Essentially what the bankers have done, is illegal...fraud.

BILL MOYERS: You're describing what Bernie
Madoff did to a limited number of people. But
you're saying it's systemic, a systemic Ponzi
scheme.

WILLIAM K. BLACK: Oh, Bernie was a piker. He
doesn't even get into the front ranks of a
Ponzi scheme...

BILL MOYERS: But you're saying our system
became a Ponzi scheme.

WILLIAM K. BLACK: Our system...

BILL MOYERS: Our financial system...

WILLIAM K. BLACK: Became a Ponzi scheme.
Everybody was buying a pig in the poke. But
they were buying a pig in the poke with a
pretty pink ribbon, and the pink ribbon said,
"Triple-A."

BILL MOYERS: Is there a law against liars'
loans?

WILLIAM K. BLACK: Not directly, but there, of
course, many laws against fraud, and liars'
loans are fraudulent.

BILL MOYERS: Because...

WILLIAM K. BLACK: Because they're not going to
be repaid and because they had false
representations. They involve deceit, which is
the essence of fraud.

And apparently what Geithner is doing and Obama is supporting,
is also breaking the law.

BILL MOYERS: To hear you say this is unusual
because you supported Barack Obama, during the
campaign. But you're seeming disillusioned now.

WILLIAM K. BLACK: Well, certainly in the
financial sphere, I am. I think, first, the
policies are substantively bad. Second, I think
they completely lack integrity. Third, they
violate the rule of law. This is being done
just like Secretary Paulson did it. In
violation of the law. We adopted a law after
the Savings and Loan crisis, called the Prompt
Corrective Action Law. And it requires them to
close these institutions. And they're refusing
to obey the law.

BILL MOYERS: In other words, they could have
closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership.
No one -- Ronald Reagan did receiverships.
Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this?
Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated--

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

BILL MOYERS: This law, you're talking about.

WILLIAM K. BLACK: Yes.

BILL MOYERS: What the reason they give for not
doing it?

WILLIAM K. BLACK: They ignore it. And nobody
calls them on it.

BILL MOYERS: Well, where's Congress? Where's
the press? Where--

WILLIAM K. BLACK: Well, where's the Pecora
investigation?

BILL MOYERS: The what?

WILLIAM K. BLACK: The Pecora investigation. The
Great Depression, we said, "Hey, we have to
learn the facts. What caused this disaster, so
that we can take steps, like pass the
Glass-Steagall law, that will prevent future
disasters?" Where's our investigation?

What would happen if after a plane crashes, we
said, "Oh, we don't want to look in the past.
We want to be forward looking. Many people
might have been, you know, we don't want to
pass blame. No. We have a nonpartisan, skilled
inquiry. We spend lots of money on, get really
bright people. And we find out, to the best of
our ability, what caused every single major
plane crash in America. And because of that,
aviation has an extraordinarily good safety
record. We ought to follow the same policies in
the financial sphere. We have to find out what
caused the disasters, or we will keep reliving
them. And here, we've got a double tragedy. It
isn't just that we are failing to learn from
the mistakes of the past. We're failing to
learn from the successes of the past.

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: In the Savings and Loan
debacle, we developed excellent ways for
dealing with the frauds, and for dealing with
the failed institutions. And for 15 years after
the Savings and Loan crisis, didn't matter
which party was in power, the U.S. Treasury
Secretary would fly over to Tokyo and tell the
Japanese, "You ought to do things the way we
did in the Savings and Loan crisis, because it
worked really well. Instead you're covering up
the bank losses, because you know, you say you
need confidence. And so, we have to lie to the
people to create confidence. And it doesn't
work. You will cause your recession to continue
and continue." And the Japanese call it the
lost decade. That was the result. So, now we
get in trouble, and what do we do? We adopt the
Japanese approach of lying about the assets.
And you know what? It's working just as well as
it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy
Geithner, the Secretary of the Treasury, and
others in the administration, with the banks,
are engaged in a cover up to keep us from
knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

You can read the transcript or watch the video. And if you want to
read the Prompt Corrective Action Law, here is a link to the FDIC version.


C

Well the banks can now appraise  their assets higher.
Even though they are walking away from some of these
same valuable properties.

Well thats one way to make the auditors happy, I guess.
Wish I could do that when my car falls apart. Would certainly
make my bottom line much better. Being able to get a higher
trade in for it than what it's actually worth.

Works for me.

C

Sarkozy gets it.

"The decisions need to be taken now, today and
tomorrow," he said. "This has nothing to do
with ego. This has nothing to do with temper
tantrums. When it comes to historic moments, you
can't circumvent them."

Mr. Sarkozy added that tougher regulation  -  he
has called for a "global regulator" that
would be able to reach inside the borders of the
United States and other large nations to deal with
international financial firms  -  is
"nonnegotiable."

"The compromise has to come from all countries
around the world," he said. Saying he trusted
Mr. Obama, Mr. Sarkozy said he did not want to point
fingers about the crisis. But then, in a verbal jab
he has used before, he added, "The crisis
didn't actually spontaneously erupt in
Europe."

The US is still out to lunch and drunk as a skunk on cheep,
unregulated Wall Street wine.

Figures.

C

Josh brings up a good point with this news about Ratigan's
departure from CNBC. But this point really struck me and
I don't think enough people are paying attention to it.

Ratigan was consistent in his opinion that the average
investor would never return to the stock market until we
saw some Wall Street CEOs being hauled away in
handcuffs.

I believe that Wall Street, the Banks and those inside
the beltway all under estimate the negative effect this mess
is having on the public at large. Or at least they are being
low key about it. One reason for Geithner and Obama doing
the Cash for Trash plan could be that blow back wise, it may
have the fewest negative consequences. (Assuming it works)

Considering the general mood of the public right now, airing
all the banks dirty laundry could really turn people off to dealing
with commercial banks.  Humans love to generalize and it would
not be too difficult to go from BoA and CITI are scams to All
banks are scams. It's happened before.

C

This flies in the face of Obama and the US and the UK.

The likely deadlock at this week's meeting
will kill any remaining hope that Alistair
Darling's April 22 budget will offer
significant tax cuts.

The assault by European Union leaders also
represents a defeat for President Barack
Obama, who is desperate for other big
economies to copy his $800 billion stimulus
plan.

Most of the EU members have social and economic safety
nets. Like national health, free schooling, unemployment
compensation etc. So their citizens are not as bad off at all
and they do not see that the health of the private sector
is the primary responsibility of  government. 

If the US had these types of programs in place, the need
for bailing out any corporation would be far, far less.

C

Sarkozy seems to be the only one with any smarts.

President Sarkozy yesterday threatened to
wreck the London summit if France's
demands for tougher financial regulation
are not met.

France will not accept a G20 that
produces a "false success with language
that sounds good but contains no
commitments", his advisers said.

Asked if this meant a possible walk-out,
Xavier Musca, Mr Sarkozy's deputy chief
of staff for economic affairs, said: "A
basic rule with nuclear deterrence is
that you do not say at what point you
will use the weapon."

He's absolutely on the money. We need Global financial
regulation to keeps these clowns from wrecking things again
just to line their pockets.


C

This is the kind of crap that make me want to go up to
every republican I see and give them a good swift kick
right in the gonads. Just as hard as I can.

C