff. Still young at age 90, Morgenthau will retire next Thursday after over 35 years as the chief District Attorney for New York.

The entire piece is well worth the read, but of particular interest, in light of the financial meltdown we have just lived through, and may yet again the way the Wall Street Banksters are cranking their same old casino back up, is the broadside Morgenthau lands on the Federal oversight and investigation of financial fraud.

These big criminal forfeitures support his $80 million budget, but they are also the product of Mr. Morgenthau’s unique legacy among district attorneys: his national and global reach. Such resources have allowed him to prosecute complex international business cases. Combined with his jurisdiction in the world’s financial capital, he has become in a sense the world’s district attorney.

Thomas Jefferson would have liked this bastion of local power as part of a federal system, but it is not always celebrated by federal officials. “I’m sure it [annoys] the hell out of them,” Mr. Morgenthau observes.

The feeling is mutual. The D.A. says that while he’s had to deal with the federal bureaucracy for decades, “it has just gotten worse” and “they ought to burn it down and start all over again. It’s extremely worrisome.”

For example, he says, “We had a lot of trouble with the Treasury Department” in his recent case against Credit Suisse, in which the bank coughed up $536 million and admitted to aiding Iran and other rogue nations in violating economic sanctions. The feds, as they did in a similar settlement with the British bank Lloyds, wanted only civil penalties.

Mr. Morgenthau would have none of it. He says Credit Suisse had been “stonewalling us” and only struck a deal after he threatened to bring criminal charges to a grand jury. “We would have gotten an indictment,” he says. (emphasis added)

It is a great snapshot of a one of a kind force of legal nature, Robert Morgenthau, and there are several other interesting topics; I recommend reading the entire article.

As to the portion of Morgenthau I quoted though, “Feds only wanted civil penalties and not interested in using criminal charges” to crack open the case and bring accountability for the Wall Street Banksters; sound familiar? It should, it is the exact same conclusion that blew the mind of SDNY Judge Jed Rakoff Read more

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