What Past Presidents Thought About Big Banks

Stephen D. Foster Jr.
June 3, 2012
http://www.addictinginfo.org/2012/06/03/what-past-presidents-thought-about-big-banks

The Occupy Wall Street protesters have been standing against the big banks for a few months now. They are protesting the greed, irresponsibility, and fraud that banks like Bank of America, Citigroup, and JPMorgan Chase commit on a daily basis. The big banks of Wall Street caused an economic collapse. As a result of that collapse, Americans suffered job losses and money losses while the banks got a bail out on the taxpayer’s dime. Not one banker has been arrested for stealing billions of dollars from the American people.

Throughout American history, big banks have sought to fleece the people and control government. They have a caused economic turmoil, social injustice, war, hunger, and crises too numerous to mention, all because of greed and a lust for absolute power. Many American Presidents have risen to challenge them and hold them accountable for their actions. So which Presidents would cheer on Occupy Wall Street? What did past Presidents think about big banks? I’ll let the quotes speak for themselves.

1. “Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”
~John Adams

2. “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.”
~Thomas Jefferson to Albert Gallatin, 1803.

3. “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” ~James Madison

4. “I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. … You are a den of vipers and thieves.”
~Andrew Jackson, 1834, on closing the Second Bank of the United States

5. “I have two great enemies, the southern army in front of me and the financial institutions, in the rear. Of the two, the one in the rear is the greatest enemy….. I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war.”
~Abraham Lincoln

6. “Whosoever controls the volume of money in any country is absolute master of all industry and commerce… And when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
~James Garfield (assassinated within weeks of release of this statement during first year of his Presidency in 1881)

7. “Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day.”
~Theodore Roosevelt, April 19, 1906

8. “A great industrial nation is controlled by its system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world– no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.”
~Woodrow Wilson

9. “We had to struggle with the old enemies of peace-business and financial monopoly, speculation, reckless banking, class antagonism, sectionism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know that Government by organized money is just as dangerous as Government by organized mob. Never before in history have these forces been so united against one candidate as they stand today. They are unanimous in their hatred for me – and I welcome their hatred. I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second administration that in it these forces met their master.”
?~Franklin Delano Roosevelt, Speech at Madison Square Garden

10. “All problems, depressions, wars, disasters, assassinations, all of them were planned, caused, instigated, and implemented by the International Bankers and their attempt to establish a central bank in every country in the world, which they have now done, thanks to corrupt politicians who have been bought and paid for. This is all you need to know about the history of the world.”
~John F. Kennedy

For more than a decade now, banks have brought this country to near economic ruin. They have successfully lobbied to repeal key regulations that have prevented them from employing the harmful tactics they use to fleece the American people in the name of profit. The big banks bet against America and then expect taxpayers to bail them out when they fail. They then gamble with that money and pay their executives millions. It’s wrong and should not be tolerated. The above Presidents knew how dangerous and harmful big private banks can be. Presidents like Andrew Jackson and Theodore Roosevelt fought hard against the “den of vipers,” and the “invisible government,” and FDR had finally put the banks in their place during his own Presidency. These Presidents would most certainly stand with the Occupy protesters and would fiercely call for breaking up and regulating the big banks. The banks have grown powerful and corrupt once again and it will take another great President to rein them in. The question is, who will be that great President?

After the JPMorgan Chase mess

After the JPMorgan Chase mess, we must bust up the big financial houses
Peter Morici
May 11, 2012
http://www.foxnews.com/opinion/2012/05/11/after-jpmorgan-chase-mess-must-bust-up-big-financial-houses

JPMorgan Chase’s $2 billion loss from betting on corporate bonds will embolden advocates of the Volcker Rule—a provision of the 2010 Dodd-Frank law that will prohibit banks from trading on their own account. Unfortunately for federal regulators, trading in securities is essential to modern banking, and busting up the big Wall Street financial houses may be the only way to better ensure financial stability.

The Glass Steagall Act of 1933 separated commercial banking—taking deposits and making loans to finance businesses, homes and the like—from investment banking—selling stocks, bonds and other securities, and making markets for investors to buy and sell those assets quickly.  That separation was repealed during the final years of the Clinton administration, and Wall Street institutions like J.P. Morgan now perform both roles.

Modern commercial banking simply won’t tolerate such an absolute separation, because banks cannot finance all the demand for loans from deposits. In recent decades, too many savers have found they can earn higher returns than at the bank by investing in money market funds, bond funds and directly buying bonds.

Regulators have been working for the last two years to define the difference between hedging and gambling. They can’t.

Consequently, banks make loans, issue credit cards and the like, and bundle borrowers’ promises to pay into securities and sell those to bond investors. Fannie Mae and other government backed housing banks don’t take deposits at all, and get virtually all their financing selling mortgage-backed securities.

Also, regional banks can buy securities backed by the loans of banks in other regions to mitigate the risks inherent in serving a local economy. Kansas banks are just too dependent on the price of corn, and do well to hold some debt whose repayment depends on the vitality of other regions and industries.

Of the many activities performed by large investment banks—essentially, the big financial houses on Wall Street like JP Morgan —making markets for securities, so that investors can buy and sell when they like, is most essential for making the U.S. and broader global economies work.

Without assurance bonds can be sold when liquidity is needed, many investors simply would not buy mortgage-backed securities or would demand much higher interest rates, making the cost  ordinary folks pay on home mortgages prohibitively high. The same reasoning applies to the availability and cost of business, auto loans and credit card debt that create jobs.

Investment banks must buy and sell securities with their own capital, “on their own account,” to ensure liquidity and hedge, in other words to insure their positions against losses. The Volcker Rule would permit these activities but ban simple gambling—the latter is what cost JPMorgan Chase at least $2 billion in recent weeks.

The basic problem is that regulators have been working for the last two years to define the difference between hedging and gambling, and can’t. Either the rules would be too severe and shut down banking, or would permit reckless risk taking that could take down a huge bank, and potentially put the taxpayer on the hook to pay off depositors through the FDIC.

Commercial banks are essential to the smooth function of a market economy—capitalism runs on credit much as air conditioning runs on electricity—and without stable commercial banks the economy can’t grow.

The simplest solution is to once again separate commercial and investment banking, as was required by the Glass Steagall Act, with some modest exceptions.

Let banks take deposits and make loans, and sell those to investors through investment banks who would do the bundling of loans into securities. Even let commercial banks own securities backed by loans in other regions to balance default risk, but leave the business of making markets and trading to separate investment banks.

Commercial banks would continue to be regulated and government insured by the FDIC, and investment banks would be free to trade and take risks with their stockholders capital. If the latter failed from foolish trades their investors would lose their capital, but the taxpayer would not be on the hook.

Seven Day Plan to Hold Wall Street Accountable

A Seven Day Plan to Finally Hold Wall Street Accountable
New evidence points to illegal behavior. Prosecution is the only way to keep that behavior from continuing.
Bruce Judson
Monday, 03/19/2012
http://www.newdeal20.org/2012/03/19/a-seven-day-plan-to-finally-hold-wall-street-accountable-74581

It’s now a near certainty that Wall Street executives committed felonies.

The recently released audits of robo-mortgage activities by the Office of the Inspector General of the Department of Housing and Urban Development (HUD) details shocking behavior at the five banks constituting the Federal Housing Administration’s largest mortgage servicers. At Wells Fargo, management quashed a midlevel manager’s study of the foreclosure process as negative results began to emerge, and it gave an individual whose last job had been in a pizza restaurant the title of “vice-president of loan documentation” to facilitate robo-mortgage signing. Bank of America evaluated employees on the volume of foreclosure affidavits produced. JP Morgan Chase gave individuals titles such as “vice-president of Chase Home” where “the titles were given by Chase for the sole purpose of allowing individuals to sign documents and came with no other duties or authority.” Citigroup and Ally similarly engaged in seemingly illegal practices.

Under federal law, the knowing filing of a false affidavit with the court is a felony offense of perjury, punishable by a prison term of up to five years. An individual violates laws against perjury whether he or she personally appears in court and swears to a false statement or provides the court with a false affidavit. Individual states have their own perjury laws, which were undoubtedly violated as well. The HUD report also suggests that individual banks may be guilty of obstruction of justice and the criminal violation of the False Claims Act for filing insurance claims without following HUD requirements.

Since the start of the financial crisis, federal and state officials have been struggling to change Wall Street behavior. To date, every effort has failed miserably, and the weak enforcement provisions of the robo-mortgage settlement are unlikely to meaningfully change this dynamic. Government officials have also relied, with a very few exceptions, entirely on civil enforcement when criminal laws appear to have been egregiously violated.

The greatest moral hazard now confronting the nation is what appears to be increasingly brazen criminal activity by financial industry executives. With each decision not to prosecute, Wall Street executives justifiably conclude that they are immune to the rules. As a result, it appears that Wall Street criminal activity is increasing in frequency and severity, as opposed to the reverse. The activities surrounding the collapse of MF Global are one example.

So what can be done about it? We can change the behavior in the financial service industry for a full generation in just seven days. This plan may seem to be tongue and cheek, but it hearkens back to a similar action in the era of the Great Depression. In the final months of Herbert Hoover’s presidency, the Senate Banking Committee began an investigation into the causes of the Great Crash of 1929, and a young prosecutor named Ferdinand Pecora was appointed as Chief Counsel. Subsequently, the Roosevelt administration conveyed to Pecora that “the prosecution of an outstanding violator of the banking law would be the most salutary action that could be taken at this time. The feeling is that if the people become convinced that the big violators are to be punished, it will be helpful in restoring confidence.” Ultimately, this investigation, which came to be known as the Pecora Commission, led to the indictment of one of America’s most prominent financiers; demonstrated widespread self-dealing in the financial sector; and, as noted by historian Alan Brinkley, generated “broad popular support” for Roosevelt’s reform agenda, including the creation of the SEC and the Glass-Steagall Act.

My seven day plan is based on a simple premise: When criminal laws are egregiously violated, the guilty parties should face appropriate punishment. Here’s the plan:

Day One: Read the HUD Inspector General’s reports and the public records of past mortgage foreclosure cases from across the nation.

Day Two: Meet with the team at the Office of the Inspector General at HUD that prepared the audits. Obtain the names of all the bank officials, lawyers, and notaries whose behavior, as cited in the audit reports or otherwise known to the investigators, represent clear and unquestionable criminal violations. Add to this list other individuals who have similarly demonstrated or testified to behavior unquestionably constituting criminal acts, as indicated by the public records of the mortgage foreclosure cases reviewed in day one.

Day Three: Indict all of the individuals on the list compiled on day two.

Day Four: Indict banks and financial institutions on criminal charges where criminal behavior by employees (as demonstrated by day three indictments) appears to be endemic. The Justice Department guidelines for prosecuting firms include: (1) the pervasiveness of such activity, (2) the compliance procedures in place, (3) attempts by the corporation to end bad behavior, and (4) cooperation with federal investigators. In 2008, the Justice Department adopted a policy of accepting “deferred prosecutions,” involving agreements to change corporate behavior without damaging innocent third parties through prosecution.

Corporations receive the benefits of “legal persons,” as demonstrated by Citizens United. But they must also bear the responsibilities of these privileges. A reading of the HUD reports, and other public records, suggests several banks should clearly be prosecuted.

Day 5: Discuss plea bargains with indicted lower-level officials in return for cooperating in investigations of higher-level officials.

Day 6: Consider plea bargains with indicted banks, which require the removal of all remaining officers and directors who were serving when egregious criminal activity occurred, as well as senior officials who were in a position to exercise appropriate supervisory responsibility but chose to look the other way.

Day 7: Indict any senior Wall Street officials implicated by new cooperative testimony resulting from activities on day five. Adopt and announce a policy that future criminal violations will be prosecuted in a similar fashion.

What is particularly disturbing is that a look at the evidence already in the public domain (much less what investigators already know) shows that none of the actions discussed above are entirely absurd. The purpose of prosecution not simply punishment. It acts to deter further illegal activity and to restore public confidence in our system of governance. The nation desperately needs both of these benefits today.

Moreover, these ongoing, almost certainly criminal activities are ultimately dangerous threats to our economy, the success of capitalism, and our democracy. In his column on MF Global, Joe Nocera noted that “customers need to be able to trust” the laws protecting their money. “Otherwise, the markets can’t function.”

Today, as in the era of FDR, we must send a message to the financial community that illegal behavior will not be tolerated. By prosecuting blatant felonies now, we will deter future misbehavior and begin the process of recreating a fair society where equal justice prevails.

Bruce Judson is Entrepreneur-in-Residence at the Yale Entrepreneurial Institute and a former Senior Faculty Fellow at the Yale School of Management.

Foreclosure firm has Halloween party dressed as depressed homeowners

Andrew Jones
Saturday, October 29, 2011
http://www.rawstory.com/rs/2011/10/29/foreclosure-firm-has-halloween-party-dressed-as-sad-homeowners

Based on their Halloween costumes from last year, it would not be surprising if employees from foreclosure firm giant Steven J. Baum dressed up this year as homeowners who’ve lost their property thanks to firms like them.

In a column from The New York Times Joe Nocera, a former employee of the Baum firm revealed that his former co-workers did indeed dress as downtrodden individuals with signs representing their depressed state. The ex-Baum employee, who Nocera kept anonymous, told the Times reporter that she wanted to show how the firm had a “cavalier attitude” towards foreclosing people’s homes.

After getting word of Nocera’s story, the firm vehemently defended itself, saying the column was “another attempt by The New York Times to attack our firm and our work.”

The Baum firm represents virtually all the prominent mortgage lending Wall Street giants, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

Newsflash: Banks Out to Screw Customers

From the NYT:

Bank of America, the nation’s biggest bank, said on Thursday that it planned to start charging customers a $5 monthly fee when they used their debit cards for purchases. It was just one of several new charges expected to hit consumers as new regulations crimp banks’ profits.

Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month, while SunTrust, another regional powerhouse, is charging a $5 fee.

The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. The rule, known as the Durbin amendment, after its sponsor Senator Richard J. Durbin, is a crucial part of the Dodd-Frank financial overhaul law.

Until now, the fees have been 44 cents a transaction, on average. The Federal Reserve in June agreed to cut the fees to a maximum of about 24 cents. While the fee amounts to pennies per swipe, it rapidly adds up across millions of transactions. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.

And even though retailer groups had argued that lower fees were important to keep prices in check, consumers were not likely to see substantial savings. In fact, they are simply going to end up paying from a different pot of money.

Or as Jamie Dimon, chief executive of JPMorgan Chase, put it after passage last year of the Dodd-Frank Act, “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger.”

Chase is now charging customers for a paper statement. It also, like many other banks, scrapped its debit card rewards program. And customers that Chase inherited from Washington Mutual no longer enjoy free checking accounts.

The bank is also exploring a number of other fee increases, including for online banking, according to people with knowledge of the matter.

Bank of America’s debit fee is steeper than most of its competitors’, reflecting the broader challenges the bank is facing after the financial crisis. The bank has introduced an online-only account that charges customers for doing business at a local branch. It also plans to apply its new debit card fees to anyone who uses the card to make recurring payments like gym fees or cable bills.

Citibank is one of the few that said it would not introduce a charge for debit card use. “We have talked to customers and they have made it abundantly clear that ‘if you charge me to use my debit card, I would find that very irritating,’ ” said Stephen Troutner, head of Citi’s banking products. Still, the bank has made it more difficult to qualify for free checking, among other moves.

Earlier this year, Wells Fargo estimated that the Durbin rules would cost the bank $250 million in revenue every quarter. It hopes to make up half that gap with a variety of new products and customer fees, including the monthly debit card fee of $3. The change is part of a “pilot program” the bank will begin on Oct. 14 in five states across the country, including Washington and Georgia. As of Saturday, the bank will discontinue its debit card rewards program.

Meanwhile, HSBC said that it recently increased an A.T.M. fee — to $2.50 from $2 — for certain customers when they used a competitor’s A.T.M. It also recently introduced a debit transaction fee of 35 cents, though the first eight transactions are free.

And at TDBank, customers will now have to pay $2 for using A.T.M.’s outside their network.

“Durbin essentially moves the cost of debit away from merchants, and now it’s more focused on consumers,” said Beth Robertson, director of payments research at Javelin. “There are all sort of things happening where banks are saying, where can we put fees in place for our service to generate revenue or how can we reduce our costs?”

Over the last few years, consumers have increasingly shifted their spending to debit cards from credit cards, in large part to curb their spending. But some analysts predicted that the new fees could prompt consumers to return to credit cards — a more lucrative alternative for the banks...

Banks to Make Customers Pay Fee for Using Debit Cards
TARA SIEGEL BERNARD and BEN PROTESS
September 29, 2011
http://www.nytimes.com/2011/09/30/business/banks-to-make-customers-pay-debit-card-fee.html

Illegal Foreclosure Epidemic

Robo-signing foreclosure paperwork is a federal crime, but no bank or banker has even been charged.
Jim Hightower
August 15, 2011
http://www.otherwords.org/articles/illegal_foreclosure_epidemic

Two-year-olds often go running around the house too wildly and crash into something. They get an "ouchie" and fall down crying, but they learn from it.

That's the virtue of the "ouchie" that Bank of America, Goldman Sachs, JPMorgan Chase, Wells Fargo, and other big financiers got last year when they ran into the law after racing wildly through home foreclosure paperwork. They were caught falsifying thousands of documents and taking illegal shortcuts that were causing innocent families to lose their homes. They had to pay fines, make restitution, suspend foreclosures, and pledge to clean up their act. But at least they learned their lesson.

Oh, wait — these aren't two-year-olds. They are wily bankers, and the only lesson they ever seem to learn is that shortcuts can be profitable — as long as you don't get caught. But once again they've been caught rushing through foreclosures, using the same old scam called "robo-signing."

To foreclose on someone's home, an authorized bank employee must sign the foreclosure document, swearing that the facts in it are true. But that requires hiring people to review each case. To avoid that cost, they take an illegal shortcut by signing the name of someone who has not read the document and might not even exist.

In one Massachusetts county, for example, the signature of "Linda Green" has recently appeared on some 1,300 foreclosures. Curiously, her signature was written in many different styles, and she had many different titles. Also, there's no Linda Green presently working in the mortgage banking company involved. Meanwhile, state officials say that robo-signing is, once again, "an epidemic" all across the country.

It's a federal crime to do this, yet no bank or banker has even been charged. Until we put a CEO in jail, the banking barons will never learn their lesson.

Jim Hightower is a radio commentator, writer, and public speaker. He's also editor of the populist newsletter, The Hightower Lowdown.

Chase Bank Sells Off Soldier’s Home Very Same Day He Returns From Iraq

Chase Bank Sells Off Soldier’s Home On The Very Same Day He Returns From Iraq
Zaid Jilani
Aug 10, 2011
http://thinkprogress.org/economy/2011/08/10/292993/chase-bank-soldier-home

As ThinkProgress previously reported, Chase Bank had been planning to foreclose on the home of the family of Aaron Collette, who was serving in Iraq. Aaron’s father Tim had fallen on hard times following the recession, and the bank was refusing to work with the family to negotiate for new terms. After an intense pressure campaign from activists and Sen. Jeff Merkely (D-OR), the bank decided to delay the foreclosure past the original June date.

Yet when Aaron Collette returned home to the states this week for what should have been a warrior’s homecoming, he faced his father’s home that had been foreclosed on instead. On the very same day that Collette returned from Iraq, Chase sold the house back to itself during auction proceedings on the local courthouse’s steps. Local news station News 21 covered the event.

Despite the fact that Collette’s family will soon have to leave its home, they remain hopeful that they can help other people keep their residences. “We are going to continue to move forward, because there’s tens of thousands of more people who have not yet lost (their homes). And for those who have lost them, we might be able to try to get them back,” said Tim Collette.

Ironically, the day before the Collette family had their home sold off to the bank, JP Morgan Chase CEO Jamie Dimon bragged to Chase bank employees at a barbecue in Vancouver that his company was helping veterans keep their homes.

JP Morgan: Food Stamps Welfare Queen

From The Economic Collapse Blog:

"JP Morgan is the largest processor of food stamp benefits in the United States. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Yes, you read that correctly. When the number of Americans on food stamps goes up, JP Morgan makes more money... Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared. But doesn't this give JP Morgan an incentive to keep the number of Americans enrolled in the food stamp program as high as possible?"

The author then asks:

"So is this what America is turning into?

A place where tens of millions of the unemployed and the working poor crawl over to Wal-Mart and the dollar store every month to use the food stamp debit cards provided to them by JP Morgan?"

But wait, there's more:

"Apparently states have found that they can save millions of dollars by 'outsourcing' the provision of these benefits to big financial firms like JP Morgan.

So what happens if you have a problem with your food stamp debit card?

Well, you call up a JP Morgan service center. When you do this, there is a very good chance that you are going to be helped by a JP Morgan call center employee in India.

That's right - it turns out that JP Morgan is saving money by 'outsourcing' food stamp customer service calls to India.

When ABC News asked JP Morgan about this, the company would not tell ABC News which states have customer service calls sent to India and which states have them handled inside the United States....

JP Morgan is the only one today still operating public-assistance call centers overseas. The company refused to say which states had calls routed to India and which ones had calls stay domestically. That decision, the company said, was often left up to the individual states."

The More Americans That Go On Food Stamps The More Money JP Morgan Makes
January 19th, 2011
http://theeconomiccollapseblog.com/archives/the-more-americans-that-go-on-food-stamps-the-more-money-jp-morgan-makes

Madoff lawsuits charge JPMorgan and HSBC with complicity in Ponzi

http://wsws.org/articles/2010/dec2010/mado-d18.shtml

Madoff lawsuits charge JPMorgan and HSBC with complicity in Ponzi scheme
By Andre Damon
18 December 2010

Two years after the arrest of Bernard Madoff, ample evidence has emerged that a substantial number of major financial institutions profited from and knowingly facilitated his Ponzi scheme.

Irving H. Picard, the trustee for the investors who were defrauded by Madoff, filed a lawsuit against JPMorgan Chase on December 2 alleging that the bank knew that Madoff’s transactions were fraudulent but continued doing business with him.

“While many financial institutions enabled Madoff’s fraud, JPMC [JPMorgan Chase] was at the very center of that fraud and thoroughly complicit in it,” said David J. Sheehan, an attorney for Picard and a partner at Baker & Hostetler LLP, the trustee’s court-appointed counsel.

Madoff pled guilty on March 12, 2009 of operating a Ponzi scheme for more than a decade that masqueraded as an investment firm. He admitted that for years he had not invested the money of his clients. Instead, in classic Ponzi fashion, he paid dividends from funds provided by new investors. Madoff, 71, is currently serving a 150 year sentence.

The total in losses from his scam is now estimated at $20 billion.

Picard had a deadline of December 15 to present all of his charges. He had spent the previous two years gathering information to support the lawsuits.

Instead of making trades with the money he received from investors, Madoff simply deposited the funds in an account at JPMorgan Chase, from which he paid dividends. He was able to maintain the scheme as long as he continued attracting investors. This inflow, however, fell off sharply after the September 2008 financial panic, making it impossible for Madoff to keep paying his clients.

“JPMC was BLMIS’ [Bernard L. Madoff Investment Securities’] primary banker for more than 20 years and was responsible for knowing the business of its customers—in this case, a very large customer,” said Sheehan. “Madoff would not have been able to commit this massive Ponzi scheme without this bank. JPMC should pay the price for its central role in enabling Madoff’s fraud.”

Picard alleges that JPMorgan made $1 billion in fees and profits from its role as Madoff’s main banker and is seeking to recover an additional $5.4 billion in damages as part of the lawsuit.

In a press release issued earlier this month, Picard wrote: “JPMC had clear, documented suspicions about the legitimacy of BLMIS’ operations. Instead of acting on that information, it simply continued to collect fees and profit from the fraud.”

Picard has filed the complaint with the bankruptcy court but it has not been publicly released because JPMorgan claims it contains confidential information. “While JPMC may want to hide the full extent of its significant role in the Madoff fraud from the public, we intend to move to have the complaint made public as soon as possible,” Picard said.

Picard also filed a $9 billion lawsuit against London-based HSBC on December 5, claiming that HSBC “enabled Madoff’s Ponzi scheme through the creation, marketing and support of an international network of a dozen feeder funds based in Europe, the Caribbean and Central America.”

The bank “earned hundreds of millions of dollars by selling, marketing, lending to and investing in financial instruments designed to substantially assist Madoff by pumping money into BLMIS and prolonging the Ponzi scheme,” according to Picard.

Although the complaint against JPMorgan Chase remains under seal, elements of its likely contents emerged earlier this year in the form of 500 internal JPMorgan documents leaked to the French weekly L’Expresse.

Among the documents is a report, dated October 2008, in which the bank notes that “the investment performance achieved by it’s [Madoff’s] funds, which is so consistently and significantly ahead of its peers year-on-year, even in the prevailing market conditions, appears too good to be true, meaning it probably is.”

The report was filed with the UK’s Serious Organized Crime Agency in October 2008 after employees of a JPMorgan subsidiary in Europe were threatened with violence for attempting to withdraw holdings from a Madoff-related fund. A representative of Aurelia Finance, a Geneva firm acting as an advisor to one of Madoff’s feeder funds, said that its “Colombian friends” would “create havoc” if the JPMorgan employees withdrew the money. JPMorgan did not file a similar report with US regulators.

Last year, a Palm Beach, Florida partnership that lost $12.8 million in Madoff investments filed a lawsuit claiming that JPMorgan “quietly liquidated its entire $250 million cash position” with Madoff before his fraud became public, while helping him to continue to defraud investors.

“Rather than protect other victims of Madoff’s fraud as it had already protected itself, Chase chose not only to protect Madoff but to partner with him in the fleecing of his victims by providing exactly the same range of services, for substantial fees, after learning of his criminal enterprise,” the Florida firm said in a press release.

The case was thrown out by US District Judge Barbara S. Jones in New York, who said the “plaintiff alleges no facts to demonstrate” that JPMorgan did actually make a discovery of fraud. The ruling is contradicted by evidence presented by L’Expresse and other news sources that JPMorgan strongly suspected Madoff’s business was fraudulent.

Particularly striking is the fact that the bank account in which Madoff held investors’ funds nearly hit zero several times in 2008, a fact that JPMorgan could not have failed to notice, considering that the account had previously held billions.

JPMorgan Chase and HSBC are only two of many banks and hedge funds that suspected Madoff was perpetrating a fraud but continued to direct investors to his operation, raking in fees on his returns.

The suits filed against JPMorgan Chase and HSBC vindicate the analysis of the Madoff scandal made by the World Socialist Web Site from the time of Madoff’s arrest. While the media depicted the big Wall Street firms as shocked and entirely innocent bystanders, the WSWS wrote on December 16, 2008:

“Madoff’s scam could not have been carried out without the complicity of the highest echelons of the financial elite and the government… What is being widely reported as the largest financial fraud in history goes far deeper and extends far wider than the machinations of a single broker and fund manager… To a great extent, the entire economy has been transformed into a giant Ponzi scheme. The collapse of trillions in paper assets will assume ever more malignant forms.”

It is now clear that a decision was made, under conditions of mounting public outrage over the machinations of Wall Street and the government bailout of the banks, to make Madoff, a relative small fry in comparison to the likes of JPMorgan Chase and Goldman Sachs, a sacrificial lamb. It was decided to “throw Bernie to the wolves” in order to focus public anger on him and divert attention from those whose swindling was on a far greater and even more destructive scale.

To this day, Madoff is the only significant Wall Street figure to have been imprisoned as a result of the financial crisis. Angelo Mozilo, the former Countrywide Financial CEO charged with insider trading and securities fraud, recently reached a settlement with the Securities and Exchange Commission requiring only that he pay a fine of $67.5 million, one seventh of his lifetime compensation as head of the country’s biggest purveyor of sub-prime mortgages.

A Real Jaw Dropper at the Federal Reserve

http://www.huffingtonpost.com/rep-bernie-sanders/a-real-jaw-dropper-at-the_b_791091.html

Sen. Bernie Sanders
Independent U.S. Senator from Vermont
December 2, 2010
A Real Jaw Dropper at the Federal Reserve

At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed, and the American people now have this information.

It is unfortunate that it took this long, and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve's website, and this is a major victory for the American taxpayer and for transparency in government.

Importantly, my amendment also required the Government Accountability Office to conduct a top-to-bottom audit of all of the emergency lending the Fed provided during the financial crisis to be completed on July 21, 2011, which will take a hard look at all of the potential conflicts of interest that took place with respect to this bailout. So, in many respects, details that the Fed was forced to divulge on Wednesday about the $3.3 trillion in emergency loans that until now were totally kept from public scrutiny, marked the beginning, not the end, of lifting the veil of secrecy at the Fed.

After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.

What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.

We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks -- Deutsche Bank and Credit Suisse -- which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.

Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.

Has the Federal Reserve of the United States become the central bank of the world?

The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened.

What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans.

For example, at a time when big banks have nearly a trillion dollars in excess reserves parked at the Fed, the Fed did not require these institutions to increase lending to small- and medium-sized businesses as a condition of the bailout.

At a time when large corporations are more profitable than ever, the Fed did not demand that corporations that received this backdoor bailout create jobs and expand the economy once they returned to profitability.

I intend to investigate whether these secret Fed loans, in some cases, turned out to be direct corporate welfare to big banks that used these loans not to reinvest in the economy but rather to lend back to the federal government at a higher rate of interest by purchasing Treasury Securities. Instead of using this money to reinvest in the productive economy, I suspect a large portion of these near-zero interest loans were used to buy Treasury Securities at a higher interest rate providing free money to some of the largest financial institutions in this country. That is something that we have got to closely examine.

At a time when Wall Street executives are now making more money than before the financial crisis, how many big banks that paid back TARP funds in 2009 to avoid limits on executive compensation received no-strings-attached loans from the Federal Reserve?

At a time when millions of Americans are paying outrageously high credit card interest rates, why didn't the Fed require credit card issuers to lower interest rates as a condition of the bailout?

The four largest banks in this country (Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup) issue half of all mortgages in this country. We now know that these banks received hundreds of billions from the Fed. How many Americans could have remained in their homes, if the Fed required these bailed-out banks to reduce mortgage payments as a condition of receiving these secret loans?

We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.

20,000 Sacrificed In Annual Blood Offering To Corporate America

http://www.theonion.com/articles/20000-sacrificed-in-annual-blood-offering-to-corpo,18542

20,000 Sacrificed In Annual Blood Offering To Corporate America
November 29, 2010 | ISSUE 46•48
The High Priest appeases Corporate America with another fresh sacrifice.

WILMINGTON, DE — The nation looked on in reverence Friday as 20,000 citizens were decapitated, dismembered, and burned alive in the name of Corporate America, continuing the age-old annual rite to ensure bounteous profits in the coming fiscal year.

"Corporate America has always provided us with plenty," said High Priest James N. Cahill, who opened the ceremony by plunging the horn of a bull into a fair-haired child's abdomen and using the freshly spilled blood to write the current value of the Dow Jones Industrial Average upon sacred parchment. "JPMorgan Chase, General Electric, and all in the great pantheon of publicly traded entities will continue to watch over us so long as we appease them each year with human lives."

"The prophecies are clear," Cahill continued. "As we utter the hallowed incantations and make our humble sacrifices of flesh, so shall the shelves of retailers overflow with the most desirable consumer products."

The blood offering follows last week's Feast of Increasing Market Values, a yearly celebration during which Americans gather with their families under the second Q4 full moon to give thanks to corporations and to pray for cash dividends during the holiday shopping season.

The grand foyer of one of the nation's great corporate overlords, to whom tribute was bountifully paid this week.

In accordance with tradition, Friday's ritual—hosted this year by the Greater Wilmington Convention Center—included stonings in honor of Monsanto, the drowning of elders on behalf of Ford, and live flayings in the name of Whole Foods.

"A joyful noise filled the hall as the priest pulled the first virgin's heart from her chest and recited the ancient, mystical section 102(a)(3) of the Delaware General Corporation Law," said 44-year-old disciple David Infantes, recalling the blasts from plastic horns donated by Wells Fargo that accompanied a young girl's lifeless body rolling down the altar steps. "In that moment, I pledged my soul anew to our blessed Corporate Overlords, increasing profits be upon them."

By many accounts, the highlight of the evening took place when the 500 Shareholder Guardians, wearing robes adorned with logos of the nation's top-ranked businesses and chanting optimistic revenue projections, used their companies' balance sheets to ignite the alcohol-soaked vestments of the "cursèd and damnable" children born the day Lehman Brothers collapsed.

"To quick profits on high-risk, short-term investments of other people's money!" the assembled masses shouted in unison. "Quick and easy profits for all eternity!"

The ceremony drew to a close as the High Priest bathed in the accumulated blood on the altar and cleansed himself in the Font of Gross Receipts, symbolically rinsing the corporate world of undesirable red ink and granting it immunity from disclosure of negative earnings.

Though the ceremony's origins are shrouded in mystery, most scholars agree on its historical success, noting that the yearly killings have coincided with an exponential growth in corporate earnings over the past two centuries. Recently, however, some high-profile academics have suggested the practice is flawed, citing the recent economic malaise as evidence.

"We're stuck in the Dark Ages if we still believe some elaborately choreographed, archaic ritual has any impact on today's dynamic multinational corporations," New York University professor Nouriel Roubini said on CNBC this week. "If we really want Corporate America to restore our prosperity, then we have to own up to the facts, face reality, and kill every last one of our firstborn sons with our own bare hands."

"It was a great honor for my daughter to be chosen by a company as esteemed as Best Buy," said ceremony attendee Mark Granaldi, who, as a family member of one of the sacrificed, received a complimentary gift bag that included Crest whitening strips, a $25 Hess gas card, Old Navy board shorts, and a tote bag bearing the trademark of Merck. "Just as the flames rose from her body toward heaven, so too shall Best Buy's stock price climb ever higher."

At press time, Corporate America had conferred upon its devout followers the blessings of several new Doritos flavors and a sacred promise to release a deluxe unrated edition of Salt, starring Angelina Jolie, on Blu-ray.

Obama-Goldman Sachs Administration Sides with Banks

http://www.prisonplanet.com/obama-goldman-sachs-administration-sides-with-banks-on-foreclosure-moratorium.html
Obama-Goldman Sachs Administration Sides with Banks on Foreclosure Moratorium
Kurt Nimmo
Infowars.com
October 17, 2010

It was predictable. Obama and his Goldman Sachs insiders have sided with Bank of America and JP Morgan on the growing call for a national moratorium on foreclosures. Obama has sided with the banksters against the American people. No surprise there.

It’s all for our own good, of course. “Delays in foreclosures add cost and other burdens for communities, investors and taxpayers,” said the faceless bureaucrats at the Federal Housing Finance Agency.

In short, bring on the robo-signers.

Imagine my surprise. Banks signed thousands of documents authorizing foreclosures across the country, without actually having reviewed the loan documents, as required by law. In other words, they engaged in fraud in order to expedite the confiscation of property. Ohio Attorney General Richard Cordray sent letters to Wells Fargo & Co., Chase, Bank of America Corp., and CitiMortgage asking them to halt foreclosures in Ohio and meet with him to discuss how to solve the problem.

Law officers in California, Connecticut, Illinois, Iowa, Maryland, Massachusetts, North Carolina and Texas have done likewise, demanding answers and an end to foreclosures until the matter is resolved.

Last week, attorney generals in 40 states announced an investigation into the mortgage-servicing industry. “I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they’ve just paid lip-service to,” said Cordray, reports the Wall Street Journal.

Corday’s outspoken effort is admirable. But the likelihood the “mortgage services industry” run by the mega-banks will be forced to shut down their foreclosure and property confiscation mill is slim to none.

On Friday, John Carney, writing for CNBC, said he thinks Congress will line up behind the banksters. “Here’s what is going to happen: Congress will pass a law called something like ‘The Financial Modernization and Stability Act of 2010' that will retroactively grant mortgage pools the rights in the underlying mortgages that people are worried about. All the screwed up paperwork, lost notes, unassigned security interests will be forgiven by a legislative act,” writes Carney.

Carney notes that the 2008 “crisis” was about economics. The new one is about legal rights. If Congress manages to line up behind the banksters and pass such legislation, it will spell the end of property rights in America. “If you’re skeptical about the possibility that this will happen, you have greater faith than I do in the ability of the political system to resist doing favors for bankers,” writes Carney.

Favors? The banksters own Congress, as Sen. Dick Durbin admitted in May, 2009. “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he blurted out on a Chicago radio station.

Members of Congress do not do “favors” for Wall Street and the banksters. They follow orders.

Millions of Americans are about to wake up homeless on the continent their fathers conquered, as Thomas Jefferson warned. Gouverneur Morris, who represented Pennsylvania in the Constitutional Convention of 1787 and signed the Constitution, said the “rich will strive to establish their dominion and enslave the rest… if we do not, by the power of government, keep them in their proper spheres.”

Government is now owned by the international bankers and their mega-corporations. A Republican compromised Tea Party movement will not change the situation. It will work for the bankers too, albeit while sporting patriotic plumage as camouflage.

It may take another election cycle before the people realize the trademark Tea Party will not save them. Nobody will be safe until the Federal Reserve is abolished and the banksters are sent packing.

Connecticut halts all foreclosures for all banks

http://voices.washingtonpost.com/political-economy/2010/10/connecticut_halts_all_foreclos.html

Connecticut halts all foreclosures for all banks
Ariana Eunjung Cha | October 1, 2010

Connecticut Attorney General Richard Blumenthal on Friday ordered a moratorium on all foreclosures by all banks for 60 days--the most radical action taken by a state on issue of document irregularities.

California also expanded the moratorium on foreclosures it announced last week on Ally Financial foreclosures to include those by J.P. Morgan Chase.

Calling the companies' review of key foreclosure documents "a ruse," California Attorney General Jerry Brown (D) ordered J.P. Morgan to prove it is following the law before it continues foreclosures in the state.

Both J.P. Morgan Chase and Ally have frozen foreclosures in 23 states because some employees had signed off on foreclosure paperwork without properly reviewing the files.

Colorado and Illinois have stopped foreclosures by Ally and at least seven other states have launched probes into the issue. But Connecticut is the first to institute an industry-wide ban.

in Connecticut, Blumenthal said in a statement that he is investigating J.P. Morgan Chase and Ally, formerly GMAC, which is the recipient of a $17 billion federal bailout and majority-owned by the U.S. Treasury, as well as other lenders.

He said the actions of J.P. Morgan and Ally are a "possible fraud on the court undermining the integrity of the legal process and consumers' ability to fight foreclosures.

"This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies," Blumenthal said.

Ally Financial had already voluntarily suspended evictions and resales of homes in 23 states that require a court order for foreclosures. J.P. Morgan's actions were a bit broader--the bank suspended all foreclosures in the same 23 states. Connecticut was on the original list of 23 but California was not.

Both Blumenthal and Brown are running in high-profile races for higher office in their respective states in the Nov. 2 election -- Blumenthal for U.S. Senate, and Brown for governor.

Homeowners' Rebellion: Could 62 Million Homes Be Foreclosure-Proof?

http://www.commondreams.org/headline/2010/08/18-8
Wednesday, August 18, 2010 by YES! Magazine
Homeowners' Rebellion: Could 62 Million Homes Be Foreclosure-Proof?
A committed movement to tear off the predatory mask called MERS could yet turn the tide for struggling homeowners.
by Ellen Brown

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere "nominee"-an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff's legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear-while the financial industry could end up skewered on its own sword.

California Precedent

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E-11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS' ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the "Boyko" decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee's Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS' technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled "Fannie and Freddie's Foreclosure Barons" exposes a widespread practice of "foreclosure mills" in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders' case in 2004. Five years later, she says, some of the homeowners she's helped are still in their homes. According to a Huffington Post article titled "‘Produce the Note' Movement Helps Stall Foreclosures":

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets' all other claims). Charney says she's helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used "the artifice of MERS to sabotage the judicial process to the detriment of borrowers;" that "to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;" that the scheme depended on "the MERS artifice and the ability to generate any necessary ‘assignment' which flowed from it;" and that "by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,' the Defendants . . . participated in a criminal enterprise affecting interstate commerce."

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or "whistle blower" to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for "wrongfully bypass[ing] the counties' recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located." The complaint notes that "MERS claims to have ‘saved' at least $2.4 billion dollars in recording costs," meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

By Their Own Sword: MERS' Role in the Financial Crisis

MERS is, according to its website, "an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans." Or as Karl Denninger puts it, "MERS' own website claims that it exists for the purpose of circumventing assignments and documenting ownership!"

MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder's office where documents reflecting any ownership interest in real property are kept....

After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible .... The servicer was interested in only one thing - making a profit from the foreclosure of the borrower's residence - so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary' under millions of deeds of trust in Nevada and other states.

Axing the Bankers' Money Tree

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .

Nationalization of these giant banks might be the next logical step-a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a "people's bank," making low interest loans to consumers and businesses through branches all over the country.

With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

Feinberg: Unfair to Ask Firms to Return Payouts

On a related Ken Feinberg note...

http://online.wsj.com/article/SB10001424052748703294904575385120617510164.html

BUSINESS JULY 23, 2010
Feinberg: Unfair to Ask Firms to Return Payouts
VICTORIA MCGRANE

WASHINGTON — U.S. "pay czar" Kenneth Feinberg on Friday declined to request 17 financial firms that doled out $1.6 billion in "ill advised" executive compensation to return the excessive payouts, saying to do so would be unfair to the companies and could trigger private lawsuits and additional Congressional investigation.

Mr. Feinberg released a report that found 17 firms—including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Citigroup Inc.—made the bonus-like payouts to top executives in late 2008 and early 2009 even as the companies were receiving taxpayer assistance.

Mr. Feinberg, the Obama administration's special master for compensation, said he deemed these payments as "ill advised" both for the sheer amount—some individual payouts exceed $10 million, he said—and the lack of reasonable rationale for their payment.

Other firms Mr. Feinberg criticized for poor judgment included: American Express Co., American International Group Inc., Bank of America Corp., Boston Private Financial Holdings Inc., Capital One Financial Corp., CIT Group Inc., M&T Bank Corp., Regions Financial Corp., Sun Trust Banks Inc., Bank of New York Mellon Corp., Morgan Stanley, PNC Financial Services Group Inc., U.S. Bancorp and Wells Fargo & Co.

But he stopped short of saying any of the firms violated the public interest, the highest criticism allowed by the law mandating his review. None of the firms violated any law or regulation when they made the payouts, Mr. Feinberg told reporters during a briefing Friday.

Mr. Feinberg's study, which was required by the 2009 stimulus law that also created his post, covered the five-month window during which firms were getting government assistance but policy makers hadn't yet enacted executive-compensation restrictions. Those rules came into force in early February 2009.

The payments "were ill advised, they were troublesome. But I do not believe it is fair to declare...that the payments were 'contrary to the public interest,'" he said. In fact, Mr. Feinberg said he undertook the compensation review, which was required by the 2009 stimulus law, with "some reluctance."

"This is arm-chair quarterbacking," he said.

Mr. Feinberg also said he felt it was inappropriate for him to ask any of the 17 firms to claw back or reimburse taxpayers for the bonus payouts. Under the law he has no authority to demand repayment, but Congress did direct him to request reimbursement if appropriate.

Nonetheless, Mr. Feinberg felt these payouts were misguided enough to push the firms to adopt a policy that would limit their ability to pay out large sums during the next crisis.

Specifically, Mr. Feinberg's plan would enable a company's compensation committee to restructure, reduce or cancel pending executive payouts once the company's board of directors judged the firm to be in a crisis situation.

It remains unclear if any of the 17 firms will actually adopt Mr. Feinberg's recommendations. The proposal is voluntary, and the government's influence over many of the cited firms has waned. Eleven of the 17 firms have fully repaid taxpayers.

But Mr. Feinberg, who has discussed his proposal with each of the 17 firms cited by his report, said he is "hopeful" the firms will comply. "I have not heard much pushback."

The study is the result of four months spent reviewing pay at 419 firms that took government money during the crisis. The task was in addition to Mr. Feinberg's core assignment to review pay at a handful of firms that received "extraordinary" assistance from the government.

Mr. Feinberg narrowed his study to "highly compensated employees" with annual pay packages of more than $500,000 that received payments that were later curbed by Congress and Treasury, including cash bonuses, retention rewards, stock grants and golden parachutes.

“The Market” is a Reactionary Mystification

http://tarpley.net/2010/05/23/reply-to-the-attack-on-economic-populism/

“The Market” is a Reactionary Mystification: Reply to the Attack on Economic Populism from Franco Debenedetti and other Italian Economists
Webster G. Tarpley
TARPLEY.net
May 23, 2010

A group of Italian economists led by Franco Debenedetti of the famous financier clan and the banker Paolo Savona, obviously fearful that the Berlusconi-Tremonti government of Italy will join last Tuesday’s successful German ban on the type of toxic derivative known as the naked credit default swap, have sent an alarmed warning to the Corriere della Sera of Milan1. Debenedetti has contributed an article expressing similar sentiments to the Italian business newspaper Il Sole 24 Ore in which he rails at the “Mrs. Merkel market” now in force in Germany2. These economists, obviously inspired by the doctrines of Friedrich von Hayek and the Austrian school, want Italy to remain faithful no matter what to the widely discredited ideas of laissez-faire economics, even as those doctrines are everywhere under attack for having caused the current world economic depression. For these neoliberal and monetarist thinkers, any attempt to ban derivatives or tax speculation must be condemned as “economic populism,” which for these writers is a term of opprobrium.

These anti-populist economists need to be reminded of some basic facts about derivatives. The collapse of the Central European banking system in the summer of 1931 was decisively enabled by derivatives – specifically by speculation in wool futures by a north German textile company which brought down the Danat Bank, leading to panic runs on all German banks. Thanks to the American New Deal of Franklin D. Roosevelt, most over-the-counter and exchange-traded derivatives were illegal from 1936 to 1982 under the Commodities Exchange Act, which was repealed by the free-market enthusiast Ronald Reagan. During those years, US rates of economic growth and real wages were far superior to what they have been any time since, and financial panics were much more limited than they had been before or have become since. Presumably, FDR would be dismissed as a mere populist.

In today’s crisis, we are confronted at every turn with the fatal combination of deregulated hedge funds plus these now-rehabilitated derivatives, which in the meantime amount to a world speculative bubble of some $1.5 quadrillion of notional value. Lehman Brothers, Citibank, and Merrill Lynch were destroyed by derivatives in the form of a combination of their issuance of synthetic collateralized debt obligations based on mortgages and consumer debt, together with the credit default swaps used by hedge funds to attack these banks. The insurance company AIG had a hedge fund in London which issued $3 trillion worth of derivatives (more than the GDP of France), featuring a very toxic portfolio of credit default swaps. The failure of AIG caused by these toxic bets has now cost the US taxpayer $180 billion and counting. The attack on Greece, as these economists seem to recognize, was organized during a dinner party in Manhattan on February 8, 2010, leader reported in the headline story of the Wall Street Journal on February 26, 20103. European taxpayers are now on the hook for almost $1 trillion in bailouts as a result of this speculation. That Manhattan hedge fund dinner seems to fulfill the prima facie specifications of an illegal conspiracy in restraint of trade under the terms of the US Sherman Antitrust Act of 1890, a law proposed all those years ago by a very Republican senator and signed by Benjamin Harrison, a very Republican president. Were they populists too?

The May 6, 2010 1,000-point fall of the Dow Jones Industrial Average was the result of a speculative bet using options (i.e., derivatives) against the Standard & Poor’s 500 stock index placed by the Universa Investments hedge fund, advised by “Black Swan” theorist Nassim Taleb – according to the Wall Street Journal of May 11, 2010. That thousand point plunge, it is estimated, wiped out about $1 trillion worth of paper wealth in about 20 minutes. What with a trillion here and a trillion there, derivatives and the regulated hedge funds are becoming a prohibitively expensive luxury.

Debenedetti and his friends wish to save credit default swaps at all costs. In this they face serious problems. On one level, credit default swaps are bets, wagers, and therefore illegal under the gambling laws in many countries. If it is argued that credit default swaps are insurance, then they are also illegal, since most of the issuers are not insurance companies, and have no intention of meeting the legal requirements to underwrite insurance policies, such as legal registration, capital requirements, etc. Are credit default swaps such a glorious benefit to society that they should enjoy exemption from laws and regulations? Recent history indicates that derivatives do not merit such special treatment.

Debenedetti and his friends are also opposed to a Tobin tax, otherwise known as a Wall Street sales tax, financial transaction tax, securities transfer tax, trading tax, or Robin Hood tax, which would be levied on the financial transactions of market players. Debenedetti & Co. therefore want derivatives and other financial instruments to enjoy yet another exemption. In Italy, the vast majority of goods and services must pay a hefty Value Added Tax (VAT or IVA). Parents who want to buy shoes, clothing, and school supplies for their children must pay this tax. But for some strange reason, banks and hedge funds do not pay on their flash trading, program trading, and high-frequency trading. We can guess that the total deficit of governments at all levels in Europe, the United States, and Japan is closely correlated to the total exemption of financial institutions from IVA or sales tax on their turnover. To argue that this de facto public subsidy for speculation should be continued in an era when so many other activities are being heavily taxed or subjected to austerity cuts is reminiscent of the mentality of the French aristocracy under the pre-1789 ancien régime, which claimed that it had the divine right not be taxed under any circumstances. This claim, as we know, did not hold up.

At the heart of the arguments put forward by Debenedetti and his friends is the notion that human reason is very weak indeed, and cannot attain a practical understanding or overview of how political economy works. Only the market, they claim, can do with this by totalizing so many separate facts. But they are not arguing from any empirical observation of how markets really work, but expressing the fetishism of an efficient market which was typical of von Hayek and other Austrians. They tried to portray markets as genuine epistemological tools, which provided knowledge which could not be obtained any other way. Even the Ayn Rand devotee Alan Greenspan has backed away from this extravagant claim in the wake of the catastrophic collapse of the New York banks in October 2008. When asked whether he had been led astray by his market ideology, Greenspan told a Congressional hearing: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.” (New York Times, October 23, 2008) Debenedetti does not share this distress. At the same time, the successful history of the Bank of the United States under Alexander Hamilton, the French Commissariat du Plan under DeGaulle, and the Japanese Ministry of International Trade and Industry (MITI)) makes clear to human reason is indeed capable of determining the main priorities of national economies.

Market fetishism is radically anti-historical. Everyone is aware of speculative manias, bubbles, panics, and the other recurring psychoses which make the judgment of any market totally unreliable in many critical moments. And what if there are monopolies, duopolies, oligopolies, trusts, combinations, or cartels of the February 8 type? Then the market is permanently distorted, which is what we have been seeing for decades.

Debenedetti wants “the market” to be seen as objective and impersonal, but it is not. “The market” has names and faces. If we find that half a dozen of the largest US banks control about 60% of all assets in the entire United States economy, then we can make that exorbitant control very personal and concrete. The owners of a majority share of the United States are bankers like Jamie Dimon of J.P. Morgan Chase, Vikram Pandit of Citibank, Lloyd Blankfein of Goldman Sachs, John Mack of Morgan Stanley, and Brian Moynihan of Bank of America/Merrill Lynch, and their respective boards. We can even know how many billions each one has been given in the form of bailouts at public expense.

The Austrian school makes the market into a metaphysical abstraction, a force above the rest of history, because it needs this mystification in order to defend the very concrete privileges of some very sleazy individuals who are the speculators. Some early Protestants tried to argue that the success of the speculator had been instituted by God. When this idea lost traction, apologists for speculation tried to argue that the speculators were morally or intellectually superior to the rest of humanity. When that did not work either, the Austrian school hit upon the trick of removing the speculators from consideration altogether by hiding them from view behind the anonymous and impersonal abstraction of “the market.” As the case of Greenspan suggests, this argument has also become untenable, and the entire edifice of Austrian thought is falling to the ground.

Debenedetti and his co-thinkers suggest that “the market” is able to detect the secret financial weaknesses of nations. But surely the shoe is on the other foot. The major US banks listed above were all, without exception, bankrupt and insolvent before US government intervention in the form of the bailout of October 2008. Today, any objective appraisal would conclude that Greece is far more economically viable and solvent then Citibank. Portugal is more viable than Goldman Sachs. Italy has a brighter economic future by far than J.P. Morgan.

The situation today would therefore seem to offer the following alternative. The speculative assault of the zombie banks and hedge fund speculators may succeed in bankrupting the modern nation state at all levels, in which case we will be dealing with the collapse of civilization as we have known it since the first prototype of the modern state emerged in Milan in the late 14th century under Giangaleazzo Visconti, who offered debt relief to strapped farmers. The better alternative is that the nation state will use its inherent sovereign powers to liquidate the bankrupt zombie banks and regulate many of the predatory activities of hedge funds out of existence, while banning the most toxic forms of derivatives and forcing speculators to share in the general tax burden of society.

Those who want the second of these alternatives must get to work here and now. The most obvious way to begin is for the present Italian government of Berlusconi and Tremonti to join the measures instituted by the German government last Tuesday. Italy should also go beyond these tentative initial German measures by banning all forms of credit default swaps, which are already inherently illegal under existing laws. Then there are those extremely dangerous synthetic collateralized debt obligations, which even Blankfein of Goldman Sachs has suggested might be done away with. They should indeed be totally banned at once. Antitrust investigations could be opened against the Feb. 8 hedge fund group by the Italian magistrates, whose independence has become world-famous. The Tobin tax should also be instituted on an emergency measure for financial stability and revenue enhancement on a purely national basis, with the revenue being retained for the benefit of the national budget.

Additional countries may soon join in the German ban. Likely candidates are the nations that were closely associated with the D-Mark in the old “snake in a tunnel” currency bloc starting in the 1970s. These would include Belgium and the Netherlands. The Czech Republic is another possibility, as is Sweden. Soon we may have a pro-derivatives bloc led by the US and the UK confronting an anti-derivatives bloc led by Germany. On the eve of the Washington Economic Conference of November 2008, I wrote: “The best we can hope for … is … dividing the world between a US-UK dominated derivatives bloc and a Brazil-India-Russia-China-South Africa anti-derivatives bloc interested in real physical commodity production, not fictitious capital.” The surprise is that the leadership of the anti-derivatives forces has actually been seized by Germany.
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[1] Franco Debenedetti, Oscar Giannin, Antonio Martino, Roberto Perotti, Nicola Rossi, Paolo Savona, Vito Tanzi, Alberto Mingardi, “In difesa del mercato e degli operatori i responsabili veri e presunti della crisi,” Corriere della Sera, May 21, 2010, http://archiviostorico.corriere.it/2010/maggio/21/difesa_del_mercato_degli_operatori_co_9_100521085.shtml

[2] Franco Debenedetti, “È il mercato signora Merkel,” Il Sole 24 Ore, May 21, 2010, http://www.ilsole24ore.com/art/SoleOnLine4/Editrice/IlSole24Ore/2010/05/21/Italia/17_A.shtml

[3] See “Financial Warfare Exposed: Soros, Goldman Sachs, Hedge Funds Attack Greece to Smash Euro,” http://tarpley.net/2010/03/04/financial-warfare-exposed-soros-goldman-sachs-hedge-funds-attack-greece-to-smash-euro/

Financial Regulation & Regulatory Capture

http://www.pbs.org/moyers/journal/blog/2010/04/financial_regulation_regulator.html

Financial Regulation & Regulatory Capture
Simon Johnson and James Kwak
April 16, 2010

The White House and Democrats in Congress have begun pushing in earnest for a package of financial reforms. But will it be enough to stop Wall Street from causing another meltdown?

To find out what real financial reform needs to look like, Bill Moyers turns to Simon Johnson and James Kwak, the co-authors of 13 BANKERS: THE WALL STREET TAKEOVER AND THE NEXT FINANCIAL MELTDOWN.

The problem, according to Kwak, is that the legislation currently doesn't address the central problem of the crisis, that America's banks have grown 'too big to fail.' In fact, the problem has gotten worse, with just six banks holding assets in excess of 63% of the U.S. Gross Domestic Product. Kwak explains that the crisis actually made the surviving banks more powerful, "I think what's remarkable is that it used to be maybe eight or nine banks. But what's happened over the last two years, as Simon is saying, is that these banks have gotten bigger, because they've bought each other. They've become more powerful. And they have an even stronger market position in some key markets like credit cards, mortgages, equity underwriting, and derivatives."

Johnson argues that for reform to work, policy makers and regulators must reject the belief that Wall Street knows what's its doing, that its interests are always aligned with the nation as a whole, "The idea that we need Wall Street with its current structure — and a disproportionate economic power that implies — to somehow make this economy work and drive entrepreneurship, that idea is nonsense. This is why we wrote the book, all right? There's plenty of evidence on this issue. We go through it. If you want a faith based economy in this regard, you can disregard the evidence."

Senator Brown and the 'Volcker Rule'

Johnson and Kwak believe Congress should pass a law capping the size of the banks, to keep them from becoming so large that their failure threatens the world economy. This approach has been dubbed the 'Volcker Rule,' after Paul Volcker, the well-respected former Federal Reserve chairman who has pushed hard for its inclusion. Senator Sherrod Brown from Ohio has introduced an amendment to the bill that would do just that, reading in part that, "No bank holding company may possess non-deposit liabilities exceeding 3 percent of the annual gross domestic product of the United States."

The Six Big Banks

The names of the six banking behemoths are no doubt familiar to most Americans. The four largest by assets — Bank of America, JPMorgan Chase, Wells Fargo and Citigroup — hold 39 percent of American's deposits.

The six biggest commercial banks by deposit:
Bank of America, $817.9 billion
JPMorgan Chase Bank $618.1 billion
Wachovia Bank $394.2 billion
Wells Fargo Bank $325.4 billion
Citibank $265.9 billion
U.S. Bank $151.9 billion
Source: FDIC

James Kwak

James Kwak is the co-author, along with Simon Johnson, of 13 BANKERS: THE WALL STREET TAKEOVER AND THE NEXT FINANCIAL MELTDOWN, and the co-founder/co-author of THE BASELINE SCENARIO. Kwak is currently a student at the Yale Law School. Previously, he was a management consultant at McKinsey and Company and co-founder of a successful software company. Kwak received an A.B. in Social Studies from Harvard College and an M.A. and a Ph.D. in History from the University of California, Berkeley.

Simon Johnson

Simon Johnson is the Ronald A. Kurtz (1954) Professor of Entrepreneurship at MIT's Sloan School of Management, a position he has held since 2004. He is also a senior fellow at the Peterson Institute for International Economics in Washington, D.C., and co-founder of a Web site on the global economic and financial crisis, THE BASELINE SCENARIO and "The Hearing," a new economics blog at washingtonpost.com. He is co-director of the NBER project on Africa and President of the Association for Comparative Economic Studies (term of office 2008-09). He is also a contributing editor at the HUFFINGTON POST.

From March 2007 through the end of August 2008, Professor Johnson was the International Monetary Fund's economic counsellor (chief economist) and director of its research department. At the IMF, Professor Johnson led the global economic outlook team, helped formulate innovative responses to worldwide financial turmoil, and was among the earliest to propose new forms of engagement for sovereign wealth funds. He was also the first IMF chief economist to have a blog.

In 2000-2001 Professor Johnson was a member of the US Securities and Exchange Commissions Advisory Committee on Market Information. His assessment of the need for continuing strong market regulation is published as part of the final report from that committee.

Johnson is an expert on financial and economic crises. As an academic, in policy roles, and with the private sector, over the past 20 years he has worked on crisis prevention, amelioration, and recovery around the world, in both relatively rich and relatively poor countries. His work focuses on how policymakers can limit the impact of negative shocks and manage the risks faced by their countries.

Johnson has worked with most of the leading research organizations focused on global economic stability. He remains a Research Associate at the NBER, a CEPR Research Fellow, a BREAD affiliate, a member of the Advisory Group at the Center for Global Development (CGD) in Washington D.C., a member of the International Advisory Board of CASE in Warsaw, and a non-resident Research Fellow at the Asian Institute for Corporate Governance of Korea University. In 2006-07, he was a Visiting Fellow at the Peterson Institute for International Economics in Washington, D.C.

Recent papers have appeared or are forthcoming in THE AMERICAN ECONOMIC REVIEW, THE JOURNAL OF POLITICAL ECONOMY, THE QUARTERLY JOURNAL OF ECONOMICS, THE JOURNAL OF FINANCIAL ECONOMICS, and THE JOURNAL OF FINANCE. He is on the editorial board of THE JOURNAL OF FINANCIAL ECONOMICS, THE REVIEW OF ECONOMICS AND STATISTICS, THE JOURNAL OF COMPARATIVE ECONOMICS, and CLIOMETRICA (a new journal of historical economics and econometric history).

His Ph.D. is in economics from MIT, while his M.A. is from the University of Manchester and his B.A. is from the University of Oxford.