William Dudley’s “explosive charge against big banks,” as characterized by the Financial Editor of Huffington Post’s article on November 8th, is simply passing on Wall Street propaganda from a leading Fed culprit in the financial crisis and former Goldman partner. Dudley’s excuse for no Fed intervention (means – let Big Banks self-correct) was represented as gospel by S. Nasiripour the author of the piece who is either naïve, gullible, or a Wall Street closet shill who enables Dudley to lie. Can what Dudley said about “Big Banks” (Wall Street Bank Holding Companies) sound true to any financial editor?
Certainly not to anyone who has read How We Got Swindled by Wall Street Godfathers, Greed & Financial Darwinism or knows that Dudley was instrumental in allowing investment banks like Goldman (where he was formerly a partner and managing director) to become Bank Holding Companies in the Fall of 2008.
In the Fall of 2008, Dudley made “Big Banks” eligible for vast sums of capital from the Fed which gets all the money it wants from our U. S. Treasury – with zero oversight! “Big Banks” pay .0075% interest, and are free to use taxpayer dollars to create their own proprietary complex investments (translation: geometrically risky “financial innovation”) to contrive a tsunami of fees to grow net worth for Big Bank job creator leaders – rather than use taxpayer dollars from Treasury to create capital formation necessary to provide jobs. Further, the Fed backs up all the risk of failure for Bank Holding Companies; so Dudley shifted all the toxic risk of too complex to explain financial innovation to taxpayers. (Think about $700 trillion to $1.2 quadrillion of swap derivatives without foundational value circling the globe like a giant H-Bomb in the sky, waiting for the right detonator like a default.)
Does any financial editor, who is not a Wall Street shill, or a Teapublican Koch-pawn think job creators are really Santa Clauses who will come down chimneys with jobs for Christmas.
The Fed is charged with the responsibility of enforcing Bank Holding Company Regulations. Significant regs have the force of law behind them. So Dudley is obligated (like Greenspan was and Bernanke still is) to initiate the prosecution of “big banks” that break the law. Is Dudley, the ultra rich former Goldman guy, going to indict his friends and former colleagues? Or make an “explosive charge” and persist in habitually waiting (with everyone else at the Fed) for the “big banks” to self-indict?
New York Fed Chief Levels Explosive Charge Against Big Banks: http://www.huffingtonpost.com/2013/11/07/william-dudley-big-banks_n_4235834.htmlPosted: 11/07/2013 6:15 pm EST | Updated: 11/08/2013 9:49 am EST
William C. Dudley, president and chief executive officer of the Federal Reserve Bank of New York, chats before an interview in New York, U.S., on Tuesday, May 21, 2013. (Scott Eells/Bloomberg) | Getty
The head of the Federal Reserve Bank of New York said Thursday that some of America’s largest financial institutions appear to lack respect for the law, a potentially explosive charge against an industry already roiling from numerous government investigations into alleged wrongdoing.
William Dudley, one of the nation’s top banking regulators whose organization helps oversee Wall Street banks including JPMorgan Chase and Citigroup, made the comment during a speech focused on the problems posed by banks perceived to be “too big to fail,” and possible solutions to correct them.
But in an abrupt turn, Dudley suggested that regulators may be stymied by “cultural” issues that have negatively affected the nation’s biggest banks…..
The following objectively accurate information is from 4 decades of personal inside experience in the securities business and from writing How We Got Swindled by Wall Street Godfathers, Greed & Financial Darwinism: Dudley’s explosive proclamation that financial institutions appear to lack respect for the law is geometrically fallacious. His memorable excuse – “stymied by cultural issues” – translated into realspeak means, the Fed has no policy to enforce significant regulations. There is a quick fix: Warren-McCain 21st Century Glass-Steagall that will remedy the behavior of Big Banks in less than 100 pages, which is the last thing Goldman or anyone ever close to Goldman or Wall Street wants.
The Huff Puff piece is equivalent to picking straw out of manure and then not noting all the manure is still there along with the rancid 30 year old stench of the Fed which was a prominent enabler of sociopathic greed. It is apparent that Shahien has a bad nose, along with so many others. I wrote the following piece for Huffington, which was edited by David Satterfield, who wrote the foreword for my new book and obtained a Huffington blog for me from a junior editor who worked for him when he was the managing editor of the San Jose Mercury News – Huffington would not post Fed Fails to Regulate.., although Dave won 2 Pulitzers for financial journalism when he was the business editor of the Miami Herald.
Fed Fails to Regulate is from a one hour meeting with the SRVP of the Cleveland Fed Bank. It was crystal clear from one hour of equivocation with an economist that would not meet until he read my book, that the Fed will not admit to having any policy to enforce the regulation cited below in this excerpt from HOW WE GOT SWINDLED. And IM-2210-1 makes it obvious that any complex security which cannot be explained well enough to be understood is illegal. (Keep in mind this should/could apply to $700 trillion to $1.2 quadrillion swap TO 1.2 swap derivatives with without foundational value.) >>
FED FAILS TO REGULATE: GALLOPING INFLATION VS GALLOPING GREED?
Excerpts from How We Got Swindled by Wall Street Godfathers…about the Fed and Dudley:
Chapter 8. Self-Serving Regulators Serve the Self-Interested Ultra Rich ……………………… 79
“The Fed Bank Holding Company Supervisory Manual of about 1,700 pages stipulates: IM-2210-1. Communications with the Public Abou tCollateralized Mortgage Obligations (CMOs) – (a) General Considerations, … (3) Safety Claims – A communication should not overstate the relative safety … (5) Simplicity Claims – CMOs are complex securities and require full, fair and clear disclosure in order to be understood by the investor. So if something is too complex to explain. therefore unable to be understood, it seems that it would be illegal to sell it. …
Typically, the President of the Bank of New York is the Vice Chairman. In addition to setting Monetary Policy (which I promise not to explain here as this is not an Economic textbook and I do not have a “Piled higher and Deeper”), the Fed is responsible to regulate and supervise member banks, bank holding companies, international banking facilities in the US and other entities it is responsible for. The Fed also sets margin requirements, which…
The President of the Federal Reserve Bank of New York William Dudley, a former Goldman partner and managing director, promoted and approved that Goldman should become a BHC. And Steve Friedman, who resigned in May 09 as Chairman of the New York Federal Bank’s Board, a retired chairman of Goldman, was a part of the board that approved Goldman’s ability to become a BHC in September 08, which enabled Goldman to be in the first group to receive TARP money.
Friedman bought 37,300 shares of Goldman stock on December 17, 2008 – which by May had increased in value by $1.7MM. He purchased the stock while waiting for a waiver from the Fed for approval to have been able to purchase the stock. Without the waiver, on January 22, 2009, Friedman bought an additional 15,300 shares when he was still the Chairman. He made more than $3MM in profit in total based on his knowledge as the President. In January of 2009, the Fed issued the “SR” letter authorizing the Temporary Liquidity Guarantee Program (TLGQ) which allowed the FDIC to loan an additional $100 billion to needy banks (which was closer to $500 billion). It seems probable this allowed Goldman to quickly announce it wanted to repay the TARP money. Of course Goldman didn’t announce it knew it would get, a reported, $28 billion from the FDIC. To have bought the stock, while Chairman of the New York Federal bank’s board, was a violation of Fed policy. It is worse to consider that advance knowledge of how the proposed Fed TLGP FDIC money would benefit SELF-SERVING REGULATORS SERVE THE SELF-INTERESTED ULTRA RICH Goldman Partners constitutes insider information. This…”
Something is very wrong with the “so-called” press, not just Huffington. And the self-serving shit from Dudley and the naïve gullible Huffington financial editor (from the Financial Times, a slanted paper on the side of greed) who wrote this article for Huffington which only regurgitates FED PROPOGANDA – and Wall Street propaganda which only perpetuates self-serving lies to create the confusion necessary to foster the continuation and maintenance of sociopathic greed.