Captured Congress, SEC and Financial Media Enabled Economic Meltdown

             I usually harken to George Friedman’s latest Stratfor Geopolitical Intelligence report because the analysis is typically well thought out, clearly articulated and often insightful.  But when he recently wrote: “Recessions occur when, as is inevitable, inefficiencies and irrationalities build up in the financial and economic system,” he sounded like just another Wall Street apologist aping the mainstream financial media penchant for using weasel words like inefficiencies and irrationalities to characterize the deeds of wrongdoing that have finally brought the world’s finances it its knees.

             In eschewing its once noble calling to speak truth to power as the Fourth Estate, today’s captured corporate media has become our 21st century fifth column, abusing the public trust from within by either failing to investigate and accurately report evidence of massive unlawful conduct, or on the rare occasions it does, by sugarcoating criminal deeds with words more aptly suited to boyish pranks– shenanigans, hijinx, mischief, monkeyshines and foolishess– rather than call a spade a spade and honestly label them the acts of consummate lying, cheating and stealing they are.   Irrational exuberance and moral risk, indeed.

              Friedman also doesn’t seem to realize that the crisis now decapitating the world’s economies didn’t have to happen– would not in fact have happened if those charged with protecting the financial system and the investing public— namely Congress in general and the Securities and Exchange Commission in particular— had simply done their jobs, upheld their oaths, and seen to the enforcement of laws already on the books, instead of consistently looking the other way; or worse still, directly aiding their campaign contributors, benefactors, patrons, employers and future employers by contemptible acts of public disdain such as repealing Glass Steagel, allowing Reg Sho’s grandfathering of billions in counterfeit shares, scuttling the systemic market protections provided by the uptick rule, and encouraging $62 Trillion in credit default swaps, insurance contracts in all but name, that would be void as against public policy for lack of “insurable interests” if called by their rightful name, as the courts should some day do.

             While today’s crisis had lots of chefs, the cake could never have been baked if certain of those in government had not unflinchingly aided the finance and banking industries in zero-sum gaming the system.  Cloaked in the Gekkoesque doublespeak of deregulation, innovation, self governance and market efficiency, they fostered a free market system in which the only thing free about it was that insider participants (read banks, hedge funds, broker dealers and their minions) felt free to pillage and plunder at will; a system steeped in secrecy, cooked books, phony opinions, reckless ratings, ludicrous leverage, off balance sheet conduits, and zero accountability; a greedy, arrogant, amoral, some say sociopath culture of corruption, unfettered by the fear of ever being caught, having to admit wrongdoing, or suffer any meaningful punishment. 

             And why not, knowing their misdeeds would also be zealously overlooked or glossed over by a feckless financial media that dutifully ignored or proclaimed wrongs like naked shorting, stock counterfeiting, failure to deliver and options market maker fraud, mere mirages, while sucking up to billionaire short-seller hedge fund finaglers and ridiculing people like Overstock CEO Patrick Byrne, who valiantly tried to sound the warning.   

             This collective dereliction of duty (some might say treason, given the harm that has– and is yet to befall us) further emboldened the wheeler dealers in an already historically suspect system to make market manipulation and fraud not just the occasional aberration, but the very modus operandi and profit leitmotif.  Of late, they’ve even gone so far as to naked short the gold and silver markets along with $2 trillion in US Treasuries! 

            Over the past ten years, increasing numbers of financial experts, economists, academics and market reform advocates like Byrne, Bob O’Brien, Dave Patch, Robert Shapiro and Susan Trimbath, along with tens of thousands of individual investors who’ve seen their retirement savings swiped in broad daylight, have repeatedly complained, cajoled and pleaded with Congress, the SEC and their industry owned and controlled accomplices at the ironically named Depository Trust Clearing Corporation to stop the carnage—  but to no avail.  (The DTCC’s latest attack on investors which they call dematerialization, seeks to do away with all paper stock certificates, the only true evidence of share ownership, to be replaced by a “trust us” electronic record, known only to the  DTCC).  

            While a rare few in Congress— notably Senators Grassley (IA), Specter (PA), and Sanders (VT)— seem to comprehend just how crooked, unfair and untrustworthy our markets and their regulators have become, one wonders how those who’ve charted the SEC’s course over the past 8 years could have any doubts about it!   As the agency explicitly created to first and foremost, uphold and protect the integrity of the markets and the best interests of the investing public, they have, with unceasing devotion, in the eyes of most informed observers, done the exact opposite– enabling wrongdoers to operate with almost total impunity.  A bold faced license to steal. 

            As with the O.J. murder trial years back, there is a mountain of evidence of wrongdoing, but the jury in this case, Congress, the SEC, and the financial media have remained steadfastly deaf, dumb and blind to it.  

            The NY Times just reported that  both the SEC and FBI seemed “taken by surprise” by former Nasdaq lead market maker and NASD Chairman Bernard L. Madoff’s alleged $50 billion fraud, while harmed investors are incredulous that the premier regulatory body and protector of the investing public could have missed such a towering Ponzi scheme.  Authors of the NY Times “Your Money” column added their tin dime claiming “Thankfully, outright fraud is pretty rare,” evidencing once again that at the paper of record, journalism itself is in a state of permanent recession. 

 

http://digg.com/Congress%2C+SEC+and+Financial+Media&submit=Search&section=all&type=both&area=dig&sort=score

 

 

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2 Responses to Captured Congress, SEC and Financial Media Enabled Economic Meltdown

  1. mhelburn says:

    There is mounting evidence that the financial crisis was created. Why would anyone do that? Who would profit and who had enough infludence to bring it about?

    Read the article by Michael Lewis “The End” wherein he says that Goldman Sachs and Deustchebank were counterfeiting bonds.

    Everything that has transpired since the Republicans realizled that they were going to lose the election appears to have been done to cover up the fraud. http://www.velvet revolution delves into the election fraud. Were it not for velvet revolution, things may have turned out different.

    Up until the time that the administration still believed that they could take the election, they were saying that the economy was strong. When it became apparent that they couldn’t rely on previous methods to control the voting outcoome, the administration started a course of coersion much like they did with weapons of mass destruction. They were bandying about martial law threats and having put the pen to paper that would allow that, they were prepared.

    First they wanted to collect all the “toxic paper” in the TARP, but that isn’t happening and instead banks have been given money to boster their financials instead of changing the accounting rules that would have done the same thing. Changing the accounting rules would have helped those who are long the housing market and the insurers of the CDS that have huge liabilities insuring the mortgages in an unregulated , basically gambling scheme. AIG gets money.. all determined by the Fed and Treasury run by a former CEO of Goldman.

    After losing the election and facing a new administration who will surely look into the whole thing, they want to take money and give it to hedge funds to disperse the bonds.

    Now Paulson is saying that they couldn’t do anything about the bankruptcies that took down Lehman, but having not put in an emergency order to change the accounting rules, this doesn’t even have credibility.

  2. solomon740 says:

    Bravo!

    You’ve nailed it.

    Until DTCC and SEC do something about naked short selling, the stock market is nothing but a crap shoot. If the criminals choose your stock, you lose. Game over.

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