Saturday, Sep 04, 2010
James Galbraith excellent piece
Greg Pytel: James Galbraith: "Fraud at the root of the financial crisis"
James Galbraith makes it clear: the current financial crisis is a result of a monstrous banking scam. The message is getting to the top.
Posted by ant @ 09:06 AM (738 views) Add Comment
5 Comments
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1. thetidewillturn said...
Surely a banking and POLITICAL scam???
"There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those PUBLIC OFFICIALS who failed the public trust." - couldn't agree more - stable door/ bolts etc but hey at least it will keep the newborn foal in!
Three parties are responsible for this mess :-
1. The respective Governments around the globe who failed to regulate properly because as long as the money kept coming in they were happy and didn't really want to know where it came from and in the case of the UK lulled the public into a false sense of security by brainwashing them that there would be no more boom and bust. Asleep on the job (see quote below) I'm amazed we've allowed them to keep their pensions.
2. Almost all banks (please note not all) who failed to spread risk and massively overextended themselves in certain products/sectors requiring the "blackmailed" bailing out the article refers to by Government when it all went wrong. (as I type I can hear some Government sponsored Natwest propoganda about "helpful banking" on the TV behind me!!!)
3. The public ie all of US for believing the boom was a stable state (see 1 above for part of the cause) and for participating in what was to anyone with half a brain an obvious asset bubble....oh and finally for electing the people in 1 above and in the case of the UK for believing that song they played in 1997 that "things can only get better".
Quote:-
"I thank you for the contribution you make to the UK economy" - Gordon Brown (last ever Labour Prime Minister ) on opening Lehman Brothers Headquartes in London in 2006
2. cat and canary said...
"3. The public ie all of US for believing the boom was a stable state (see 1 above for part of the cause) and for participating in what was to anyone with half a brain an obvious asset bubble....oh and finally for electing the people in 1 above and in the case of the UK for believing that song they played in 1997 that "things can only get better"."
> I never believed the boom was stable
> I never bought a house, on the grounds of getting myself in too much debt.
> I never bought into believing the asset bubble was a decent way to make a living
> I never elected these political monsters, i choose to vote for whichever party I deem to be the least corrupt.
Now I pay in tax, BoE engineered inflation, lack of savings interest, a continued out of control housing market.
Im quite sure im not alone.
3. clockslinger said...
Those behind 1 & 2 are the same. As to 3, it doesn't matter one iota what you think or what you did, you can be made to do whatever those in charge of the banks and political system want, for sure.
4. icarus said...
Fitch credit-rating agency found financial fraud in every mortgage package it examined, packages that made Wall Street rich and powerful enough to gain bailouts to use for buying up yet more politicians and media influence to tell people how necessary Wall Street is for the economy. Where do you even start when you look into fraud? Harry Markopolos made a detailed submission to the SEC in 2005 with 29 'red flags' suggesting that Madoff's operation was completely fraudulent. Why was nothing done - how can the regulator be 'asleep at the wheel' when somebody's bellowing in his ear?
It's like Hitler's "if you tell a big enough lie people will believe it because they're accustomed only to little fibs". If the system is completely fraudulent people won't believe such a big fraud is possible and fraud becomes the new normal.
Here's a good one. Lehman was fed to the dogs because it owed more than its assets were worth (correct) but the other banks were bailed out because all they had was a "temporary liquidity problem" (nonesense - trillions of dollars-worth of it). Those banks were set free to 'earn their way out of debt' by ripping off everybody else. That was the biggest fraud of all.
5. ant said...
@icarus: great comment!