Month: November 2011

I get asked this all the time: what is the big deal about all these Occupy Wall Street Protestors? What’s their gripe? Certainly our news media seems more than a tad confused. Well, I can explain a large part of it best by the example of these two recent news stories:

First (but not the worst) Story:

Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into the brokerage firm, which is run by Jon S. Corzine, the former New Jersey governor, several people briefed on the matter said on Monday. […]

Regulators are examining whether MF Global diverted some customer funds to support its own trades as the firm teetered on the brink of collapse.[…]

In any case, what led to the unaccounted-for cash could violate a tenet of Wall Street regulation: Customers’ funds must be kept separate from company money. One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis.

How much money? At least $700 Million. MF Global filed for bankruptcy on Monday. Odds of the people who invested in MF Global for their own account getting repaid in full for what I consider THEFT? Well let’s just say I wouldn’t bet on them doing too well in the bankruptcy.

But that’s peanuts compared to what Bank of America did to screw over the American Taxpayers in a Second, Far Worse Story: Bank of America transferring TRILLIONS of DOLLARS of WORTHLESS MORTGAGE BACKED DERIVATIVES to its FDIC insured bank unit. Why is this worse? Because in the event of a bankruptcy all the “counter-parties of those derivatives” (i.e., the people who would normally lose every penny they invested in the fraudulent scheme concocted by Merill Lynch–the investment house that sold these crappy securities as AAA rated investments– the same Merrill Lynch that Band of America purchased) would be paid first under the 2005 Bankruptcy Reform Law.

That would leave all of Bank of America’s other customers out in the cold. It would also force the FDIC to bail out all of Bank of America’s depositors. Needless to say this would cost the American taxpayers another who knows how many BILLIONS of DOLLARS as the FDIC insures the accounts of those depositors.

Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms.

For perspective, the entire Federal bailout of the Savings and Loan Crisis, for all those Savings and Loan Associations that went belly up after Reagan deregulated the rules that restricted them to making residential mortgage loans, was roughly 153 BILLION DOLLARS as of 1999. That figure does not include state bailouts from their own thrift insurance funds.

So, the shift of derivatives to Bank of America’s FDIC insured bank unit has the potential to exceed the cost of the Savings and Loan Crisis (the previous largest banking crisis since the Great Depression) by a conservative estimate of at least 400 BILLION DOLLARS and quite possibly much more. As many Democratic Legislators have complained, what Bank of America is doing is shifting the risk of losses on these derivatives from its investors to the FDIC and thus the American taxpayers.

Oct. 27 (Bloomberg) — Congressional Democrats are asking regulators whether they explored possible risks connected to Bank of America Corp.’s moving of derivatives from Merrill Lynch into its deposit-taking unit after a credit downgrade.

Eighteen lawmakers signed onto letters from Representative Brad Miller and Senator Sherrod Brown seeking information about whether agencies consulted on the transfer considered the potential impact on the bank’s health and customer accounts.

“Because of the favored treatment of derivative contracts in receivership, it appears highly likely that losses on derivatives would result in losses to insured deposits ultimately borne by taxpayers,” Miller wrote in his letter, which was signed by eight House Democrats. The transfers were first reported by Bloomberg News on Oct. 18.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/27/bloomberg_articlesLTQVRY1A74E9.DTL#ixzz1cSZWzVif

In short, Wall Street owns the government, and is treating the Federal Treasury and the Federal Reserve as their own private piggy bank. And no one is stopping them. Meanwhile Republicans rail on Cable TV the street that the problems with America are all related to greedy unions, bad teachers, government workers, social security and Medicare recipients, the unemployed and federal regulations.

Considering unregulated Wall Street banks and investment houses crashed the Economy through their risky and fraudulent derivatives schemes, took billions of free money from the government it doesn’t take a genius to see why Occupy Wall Street has taken of like it has all around the country. Wall Street firms received federal bailouts and are now making obscene profits at a time when their actions crashed the economy, required billions of taxpayer funded bailouts, created massive unemployment, pay freezes or cutbacks in benefits for middle class and poor American workers, an increased loss of medical insurance coverage for millions of Americans and unprecedented rates of foreclosures. I think these two examples of Wall Street’s continuing piracy makes it very clear why people are angry with a political and economic system that favors corruption, greed and income inequality on behalf of individuals who caused this mess in the first place, and are now continuing to profit from it.

Despite the Catholic Church’s mission to help the poor which took expression in their recent report blasting the idolatry of global markets, the U.S. Conference of Catholic Bishops remains little more than Republican-front organization.

The latest dispute centers on a decision by the Department of Health and Human Services in late September to end funding to the U.S. Conference of Catholic Bishops to help victims of human trafficking, or modern-day slavery. The church group had overseen nationwide services to victims since 2006 but was denied a new grant in favor of three other groups.

The bishops organization, in line with the church’s teachings, had refused to refer trafficking victims for contraceptives or abortion. The American Civil Liberties Union sued, and HHS officials said they made a policy decision to award the grants to agencies that would refer women for those services.

The bishops conference is threatening legal action and accusing the administration of anti-Catholic bias, which HHS officials deny.

The fight further sours an already difficult relationship between the government and some Catholics over several issues. The bishops fiercely oppose the administration’s decision in February to no longer defend the federal law barring the recognition of same-sex marriage. Dozens of Catholic groups also have objected in recent weeks to a proposed HHS mandate — issued under the health-care law — that would require private insurers to provide women with contraceptives without charge.

I do not like to mix religion with politics. But that is precisely why I get frustrated with the Bishops. Why are they seeking government contracts in the first place? Is the Catholic Church short on funds? Their desire to confront human trafficking and sex-slavery is admirable. Their decision to try to make it our government’s policy to deny contraceptives and abortion to sex slaves? Abominable.

I don’t like how the Bishops inject themselves into our political debates, telling Catholic politicians how to vote. That’s precisely what people feared about John F. Kennedy. We don’t want politicians who are beholden to Big Oil or Wall Street. Why would we want politicians who are beholden to the teachings of any particular religious leader or leaders? And they always seem to weigh in heaviest on abortion or contraception or gay rights. Where was the pressure on Republican lawmakers to support the health care law or the crackdown on credit card companies?

I know a lot of Catholic people and the only ones I’ve ever met who oppose contraception are old ladies. If you talked to them when they were of child-bearing age, they probably were singing a different song. Or, maybe, they’re just old enough to be a little old-fashioned. My point is, the Bishops can complain all they want about losing a government contract, but they weren’t ever going to support the Democrats because they’ve placed their reproductive dogmas over their mission to the poor. That’s their right, but let’s not pretend that the Obama administration has caused a rift. They just decided that any group that would deny a sex slave contraception doesn’t deserve a government contract.

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Occupy Nashville protesters’ arrests catch legal flak

RICHMOND, TN (Tennessean) – Implementing the new rules amid an ongoing protest may have violated the group’s rights of speech, assembly and petition under the First Amendment, some observers say.

“This is sort of a basic, core right to protest,” said Hedy Weinberg, state director for the ACLU. “The state cannot change the rules in the middle of the game, which is what’s happening, and the state knows that they cannot change the policy and selectively apply it.”

Haslam has said protesters were given advance notice of the curfew and chose not to clear the plaza.

State troopers arrested 26 people, including one journalist, on Legislative Plaza beginning just after midnight Friday. Police had previously arrested 29 people when they broke up Occupy Nashville’s encampment shortly after 3 a.m. Friday. Six were arrested on both nights.

Early Saturday, Magistrate Tom Nelson told troopers delivering the protesters to jail that he could “find no authority anywhere for anyone to authorize a curfew anywhere on Legislative Plaza.” Later in the day, protesters marched down to Public Square to show their thanks to Nelson. They collected signatures on a thank-you card for him.

Haslam said his administration decided to act after lawmakers and members of the public complained the Occupy Nashville protest had become a source of lewd behavior, robbery and assaults.

Curfew arrests may backfire on State  

• Federal judge orders TN to stop arresting Occupy Nashville protesters for curfew violation  

"But I will not let myself be reduced to silence."

One of the things I’m enjoying most about the OWS movement is the creativity of some of the offshoot efforts. Like this.

By themselves, such efforts aren’t going to change or rock the world. But multiply these sorts of ideas by thousands – or millions – and you’ve got a movement that only channels massive amounts of pent up frustration and anger over our broken economic and political systems, and not only has a strong identity, but is life-affirming and fun. And as any good organizer knows, you can have the most committed people and the most righteous cause possible, but if people aren’t having fun participating it’s very difficult to sustain. The encampments may fade as the novelty wears off and the weather worsens in much of the country, but if the creativity and fun blossom, the movement will simply shift to other tactics. It doesn’t look like this is going to fade away any time soon.