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In case you were wondering what the Congress and the Administration were doing with all those faxes, cards, phone calls, and letters you were sending in about the need for financial reform and tougher law enforcement, they decided to make it official policy not to aggressively prosecute the laws against white collar crime in 2008. Another innovation in outsourcing justice through extended self-regulation.
Apparently they told this privately to the Wall Street banks and their lawyers in 2008, but neglected to copy the American public on the memo.
Some have noticed the lack of reform, but the monied interests have done quite a successful PR job in refocusing the national discussion on priorities involving social issues, and the reform of the support systems for the weak, the unfortunate, and the elderly. Turning one group against another, and objectifying your intended victims through slogans and stereotypes, has always been an effective method of bending the herd to your will. Score one for Edward Bernays.
As W.C. Fields said, 'Never give a sucker an even break.'
How about it, feeling more confident yet? We know some people who are.
At least they have not overtly played the disability or the race card - yet. But things are relatively calm, and why be glum, the night is still young.
New York Times
Behind the Gentler Approach to Banks by U.S.
By GRETCHEN MORGENSON and LOUISE STORY
July 7, 2011
As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.
Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.
Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.
The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.
But this approach, critics maintain, runs the risk of letting companies off too easily.
“If you do not punish crimes, there’s really no reason they won’t happen again,” said Mary Ramirez, a professor at Washburn University School of Law and a former assistant United States attorney. “I worry and so do a lot of economists that we have created no disincentives for committing fraud or white-collar crime, in particular in the financial space."
While “deferred prosecution agreements” were used before the financial crisis, the Justice Department made them an official alternative in 2008, according to the Sullivan & Cromwell note.
It is among a number of signs, white-collar crime experts say, that the government seems to be taking a gentler approach.
The Securities and Exchange Commission also added deferred prosecution as a tool last year and has embraced another alternative to litigation — reports that chronicle wrongdoing at institutions like Moody’s Investors Service, often without punishing anyone. The financial crisis cases brought by the S.E.C. — like a recent settlement with JPMorgan Chase for selling a mortgage security that soured — have rarely named executives as defendants..."
Read the rest of the story here.
The metals continue to move higher, in fairly steady manner, after the coordinated smackdown at the Comex for the July options expiration.
Gold and silver are typically capped and then hit on a US Non-Farm Payrolls report. Today was the capping of price. Let's see if they can hold their own tomorrow. If they do get pushed down hard, it may very well set up a short term entry point, providing the asset markets do not start liquidating based on some failure or exogenous event.
It is interesting to see the strong negative correlation between the dollar and stocks. It almost looks like they are moving asset allocations around the plate, trying to whistle up the wind of retail buying.
The metals will be entering a seasonally stronger period of the year after July based on the last ten years, barring the liquidity panic of 2008.
Major players are reported to be calling around Wall Street to reassure the bankers that the US budget deficit debate is a show piece to allow the politicians to serve up some meaningless symbolic diversions to their various constituents. Not to worry, the deal will be done, with token sacrifices from the wealthy and a further erosion of the economic viability of the middle class, the elderly, and the weak. And remember to send in those corporate donations in time for the 2012 elections.
JPM was found by the SEC, at the prompting of the states and some exceptionally blatant evidence, to be bribing officials and systematically corrupting bond markets over a long period of time.
They have settled with the SEC, and issued a press release blaming rogue traders who operated without the knowledge of management.
JPMorgan Chase does not tolerate anticompetitive activity or other violations of law. The firm assisted the government agencies in their investigations and is pleased to have resolved this matter with its regulators. The majority of the funds being paid under the settlement agreements will be distributed to municipalities and other tax-exempt issuers.
The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm. These employees concealed their conduct from management.
The firm's policies -- both now and during the period in question -- expressly prohibit the conduct that gave rise to these proceedings. During the course of the investigations, the firm initiated enhanced supervisory protocols and worked with its regulators to further strengthen its compliance programs in the public finance business. These improvements included
implementing a heightened supervision program, increasing surveillance, and increasing antitrust, ethics and other compliance training. The firm will continue to strengthen these programs.
Under the terms of the settlements, JPMorgan Chase will pay a net amount of $211.2 million as follows: $50.0 million to the IRS; $51.2 million to the SEC; $35.0 million to the OCC; and $75.0 million to the State Attorneys General. Of those funds, $129.7 million will be eligible for distribution to municipalities and other tax-exempt issuers. The settlements are not expected to have any material impact on the firm's earnings.
One wonders if the Justice Department will be pursuing specific criminal charges against these individuals, in addition to banning them from participation in the securities markets, but allowing them to remain free to enjoy their enormous salaries and bonuses.
Stay tuned as more of these control frauds continue to fall apart, and the corporate media and the monied interest's demimonde try to ignore them and move along.
As in the case of the Madoff Ponzi scheme, if trading results are improbably and too consistently good, there is a high likelihood that fraud and corruption is being concealed.
Tomorrow is the Non-Farm Payrolls report for June.
This market rally is over-extended, but it could drift higher in the absence of news founded in economic reality.
There is optimism over the earnings season which starts shortly.
The boyz are quite anxious for mom and pop and a few of the institutions to put some cash in this market. You can't keep passing around a hot potato forever.
Tomorrow eyes will be on the Non-Farm Payrolls report.
The sovereign debt crisis looms large although largely ingnored for now in the United States of Amnesia.
Informed sources and major players are assuring Wall Street that the US Congress will reach a deal on the debt limits, and what transpires for now is to impress the various constituencies as to their seriousness in dealing with the problem.
