Showing posts with label bankers. Show all posts
Showing posts with label bankers. Show all posts

Tuesday, March 25, 2014

Bankers' Deaths Shine Light on Stress in Industry, Tunnel Vision

By Ben Moshinsky Mar 24, 2014
Bloomberg

Coroners in London are preparing to investigate two apparent suicides as unexpected deaths by finance workers around the world have raised concerns about mental health and stress levels in the industry.

The inquest into the death of William Broeksmit, 58, a retired Deutsche Bank AG (DBK) risk executive found dead in his London home in January, will start tomorrow. The inquest for Gabriel Magee, a 39-year-old vice president in technology operations at JPMorgan Chase (JPM) & Co., who died after falling from the firm’s 33-story London headquarters, is scheduled for late May.

The suicides were followed by others around the world, including at JPMorgan in Hong Kong, as well as Mike Dueker, the chief economist at Seattle-based Russell Investment Management Co. The financial world’s aggressive, hard-working culture may be hurting itself, professionals advising on mental health in the industry say.

At greatest risk are “those who have not cultivated friendships, networks, outside of their company,” said Stewart Black, professor of global leadership and strategy at IMD, a business school in Lausanne, Switzerland.

“A lot of executives keep their nose down, work hard, do great work and don’t really cultivate extra networks,” he said. “Those broader networks act as safety valves.”

Banks are starting to realize the scale of the problem, said Peter Rodgers, chairman of the City Mental Health Alliance, which counts Morgan Stanley (MS) and Bank of America Corp. among its members.

Cultural Change


When the group was set up last year banks, law firms and accountants including Goldman Sachs Group Inc. (GS), Linklaters LLP and KPMG LLP, “no one in the City was really talking” about mental health, Rodgers said. Now they have 18 firms on their list, including the Bank of England, the central bank.

The banking sector has “seen a number of initiatives” to improve staff well-being but they “need to be accepted by a cultural change at the very top,” said Rodgers, who is also deputy general counsel at KPMG.

Magee’s family didn’t return a phone call seeking comment. Ed Adler, a spokesman for the New York-based Broeksmit Family Foundation, also didn’t return a call seeking comment. Kathryn Haynes, spokeswoman for Deutsche Bank in London, and Jennifer Zuccarelli, a spokeswoman for JPMorgan, declined to comment.

Finance “does tend to have a long-hours culture,” said Emma Mamo, who leads workplace initiatives at Mind, a U.K. mental health charity. “People can’t keep doing long hours; you need perspective and downtime.”


‘Finest Minds’


Broeksmit died on Jan. 26 at his home in Chelsea, west London, according to a memo to employees obtained by Bloomberg News. Police said he was found hanging and they aren’t treating the death as suspicious.

“He was considered by many of his peers to be among the finest minds in the fields of risk and capital management,” Deutsche Bank’s co-CEOs Anshu Jain and Juergen Fitschen wrote in the memo. They said Broeksmit was “instrumental as a founder of our investment bank.”

Dueker was found dead at the side of a highway that leads to the Tacoma Narrows Bridge in Washington state, according to the Pierce County Sheriff’s Department. He was 50.

The reviews into the deaths of Broeksmit and Magee will be overseen by a coroner, whose role is to question witnesses and police to determine where, when, how and why sudden or unexplained deaths occur, including suicides.

Magee’s inquest will be held by Mary Hassell, the coroner who said practices at Bank of America Merrill Lynch’s London office may have been a factor in the death of 21-year-old intern Moritz Erhardt from an epileptic seizure last year.

5 A.M. E-Mail


“It may be that Moritz had been working so hard that his fatigue was a trigger for the seizure that killed him,” Hassell said at the Nov. 23 inquest. “But that is only a possibility.”

Erhardt was found unconscious in a shower at Claredale House, a student residence in East London, on Aug. 15. His parents told the coroner that their son contacted them the day before his death in a 5 a.m. e-mail and that they were worried he was working too hard and sleeping too little.

Hassell questioned Juergen Schroeder, Erhardt’s development officer at Merrill Lynch, about whether working late was necessary in investment banking.

“There is a general expectation in our profession,” Schroeder said.

Weekends Off


Bank of America told staff on Jan. 10 its junior bankers should take some weekends off. Christian Meissner, head of global corporate and investment banking at the lender, said in a memo to employees that analysts and associates should “take a minimum of four weekend days off per month.”

JPMorgan, which has had at least two suicides so far this year, isn’t a member of the City Mental Health Alliance and hasn’t publicly announced measures to deal with the aftermath of the deaths.

“JPMorgan haven’t come forward to us and we haven’t approached them either,” Rodgers said. “There’s a period of mourning. The last thing they need is us sticking our heads in. I’m confident they will come forward.”
Related:

Wednesday, June 27, 2012

A Free Pass for Financial Predators

by ROBERT HUNZIKER
 
The American plutocratic revolution is now complete. The proof is: There are no criminal charges for the housing bust and financial meltdown of 2008. Starting with Reagan in the 1980s, as of today the Right has won their decades-long overthrow for complete control of America. An elite corps of wealthy now runs the country. Their bloodless rebellion, a coup d’etat whereby the Left was nullified by a tripartite (bankers, academia, and politicians) cabal’s tour de force, is a sharp contrast to the old-fashioned traditional bloody coup d’etats were accustomed to in South America, e.g., the Chilean September 1973 military coup against President Allende conducted by ultra right wing General Pinochet, who, after bombing the presidential palace, massacred the Left (See: the film Missing, by Costa-Gavras, Universal Pictures, 1982.). Of course, Pinochet’s old-fashioned coup had the advantage of speed and efficiency, completed within hours, whereas America’s bloodless coup took decades to accomplish, but on the other hand, America has not yet condoned military occupation on domestic soil.

The proof of a successful coup by the plutocratic elite is everywhere on display because it is absolutely remarkable how much we know about their unethical and/or criminal behavior behind America’s 2007-08 financial meltdown without knowing what to do about it!

As Charles H. Ferguson, winner of the 2010 Academy Award for Best Documentary Feature, Inside Job, says, “There is overwhelming evidence of massive criminal behavior” in the 2007-08 real estate bust and financial meltdown, but nobody has been charged with a crime. This, in part, is why he recently published Predator Nation, Corporate Criminals, Political Corruption, and the Hijacking of America, Random House, 2012, which book footnotes/documents the virulent combination of unchecked greed and criminal behavior behind the financial collapse of 2008. Ferguson identifies leading bankers, academics, and politicians who collaborated to pillage the American public. The book has been called a “roadmap for prosecution,” naming the culpable, stating the crimes, referencing laws that were broken.

How this tragedy occurred right under the country’s collective noses is a lengthy and nefarious story. Charles Ferguson’s new book covers this story with remarkable detail. Ferguson’s diatribe is laced by a book cover depicting a one hundred dollar bill folded into the image of a hand, flipping the bird, an obvious reference to the perpetrating financial, political, and academic elite’s haughty attitude towards the general public, emphasizing the dauntless, depraved lawlessness behind their theft committed in broad daylight. And, part of Ferguson’s thesis is exactly that, i.e., criminal acts led to, and were the cause of, one of history’s worst financial meltdowns. He also paints the picture of how America has been hijacked by a financial elite, an oligarchy that operates at the expense of the entire American population: “The financial sector is the core of a new oligarchy that has risen to power over the past thirty years, and that has profoundly changed American life.”

Ferguson’s ingenious work is, without a doubt, on target because we, as a nation, know it is true. Not only have oodles of articles and books already flushed out this repugnant story but intuitively, the citizens of the country know it is true because of how the disaster came down, namely: Governmental policy and Wall Street chicanery turned the housing industry into a gigantic Las Vegas craps table and dispensed free playing chips to beginners. Millions of unsuspecting Americans bought into this deal-of-a-lifetime, and when the house of cards tumbled, unsuspecting American taxpayers rescued the culprits, but the bankers already tucked away gargantuan fees.

We also know it is true because it happened in broad daylight, right before our eyes, caught on camera was the U.S. Treasury Secretary Henry Paulson, former CEO of Goldman Sachs, on one knee before a stern-faced, but dismayed, House Speaker Nancy Pelosi, pleading congressional approval for $700 billion (taxpayer funds) to bail out his buddies (so sorry Richard S. Fuld, Jr., CEO, Lehman Brothers, no jerks allowed.) Meanwhile, the Federal Reserve turned the SWIFT international wire system white hot, spreading trillions of US Dollars around the globe to foreign banks and multinational corporate interests in order to keep the worldwide ship of state afloat, and surrounding these horrifying events, the housing market crumbled apart like broken tinker toys, credit dissipated, and Wall Street crashed with the durable S& P Index registering a nasty, and ominously devilish, 666 low print early in March 2009.

As of today, people who are not normally schooled in the language of the Wall Street know names of people and of programs, like Goldman Sachs, Bear Stearns, Lehman, Freddie Mac, credit default swaps, and derivatives. Wall Street and big banks are the butt ends of crass jokes on late night TV, and inequality of income/wealth has never been so obvious. According to a recent Survey of Consumer Finance by the Federal Reserve, median family net worth fell 40% from 2007 to 2010. Meanwhile, according to Forbes magazine, billionaires and multi-millionaires set all-time records. The discrepancy between Middle America and Wall Street has never been so radiantly exposed, and the general public has finally learned how Wall Street makes a killing off their backs. Most likely, Goldman Sachs’ CEO Lloyd Blankfein, whose firm bet against (short sales) toxic securities they sold to other institutions, would not survive a stroll down Main Street in certain parts of the country.

The American public is overly informed about how and why one of the most corrupt and stupidest-ever financial schemes body-slammed the world economy, but as Charles Ferguson astutely declares, “Nobody has gone to jail” (poor ole Bernie Madoff must feel like he’s carrying the burden for everybody.)  Mortgage brokers, Wall Street investment bankers, commercial bankers, credit rating agencies, accountants, and politicians are complicit in the world’s biggest-ever ponzi scheme, taking advantage of the entire population of the country and sticking it to foreign banks/institutions by selling them toxic housing securities. The pure ugliness, brazenness, and gall of the perpetrators is enough to turn one’s stomach. As for CEO Fuld, he was attacked shortly after it was announced Lehman was bankrupt: “He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold.” (The Telegraph, October 7, 2008.)

According to Ferguson, there is overwhelming public evidence in (1) lawsuits, (2) depositions, (3) government investigations, and (4) whistleblowers of highly illegal conduct in the housing bubble and financial crisis. There is a staggering amount of evidence that CEOs of Wall Street firms, like Lehman Brothers, were warned that their financial controls were inadequate and their accounting was wrong, or to put in it in plain English: ‘their books were cooked’. A prime example is a memo warning to top Lehman executives by Senior Vice President Matthew Lee, “I feel it is my ethical and legal responsibility to point out to you that there are billions of dollars of unjustified assets on our balance sheet.” (To see the memo, Google: “Matthew Lee and Lehman.”) A month later Lee was dismissed from the firm and the CEO of Lehman continued to stand by the firm’s financial statements even though warned of extreme problems, inaccuracies, and overstatements, e.g., ‘Repo 105’ transactions artificially boosted the firm’s balance sheet by $50 billion! This is illegal corporate behavior of the first order, but where are the criminal charges?

Furthermore, according to Ferguson, “Over the last thirty years, in parallel with deregulation and the rising power of money in American politics, significant portions of American academia have deteriorated into ‘pay to play’ activities. The sale of academic expertise for the purpose of influencing government policy, the courts, and public opinion is now a multibillion-dollar business,” academia has become embedded within the finance industry and its greatest apologist, Exhibit A, is Lawrence Summers, former Treasury Secretary, former President of Harvard, former Head of the Council of Economic Advisors, former Mister Everything Economics, a proponent of the deregulation of financial services, i.e., elimination of the Glass-Steagall Act, which kept commercial bankers out of the risky securities business ever since 1933, stating, when significant parts of Glass-Steagall were overturned: “With this bill, the American financial system takes a major step forward towards the 21st Century.”  Thus, Summers was directly behind the entire meltdown, but as a highly endorsed hedge fund/banking consultant raking in millions, before and after his stint with Clinton, he had to follow his true conscience, i.e., benefactors, and push to kill the 1933 Act, which successfully, and responsively, protected bank depositors from risky commercial bank shenanigans for over 60 years.

Summers is the one who dressed down Raghuram Rajan (Finance Professor, University of Chicago; Chief Economist IMF), who presented a paper about credit default swaps at the Federal Reserve Jackson Hole 2005 Conference titled Has Financial Development Made the World Riskier? accusing firms of “goosing up returns” with latent risk, which proved to be precisely what cratered A.I.G., asking the prescient question: “If firms today implicitly are selling various kinds of default insurance to goose up returns, what happens if catastrophe strikes?” Rajan’s critique was thoughtful, balanced, and very obviously on point; it is indeed a sad commentary that Summers immediately stood up, lambasting Rajan and calling him a “Luddite,” but on the other hand, since Summers planned to be or was/is in the pockets of hedge funds and Wall Street, he flippantly overlooked the most obvious of dangers to the entire financial system in concert with the “profits now” mentality that bends to Wall Street’s every wish.

The real mystery is how and why they get away with it when their crimes and/or despicable ethical behavior prove so hideous… and so obvious, and thus, many astute progressive mouths dropped wide open with dismay when President Obama insanely appointed Summers as the Director of the National Economic Council, which only goes to prove what a tight clique exist amongst academia, politicians, and Wall Street whereby bad judgment and/or unethical practices are overlooked in favor of companionship-to-profits.

Nobody has gone to jail and as Ferguson explained in an interview with Amy Goodman on Democracy Now, “There is overwhelming evidence of massive criminal behavior.” Ferguson says: “the American people need to take their country back.” He suggests some kind of nationwide movement but without stating specifics. Indeed, the stench of the entire cabal, including academia, politicians, Wall Street, and rating agencies is so loathsomely squalid, and rotten to the core, it would not surprise if perpetrators are dragged into the streets in the middle of the night, stripped naked, tarred, feathered and run out of town on a rail, assuming some daring citizens become so fed up with the ‘system’ they take matters into their own hands.

Otherwise, and because nobody has been criminally charged, one can bitterly assume the country is now firmly in the hands of a wealthy elite, including academicians who, similar to guns for hire, will say or publish anything for a buck. With 20/20 hindsight, it is now clear the citizenry of the country cannot trust, but also cannot do anything about (other than revolt in the streets), the tripartite cabal that stole their country in broad daylight right under their noses. And, really…  isn’t it a crying shame the intelligentsia, who we trust to educate our society, is so deeply involved… but… come to think about it, they probably saw what happened to their colleagues in Chile under Pinochet, concluding life is much better, and easier, when one is part of the Inside Job.

By definition … if no criminal charges are filed, the coup is complete.

Friday, May 18, 2012

American Empire and the Future

by PAUL L. ATWOOD
 
 
The Great Recession is the worst economic crisis since the Great Depression and, like the aftermath of Katrina, or the BP calamity, or the invasions of Iraq and Afghanistan, is a man-made disaster. Many signs point to worse tidings. Many of us who live in this the most advanced capitalist country are indoctrinated at an early age to believe our system is by far the most efficient and best ever created, especially if we are affluent and live well. We tend to believe it obeyed the laws of evolution toward ever higher form, more or less as we imagine the human species itself. We go to lengths to ignore the fact that our system began as the brainchild of a minority that imposed its will by brute force against others who had good reason to oppose it. It is impossible to separate our republican form of government from our economic system. As former Secretary of State John Hay put matters as far back as the 19th Century: “This is a government of the people, by the people, and for the people no longer. It is government of corporations by corporations.”  It has been the case since the American Revolution, and remains the case, that the American government has been owned and operated by the financial and corporate elites and government policies, and most definitely foreign policy, are largely their agendas set out for their interests. Bankers and immense industrial corporations largely run the global show, backed by the Executive, Congress and the Supreme Court, America’s gargantuan military power and the connivance of corporate media.
 
As a culture we deliberately ignore the brutal genesis of American capitalism, feeding ourselves Disney fantasies about religious freedom etc. The origin of the modern American corporation is to be found in the Plymouth and Virginia companies. Childish mythologies aside, these were established as profit-making entities and to make their claim upon the so-called New World these new enterprises required systematic plunder of lands and resources from natives, and their virtual annihilation in the original colonies, ethnic cleansing, cheap white labor in the form of indentured servitude, and ultimately the importation of African slaves. The American capitalist system was therefore premised at its outset by murder and de facto aggression, and human bondage, the very sins for which we condemn others today. Many of our early American heroes were slaveholders and war mongers par excellence.

Some of us are old enough to remember when we condemned the communists for their “slave societies,” believing that our own slavery was somehow an aberration instead of the absolute prerequisite to establish today’s American way of life. Our system’s continued success still requires these critical factors. We still have slaves but now we don’t have to see them. They toil on plantations, mines and factories hidden away in far continents, victims of centuries of western plunder, today camouflaged  as “globalism.” We employ terms like “neo-colonialism” but pretend this term does not apply to us. What else was Cuba before Castro but an American satrapy? What else South Vietnam, South Korea, Dominican Republic, Iran before 1979, Philippines, Guatemala, El Salvador, Nicaragua and many others?  Why else has the US invaded Iraq and Afghanistan but to try to secure the world’s remaining second largest deposit of oil and to acquire oil and natural gas from Central Asia in the very backyards of our rivals China and Russia? As Edward Said asked, “if the principal product of Iraq were broccoli would the U.S. be in Iraq?”

Victims of our wars are dismissed under the Orwellian rubric of “collateral damage” committed accidently in the “fog of war.” While our government now goes to some lengths to ensure that the worst of such crimes are committed by proxies wherever possible, when all else fails we send in our own armed forces. As reports from Iraq and now Afghanistan and Pakistan and Yemen and Somalia show daily, our pilotless predators wreak a terrible slaughter on civilians. Our Army and Marine Corps do not exist to protect and defend our shores but to enter other nations and force them to our will.

We Americans hide from such uncomfortable facts largely by ignoring them, believing the lies we are told, or by fantasizing that we are a new chosen people, or the redeemers of a benighted world.  We have constructed a mass delusion that our way of life represents the most advanced civilization in human existence despite the fact that its perpetuation has required the deaths quite literally of many millions as it took shape, the wholesale violation of the very values we claim, and the destruction of the very resources and environment that made the “American way of life” possible in the first place.

Any trust in this system is really a kind of fundamentalism; many want to believe that all of this was ordered on high, perhaps encoded in our genes at the very dawn of humanity, its inevitability impressed in the Book of Time.

As in all fundamentalist faiths we have created a set of myths about why we go to war and these myths center on the falsehood that we do so to protect and defend noble values, and principles, and our superior way of life; never for the reasons others wage war, such as lebensraum, or to seize resources, or to prevent others from exercising their ‘right’ to self-determination should that impede our “interests.”

In American public culture enemies have always been presented as aggressors against an intrinsically peace loving people who take up the sword only, ONLY, because our antagonists have left us no alternative. Thus, it is always the other who bears the opprobrium for anything the US has done in the name of national “defense.” Think, say, of the atomic bombings of Hiroshima and Nagasaki, or the carpet bombing of South Vietnam, or the more recent destruction of Fallujah where white phosphorus, a chemical  banned under international law, and depleted uranium was used on civilians to awful effect causing a plague of cancers. All of these were brought on by the iniquities of our enemies, or so we claim… 

Yet not a single war in American history has at bottom NOT been one of choice. And we never go to war against any nation capable of wreaking havoc on us. No, we ravage only those who lie helpless before us.  The American way of war has been hailed culturally as “exceptional” and humane and just and necessary for the defense of profound human values and ideals, and thus a model for the rest of humanity…but the truth stands naked in the neo-colonies.

This has been especially true since the US assumed ownership of the Western capitalist system in 1945 and has used armed violence against many nations, either overtly or covertly, to expand it to the entire world, thereby building new roads so to speak, all leading to our New Rome.

In these almost innumerable wars, interventions, covert ops, assassinations etc. since the end of World War II the US has killed millions in places too numerous to list here, all of course in the name of progress and humanity.

The American empire that most Americans are persuaded does NOT exist began as an outpost of British imperialism, and now occupies the dominant position among the nations of our planet. One of the American goals of WWII was to knock Britain from its perch… to play Rome to Britain’s Athens as it were. Today American armed forces are in at least 170 of the 192 nations comprising the United Nations, and American ships, aircraft and satellites are deployed to every corner of the terrasphere, stratosphere, ionosphere, and outer space. The reach of American empire is a quantum leap in power beyond anything ever seen on planet earth.

Empire by definition is one core nation living at the expense of many others. Clearly, in terms of the distribution of wealth and resources, mal-distributed as they are domestically, most roads today lead to the United States.  Yet a “perfect storm” of merging crises is gathering force that has every possibility to undo the American imperial project and, indeed, prove catastrophic for human civilization across the globe.

Empire, and the American neo-empire today, has always relied at bottom on armed force and that in turn has always been dependent on advantages in the technology of war. Since at least the turn of the 19th Century, when the emergence of modern capitalism fostered the Industrial Revolution, military and economic advantage has required access to ever greater quantities of energy. To a significant extent both World Wars were global imperial competitions for the control of oil. Until 1945 the US was self-sufficient in energy but used so much petroleum supplying its war machine and those of the United Kingdom and Soviet Union, that in order to maintain our enormously bloated way of life we became dependent on oil in other nations.

Since then the American armed juggernaut has been deployed often, if not primarily, to protect access to petroleum in other people’s countries, to fuel our army, navy and air force, to safeguard the trading routes and shipping lanes to transport the black gold, all for the benefit of American living standards.

Our swollen way life is inconceivable without oil, and other hydrocarbons. Yet, the absolute reliance on the substances is slowly but indisputably poisoning and suffocating the very systems they enabled to arise, and the day draws near when the Age of Oil will end because of declining reserves and increasing costs.

Consider Peak Oil. A concerned geologist at Columbia named Hubbert began to worry about how long oil would last and he predicted that American production would peak about 1973. He was correct. Since 1859 the US has used half of its oil and now the other half will be consumed in the next 50 years, though it will undoubtedly be so expensive well before that many will have to choose between heat and food. He also predicted global oil production to peak about now and most analysts agree that his prediction is correct.

Americans have always relied upon ingenuity and technological fixes to solve problems but in this case the likelihood that hydrogen, biofuels, solar or cold fusion will ever replace petroleum and natural gas is slim. The U.S. is the Saudi Arabia of coal but reverting to that fuel will entail other collateral damage. Some, like James Lovelock, argue that nuclear power could save the advanced nations from total collapse but opposition to that is widespread especially after the events in Japan last spring.

Thus, intensifying competition for access to fossil energy reserves is inexorably leading to increasing armed conflict, and, ironically, the armies in conflict will not be capable of combat without the very energy they are fighting to protect, thereby hastening the disappearance of this energy source, and therefore exacerbating the very problems that in truth cannot be resolved by war. A case in point is the fact that American and NATO forces in Afghanistan now consume a million gallons of fuel per day!

The release of carbon and other byproducts of burning coal, oil, and gas has altered the world’s ocean and atmospheric systems, while the industrial processes have also ravaged landscapes, rivers, overturned settled ways of life, and polluted cities. The net result is increasingly catastrophic climate change, just as climate scientists have predicted, leading to intensifying social problems like drought, floods, famine, increased disease, and the mass migration of populations. All of these are sure to lead, in turn, to more armed violence globally, and will unless a massive shift in consciousness takes place with an equal commitment to change.

While there are numerous Cassandra voices prophesying these outcomes the real issue before us is whether we have the will to see and take the necessary action before it is too late.
President Obama was elected primarily on the basis of his promise to end the war in Iraq. Is anyone fooled by his withdrawal that is not a withdrawal? And what of the uncounted but very numerous cohorts of “contractors,” like Blackwater/Xe, many of whom are highly paid former Special Forces operatives with “trigger time” who will employ their martial skills while remaining in Iraq? These privatized troops cost far more than the pay scale for regular troops.

For what other purpose will these mercenaries remain than to ensure that this long coveted, yet incipient neo-colony remains in the American orbit and provides its only natural resource?
One of the first measures undertaken by the Bush Administration was to create a National Energy Policy Development Group headed by the chief spokesman of the oil industry, one Richard Cheney. No access to their records or discussions has ever been allowed but their actions surely indicate that the energy chief executives are mightily aware of Peak Oil. Their policy? Not conservation; no crash program of alternative energy sources, no commitment to work with the international community for peaceful solution. NO! The policy is clearly to invade other countries and seize their energy reserves and/or the means to transport them. For all President Obama’s rhetoric there really is no Plan B.

The U.S.-NATO induced civil war in Libya has been won by rebels opposed to the ousted and now departed Gaddaffi. The rationale provided by the United Nations and Obama was that a “no fly zone’ was necessary to prevent the slaughter of Libyan civilians and that would be the limit of American intervention. The 7-month long bombardment of Libya’s cities resulted in a massive humanitarian catastrophe, the very outcome the intervention was supposed to prevent.

It is clear that even before this intervention was  announced to the public the U.S already had CIA and Special Forces operatives on the ground in Eastern Libya. The intelligence analysis institute STRATFOR  published a map of foreign oil concessions in Libya. The vast bulk are in Eastern Libya, now  liberated from Gaddaffi’s grasp and soon to be made more profitably available to Western energy conglomerates. As South Carolina Senator Lindsay Graham put it nakedly “Let’s get in on the ground. There is a lot of money to be made in the future in Libya. 
Lot of oil to be produced. Let’s get on the ground and help the Libyan people establish a democracy and a functioning economy based on free market principles.” The “humanitarian” pretext stands naked in its hypocrisy. No such intervention has been deemed necessary in Bahrain or Yemen, or conspicuously, Saudi Arabia where repressive governments have killed numerous civilians demonstrating against those governments for the obvious reasons that these countries’ dictatorships cooperate with the American agenda in the region.

President Obama was elected on the strength of his opposition to the War in Iraq and his promise to end it. Yet in his recent speech declaring the Iraq War at an end he asserted that the original purpose was to disarm terrorists, the false claim made by his predecessor. Thus Obama has adopted the very narrative of the Bush deceptions. Bear in mind that Obama has always been in the camp of that section of the elite who saw the invasion as a blow to a very specific international order that would weaken the American position and overall agenda in the world.

Read his speeches made as a senator before his candidacy. He feared the real American agenda to keep consuming the lion’s share of vital global resources was endangered by Bush’s cowboy tactics, and could lead to conflict with people who could do real damage, like Russia and China. His actions as president show he is not morally opposed to bombing and killing barefoot civilians who employ donkeys or camels as their mode of transport. That has continued unabated at his command. He claims to lose sleep over the deaths of American troops. At first he said that he was serious about withdrawing from Afghanistan in July of 2011. Then the date has been moved up to 2014, now it is 2024. At best Obama seems the captive of the real government behind the scenes.

If you’ve never heard of Col. Fletcher Prouty that would not be an accident. He testified before the United States Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities, otherwise known as the Church Committee during the mid-1970s that revealed, among other things, the CIA’s assassination squads and its secret alliance with the Mafia. He blew minds with his description of the Secret Government behind the scenes. Prouty was a distinguished career military officer who in the last third of his career was deeply involved in the so-called intelligence community. He was go-between for the Joint Chiefs of Staff, the Defense Intelligence Agency, and the CIA, and he reminds us that the CIA emerged directly from Wall Street at its birth in 1947. Prouty was a consummate insider who spilled the beans. At the time his remarkable book The Secret Team was deep-sixed by the very secret team he revealed. It has recently been re-published by a small press and is available.  Read it and learn how our government’s foreign policy is really shaped and by whom and for what. As Prouty shows, this intelligence, military, and “national security” network is really a combine of  those entities known popularly as High Finance, the Military Industrial Complex,  and Big Media.

Prouty emphasizes that this secret government behind the scenes is not a tiny cabal comprised of the Illuminati or Tri-lateral Commission or Bilderbergers, or Council on Foreign Relations though they do play roles. Rather, each faction of the Financial-Military-Industrial- Intelligence-Congressional-Media Complex has self-interests, large-scale benefits, and its future existence to protect. No one is initiated into these agencies unless vetted very carefully, and that would be especially true of party nominations for president. While disputes arise between factions and can be intense, on rock bottom interests, like access to energy reserves and control of resources and markets, and on maintaining the dollar as the world reserve currency, each collaborates with the others in symbiotic and synergistic relationships. The clearest example is the war (Iraq and Afghanistan, and Pakistan, Iran, Somalia, Yemen, Libya and Venezuela are essentially the same war!). Virtually all factions of the Secret Government support it, if for somewhat different reasons.

An example is the recent revelation that the Federal Reserve Bank printed 40 billion dollars and sent it to Iraq in 2003 where most of it promptly disappeared. This action clearly indicates that the nation’s chief bankers were part of the broad conspiracy among the behind-the-scene elites to invade Iraq, for conspiracy it was since Iraq had nothing to do with the events of 9-11, as the Bush Administration claimed. Masquerading as a government agency the Fed is really the nerve center of a consortium of the nation’s largest and most important banks. Fed officials acted in secrecy as always. Why they acted as they did should be thoroughly analyzed and revealed.

This Secret Team has certainly never served the people, though it claims to do so as our national defense team (against enemies it creates!). For at least the last century its members have come to believe the president is its servant and most definitely not the other way around. As even ultra-conservative spokesman George Will said publically on a Sunday talk show: America has always been ruled by its aristocracy. It has never been about democracy but about which section of the elite will rule at any given time. Or as Noam Chomsky avers: There is only one political party, the Corporate party, with two separate wings.

Of course this Secret Government’s chieftains, no matter their past history, believe themselves to be omniscient and infallible. To take just the current crisis, the CIA itself fostered the rise of Islamic extremism during the Cold War because it believed this force would obstruct communism and prevent Arab and Muslim nationalism from achieving independence of western control, especially over oil. The CIA actually fostered Ayatollah Khomeini in Iran as the strategic answer to Iranian communists; as well as the Muslim Brotherhood in Egypt to thwart Nasserism, or Arab nationalism; and the mujahideen in Afghanistan who morphed into the Taliban and al Qaeda. As the CIA itself said the eruption of Islamic militancy in opposition to the hand that fed it was “Blowback” of the first magnitude. When the Carter Administration national security chief, and current background adviser to Obama, Zbigniew Brzezinski, armed the Mujahideen in 1988 in order precisely to draw in Soviet troops, Brzezinski infamously declared: “That secret operation was an excellent idea. It had the effect of drawing the Russians into the Afghan trap and you want me to regret it?… I wrote to President Carter: ‘We now have the opportunity of giving to the USSR its Vietnam War’…What is more important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred up Moslems or the liberation of Central Europe and the end of the Cold War?”

Stirred up Moslems indeed!

President Obama said clearly during his campaign that he would focus on Afghanistan in order to prevent the return of the Taliban and al Qaeda, thereby enhance American national security, and ensure that another 9-11 could never be planned and orchestrated from that country. We know now of a serious split between al Qaeda and the Taliban prior to 9-11 because of the latter’s fear of American retaliation. We know, also, that the Taliban have no desire to attack the United States itself, only those Americans on Afghan soil. American actions are clearly destabilizing Pakistan, thereby portending a far greater threat in terms of Pakistan’s nuclear weapons. So what is the United States REALLY seeking to accomplish in Afghanistan? Again, the claim of a “humane” intent is preposterous. American actions in both Afghanistan and Pakistan, especially attacks by pilotless drones that kill numerous civilian by-standers, do more for Al Qaeda’s and the Taliban’s recruiting than anything done by themselves.

If Bob Woodward’s recent book, Obama’s War, is to be believed the president desires to withdraw from Afghanistan but is being thwarted at every turn by the military, the CIA and even Hillary Clinton. I’m sure that Obama, having been cultivated and financed by major financial corporations still wishes to gain American access to the energy reserves of central Asia but the issue is whether that goal will be utterly compromised by policies based on raw force. It appears that the devotees of military solution are winning that argument but it is a doomed prospect and one that is fraught with danger.

When the Red Army finally left Afghanistan in the early 90s that tragic place descended into civil war while the US washed its bloody hands and walked away. Even so, as the Taliban came to dominate and as it committed terrible atrocities like public beheadings, and stonings of women, the CIA, Enron, and Unocal continued to negotiate with these extremists for a pipeline to carry oil and natural gas through Afghanistan to Pakistan and the Indian Ocean. If the Taliban were to regain power over all of Afghanistan and offer a guarantee for the pipeline, I’m quite sure the US would crawl right back into bed with them no matter their brutality with no shame and excuses aplenty for public consumption, just as was the case in the 1990s. But given the damage wrought by US armed intervention today a deal with the Taliban is probably all but impossible, and the US will never be able to impose its own  puppet able to guarantee the original US goal.

The real issue facing the so-called “advanced” nations and now China, India and the Asian tigers is that cheap oil is running out. Extracting oil will become ever more difficult and expensive and at some future point will be so costly that it will cause essentially a collapse of globalism with real depression here in the US. The fact that oil commerce is denominated in dollars while the value of the dollar steadily declines also presages a future in which the dollar may be toppled as the world currency, thus leading to widespread inflation and certain critical shortages of basics.

Widespread suffering will be endemic, unless an alternative source of energy is found able to sustain our way of life. But that is extremely unlikely. Coal and natural gas can compensate to some degree but since our luxurious and wasteful way of life is based on oil and since we see our many profligate luxuries as necessities, the industries that support them will fail, and that will lead to mass unemployment, cold winters indoors and the absence of air-conditioning in summer, not to mention starvation in what we like to think of as the “backward” nations, and hunger here since our supermarket cornucopia requires hydrocarbon for fertilizers and pesticides. Miracle cures like bio-fuels and hydrogen are wishful thinking. Nuclear power could maintain the electrical grid but the recent meltdown in Japan may make that hope insurmountable despite Obama’s continuing support for a nuclear renaissance.  Green technologies are unlikely to fill the void on time to avert the falling economic and political dominoes, if ever.

The US government’s real energy policy up to now has been to support energy corporations to exploit oil as usual and gain control over such reservoirs still existing. Congress is the creature of oil and other hydrocarbon corporations and their financiers…largely to protect their profit margins, and there is no plan for the day when the Age of Oil ends with a crash. Again natural gas and coal can maintain some of the richer nations at a much lower standard of living but this will result in widespread social upheaval leading to more international tension…not to mention an intensification of global warming

American foreign policy is premised today on garnering as much control over shrinking energy resources as possible…and to protect this access strategically. The various military commands are deployed primarily for this reason. Note that a new military command with responsibility for Africa has been created. The opportunity to create new military bases for AFRICOM is one of the prime reasons the U.S. is now in Libya. Note the recent incursion of American “advisors’ into Uganda and Sudan. Nigeria now provides a third of American needs, and Angola and other smaller nations have reservoirs that are targets for U.S. control. Obviously our attempt to gain control of the lion’s share of Middle East oil and especially of oil and natural gas in the Caspian and Central Asian regions will bring us into serious conflict with those nations that see these as their back yard – namely China and Russia and India and Pakistan. Imagine our response if China were to inject 150,000 troops into Mexico, the number two supplier of our domestic needs, or Venezuela, with the clear intention of siphoning these reserves to themselves?

Al Qaeda does not constitute an “existential threat” to the US and most real terrorist threats can be dealt with by police methods as the last decade has shown. It is well known in Washington but not among the public that the Taliban told al Qaeda not to attack the US from Afghanistan before 9-11. The fact that al Qaeda did so created a break between the two groups. The Afghan Taliban itself cannot threaten the US, and has never declared any intention to do so. But when Americans kill Muslims in Muslim lands we do far more to create terrorists than anything al Qaeda could do on its own. Meanwhile, attacks on Pakistan have promoted a separate Pakistani Taliban, and that faction has vowed to wreak vengeance on America, though its capacity to do so remains limited. The Pakistani Taliban, coupled with American air assaults, could destabilize Pakistan, and perhaps foster a takeover by Islamic fundamentalist junior officers. Recall that Pakistan possesses nuclear weapons.

Meanwhile, the public is frightened and off balance and paying through the nose for endless deployments. None of this four trillion dollar war (as Nobel economist Joseph Stiglitz, and Harvard professor Linda Bilmes now estimate) has been paid. Our children, and grandchildren, if they are lucky to have a future worthy of the name, will spend their working lives paying off these debts at jobs that won’t reflect degrees in higher education.  Meanwhile, the various elements of the secret team are currently reaping the benefits of deficit spending and the national debt and they feel sure that eventually the real price will be paid by those who sacrifice their lives and by taxpayers forced ever more into bankruptcy, foreclosure and unemployment.

The current wars will fail to achieve their goals. Premised as they are on lies they are in fact crimes against the peoples of the region, crimes intended to take advantage of their weaknesses and reward American energy and financial corporations and secondarily we citizens of the empire who insist on maintaining a failing way of life. It is the same ancient game of beggar our neighbors to advantage ourselves. In neither Iraq nor Afghanistan will the US achieve control of shrinking energy reserves for essentially the same reason it could not control Vietnam, the very war waged upon their peoples ostensibly to “liberate” them recruits more opponents. Moreover, the attempt to do so will result ever more tensions with the Muslim world and the other nations that need energy too.

In other words, the global climate is heating up in more ways than one. The conditions for another global war are present, and let us not ignore the fact that the last one was waged with toys compared to the present.

President Obama has said that he wants to see a “nuclear free Middle East. That would require the nuclear disarmament of Israel. Yet Obama goes along with the pretense of all his predecessors and refuses to acknowledge that Israel has these Weapons of Mass Destruction. If, indeed Iran is building nuclear weapons why wouldn’t it given the fear of Israel’s, or of America’s in the Persian Gulf, of Russia’s to the north, of Pakistan’s to the east? A world in which some nations declare their entitlement to such horrific weapons is a world in which many others tremble and come to reason that their only protection lies in possessing such themselves.

As international tensions rise over shrinking resources, and the ravages of climate change, the more likely a hair trigger mentality will arise. Hiroshima was the handwriting on the wall. As these demonic weapons increase sooner or later they will be used.

That is, unless the American people force our policies toward sanity, and come to focus on what our rhetoric has claimed we stand for all along.

Congressman Barney Frank has stated that the current economic crisis could be resolved by simply reducing the size and mission of the military. To be sure, the U.S. could defend itself against any existential threat with a tenth of our current military budget,. But the real threats perceived by elites are to their control of resources and markets. Such a redirection of resources could ameliorate economic crisis significantly but only for a time. The issue still remains the energy future, especially depletion and the effects of discharging hydrocarbon effluents into the atmosphere in the first place, and the growing likelihood of spreading violence. By all measures the American government and the public appear intent to hang on to our way of life no matter the consequences. That way of life is inherently profligate and unsustainable. We have altered the climate to the extent that ravaging events like the recent floods in Pakistan, vast forest fires in Russia, Hurricane Katrina, water shortages, and desertification are mere warnings. The worse all such conditions become the more social and political instability with severe danger of armed violence.

Our policies in the future must center on a crash program of conservation of energy, even if this means draconian limits imposed by law such as smaller more fuel efficient vehicles, and heating devices, and restrictions on air-conditioning and banning plastic containers etc. Both the nuclear power and coal industries are ramping up pressure since they know that natural gas, which at present provides most electricity, is also depleting and we need to educate people to be aware of what will happen without secure electricity. Simultaneously we need a Manhattan Project “cubed” and focused on alternative energy. Above all the crying need is for international cooperation in conservation, for cooperation into research into alternative energy sources, and mutual disarmament treaties and agreements to avoid conflict over shrinking resources. The alternative is the worsening probability of a third global war. Yet at present we have only Plan A: Armed intervention.

Alternatives can occur ONLY if the public awakens to the coming storm. We cannot depend on the corporate media to educate us; they are allied with their major clients, not the public, and they are deliberately withholding bad news for fear of stampeding the stock markets into panic. We must get the word out ourselves and make it clear that we will not accept or cooperate with business as usual from Congress or the presidency. That will have to mean more militancy throughout this nation than seen since the 1960s, or really even the 1930s.  Unfortunately I fear this will require even deeper crisis before we begin to awaken to the danger ahead.

Bibliography  

Nafeez Mosaddeq Ahmed, Behind the War on Terror: Western Secret Strategy and the Struggle for Iraq (New Society Publishers, 2003) Following the U.S. declaration of a “war on terror,” Washington hawks were quick to label Iraq part of an “axis of evil.” After a tense build-up, in March 2003 the United States and Britain invaded Iraq, purportedly to protect Western publics from weapons of mass destruction (WMD). But was this the real reason, or simply a convenient pretext to veil a covert agenda? Ahmed shows that economic considerations prompted US-UK to invade Iraq. The US has become vulnerable to energy shocks with domestic production unable to cope with increasing demand. This has led to occasional blackouts in places like California. Prior to Iraq war America’s oil inventories fell to the lowest level since 1975 with the country on the verge of drawing oil from ‘Strategic Petroleum Reserve.’ Iraq under Saddam Hussein was becoming what author says a ‘ swing producer.’ In other words he was turning oil tap on and off whenever Baghdad felt that such a policy was suiting its interests. Hussein even contemplated removing Iraqi oil from the market for extended periods of time which would have sent crude oil prices soaring.

Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam (NY, Metropolitan Books, 2006)       In an effort to thwart the spread of communism, the U.S. has supported–even organized and funded–Islamic fundamentalist groups, a policy that has come back to haunt post-cold war geopolitics. Drawing on archival sources and interviews with policymakers and foreign-service officials, Dreyfuss traces this ultimately misguided approach from support for the Muslim Brotherhood in Egypt in the 1950s, the Ayatollah Khomeini in Iran, the ultra-orthodox Wahhabism in Saudi Arabia, and Hamas and Hezbollah to jihads in Afghanistan and Osama bin Laden. Fearful of the appeal of communism, the U.S. saw the rise of a religious Right as a counterbalance. Despite the 9/11 terrorist attacks and the declared U.S. war on terrorism in Iraq, Dreyfuss notes continued U.S. support for Iraq’s Islamic Right. He cites parallels between the cultural forces that have promoted the religious Right in the U.S and the Middle East and notes that support from wealthy donors, the emergence of powerful figures, and politically convenient alliances have contributed to Middle Eastern hostilities toward the U.S. 

William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order  (London, Pluto Press, 2004) This book is a gripping account of the murky world of the international oil industry and its role in world politics. Scandals about oil are familiar to most of us. From George W. Bush’s election victory to the wars in Iraq and Afghanistan, US politics and oil enjoy a controversially close relationship. The US economy relies upon the cheap and unlimited supply of this single fuel. William Engdahl takes the reader through a history of the oil industry’s grip on the world economy. His revelations are startling.

Zbigniew Brzezinski The Grand Chessboard: American Primacy And Its Geostrategic Imperatives (NY, Basic Books, 1998)            President Carter’s former National Security Adviser, and now an informal adviser to President Obama, bragged that he had drawn the Soviets into their debacle in Afghanistan: ”What is most important to the history of the world? Some stirred up Moslems or the liberation of Central Europe and the end of the Cold War?” As his title indicates the fate of nations and their peoples are relegated to game theory. If America is to play the game of geo-strategic chess who are the pawns? 

Richard Heinberg, The Party’s Over: Oil, War and the Fate of Industrial Societies (New Society Publishers, 2005)        The world is about to run out of cheap oil and change dramatically. Within the next few years, global production will peak. Thereafter, even if industrial societies begin to switch to alternative energy sources, they will have less net energy each year to do all the work essential to the survival of complex societies. We are entering a new era, as different from the industrial era as the latter was from medieval times… Heinberg places this momentous transition in historical context, showing how industrialism arose from the harnessing of fossil fuels, how competition to control access to oil shaped the geopolitics of the twentieth century and how contention for dwindling energy resources in the twenty-first century will lead to resource wars in the Middle East, Central Asia and South America…he also recommends a “managed collapse” that might make way for a slower-paced, low-energy, sustainable society in the future. 

Michael Klare, Rising Powers, Shrinking Planet (NY, Holt, 2009)  Looking at the “new international energy order,” author and journalist Klare (Resource Wars) finds America’s “sole superpower” status falling to the increasing influence of “petro-superpowers” like Russia and “Chindia.” Klare identifies and analyzes the major players as well as the playing field, positing armed conflict and environmental disaster in the balance. Currently in the lead is emerging energy superpower Russia, which has gained “immense geopolitical influence” selling oil and natural gas to Europe and Asia; the rapidly-developing economies of China and India follow. Klare also warns of the danger of a new cold-war environment.

James Howard Kunstler, The Long Emergency: Surviving the End of Oil  etc. (NY, Grove Press, 2005)  It used to be thought that only environmentalists and paranoids warned about the world running out of oil and the future it could bring: crashing economies, resource wars, social breakdown, agony at the pump…Americas dependence on oil is too pervasive to undo quickly…meanwhile we’ll have our hands full dealing with soaring temperatures, rising sea levels and mega-droughts brought on by global climate change. (The Washington Post).

James Lovelock, The Vanishing Face of Gaia: A Final Warning (New York, Basic Books, 2010)  Presents evidence of a dire future for our planet. The controversial originator of Gaia theory (which views Earth as a self-regulating, evolving system made of organisms, the surface, the ocean and the atmosphere with the goal always to be as favorable for contemporary life as possible) proposes an even more inconvenient truth than Al Gore’s. The eminent 91-year-old British scientist challenges the scientific consensus of the United Nations Intergovernmental Panel on Climate Change. It is too late to reverse global warming, he says, and we must accept that Earth is moving inexorably into a long-term “hot state.” Most humans will die off, and we must prepare havens. He points out that sea levels are rising significantly faster than models predicted. Lovelock advocates solar thermal and nuclear power as the best substitutes for burning fossil fuels, and he suggests emergency global geo-engineering projects that might cool the planet. But Lovelock also avows today’s ecological efforts are futile. This is a somber prophecy written with an authority that cannot be dismissed.

L. Fletcher Prouty, The Secret Team: The CIA and Its Allies in Control of the United States and the World (Skyhorse Publishing 2008)       A retired colonel of the U.S. Air Force, served as the chief of special operations for the Joint Chiefs of Staff during the Kennedy years. He was directly in charge of the global system designed to provide military support for the clandestine activities of the CIA. Prouty’s CIA exposé, was first published in the 1970s, but virtually all copies of the book disappeared upon distribution, purchased en masse by shady “private buyers.” Certainly Prouty’s amazing allegations—that the U-2 Crisis of 1960 was fixed to sabotage Eisenhower-Khrushchev talks, and that President Kennedy was assassinated to keep the U.S., and its defense budget, in Vietnam—cannot have pleased the CIA.

Michael Ruppert, Confronting Collapse: The Crisis of Energy and Money in a Post Peak Oil World (Chelsea Green Publishing, 2009)           Ruppert confronts the stark realities of a world of declining oil production, poses vital questions of our complex oil-dependent supply chains and challenges us-people and politician alike-to build a sustainable world with what remains of our resources.
Julian Darley, Author, High Noon for Natural Gas, Founder of Post Carbon Institute 

Michael J. Sullivan, American Adventurism Abroad: Invasions, Interventions, and Regime Changes Since 1945 (Wiley Blackwell, 2007).
Traces US foreign policy from the late 1940s through the past six years of America’s ‘war on terror,’ and examines the impact of its repeated militaristic meddling into developing nations. Intended as a reference tool for undergraduates the author estimates that at least 7.1 million human beings have died as a direct result of these U.S. operations, most of them civilians.

Monday, March 26, 2012

Banking 'Technocrats' Undermine Democracy

Monday, March 26, 2012 by Real News Network
Gerry Epstein: In Europe and the US, bankers take control of the political process

In September 2011, at a time when the sovereign debt raiders, as some people call them, were focusing on Italy as their next target, the European Central Bank sent a letter—supposed to be secret, but it was leaked. And in this letter it gave very direct instructions, you could say, to then prime minister Berlusconi about privatization, lowering pensions, changing hiring and firing, regulations and laws—all things one would think should be the outcome of the political process within Italy. So what is this about banks telling countries how to govern themselves? [...] Gerry Epstein is the codirector of the PERI institute in Amherst, Massachusetts, but today he joins [RNN] from New York.

Sunday, January 1, 2012

Beware Corporate Psychopaths

They are still occupying positions of power
by Brian Basham - Thursday 29 December 2011

Over the years I've met my fair share of monsters – rogue individuals, for the most part. But as regulation in the UK and the US has loosened its restraints, the monsters have proliferated.

In a paper recently published in the Journal of Business Ethics entitled "The Corporate Psychopaths: Theory of the Global Financial Crisis", Clive R Boddy identifies these people as psychopaths.

"They are," he says, "simply the 1 per cent of people who have no conscience or empathy." And he argues: "Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis'.

And Mr Boddy is not alone. In Jon Ronson's widely acclaimed book The Psychopath Test, Professor Robert Hare told the author: "I should have spent some time inside the Stock Exchange as well. Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies."

Cut to a pleasantly warm evening in Bahrain. My companion, a senior UK investment banker and I, are discussing the most successful banking types we know and what makes them tick. I argue that they often conform to the characteristics displayed by social psychopaths. To my surprise, my friend agrees.

He then makes an astonishing confession: "At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."

Here was one of the biggest investment banks in the world seeking psychopaths as recruits.

Mr Ronson spoke to scores of psychologists about their understanding of the damage that psychopaths could do to society. None of those psychologists could have imagined, I'm sure, the existence of a bank that used the science of spotting them as a recruiting mechanism.

I've never met Dick Fuld, the former CEO of Lehman Brothers and the architect of its downfall, but I've seen him on video and it's terrifying. He snarled to Lehman staff that he wanted to "rip out their [his competitors] hearts and eat them before they died". So how did someone like Mr Fuld get to the top of Lehman? You don't need to see the video to conclude he was weird; you could take a little more time and read a 2,200-page report by Anton Valukas, the Chicago-based lawyer hired by a US court to investigate Lehman's failure. Mr Valukas revealed systemic chicanery within the bank; he described management failures and a destructive, internal culture of reckless risk-taking worthy of any psychopath.

So why wasn't Mr Fuld spotted and stopped? I've concluded it's the good old question of nature and nurture but with a new interpretation. As I see it, in its search for never-ending growth, the financial services sector has actively sought out monsters with natures like Mr Fuld and nurtured them with bonuses and praise.

We all understand that sometimes businesses have to be cut back to ensure their survival, and where those cuts should fall is as relevant to a company as it is, today, to the UK economy; should it bear down upon the rich or the poor?

Making those cuts doesn't make psychopaths of the cutters, but the financial sector's lack of remorse for the pain it encourages people to inflict is purely psychopathic. Surely the action of cutting should be a matter for sorrow and regret? People's lives are damaged, even destroyed. However, that's not how the financial sector sees it.

Take Sir Fred Goodwin of RBS, for example. Before he racked up a corporate loss of £24.1bn, the highest in UK history, he was idolised by the City. In recognition of his work in ruthlessly cutting costs at Clydesdale Bank he got the nickname "Fred the Shred", and he played that for all it was worth. He was later described as "a corporate Attila", a title of which any psychopath would be proud.

Mr Ronson reports: "Justice departments and parole boards all over the world have accepted Hare's contention that psychopaths are quite simply incurable and everyone should concentrate their energies instead on learning how to root them out."

But, far from being rooted out, they are still in place and often in positions of even greater power.

As Mr Boddy warns: "The very same corporate psychopaths, who probably caused the crisis by their self-seeking greed and avarice, are now advising governments on how to get out of the crisis. Further, if the corporate psychopaths theory of the global financial crisis is correct, then we are now far from the end of the crisis. Indeed, it is only the end of the beginning."

I became familiar with psychopaths early in life. They were the hard men who terrorised south-east London when I was growing up. People like "Mad" Frankie Fraser and the Richardson brothers. They were what we used to call "red haze" men, and they were frightening because they attacked with neither fear, mercy nor remorse.

Regarding Messrs Hare, Ronson, Boddy and others, I've realised that some psychopaths "forge careers in corporations. The group is called Corporate Psychopaths". They are polished and plausible, but that doesn't make them any less dangerous.

In attempting to understand the complexities of what went wrong in the years leading to 2008, I've developed a rule: "In an unregulated world, the least-principled people rise to the top." And there are none who are less principled than corporate psychopaths.

Sunday, November 20, 2011

Former JPMorgan Banker: Exploiting Consumers Is ‘The Purpose Of The Banking Organization’

Wall Street continues to ignore America’s anger at it, sipping champagne from rooftops while protesters march below. 
By Travis Waldron, ThinkProgress
Posted on November 20, 2011

 Wall Street banks, largely spared from the economic ruin felt by millions of Americans since the financial crisis of 2008, have returned to profitability, generating higher profits in the two-and-a-half years since the crisis than they did in nearly eight years preceding it. But that hasn’t stopped them from seeking new ways to generate revenue — like Bank of America’s proposed $5-a-month debit card fee or the millions banks have made from charging consumers to receive unemployment benefits or food stamps.

If all this makes Americans feel like Wall Street banks only view them as money-making tools, well, that’s because the banks apparently do. According to David Mooney, a former JPMorgan Chase employee, Wall Street banks see consumers as an “income stream” to exploit for profit-making purposes, Reuters reports:
David Mooney, chief executive officer of Alliant Credit Union in Chicago, one of the nation’s larger credit unions, used to work at a one of Wall Street’s top banks, JPMorgan Chase. There’s a vast cultural gap between Wall Street and his new world, he says: Old friends from the Street, he says, now jokingly refer to him as a “socialist.” A credit union is supposed to be run in the interests of all members, he says, while commercial bankers tend to see consumers as customers who can be “exploited” by layering on more fees.
Says Mooney: “I don’t say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization.”
Mooney’s bluntness may seem shocking, but his assessment shouldn’t. Wall Street banks made millions profiting off shoddy mortgage lending practices, setting the stage for the housing collapse that plunged millions of Americans into foreclosure. They made a mess of the foreclosure process, using robo-signers to speed foreclosures and foreclosing on homes they either didn’t own or that weren’t even in foreclosure. They sold deals to investors that they knew would fail, and took advantage of customers with outrageous overdraft, credit card, and other fees.

In the aftermath of the financial crisis and the horrors it exposed, Wall Street banks spent millions to prevent the passage of financial regulatory reform. Once the Dodd-Frank Wall Street Reform Act passed, they spent just as much trying to shape its rules. They opposed the formation of a Consumer Financial Protection Bureau (CFPB), the agency tasked with protecting consumers from predatory banking practices, and in concert with their Republican friends in Congress, have fought to shape who will lead the bureau and how it will work.

Unfortunately for Wall Street, it didn’t take blunt assessments like Mooney’s for Americans to take action. In October, 650,000 Americans joined credit unions, which, as Mooney noted, are “supposed to be run in the interests of all members.” 40,000more joined them on Bank Transfer Day earlier this month.

Wall Street, meanwhile, continues to ignore America’s anger at it, sipping champagne from rooftops while protesters march below.

Thursday, August 25, 2011

Obama Goes All Out For Dirty Banker Deal

(The president should change his name to Bank Obanka. Or Bankhere O Banker...--jef)



by Matt Taibbi 
 
A power play is underway in the foreclosure arena, according to the New York Times.

On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.

On the other side is the Obama administration, the banks, and all the other state attorneys general.

This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.

This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.

This deal will also submarine efforts by both defrauded investors in MBS and unfairly foreclosed-upon homeowners and borrowers to obtain any kind of relief in the civil court system. The AGs initially talked about $20 billion as a settlement number, money that would “toward loan modifications and possibly counseling for homeowners,” as Gretchen Morgenson reported the other day.

The banks, however, apparently “balked” at paying that sum, and no doubt it will end up being a lesser amount when the deal is finally done.

To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS.

So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.

But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR.

In addition to the global settlement, Schneiderman is also blocking an individual $8.5 billion settlement for Countrywide investors. He has sued to stop that deal, claiming it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses.”

If Schneiderman thinks $8.5 billion is an insufficient, fractional payoff just for defrauded Countrywide investors, then you can imagine how bad a $20 billion settlement for the entire industry would be for the victims.

In that particular Countrywide settlement deal, it looks like Bank of New York Mellon, the New York Fed, Pimco and other players negotiated on behalf of defrauded investors. They told the Times they were happy with the deal, but investors outside the talks told Gretchen they weren’t happy with the settlement.

Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to the Times, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:
It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.
This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!

This quote leads one to wonder just what Wylde would consider “indefensible,” given that stealing is pretty much the worst thing that a bank can do — and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It’s really an incredible quote.

The banks are going to claim that all they’re guilty of is bad paperwork. But while the banks are indeed being investigated for "paperwork" offenses like mass tax evasion (by failing to pay fees associated with mortgage registrations and deed transfers) and mass perjury (a la the “robo-signing” practices), their real crime, the one Schneiderman is interested in, is even more serious.

The issue goes beyond fraudulent paperwork to an intentional, far-reaching theft scheme designed to take junk subprime loans and disguise them as AAA-rated investments. The banks lent money to corrupt companies like Countrywide, who made masses of bad loans and immediately sold them back to the banks.

The banks in turn hid the crappiness of these loans via certain poorly-understood nuances in the securitization process – this is almost certainly where Scheniderman’s investigators are doing their digging – before hawking the resultant securities as AAA-rated gold to fools in places like the Florida state pension fund.

They did this for years, systematically, working hand in hand in a wink-nudge arrangement with clearly criminal enterprises like Countrywide and New Century. The victims were millions of investors worldwide (like the pensioners who saw their funds drop in value) and hundreds of thousands of individual homeowners, who were often sold trick loans and hustled into foreclosure when unexpected rate hikes kicked in.

In a larger sense, even the (often irresponsible) people who simply bought more house than they could afford were victims of this scam. That's because in many of these cases, credit simply would not have been available to those people had the banks not first discovered a way to raise vast sums of money dumping crap loans on an unsuspecting market.

In other words: if Bank of America hadn’t found a way to sell worthless subprime loans as AAA paper to the Chinese and the Scandavians in May, you can be sure that it wouldn’t be going back to Countrywide in June to lend out more money for more subprime loans.
And Countrywide, in turn, wouldn’t then have been sending masses of reps out into the ghettoes to offer juicy home loans to undocumented immigrants and refis to confused old ladies on social security.

This is as bad as white-collar crime gets. But to Wylde, it doesn’t rise to the level of being “indefensible.” Until they do something worse than this, we apparently should support the banks, and make sure they don’t have to pay more than a fraction of what they made off of this kind of crime.

What is most amazing about Wylde’s quote is the clear implication that even a law enforcement official like Schneiderman should view it as his job to “do everything we can to support” Wall Street. That would be astonishing interpretation of what a prosecutor's duties are, were it not for the fact that 49 other Attorneys General apparently agree with her.
In Schneiderman we have at least one honest investigator who doesn’t agree, which is to his great credit. But everyone else is on Wylde’s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.

Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.
Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.

Monday, July 18, 2011

Obama Snubs Elizabeth Warren (2 articles)

(Proving Obama is a president for the bankers, of the bankers and by the bankers, the fix is in: Elizabeth Warren--long thought, by everyone who is NOT deeply entrenched in Wall Street, to be the ideal and most qualified candidate with the most integrity to head the CFPB--gets snubbed for former Ohio attorney general Richard Cordray, a career politician. Obama sucks, man.--jef)

++++++++++++++

Sunday, July 17, 2011 by The Daily Beast
After a months-long guessing game, the president has chosen Richard Cordray to helm his new consumer protection agency—passing over the woman who proposed it in the first place.
by Gary Rivlin
 
Barack Obama finally named his nominee to head the new Consumer Financial Protection Bureau. And his name isn’t Elizabeth Warren.

The White House press office on Sunday announced that the president had chosen Richard Cordray, the former attorney general of Ohio to head his new agency, and not Elizabeth Warren who had proved controversial for championing the rights of consumers over bankers.
The White House press office on Sunday announced that the president had chosen Richard Cordray, the former attorney general of Ohio to head his new agency, created when he signed the sweeping Dodd-Frank financial reform package into law last July.

The move will likely hurt the president’s relationships with those who wanted him to push for Warren, a plain-spoken consumer champion who first proposed the new bureau. In the wake of the financial crisis, Warren envisioned an agency that better protected Americans against suspect financial products ranging from mortgages and credit cards to fringe financial services like check-cashing and payday loans.

The president pleased his left flank last summer when he appointed Warren to create this new bureau—but he stopped short of nominating her as its permanent director. Several other names surfaced over the months as possible nominees, including Cordray and also Ted Strickland, the former governor of Ohio, and Jennifer Granholm, former governor of Michigan. But whatever the liberal bonafides of these and other choices, Warren remained the overwhelming pick among consumer champions, especially those involved in the fight against predatory lending.

A permanent director, who would be appointed to a five-year term, needs Senate confirmation. When in May word spread that the president would appoint Warren to head the agency through a recess appointment (the disadvantage of that maneuver being that Warren would serve only for the remainder of Obama’s term, rather than a full five-year stint), Senate Republicans responded by refusing to adjourn for its traditional Memorial Day recess.
"There was always something outsider about her that scared people here,” said one high-ranking Obama appointee of Warren. “They couldn’t trust her because she wasn’t one of them."
“I really like Elizabeth and think she would have been a great choice, but there was always something outsider about her that scared people here [in Washington],” said one high-ranking Obama appointee, herself a woman. Warren taught at Harvard Law and had only gotten involved in politics a few years earlier. “They couldn’t trust her because she wasn’t one of them.”

Yet whether the Senate approves Cordray remains to be seen. These days, it takes 60 votes to get anything done in the Senate—and in May, 44 of the Senate’s 47 Republicans vowed to block any nominee unless the president agreed to a watered down agency, which stands as Dodd-Frank’s most significant and controversial provision.

A career politician, Cordray served a partial term as Ohio’s attorney general (he filled the term of a fellow Democrat caught up in a sex scandal) before losing a race for reelection in November 2010. The next month, Warren chose him to head up the agency’s enforcement division—in no small part, no doubt, because in his two years as attorney general he aggressively sought punishment of those guilty of foreclosure fraud in his state.

In response to today’s news, Warren issued a statement saying: “Rich has always had my strong support because he is tough and he is smart—and that’s exactly the combination this new agency needs. He was one of the first senior leaders I recruited for the agency, and his work and commitment have made it clear that he will make a stellar Director.”

Under Dodd-Frank, the Consumer Financial Protection Bureau goes live this Thursday—one year to the day that the president signed the bill into law. Until the Senate confirms a permanent director, though, the agency’s powers are limited. The bureau can start regulating the country’s largest banks, but it will have limited rule-making authority and won't have jurisdiction over payday lenders, debt collectors, or other non-bank financial institutions until a permanent director is in place.

Obama will announce his choice at a White House event on Monday.

+++++++++++++++++++++++


07.17.11 - 5:24 PM
Too Good, Too Smart, Too Able for Wall Street Approval 
by Ralph Nader

Statement by Ralph Nader on the rejection of Elizabeth Warren by President Barack Obama to be the Director of the new Consumer Financial Regulatory Bureau.

To dump Elizabeth Warren, the most qualified, most motivated and most articulate candidate for the directorship of the Consumer Financial Regulatory Bureau is an act of political cowardliness by President Obama and a boon to anti-consumer Republicans and their corporate paymasters in Wall Street.

Elizabeth Warren apparently is just too good, too smart, and too able to arouse the just concerns of millions of American families about the need to put the law-and-order wood to the corporate criminals, defrauders and reckless speculators with the savings and pensions of millions of Americans.

President Obama should realize that his back-of-the-hand attitude to his liberal and progressive supporters – who sent him to the White House – can have consequences. He believes they have no where to go. But they do. They can stay home in 2012, as so many did in 2010 to the detriment of the Democrats and many Congressional races.