Is Anyone Minding the Store? U.S. Taxpayers Risk $9.7 Trillion on Bailout

I really admire Danny Schechter's courage. Here's something to chew on until I post later today.

Insofar as this burgeoning Millennial Depression goes, I’ve noticed there are two sorts of people: Ones such as myself, obsessively following every blog and every chart and chasing after every little Bloomberg article like a starving hunter in an African veldt chasing down every little rodent with a spear, and others who vaguely know that there’s a crisis going on but who are pretty much buying the stock markets’ rise and the mainstream media’s line that “Green shoots are sprouting, and everything will soon be back to normal.” Sam Smith: It is becoming ever harder to realize that we have recently added a new country to our Muslim war hit list, that job losses are increasing, that the budget is more out of balance than ever, that we will soon have as many troops in Afghanistan as we did in Vietnam in 1965, that banks are getting record subsidies while ordinary folk face foreclosure or job loss… GOLDMAN SACHS SETTLES SUBPRIME CLAIM FOR $60 MILLION ENRON EXEC BLAMES MEDIA FOR HIS SENTENCE In the old days, perhaps before the assassination of JFK, the publicizing of CIA intriques, Iran Contra and the current torture revelations, conspiracies were events that supposedly happened in other countries in Europe and Asia, especially in Italy where governments came and went with the wind. In Italy, the Guardian notes, “he power of conspiracy has become an art form.” And now there’s a art movie in the classic sense that peers into the land where the mafia still rules and bribery and corruption is legion. Last night, I stumbled in to see the totally engossing and amazingly acted Il Divo – the Spectacular Career of Giulio Andreotti, who between l946 and l992 held 40 ministerial portfolios in addition to six shifts in the prime minister’s office. He was tried for associating with the Mafia and many suspected he ordered killings of opponents but nothing was ever proven. At 90, he is still a Senator for Life. The relation of power, political and economic and crime has always fascinated me which is why I am making a film about it if I can find the support. And it is why I relish reporting the news of the crimes on Wall Street which seem to be becoming more visible by the day. I found this development reported on a financial site involving the firm which gave us Treasury Secretary Paulson and Robert Rubin et al. before him: Goldman Sachs, which seems to be blessed with the best image that high powered public relations can buy. We have all been reading about the billions they received in bailouts and they payments they received from AIG. If there is a financial mafia in America, its name is Goldman Sachs. And that’s why this story on Investment News is so revealing. Incidentally, for years we were told that they were to smart to get into the subprime market. We are also not being told how many billions they made overall on the scam and when they knew they part of a system of total deception. Goldman to pay $60M for role in securitizing subprime mortgages Not only were the loans unfair, ‘they were destined to fail at inception,’ Massachusetts Attorney says. “Massachusetts Attorney General Martha Coakley today announced a $60 million settlement with The Goldman Sachs Group Inc. as part of a continuing investigation into investment banks’ role in securitizing subprime-mortgage loans. Her office had already been investigating foreclosure schemes and predatory lending. In this industrywide investigation, courts in Massachusetts have determined that “not only were the loans themselves unfair but they were destined to fail at their inception,” Ms. Coakley said at a press conference today. By paying out the money Goldman avoids a trial and so there is no admission of guilt even as they cough up SIXTY MILLION, just a small check for such a large firm. . . . “Ms. Coakley stressed that this settlement isn’t part of a court procedure and that Goldman didn’t admit that it was culpable — nor did the office ask it to admit wrongdoing. Rather, Goldman and the attorney general’s office agreed on a “best efforts” proposal, which doesn’t have specific mandates for the bank but ensures cooperation with the office, she said. Michael DuValley, a spokesman for Goldman, said that the firm is pleased to have resolved the matter.” Oh how, nice. The story does not mention the pain and suffering of homeowners who bought into this scam and how many may have lost their homes. ENRON CEO BLAMES MEDIA FOR HIS IMPRISONMENT The next story of the day concerns our old friends ENRON and its former CEO which wants the Supreme Court to reverse his conviction because of the role played by the media. Unbelievable but true: CNN reports WASHINGTON (CNN) — Former Enron CEO Jeffrey Skilling has asked the Supreme Court to overturn his 2006 conviction for insider trading, his attorney told CNN. In a 50-page petition filed Monday, Skilling’s attorney, Daniel Petrocelli, said “pervasive media coverage” prevented his client from receiving a fair trial from a Houston, Texas, jury. “The widespread, persistent, and scathing demonization of Skilling by the Houston media far exceeded the editorial commentary” allowed by the high court in similar cases, said the appeal. Questionnaires submitted by potential jurors “confirmed the breadth and intensity of the hostility toward Skilling.” Skilling, 55, is currently in federal prison. He was convicted on 19 counts of fraud and conspiracy relating to the collapse of the Texas-based energy services giant in late 2001.” At its height the scammers at Enron traded $27 BILLION in one quarter. Representing Skilling is a corporate lawyer you may have heard of. Petrocelli appears in Milena Kanova’s brilliant film TOTAL DENIAL as the defender of oil companies who connived with the Burmese junta to enslave peasants and steal land to build a pipe line. Th indigenous people sued under an old Alien Tort act and WON. Petrocelli was shocked. He also represented Represented Fred Goldman, the father of murder victim Ron Goldman, in a wrongful death civil suit against O.J. Simpson. He won that won and cashed in with a best selling book, Next up in the world of sleazy business environment, employess emulate their corporate leaders: In-house fraud cases surge Fraud committed against companies by their own employees has surged this year, new data suggest, providing fresh evidence that the recession is fuelling a rise in crime. Whistleblower hotlines operated by The Network, a US group that provides compliance services to some of the world’s biggest companies – including Aviva, the UK insurer, Cisco and Yahoo, the US tech companies, and Delta, the US airline – have received a deluge of tip-offs about fraud in recent months. PAUL KRUGMAN IN CHINA Many people read NY Times Op Ed columnist Paul Krugman. Few read about him. Here’s a report on his current trip to China. BEIJING (Reuters) - The United States risks a Japan-style lost decade of growth if it does not take aggressive action to stimulate its economy and clean up its banking system, Nobel Prize-winning economist Paul Krugman said on Monday. “We’re doing half-measures that help the economy limp along without fully recovering, and we’re having measures that help the banks survive without really thriving,” Krugman said. “We’re doing what the Japanese did in the nineties,” he told a small group of reporters during a visit to Beijing. He said it was not clear that China would suffer sub-par growth as a consequence of the fallout of the present crisis. “I’m mostly worried that the U.S. and the euro zone will have Japanese-type lost decades,” he said. If You Are In the Neighborhood, Drop In: 58th Bilderberg meeting to be held in Greece, May 14-17 The 2009 Bilderberg Group Conference will be held at the five-star Nafsika Astir Palace Hotel in Vouliagmeni, Greece, May 14-17, according to author Daniel Estulin. Insiders have told Estulin that rooms have been booked and flight plans made. He has also confirmed the location and dates with sources in Greece. Estulin is the world’s foremost investigative authority on this annual secretive and exclusive assembly, having investigated and infiltrated their meetings for over 10 years. His books and reporting have helped to bring the powerful group out of the shadows, even directly affecting the very conduct and timing of the meetings . . . and encapsulating them in an even deeper shroud of secrecy.

And finally ~

Is Anyone Minding the Store at the Federal Reserve? U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month. Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed. “We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?” Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG does not know and is not tracking where this money is. May 06, 2009 Financial Rescue The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps. Federal Reserve lending to banks peaked at a record $2.3 trillion in December, dropping to $1.83 trillion by last week. The Fed balance sheet is still more than double the $880 billion it was in the week before Sept. 17 when it agreed to accept lower-quality collateral. The worst financial crisis in two generations has erased $14.5 trillion, or 33 percent, of the value of the world’s companies since Sept. 15; brought down Bear Stearns Cos. and Lehman Brothers Holdings Inc.; and led to the takeover of Merrill Lynch & Co. by Bank of America Corp. The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve. ‘All the Stops’ “The Fed, Treasury and FDIC are pulling out all the stops to stop any widespread systemic damage to the economy,” said Dana Johnson, chief economist for Comerica Inc. in Dallas and a former senior economist at the central bank. “The federal government is on the hook for an awful lot of money but I think it’s needed to help the financial system recover.” Bloomberg News tabulated data from the Fed, Treasury and FDIC and interviewed regulators, economists and academic researchers to gauge the full extent of the government’s rescue effort. Commitments may expand again soon. Treasury Secretary Timothy Geithner postponed until tomorrow an announcement that may invite private investment as a way to clear toxic debt from bank balance sheets. Measures that have been settled include a new round of injections of taxpayer funds into banks, targeted at those identified by regulators as most in need of additional capital, people briefed on the matter said. Program Delay The government is already backing $301 billion of Citigroup Inc. securities and another $118 billion from Bank of America. The government hasn’t yet paid out on any of the guarantees. The Fed said Friday that it is delaying the start a $200 billion program called the Term Asset-Backed Securities Loan Facility, or TALF, to revive the market for securities based on consumer loans such as credit-card, auto and student borrowings. Most of the spending programs are run out of the Federal Reserve Bank of New York, where Geithner served as president. He was sworn in as Treasury secretary on Jan. 26. When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return. Collateral is an asset pledged by a borrower in the event a loan payment isn’t made. Fed Sued Bloomberg requested details of Fed lending under the Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral. Arguments in the suit may be heard as soon as this month, according to the court docket. Bloomberg asked the Treasury in an FOIA request Jan. 28 for a detailed list of the securities it planned to guarantee for Citigroup and Bank of America. Bloomberg hasn’t received a response to the request. The Bloomberg lawsuit is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

Suzan ________________________