OT-Lobbyists Forge Letters In Derivatives Reform

?This story actually comes from back in November, but I just found out about it due to a recent Planet Money episode all about the regulatory scramble to
rewrite our banking rules. The whole podcast is interesting, but there's a bit in the middle about one of the tactics used by lobbyists to influence the rules: they totally forged letters from individuals and small businesses to make it seem like there was "grassroots" support for a particular position on derivatives reform.
They just forged the letters entirely -- including from a small Burger King franchise and a circuit court judge who was not happy about her name being used this way
Thus, the end result is almost always going to be in the favor of big players in the industry who can afford lobbyists (whether they do underhanded things like forge letters or just do more aboveboard lobbying).
http://www.techdirt.com/articles/20110210/12363113040/lobbyists-forge-letters-to-pretend-theres-grassroots-interest-derivatives-reform.shtml
Seems like the regulators are getting played like a violin. At the very least the justice department should look at filing RICO charges against those bastards. Notice the main stream media did not report any of this story.
Best Regards Tom.
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Hey Tom,
Hah...not real nice, but if you want a real SunOffAhBeach!! story, look at this:
<
http://www.youtube.com/user/fiercefreeleancer

Hopefully Uncle George McDuffee will chime in. I'd be interested to know if it's true. Snopes had nothing about it as of yesterday.
Brian Lawson, Bothwell, Ontario.
XXXXXXXXXXXXXXXXXXXXXXXXXX
wrote:

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Brian Lawson wrote:

It's a pretty incomplete version of reality. There are also a couple of statements that are just not correct. It's also worth noting that the IndyMac's President and two of the CFO's are going to be on trial in a criminal court shortly.
--
John R. Carroll




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On Sat, 12 Feb 2011 13:25:37 -0800, "John R. Carroll"

=========Technical term for this is regulatory capture, where the regulated become the clients/customers and the original intent of protection of the public/economy/country is ignored or forgotten.
One of the worst aspects of this is when the regulators investigate, and levy a nominal fine, generally equal in total to 1% or less of the amount of money lost. This not only "puts this behind us," but in many cases limits/prevents prosecution under the double jeopardy rule. Fines are generally paid under an Alford or nolo contendere plea rather than a guilty plea or verdict. http://en.wikipedia.org/wiki/Alford_plea http://en.wikipedia.org/wiki/Nolo_contendere
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/11/AR2011021106210.html
http://noir.bloomberg.com/apps/news?pid 601039&sid=ar6m5YSMWHZg
http://www.katv.com/Global/story.asp?S 017212 Estimated IndyMac losses 12.7 billion$. (currently -- may go much higher) Regulatory fine and restitution paid by Blair Abernathy 126,592$ + interest 126,592$/12,700,000,000$ = 0.000996787%
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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F. George McDuffee wrote:

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/11/AR2011021106210.html
I don't see how that is particularly relevant to the video offered for comment.
Do you have any idea what the shareholder's lost when the FDIC moved in? What about the debt holders? The answer in both cases is one hundred percent and that's a really big number. This is the way our markets work. The people that let Abernathy run their company got creamed right along with the people that funded the company through it's bond sales.
The FDIC isn't out a dime and won't be. One West won't know for years if their cram downs will pay off and that $75,000.00 note is to insure that the taxes owed by the original borrowers gain are paid and that the house isn't resold at a riskless profit. That's right. A borrower owes the tax on any gain realized in a cram down exactly as if there had been a normal sale.
I can understand the genuine outrage in the air but what's in that video isn't reason for it.
I've looked into the causes of our current state of affairs at length over the last ten months and from nearly every perspective. Politics, policy, regulation, culture and other considerations and most of my homework has beem the work product of real professionals in both the University, regulatory and business communities. There are real studies out there for the viewing if you dig around. I've learned a great deal, in some cases, not many but enough, that I was just wrong. In other instances, things that struck me as particularly interesting were fairly mundane or trivial.
You seem to be all hopped up on G-L-B and the repeal of Glass-Steagal. I can tell you with a very high degree of confidence that this was a fairly trivial event. The existing law was being circumvented very effectively. One proof is the location of AIG FP, a business that wouldn't have been impacted by G-S in any event. They don't know from Glass in London, don't care and never really have.
We have had exchanges, you and I, regarding the sociopathic community promoted to the top of the food chain in the financial services industry. That is a bigger factor by far than the Gramm-Leach-Bliley act of 1999. The CFTMA was relatively seminal and largely unobserved. One corrective regulatory change to undo this is the ICE Exchange for derivatives. Contrary to it's creators intention, this exchange has done nothing to bring transparency to the market beyond what existed.
Anyway. The root cause isn't directly attributable to either politics or industry misbehavior.
You can clearly discern what's happened if you will study organized interests and their trends and populations over the last fifty years. Compare membership in America's fraternal organizations, as one example, not with party swings in election cycles but with the actual policy outcomes. Then look at the number and size of organized business groups, how they have evolved, function and the regrouping that has gone on under very large umbrella organizations like the Chamber of Commerce.
The Chamber of Commerce resembles a union as much as anything. Think about that for a minute. Fraternal organizations ( down 60 percent) and labor union membership ( down by nearly 80 percent) has declined to historic lows. Business unions on the ascendant, exhibiting large multiples in membership and funding growth at the same time. It's the organization that's important and business entities are already individually organized to bring diverse resources to bear over extended periods of time to accomplish tasks not otherwise possible. What could be easier or more natural than organizing the organized?
The cloud will lift but despair will almost certainly set in......... Between policy making and policy drift we have ended up in the crapper.
--
John R. Carroll






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On Sat, 12 Feb 2011 17:48:44 -0800, "John R. Carroll"
<snip>

<snip> ===========Indeed this is another facet of a growing problem.
Just came across a CSM op-ed piece on this.
http://news.yahoo.com/s/csm/341522 ;_ylt=AoRRhLCFxV2wCGpX15Gmryf9wxIF;_ylu=X3oDMTJjZjBlcHBrBGFzc2V0A2NzbS8yMDExMDIxMS8zNDE1MjIEY3BvcwM2BHBvcwMzBHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNpc2hvbmVzdHl3YW4- <snip> Looking at perceived corruption in the public sector, a report last month found that the United States had slipped from being the 19th least corrupt nation – behind Denmark, New Zealand, Singapore, and its neighbor Canada – to 22nd, behind Chile and Ireland.
"Our rating is pretty awful," says Frank Vogl, cofounder of Transparency International, which puts together the annual report. He figures the drop has been influenced by a series of scandals at the state and city level, such as the September arrests of the mayor and city manager of Bell, Calif., accused of taking $5.5 million from the city. Though not government corruption, the "massive-scale fraud" in the American banking system uncovered since 2008 has probably also played a role in the US slippage, suspects James Galbraith, an economist at the University of Texas, Austin. <snip>
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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F. George McDuffee wrote:

http://news.yahoo.com/s/csm/341522 ;_ylt=AoRRhLCFxV2wCGpX15Gmryf9wxIF;_ylu=X3oDMTJjZjBlcHBrBGFzc2V0A2NzbS8yMDExMDIxMS8zNDE1MjIEY3BvcwM2BHBvcwMzBHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNpc2hvbmVzdHl3YW4-
"Only the biggest and oldest companies are happy being listed on public markets today. As a result, the stock market as a whole increasingly fails to reflect the vibrancy and heterogeneity of the broader economy. To invest in younger, smaller companies, you increasingly need to be a member of the ultra-rich elite. "
"At risk, then, is the shareholder democracy that America forged, slowly, over the past 50 years. Civilians, rather than plutocrats, controlled corporate America, and that relationship improved standards of living and usually kept the worst of corporate abuses in check. With America Inc. owned by its citizens, the success of American business translated into large gains in the stock portfolios of anybody who put his savings in the market over most of the postwar period. "
"Today, however, stock markets, once the bedrock of American capitalism, are slowly becoming a noisy sideshow that churns out increasingly meager returns. The show still gets lots of attention, but the real business of the global economy is inexorably leaving the stock market - and the vast majority of us - behind. "
http://www.nytimes.com/2011/02/14/opinion/14Salmon.html?_r=1&hp
--
John R. Carroll



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On Mon, 14 Feb 2011 06:13:31 -0800, "John R. Carroll"
<snip>

<snip>
Thanks for the insight and article.
Now the question is what should be done about it. Should these large private combinations be broken up under anti-trust? Should these (or at least their US operations) be required to become publicly owned joint stock companies subject to full SEC disclosure? Should there be a cap imposed on gross sales volume or market share?
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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On Feb 15, 11:40am, F. George McDuffee <gmcduf...@mcduffee- associates.us> wrote:> Now the question is what should be done about it. Should

Why do you think something needs to be done?
Dan
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On Tue, 15 Feb 2011 13:19:28 -0800 (PST), " snipped-for-privacy@krl.org"

==========If I wanted to live like a North Korean, I would move to North Korea. I have several bad habits to support. I like to wear clothes, I like to live in a house with central hear and running water and I like to eat. I also drive a car.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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On Feb 15, 4:29pm, F. George McDuffee <gmcduf...@mcduffee- associates.us> wrote:>

You did not answer the question. Why do you think something has to be done?
Are you not wearing clothes now? Are you living in a house with central heat? Does it not have running water? Are you having problems with getting food? Do you not have a car?
In other words what problems does having both private and public companies cause you?
If it ain't broke, do not fix it.
Dan
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snipped-for-privacy@krl.org wrote:

Sure he did.

Hey dude, it's broke as hell.
--
John R. Carroll



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You say it is broke, but do not say how it malfunctions. I do not find that having large private companies such as say Freescale Semiconductors causes any problems.
Dan
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snipped-for-privacy@krl.org wrote:

Would you say the same about CALPERS, which is essentially a large privately held hedge fund?
--
John R. Carroll




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Since I am not a public employee in California, I have not paid much attention to CalPERS. I do know they lobby to have more say so on corporate boards. But to answer your question, I do not see that CalPERS is much better or worse than many public owned corporations that manage pension funds.
Dan
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snipped-for-privacy@krl.org wrote:

CALPERS is the worlds single largest investor. You don't have to be a public employee in California to understand the meaning of that. They also draw the "proprietary trading" veil whenever their operations are under scrutiny. I don't think much of that.
--
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John R. Carroll wrote:

People who are paid with tax dollars should be prohibited to unionize.
When a union strikes a corporation and makes impossible demands, the company has the option of simply going out of business. The taxpayers don't have that option - you _WILL_ pay, or you will be mercilessly punished.
Thanks, Rich
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Rich Grise wrote:

Why? Prohibiting them from collective bargaining or otherwise organizing is a violation of the very right to assemble that our constitution guarantee's. What you probably want to prohibit is stupitity at the barganing table and you can do that by excercising one of your other rights. You can vote and elect people with a brain.

None of the "critical" functions that bargain collectively are able to impliment work stoppages. That's essentially what got the Air Traffic controllers fired.
--
John R. Carroll




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John R. Carroll wrote:

Oh, they have a right to organize, assemble, or whatever, but they DO NOT have a "right" to have my income confiscated from me to line their own pockets.
That's the problem with socialism - its very foundation is institutionalized theft.
Thanks, Rich
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Rich Grise wrote:

They don't do it either.

That doesn't even make sense Rich. All organized societies are "socialist" to one degree or another. That's the purpose.
--
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