Republicans Leap to the Aid of Banker-Servicers Over AG Settlement Proposal
Now this is really getting to be down right hystericalā¦ or is surreal is a better wordā¦ no, maybe hysterical and surrealā¦ along the lines of āDr. Bailout… How I Learned to Stop Borrowing and Love the TARP.ā
The top Republican on the Senate Banking, Senator Richard Shelby came out swinging, referring to the 27-page Term Sheet proposal that was given to the banks by the 50 State Attorneys General, a āregulatory shakedown.ā
It seems he was referring, in large part anyway, to the $20 billion in damages proposed by the Consumer Financial Protection Bureau, which he inexplicably claimed was now $30 billion.Ā Hereās what Shelby said, as quoted by American Banker magazine:
“Under the guise of helping homeowners hurt by improper foreclosures, regulators are attempting to extract a staggering payment of nearly $30 billion for unspecified conduct.ā
The use of the word āguise,ā I have to admit, I would probably have to agree with, as it is really just a āshowā.Ā Twenty billion dollars thrown at the foreclosure crisis is about like trying to stop a charging bull rhino by throwing ping-pong balls at him.
But, if itās the lack of specificity in the description of servicer conduct thatās got his goat, well then Iād like to volunteer to provide as many specifics as his little heart desires.Ā Iād even be willing to break it down into sub-categories for him, such as LIES, FRAUDS, NON-VIOLENT CRIMES, ACTS OF VIOLENSE, TERRORIST ACTS, BURGULARY, EXTORTION, CHILD ABUSE, ELDER ABUSE, GRAND THEFT, PETTY LARCENY, UNFAIR BUSINESS PRACTICESā¦ heck, if I could get a little help from a lawyer or two, Iām sure we could submit something pretty darn specific to the senator no later than end of business tomorrow, and even sooner if heād prefer.
Senator Shelby went on, according to the American Banker story:
“Setting aside for a moment the attempt to end run Congress, I question whether removing $30 billion in capital through a back-door bank tax is the best way to jump-start lending. The long-term consequences of this settlement could be even more serious. It would politicize our financial system.”
First of allā¦ a āback-door bank tax,ā Senator?Ā I donāt think youāre grasping what this whole thing is about, sir.Ā First of all, thereās nothing āback-doorā about itā¦ itās coming right through the front door, actually.Ā And itās not a tax, itās a fineā¦ a sanctionā¦ a penaltyā¦ punishmentā¦ restitution, evenā¦ albeit a paltry sum in light of the egregious nature of the crimes that have been committed by servicers, Senatorā¦ havenāt you been paying attention to whatās been going on for the last three years.Ā Are you unaware of the role the servicers have played in ensuring our nationās ongoing economic instability?
And āpoliticize our financial system?āĀ Thatās a good one, Senator.Ā Yeah, we wouldnāt want to politicize our financial systemā¦ you know, I hadnāt ever heard you tell a joke beforeā¦ youāre actually a funny guy, Senator.Ā Senator Al Frankenās got nothing on you, sir.
But, unquestionably, the best part of Senatorās Shelbyās largely unintelligible rant, was when he threw down the ādonāt fine them or thereāll be no lendingā card.Ā He draws that card like a gun, doesnāt he?Ā He even sounds just like a banker when he does it.
Iām sorry, Senator, but at this point, that threat should leave the vast majority of Americans in absolute stiches.Ā I mean, are you familiar with the story titled: āThe Boy Who Cried Wolf?ā
Jump-starting lending?Ā Is that what we were in the midst of doing in your mind Senator, because Iām not sure youāre using the right terminology thereā¦ you canāt really mean ājump-start,ā right?Ā Because to ājump-start,ā something actually implies not only that something is being started, but further, that itās being started in a hurry, and that wouldnāt apply to lending by the private sector, now would it, Senator?Ā Seeā¦ because thereās precious little of that going on, sirā¦ but I donāt need to tell you thatā¦ youāre on the Senate Banking Committee, silly.
This argument about lending goes all the way back to the TARP debate where we funded $700 billionā¦ to make sure that lending started up againā¦ and since thenā¦ WITHOUT APPROVAL FROM CONGRESS, OR EVEN ANY MENTION BY CONGRESSā¦ weāve DUMPED some 13 TRILLION into the banks, all tin an effort to start lending againā¦ and stillā¦ there is no lendingā¦ the federal government is today the only lender to speak of in this country.Ā Donāt you think pretty much all of us know that, Senator?
There wonāt be any lending by private sector banks in this country untilā¦ well, until there ARE some private sector banks in this country.Ā As of today, all I can see are a bunch of zombie banks, propped up with virtually unlimited free cash from then Federal Reserve, and by the suspension and modification of accounting rules, and even so, still heavily in debt to the tax-payersā¦ JPMorgan Chase, as of last October, still owed us about $32,837,870,000 according to the very easy to read spreadsheets that author, and ex-Goldman Sachs managing director, Nomi Prins is nice enough to keep updated on her Website.
You see, itās those darn toxic assets, Senatorā¦ the ones that were clogging up the bank balance sheets back in the fall of 2008, you knowā¦ when it all came out that the banks had OVER BORROWED to the tune of about 40:1 and much more, and thatās without counting the off-balance sheet crap that you and I both know should be illegal ever since ENRON showed us how much fun accounting isnāt when there are no rules and no trustworthy auditors on the job.
Yes, these toxic assets areā¦ can you guess, Senator?Ā Good!Ā Thatās rightā¦ even more toxic, thatās correct.Ā And why would that be, sir?Ā Good againā¦ because you guys forgot to do anything to stop the foreclosures from destroying the asset values of our housing markets, and guess whatās toxic about the toxic assets, Senator Shelbyā¦ itās the mortgages, sir.Ā So, every time another house goes down to foreclosure, another mortgage-backed security goes bad, as do all of the derivatives whose values are āderivedā from that mortgage-backed security.
Itās sort of a knee-boneās-connected-to-the-ankle-bone-thing, sir.Ā Maybe you could sing that little ditty to yourself every time this subject comes upā¦ it might help you to remember what the hell youāre talking about, Senator Shelby.
And if you donāt like that idea, sirā¦ perhaps use a magic marker to make a note on your hand, or tie a string around your fingerā¦ I donāt care if you have your assistant tickle your testicles to keep this stuff top-of-mind, it would just be gosh darn lovely if once in a while when you opened your mouth, you sounded like you had some faint idea of what you were talking about, Senator Shelbyā¦ you knowā¦ like maybe if you did it just once, half of the old men in the senate would likely soil themselves.
Yes, those toxic assets we all heard so much about, during the fall of 2098 are for the most part, right where they were way back then onā¦ AND OFFā¦ of the balance sheets of our Too-Big-To-Failā¦ Too-Big-To-Save and, Lord knowsā¦ Too-Big-To-Prosecute banks.
In factā¦ Shhhhhhhā¦. pleaseā¦ be quiet.Ā One of the bankers might be resting right now, and as of last week, they are also to be considered Too-Big-To-Wake-Up-From-A-Nap.Ā Thanks for understandingā¦
So, tell me something, Senator Shelbyā¦ if we gave the bankers $13 TRILLION to stimulate lending, and it didnāt accomplish a damn thing in that regard, why would fining the all the servicers combined a measly $20 billion have any effect at all, one way or the other.
Do we all understand āTRILLIONā here?Ā Itās okay if you donātā¦ itās a pretty big number, after all.Ā Chances are a trillion is not a number youāre going to bump into even if you live to be a hundred and fifty years oldā¦ twice.Ā Hereās what I use to help me realize just how large numbers like that truly areā¦
A million seconds = 12 days.
A billion seconds = 32 years.
A trillion seconds?Ā 32,000 years!
So, if we convert our banking/lending fear mongering example of yours into seconds, weāve already given the banks 416,000 years, and youāre trying to tell us that if we make them give us 640 of those years back that they wonāt be lending as a result?Ā 640 out of 416,000 is a deal killer, Senator?
Man, these seem like some very touchy bankers, donāt you think, sir.Ā If youāre right and the 640 out of 416,000 is, in fact, going to upset their apple cart like that, not that theyāre lending now, or that they have any plans to ājump-startā any such thing anytime soonā¦ but, Iād say we need to fire these girls weāve got running our banks, and get some more resilient types at the respective helms of our nationās largest financial institutions.
Because, Senator Shelbyā¦ that sounds like weāve got TROUBLEā¦ It sure sounds like TROUBLEā¦ Iām talking real TROUBLEā¦ right here in River Cityā¦ and look whoās here, sirā¦ why, itās Professor Harold Hill!Ā Did you order The Music Man, sir?Ā Letās listen, I love this musical, sirā¦
Professor Harold Hill: Wellā¦ Iād say youāve got trouble, my friends.Ā Thatās right real serious trouble.Ā And itās right there in your city.Ā Great big troubleā¦ and not just any kind of troubleā¦ itās the kind of trouble that means you gottaā stay sharpā¦ Because the trouble Iām here to sing about started with TARP!
Cause youāve got TARPā¦. And itās not at all pretty
With capital T-A-R-P and āFā which stands for FOOL
Oh yes, weāve got TARPā¦ Chase, Wells and Citi
Their lending got wiped out by those toxic pools.
Yes, youāve got TARPā¦ an idea so shittyā¦
With a capital T-A-R-P and āBā which stands for BANK.
Oh yes, youāve got TARPā¦ Chase, Wells and Citi
For the people it was a deal that really stank.
Youāve got TARPā¦ terrible, terrible TARPā¦ we bailed out banks you called Too-Big-To-Fail.
Oh, youāve got TARP, TARP, TARP (yes, youāve got TARP, TARP, TARP)
Instead we should have sent them all to jail.
Oh youāve got TARP, TARP, TARPā¦ yes, they call it TARP, TARP, TARPā¦ TARP, TARP, TARP… (Fade outā¦)
Where are you going, Senator Shelby?Ā Arenāt you going to stick around until the end?Ā Itās awful rude to walk out during a musical, sirā¦ what will your constituents think, sir?Ā Senator Shelbyā¦ sirā¦?
Oh wellā¦ he probably had a meeting scheduledā¦ Iām sure heās busy this week, Iām told tomorrow is āBlow-a-Banker Dayā in the District of Colombia.Ā I didnāt even think about that, because in California, we donāt celebrate it until late May.
Itās too bad though, because there was one more area I wanted to cover with him.Ā You see, getting back to American Bankerās article againā¦ Senator Shelby and a couple of the other prominent House Republicans, were also attacking Elizabeth Warrenās involvement in the Consumer Financial Protection Bureau, because apparently sheās the one asking for the $20 billion from the servicers, wouldnāt you know.
So, it seems the other day good senator came right out and said:
“Just last year, I warned that the new Bureau of Consumer Financial Protection would prove to be an unaccountable and unbridled bureaucracy. I did not expect to be proven correct so quickly,”
(Memo to Senator Shelby: Donāt worry, sirā¦ you werenāt.)
American Banker got a copy of a letter sent by Shelby, along with House Financial Services Committee Chairman Spencer Bachus, and Rep. Scott Garrett (R-N.J), and although they didnāt mention Elizabeth Warren by name, hereās what the letter said, among other things of courseā¦
“Reports about the role played by political appointees in the Treasury Department ā including those affiliated with the Consumer Financial Protection Bureau, an agency that does not yet have any regulatory or enforcement authority ā raise further question about the process through which the terms of the settlement are being negotiated.”
Iāll tell you whatā¦ these Republicans are two things for damn sure:
- Totally in the pocket of the banking lobbyistsā¦ and the bankers themselves, of course.
- Really petty people for grown-ups.
Theyāre actually all upset because of Elizabeth Warrenās new federal agency, the Consumer Financial Protection Bureau, Is not yet officially open for businessā¦ and doesnāt officially until Julyā¦ so therefore, she shouldnāt bring up any of her trouble-making ideas until then?
Boys, boys, boysā¦ you just donāt get it do you?Ā The people HATE the bankers for what theyāve done these past two years, and youāre going to find out the hard way what happens to politicians who are so flagrantly on the side of the bankers in the next election.Ā The Dems got shellacked for the same thing last time out, or didnāt you realize?Ā Watch outā¦ Iām telling you the backlash has been building and itās going to explodeā¦
Hereās Shelby one more time from the article in AB, making his point about Lizā¦
“The process by which it is being imposed is potentially far more concerning,” Shelby said. “The proposed settlement would fundamentally alter the regulation of our banks. Yet, this would be done without Congressional involvement. Instead, it would be done by executive fiat through intimidation and threats of regulatory sanctions.”
But, you seeā¦ thatās whatās so funny, becauseā¦ well, because lately Iāve come to realize that there are quite a few people that think that TARP was THE banking industryās bailoutā¦ but thatās not true at allā¦ in fact, the $700 billion TARP fund, was actually the smallest of all the banking industry bailouts we provided in the last two years, and there were more before that.
Now, TARP is the one with the most memorable acronymā¦ rhymes with āharpā and ācarp,ā but the others were funded into the TRILLIONS, as you can see below.Ā The thing isā¦ none of these banking industry bailouts went through Congress eitherā¦ that is to say that we authorized all of these TRILLIONS in taxpayer dollarsā¦ āwithout Congressional involvement,ā to use Senator Shelbyās own words from his quote above.
I donāt recall Senator Shelby or either of the other two House Republicans that wrote the letter to Geithner about the 27-page AG Term Sheet proposal, bellyaching about that, do you?Ā Itās rhetoricalā¦ they, of course, didnāt say a word.
Quiet like church mice when weāre giving the bankers trillions, but try to fine the servicers for doing stuff they should really be in joal for, and the bankster politicians come running out onto the floor of the House or Senate every hour on the hour, yellingā¦ Cukoo!Ā Cukoo!
Just below is a list of the less publicized taxpayer funded banker bailout programs from the last two years.Ā Iāll look them all up over the weekend and try to post an article explaining what each one was supposed to be for, and how much was spent to-dateā¦ stuff like that.
It pisses me off that they play games like this with all of usā¦ they sayā¦ lookie over thereā¦ TARP, TARP, TARPā¦ and then while weāre distracted, they spend trillions of our money without going through Congress.
Shelbyās fine with it, however, as long as it doesnāt negatively affect the bankers in any wayā¦ or come from The Desk of Elizabeth Warrenā¦ the ONLY person in Washington D.C. to even suggest that the servicers be fined as a result of what theyāve done to homeowners for three yearsā¦ the ONLY one.
But Shelby shouldnāt worry his hypocritical little head over it, because sheāll be gone by July, so yet another win for the bankstersā¦ yay.
TLGP ā The Temporary Liquidity Guarantee Program – $1.5 trillion
GSEP – Government Sponsored Entity Purchases Ā – $1.4 trillion
CPFF ā Commercial Paper Funding Facility – $1.4 trillion
TALF ā Term Asset-Backed Securities Loan Facility – $200 billion
TAF ā Term Auction Facility – $600 billion
AMLF ā Asset-Backed Commercial Paper Mutual Fund Liquidity Facility – $1.6 trillion
FEDS ā Foreign Exchange Dollar Swaps ā Undisclosed
PDCF ā Primary Dealer Credit Facility ā Undisclosed
(Iām pretty sure when they say āundisclosedā where the amount goes, itās because itās a really small number, arenāt you?Ā Of course you areā¦ Geithner wouldnāt not disclose a really big number, would he?Ā Not Transparency Timā¦ no way in the world.)
HERE’S A COPY OF THE LETTER FROM THE SENATE AND HOUSE REPUBLIC ANS :