Is the Awarding of Bonuses to the Revealed Criminals at the "Gangster Mega-banks" Psychological Warfare (PsyOps)?

Because it surely seems like it to me (and a few others). Gretchen Morgenson speaks plainly in the pages of Sunday's New York Times, which interestingly enough did absolutely no investigative reporting along these lines when the glamour boys Robert Rubin and Alan Greenspan were spinning the golden finance lies leading us to this precipice. Did anyone mention the New York Times' two-tiered reporting system yet? Like when the Times' sultry Judy Miller was leading the country down the primrose path (at the behest of Dick Cheney's man Ahmed Chalabi) to the War On Iraq? Or do we just accept that sometimes the New York Times actually reports straight news? (Or am I making too many connections too quickly?)

“As we are unpeeling what was happening on Wall Street, we may see that Wall Street didn’t find the safety from litigation risk that it hoped to find in securitization,” said Kathleen Engel, a professor at Cleveland-Marshall College of Law at Cleveland State University. “I think there is potential for liability if borrowers can engage in discovery to see exactly how much the sponsors were shaping the practices of the lenders.” . . . IT is hard not to be dismayed by the fact that two years into our economic crisis so few perpetrators of financial misdeeds have been held accountable for their actions. That so many failed mortgage lenders do not appear to face any legal liability for the role they played in almost blowing up the economy really rankles. They have simply moved on to the next “opportunity.”

And what of the giant institutions that helped finance these monumentally toxic loans, or arranged the securitizations that bundled the loans and sold them to investors? So far, they have argued, fairly successfully, that they operated independently of the original lenders. Therefore, they are not responsible for any questionable loans that were made.

But this argument is growing tougher to defend. Some legal experts point to a number of cases in which plaintiffs contend that firms involved in the securitization process, like trustees hired to oversee the pools of loans backing securities, worked so closely with the lenders that they should face liability as members of a joint venture. And these experts see a rising receptiveness to this argument by some courts.

“As we are unpeeling what was happening on Wall Street, we may see that Wall Street didn’t find the safety from litigation risk that it hoped to find in securitization,” said Kathleen Engel, a professor at Cleveland-Marshall College of Law at Cleveland State University. “I think there is potential for liability if borrowers can engage in discovery to see exactly how much the sponsors were shaping the practices of the lenders.”

. . . fighting a foreclosure on their home of 25 years that they say was a result of an abusive and predatory loan made by NovaStar Mortgage Inc. A lender that had been cited by the Department of Housing and Urban Development for improprieties, like widely hiring outside contractors as loan officers, NovaStar ran out of cash in 2007 and is no longer making loans.

Also named as a defendant in the case is the initial trustee of the securitization that contained the Jordans’ loan: JPMorgan Chase. In 2006, the bank transferred its trustee business to Bank of New York Mellon, which is also a defendant in the case. The Jordans are asking that all three defendants pay punitive damages.

“We contend that the trustee has direct liability on the theory that even though they were not sitting at the loan closing table, they were involved in the securitization and profited from it,” said Sarah E. Bolling, a lawyer in the Home Defense Program at the Atlanta Legal Aid Society who represents the Jordans.

“The prospectus had been written before the loan was closed. If this loan was not going to be assigned to a trust, it would not have been made.”

IN their legal briefs, the trustees have made the traditional argument that their relationship with NovaStar was not a joint venture and that they are not responsible for any problems with the Jordans’ loan.

A JPMorgan spokesman declined to comment on the case but said that because the bank was no longer the trustee, it was not directly involved in the litigation. A spokesman for Bank of New York Mellon also declined to comment.

Doesn't seem like it could be much clearer, so where are these borrowers who "can engage in discovery to see exactly how much the sponsors were shaping the practices of the lenders?" I'm awaiting their entrance.

Mark Crispin Miller (my secret love) fills us in on whatever's missing from today's puzzle. (Emphasis marks added - Ed.)

A few short months ago Goldman Sachs was deemed too big to fail, and allowed to sink its fangs into the public vein. Not only did it receive direct assistance from lowly tax-payers like you and I, the gaggle of Goldman alumni that run the Treasury Department and implemented the Troubled Asset Relief Program funneled tens of billions to insurance giant AIG to assure that it could cover about 13 billion in Goldman’s losses. Goldman paid back the TARP loans — because caps on executive pay are a form of socialism, of course — but is still making hay on the public dime, specifically on the sale of $28 billion worth of subsidized debt courtesy of the FDIC.

But today, as the New York Times put it, “up and down Wall Street, analysts and traders are buzzing” about the fact that Goldman is reporting “blowout profits” to the tune of $3.4 billion in the 2nd quarter. In a masterful bit of understatement, the Washington Post notes that “the New York investment bank profited from turmoil in the financial markets, the absence of former rivals and the continued support of the federal government.”

It’s good for Goldman’s shareholders and great for its traders — according to the WaPo, “Goldman said it set aside $6.65 billion for employee compensation in the second quarter.” But for everyone else? Not so much.

And not only because of the costs borne by the public, not only for the moral hazard this kind of crony capitalism represents, not just for the unfairness inherent in the pervasive reverse socialism we’re seeing these days, but also because of the lessons that support has left unlearned. Protected from the fallout of their bad bets, Wall Street’s casinos are open for business again. Just this week, Bloomberg reported that Morgan Stanley was trotting out another “Collateralized Debt Obligation” backed by shaky loans that’s again getting a AAA rating (if you have no idea what that means, see my piece from last October titled, “How Wall Street’s Scam Artists Turned Home Mortgages Into Economic WMDs”).

Read more.

If you can stand it. Suzan

Who Owns the Media? The Obama Brand

the mass-level automated technological community marketed its brand to victory in a country desperate to be rid of George W Bush.

John Pilger almost bends over backwards to make it easy to understand how the Obama brand was sold to an unwitting citizenry who were looking for a change from the disappointing (by those who thought he couldn't find Osama or kill all the suspicious people in the mideast) and embarrassing (everyone else) leadership of Cheney and Bush. The rest of us with our more definitive reasons don't really require John's explication, but it's still pretty good for a five-minute read. (Emphasis marks inserted - Ed.)

It is more than 100 days since Barack Obama was elected president of the United States. The “Obama brand” has been named “Advertising Age’s marketer of the year for 2008”, easily beating Apple computers. David Fenton of MoveOn.org describes Obama’s election campaign as “an institutionalised mass-level automated technological community organising that has never existed before and is a very, very powerful force”. Deploying the internet and a slogan plagiarised from the Latino union organiser César Chávez – “Sí, se puede!” or “Yes, we can” – the mass-level automated technological community marketed its brand to victory in a country desperate to be rid of George W Bush. No one knew what the new brand actually stood for. So accomplished was the advertising (a record $75m was spent on television commercials alone) that many Americans actually believed Obama shared their opposition to Bush’s wars. In fact, he had repeatedly backed Bush’s warmongering and its congressional funding. Many Americans also believed he was the heir to Martin Luther King’s legacy of anti-colonialism. Yet if Obama had a theme at all, apart from the vacuous “Change you can believe in”, it was the renewal of America as a dominant, avaricious bully. “We will be the most powerful,” he often declared. Perhaps the Obama brand’s most effective advertising was supplied free of charge by those journalists who, as courtiers of a rapacious system, promote shining knights. They depoliticised him, spinning his platitudinous speeches as “adroit literary creations, rich, like those Doric columns, with allusion...” (Charlotte Higgins in the Guardian). The San Francisco Chronicle columnist Mark Morford wrote: “Many spiritually advanced people I know... identify Obama as a Lightworker, that rare kind of attuned being who... can actually help usher in a new way of being on the planet.” In his first 100 days, Obama has excused torture, opposed habeas corpus and demanded more secret government. He has kept Bush’s gulag intact and at least 17,000 prisoners beyond the reach of justice. On 24 April, his lawyers won an appeal that ruled Guantanamo Bay prisoners were not “persons”, and therefore had no right not to be tortured. His national intelligence director, Admiral Dennis Blair, says he believes torture works. One of his senior US intelligence officials in Latin America is accused of covering up the torture of an American nun in Guatemala in 1989; another is a Pinochet apologist. As Daniel Ellsberg has pointed out, the US experienced a military coup under Bush, whose secretary of “defence”, Robert Gates, along with the same warmaking officials, has been retained by Obama. All over the world, America’s violent assault on innocent people, directly or by agents, has been stepped up. During the recent massacre in Gaza, reports Seymour Hersh, “the Obama team let it be known that it would not object to the planned resupply of ‘smart bombs’ and other hi-tech ordnance that was already flowing to Israel” and being used to slaughter mostly women and children. In Pakistan, the number of civilians killed by US missiles called drones has more than doubled since Obama took office. In Afghanistan, the US “strategy” of killing Pashtun tribespeople (the “Taliban”) has been extended by Obama to give the Pentagon time to build a series of permanent bases right across the devastated country where, says Secretary Gates, the US military will remain indefinitely. Obama’s policy, one unchanged since the Cold War, is to intimidate Russia and China, now an imperial rival. He is proceeding with Bush’s provocation of placing missiles on Russia’s western border, justifying it as a counter to Iran, which he accuses, absurdly, of posing “a real threat” to Europe and the US. On 5 April in Prague, he made a speech reported as “anti-nuclear”. It was nothing of the kind. Under the Pentagon’s Reliable Replacement Warhead programme, the US is building new “tactical” nuclear weapons designed to blur the distinction between nuclear and conventional war. Perhaps the biggest lie – the equivalent of smoking is good for you – is Obama’s announcement that the US is leaving Iraq, the country it has reduced to a river of blood. According to unabashed US army planners, as many as 70,000 troops will remain “for the next 15 to 20 years”. On 25 April, his secretary of state, Hillary Clinton, alluded to this. It is not surprising that the polls are showing that a growing number of Americans believe they have been suckered – especially as the nation’s economy has been entrusted to the same fraudsters who destroyed it. Lawrence Summers, Obama’s principal economic adviser, is throwing $3 Trillion at the same banks that paid him more than $8m last year, including $135,000 for one speech. Change you can believe in.

Read the rest of this devastating essay here. If you want to try to track down why the MSM no longer actually reports the news (and hasn't for decades), you might want to read below. Yes, the chart is a little bit overwhelming (actually it's only the tentacles (everywhere) of the ownership that make for an overstimulated mental condition) but it's well worth the effort:

We know the corporate media to be our culture’s main source of news. Unfortunately though, our trustworthy media is completely controlled. Observe the graph below (sourced here) and note all this happened in just 20 years time. This chart details the corporations involved. Did you know the Washington Post owns Newsweek? Or that the New York Times owns the Boston Globe? Believe it or not, getting the news “changed” to suit one’s preference isn’t that difficult. As this Saudi Prince and Rupert Murdoch know, all it requires is shares of a news agency and the owner’s phone number!

I could run more of this "news" but the exposes are easily found by just searching online for them. Karen Greenberg puts the finishing touch on why human rights and the movement for human rights are now "in the dust." Paul The Man Krugman also finishes off the subject of banksters on the rise again with:

Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels. Why is this disturbing? Let me count the ways. First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks. Remember that the gilded Wall Street of 2007 was a fairly new phenomenon. From the 1930s until around 1980 banking was a staid, rather boring business that paid no better, on average, than other industries, yet kept the economy’s wheels turning. So why did some bankers suddenly begin making vast fortunes? It was, we were told, a reward for their creativity — for financial innovation. At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes. Consider a recent speech by Ben Bernanke, the Federal Reserve chairman, in which he tried to defend financial innovation. His examples of “good” financial innovations were (1) credit cards — not exactly a new idea; (2) overdraft protection; and (3) subprime mortgages. (I am not making this up.) These were the things for which bankers got paid the big bucks? Still, you might argue that we have a free-market economy, and it’s up to the private sector to decide how much its employees are worth. But this brings me to my second point: Wall Street is no longer, in any real sense, part of the private sector. It’s a ward of the state, every bit as dependent on government aid as recipients of Temporary Assistance for Needy Families, a k a “welfare.” I’m not just talking about the $600 billion or so already committed under the TARP. There are also the huge credit lines extended by the Federal Reserve; large-scale lending by Federal Home Loan Banks; the taxpayer-financed payoffs of A.I.G. contracts; the vast expansion of F.D.I.C. guarantees; and, more broadly, the implicit backing provided to every financial firm considered too big, or too strategic, to fail. One can argue that it’s necessary to rescue Wall Street to protect the economy as a whole — and in fact I agree. But given all that taxpayer money on the line, financial firms should be acting like public utilities, not returning to the practices and paychecks of 2007. Furthermore, paying vast sums to wheeler-dealers isn’t just outrageous; it’s dangerous. Why, after all, did bankers take such huge risks? Because success — or even the temporary appearance of success — offered such gigantic rewards: even executives who blew up their companies could and did walk away with hundreds of millions. Now we’re seeing similar rewards offered to people who can play their risky games with federal backing. So what’s going on here? Why are paychecks heading for the stratosphere again? Claims that firms have to pay these salaries to retain their best people aren’t plausible: with employment in the financial sector plunging, where are those people going to go? No, the real reason financial firms are paying big again is simply because they can. They’re making money again (although not as much as they claim), and why not? After all, they can borrow cheaply, thanks to all those federal guarantees, and lend at much higher rates. So it’s eat, drink and be merry, for tomorrow you may be regulated. Or maybe not. There’s a palpable sense in the financial press that the storm has passed: stocks are up, the economy’s nose-dive may be leveling off, and the Obama administration will probably let the bankers off with nothing more than a few stern speeches. Rightly or wrongly, the bankers seem to believe that a return to business as usual is just around the corner. We can only hope that our leaders prove them wrong, and carry through with real reform. In 2008, overpaid bankers taking big risks with other people’s money brought the world economy to its knees. The last thing we need is to give them a chance to do it all over again.

What is truly puzzling to me (and I'm not kidding) is how badly the citizenry of an economically demoralized (as well as truly demoralized) country still struggle to maintain the facade of normalcy. Suzan ______________