If Only These Banks Were Teachers

From the NY Times:

For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.

But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity. Most if not all of the pleas are expected to come from the banks’ holding companies, the people said — a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.

...

The guilty pleas, scarlet letters affixed to banks of this size and significance, represent another prosecutorial milestone in a broader effort to crack down on financial misdeeds. Yet as much as prosecutors want to punish banks for misdeeds, they are also mindful that too harsh a penalty could imperil banks that are at the heart of the global economy, a balancing act that could produce pleas that are more symbolic than sweeping.

Holding companies, while appearing to be the most important entities at the banks, are in less jeopardy of suffering the consequences of guilty pleas. Some banks worried that a guilty plea by their biggest banking units, which hold licenses that enable them to operate branches and make loans, would be riskier, two of the people briefed on the matter said. The fear, they said, centered on whether state or federal regulators might revoke those licenses in response to the pleas.

Behind the scenes in Washington, the banks’ lawyers are also seeking assurances from federal regulators — including the Securities and Exchange Commission and the Labor Department — that the banks will not be barred from certain business practices after the guilty pleas, the people said. While the S.E.C.’s five commissioners have not yet voted on the requests for waivers, which would allow the banks to conduct business as usual despite being felons, the people briefed on the matter expected a majority of commissioners to grant them.

In reality, those accommodations render the plea deals, at least in part, an exercise in stagecraft. And while banks might prefer a deferred-prosecution agreement that suspends charges in exchange for fines and other concessions — or a nonprosecution deal like the one that UBS is on the verge of losing — the reputational blow of being a felon does not spell disaster.

Maybe if these banks had cheated on some standardized tests, real criminal penalties and jail time would be handed out.

More Damning Details In Cuomo Pay-To-Play Scandal

David Sirota and Matthew Cunningham-Cook follow up on their pay-to-play piece on Andrew Cuomo last night with this:

The Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. have over the past 2 1/2 years received taxpayer-financed contracts to help manage the sale of more than $3 billion worth of bonds for New York state, according to a review of state records by International Business Times. The three banking companies secured this lucrative line of business during the same period they delivered more than $132,000 in campaign contributions to Gov. Andrew Cuomo through political action committees under their corporate control.

...

• JPMorgan’s PAC gave Cuomo $15,000 April 10, 2013, and the Cuomo administration announced the firm would serve as an underwriter on a $46 million bond issue May 30, 2013.
• Citigroup's PAC gave Cuomo $15,000 May 1, 2013, and Cuomo officials named the firm an underwriter on a $61 million bond June 19, 2013.
• JPMorgan’s PAC gave Cuomo another $10,000 July 2, 2013, and the Cuomo administration named the firm an underwriter on another $36 million bond in August 2013.
• Bank of America’s PAC gave Cuomo $15,500 July 2, 2014, just after the firm had been named an underwriter on a June 2014 bond. Cuomo’s administration would subsequently name the firm an underwriter on a separate $185 million bond in March 2015.

The contracts to the banks went through a non-competive bidding process.

Can you say cha-chinggg!!!

Sony, News Corporation, REBNY, now the banks - who doesn't Cuomo hit up in the Quid Pro Cuomo game?

I dunno if the feds are looking into any of this stuff, but to be honest, the amount of money Cuomo's taking makes the Skelos stuff look small.

Randi Weingarten Says She Regrets Campaiging for Kathy Hochul

From the "She's Full Of Crap" file comes this:

BUFFALO—American Federation of Teachers president Randi Weingarten regrets campaigning for Governor Andrew Cuomo's running mate in last year’s elections, she told Capital during a union convention on Saturday.

Weingarten, former president of New York City’s United Federation of Teachers, voiced a last-minute robocall supporting current lieutenant governor Hochul last September when the former Buffalo congresswoman faced what appeared to be a serious challenge from an anti-Cuomo insurgent candidate, Tim Wu, in the Democratic primary. (Wu, a Fordham University law professor, ran with Zephyr Teachout, whose surprisingly strong challenge to Cuomo led to an unflattering result for the governor.)

...

“Look, Kathy Hochul as a congresswoman was a terrific congresswoman,” Weingarten said, after addressing more than 2,000 New York State United Teachers members who gathered in Buffalo for their annual convention. “And on balance, she would have been, and she should be, a terrific lieutenant governor. But what’s happened is that actions speak louder than words.

 “In seeing what we’ve seen, I’m really disappointed, and I regret what she’s done, and I regret actually making it clear that she was terrific beforehand,” Weingarten said, when asked directly whether she regretted doing the robocall."

Hochul was a terrific congresswoman?

What the hell is Weingarten talking about?

Hochul was a congresswoman for less than one term.

She won a special election on May 25, 2011 to fill Representative Chris Lee's seat after he resigned from Congress.

She lost her re-election bid in November 2012.

She was a congresswoman for a little over a year.

After that, she became a bank lobbyist.

Yeah, a bank lobbyist.

Weingarten is so full of crap when she says she supported Hochul because she was a terrifc congresswoman.

She supported Hochul because this was a back alley way of supporting Cuomo.

Not that Cuomo cared because, as he said right in front of Weingarten at a Forbes forum months before the election, he planned to "break" public schools as soon as he was re-elected.

He's followed through on that promise and Weingarten is complicit in his crimes against public schools and public school teachers.

We've let her have it before over this, but she kept defending the robocalls.

I guess that defense, given the virulence with which Cuomo has gone after teachers, has even started to sound hollow in her own ears.

She's trying to walk back the robocall now, but she fools few with her jive.

Weingarten supported Hochul as a way to support Cuomo.

That was true then and it's still true now, no matter how she tries to spin it.

How Are Schools Supposed To Work When Everything Else Around Them Is Broken?

Had a discussion with NY Daily News reporter Ben Chapman over the "disruption" that education reformers bring to the education system (and the money they make off of that "disruption") that went like this the other day:

@NYDNBenChapman Cuomo's Smart Schools jive all about "disrupting" system to help marketeers - http://t.co/1wqvQFrqBD
— realitybasededucator (@perdidostschool) September 26, 2014

To which Chapman replied

@perdidostschool Point taken. tricky part to me is that many NYC schools actually could use substantial help IMHO
— Ben Chapman (@NYDNBenChapman) September 26, 2014

@perdidostschool meaning that they look like sufficiently dysfunctional places that significant changes maybe a good idea
— Ben Chapman (@NYDNBenChapman) September 26, 2014

This is the education reformer "change" frame - sure, change is hard and sometimes it hurts, but given how bad things are now, significant change is needed no matter the cost.

But I don't buy that:

@NYDNBenChapman Yes, but as Ravitch points out in Nation piece on Success, changes help only some.
— realitybasededucator (@perdidostschool) September 26, 2014

@NYDNBenChapman Also, chaos brought by constant reforms increases dysfunction in system. Would add, dysfunction in 1/2
— realitybasededucator (@perdidostschool) September 26, 2014

@NYDNBenChapman school system mimics dysfunction in society as whole. Does anything work in America anymore?
— realitybasededucator (@perdidostschool) September 26, 2014

@NYDNBenChapman Banking system, political system, regulatory system - everything is broken - http://t.co/TIXLa6sVu5
— realitybasededucator (@perdidostschool) September 26, 2014

Chapman never replied to my Twitter pushback (and since it was the weekend, I'll assume he had something more fun to do than talk on Twitter with me), but this idea that schools are dysfunctional in isolation of the rest of society is something I want to hit on beyond my conversation with Ben.

Because it's bullshit.

Schools may look like sufficiently dysfunctional places to education reformers but they are no more so than other institutions in American life.

Let's start with the granddaddy of dysfunctional American institutions, the federal government.

In January, as President Obama was set to give his State of the Union address, a Wall Street Journal/NBC News poll found this:

As President Barack Obama enters his sixth year in the White House, 68 percent of Americans say the country is either stagnant or worse off since he took office, according to the latest NBC News/Wall Street Journal poll.

Just 31 percent say the country is better off, and a deep pessimism continues to fuel the public's mood. Most respondents used words like “divided,” “troubled,” and “deteriorating” to describe the current state of the nation.

On the eve of Tuesday’s State of the Union address, more than six-in-10 Americans believe that the nation is headed in the wrong direction and 70 percent are dissatisfied with the economy.

Displayed here are the words and phrases poll respondents most commonly associated with where the country is headed in 2014, according to the latest NBC News/Wall Street Journal poll.

It’s not just Obama under fire. A whopping 81 percent disapprove of Congress and twice as many Americans now hold negative views about the Republican Party as positive ones.

Democratic pollster Fred Yang, whose firm conducted this survey with Republican pollster Bill McInturff, compares these findings to the 1993 movie “Groundhog Day,” in which the protagonist finds himself living the same day over and over.

“It seems like we’ve been re-living the same basic dynamics -- a public that is anxious, dissatisfied and dismayed -- in a continuous loop,” he said.

That "continuous loop" of anxiety, dissatisfaction and dismay over the direction of the country and the economy was measured again in the latest WSJ/NBC News poll earlier this month:

The most recent NBC/Wall Street Journal poll says that a clear-cut majority is disgusted with the present political scene and retains little hope that future generations will fare as well as we have. As candidates get down and dirty in the lead-up to midterm elections, 60 percent say the country is in a general state of decline. A mere 19 percent of those polled have a favorable opinion of Republicans in Congress; their Democratic colleagues (or “colleagues”) poll at 31 percent. But the most remarkable number is 79: that’s the percentage of the politicized public that presently voices its discontent with the entire American political system as constituted; and fully half of the respondents said “very dissatisfied.”

79% of Americans polled express "discontent with the entire American political system as constituted," half say they are "very dissatisfied."

This is not a happy electorate, is it?

And one of the things they aren't happy with is the economy and how it seems to be rigged for the top 5%.

Which it certainly seems to be, as Neil Irwin showed in this recent report in the NY Times:

Every year, the Census Bureau delivers a sweeping set of numbers that give the richest annual picture of how much Americans are making, how many are living in poverty, and how many have access to health insurance. The numbers are backward-looking, covering conditions from a year ago. But the new numbers, released Tuesday, in many ways tell us more about how well the economy is serving — or failing — the mass of Americans than data that create hyperventilation in the financial markets.

The census numbers on what American families made last year are as mediocre as they are predictable. We now know that if your household brought in $51,939 in income last year, you were right at the 50th percentile, with half of households doing better and half doing worse. In inflation-adjusted terms, that is up a mere 0.3 percent from 2012. If you’re counting, that’s an extra $180 in annual real income for a middle-income American family. Don’t spend your extra $3.46 a week all in one place.

Going back a little further, the numbers are even gloomier. The 2013 median income remained a whopping 8 percent — about $4,500 per year — below where it was in 2007. The 2008 recession depressed wages for middle-income Americans, and they haven’t recovered in any meaningful way. And 2007 household incomes were actually below the 1999 peak.

...

This simple fact may be the most important thing to understand about today’s economy: Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes. In the last 15 years, median income has been more or less flat while there was far sharper growth in, for example, per capita gross domestic product.

There are various potential reasons. Evolving technology favors those with the most advanced skills and allows companies to replace formerly middle-class workers with machines. Declining union power gives workers less power at the bargaining table over wages. Cultural norms have shifted such that top executives and financiers are paid much more compared with regular workers than they used to be.

But there really is no mystery as to why public opinion has been persistently down on the quality of the economy for years. You can’t eat G.D.P. You can’t live in a rising stock market. You can’t give your kids a better life because your company’s C.E.O. was able to give himself a big raise.

The rubber-meets-road measure of whether the economy is working for the mass of Americans is median real income and related measures of how much money is making its way into their pockets and what they can buy with that money.

And the newest census numbers show that the nation experienced virtually no progress on that frontier in 2013, and remains far behind where we were seven years ago. Americans feel disappointed by the economy; the new data show that they have good reason.

Now why aren't gains from GDP "trickling down" to the middle and working classes instead of squarely going to the top 5%?

Might it be because the economy is rigged in the favor of the top 5% and the regulatory bodies that are supposed to correct this kind of criminality are themselves rigged to favor the rich and powerful?

I think it might:

Secret audio recordings made in 2012 by a former Fed employee of conversations between high-level staffers inside the New York Federal Reserve, the branch that oversees Wall Street, show how the agency was afraid of offending powerful banks, most notably Goldman Sachs. The recordings, detailed in an explosive story on Friday by ProPublica and NPR, are a bombshell that sweeps back some of the veil of secrecy surrounding the Fed’s handling of the financial crisis to expose a culture of deference toward Wall Street, institutional paralysis and a culture averse to speaking up and challenging conventions.

...

Recordings reveal how Segarra tried to persuade higher-ups at the New York Fed that Goldman Sachs needed a firm policy regarding conflicts of interest, one of several negative conclusions she had come to about the bank. She was shot down. “Why do you have to say there’s no policy?” complains Segarra’s unidentified boss in one recording.

Another recording shows how the New York Fed caved to Goldman Sachs’s insistence that it complete a deal with Spanish bank Banco Santander, even though Fed staffer Michael Silva thought the deal was “window dressing” designed to make the Spanish bank appear healthier than it really was.

The recording also suggests how in the fall of 2008, Fed staffers were akin to a deer in the headlights. As Lehman Brothers declared bankruptcy and a large money market fund, where shares are never supposed to trade for less than one dollar, “broke the buck,” confusion and paralysis reigned. In one recording, Silva, a former chief of staff to then New York Fed President Timothy Geithner, vomited. Silva, according to the recordings, later felt disappointed when Goldman Sachs did not step in to help save Lehman, a hesitance that deterred other banks. 

“It was extraordinarily disappointing to me that they weren’t thinking as Americans,” Silva says in the recording.

Segarra sued the New York Fed last fall in Manhattan federal court over her firing. In the complaint, she says that Silva said during an unspecified meeting that the Fed “possessed information about Goldman that could cause Goldman to ‘explode.’” A federal judge dismissed her claims last April. Prior to the lawsuit’s filing, Goldman Sachs attempted to negotiate a settlement with Segarra for around $7 million, court papers show.

The Fed, which injected hundreds of billions of bailout dollars into Wall Street banks to avert a global financial collapse, and the Justice Department, which has been criticized for not putting any senior executives from banks or lenders in jail, are both increasingly seen as having been too soft on Wall Street.

We have a government that no longer functions (and when it does function, it's only to reward members of the government themselves as well as their corporate backers), an economy that no longer works for the vast majority of Americans (and hasn't for a long time now, though the nadir has been in the post-2008 recession period), a banking system that is rife with criminality and corruption and a regulatory system that is rigged to ignore it (or worse, help hide the criminality and corruption.)

Schools, dysfunctional though some may be, are not dysfunctional in isolation of the rest of America's major institutions.

To think that "significant changes" - Joel Klein's vaunted "disruption" - will fix whatever dysfunction exists in the American education system while the rest of American institutions, many of which have direct power through law and mandate over how school systems run or indirect power through lobbying of those who make the law and push the mandates, is wrong-headed.

What continued "disruption" will continually bring is more chaos, more dysfunction.

We see that already with all the changes wrought since No Child Left Behind, continued through Race to the Top - constant turmoil over the Endless Testing regime, teacher evaluation changes that tie ratings to test scores and cause ever more testing, school "turnarounds" that hand public schools over to private entities to run them as charters, the fights over school closings and co-locations, the fight over Common Core and standardized standards and curricula imposed from afar.

There have been significant disruptions to the American public education system since the Bush No Child Left Behind Era and like the rest of American institutions, public schools have suffered in the esteem of the American public as measured by the latest PDK/Gall-Up Poll on education, with 80% expressing disapproval of the nation's public schools at large even as a majority said they thought highly of the schools in their neighborhoods.

Americans may see schools at large as dysfunctional (though interestingly, not their own neighborhood schools), but no more so than they see the rest of America's institutions.

And the reality is, bringing "significant changes" and "disruption" to the school system developed by the same people who run the dysfunctional government or own banks and/or corporations that wreak dysfunction in society isn't going to fix whatever dysfunction exists in the school system.

Instead it will bring about more dysfunction.

The cynic in me thinks that's exactly what education reform is meant to bring - ever-changing mandates that breed more dysfunction, more chaos, and eventually drive the public school system to dissolution, allowing it to be privatized and owned by the very institutions that cause so much dysfunction and chaos themselves - the banks and the corporations.

It's nice to think that schools can fix themselves when the rest of America's institutions are broken, but it's a fairy tale, no less mythic than the jive we still tell ourselves about having a government "Of the people, By the People, For the people" or an economy in which anybody can succeed through hard work and sweat alone.

Another Banskter/Wall Street Mess

Gee, this story doesn't sound familiar at all:

Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.

“I am not sure how I got the loan,” Mr. Durham, age 60, said.

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.

This is the face of the new subprime boom. Mr. Durham is one of millions of Americans with shoddy credit who are easily obtaining auto loans from used-car dealers, including some who fabricate or ignore borrowers’ abilities to repay. The loans often come with terms that take advantage of the most desperate, least financially sophisticated customers. The surge in lending and the lack of caution resemble the frenzied subprime mortgage market before its implosion set off the 2008 financial crisis.

Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.

The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.

And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.

I'm sure this will all end well - just the way it all ended so well for the subprime mortgage wave and the investors who bought those subprime mortgages bundled into bonds and securities hawked by Wall Street.

Wingnut Attack On De Blasio

De Blasio Wins! Exciting! How soon until streets of NYC look like scenes from 'The Warriors'? pic.twitter.com/FMxIpbhdM1
— MATT DRUDGE (@DRUDGE) November 5, 2013

In actuality, the city is already crime-ridden:

Interest Rates For Student Loans Set To Double

This is bad:

WASHINGTON — Congressional inaction could end up costing college students an extra $5,000 on their new loans.

The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses. The difference between the two rates adds up to $6 billion.

Just a year ago, lawmakers faced a similar deadline and dodged the rate increase amid the heated presidential campaign between President Barack Obama and Republican challenger Mitt Romney. But that was with the White House up for grabs and before Washington was consumed by budget standoffs that now seem routine.

“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”

The rates do not count for subsidized loans previously taken out by students - just for future Stafford subsidized loans.

Unsubsidized and private student loan rates are not expected to change.

Let's see, the banks get money at 0% and lend it out at 3.4% -hmm, that's a pretty good deal for the banks.

Now they get money at 0% and lend it out at 6.8% - and the loans are "guaranteed".

Sure is good to be bankster.

Might say it's better to be a bankster than even a king.

And where is Obama in all of this?

So far, pretty silent.

From Detroit To Cyprus To NYU - The Bankers Own It All

Light posting for a few days, but two good pieces before I go:

Glen Ford: From Detroit to Cyprus, Banksters in Search of Prey

Michael Hudson: Solution to Student Debt is to Get the Banks Out of the Education Business

The Damage Is Done

From The Guardian:

Experts warned that even if the levy on deposits below €100,000 was axed entirely, it would not be enough to restore confidence in the bank guarantee system put in place across the eurozone.

"The craziest thing about the Cyprus announcement is the huge potential cost of undermining the spirit of the bank deposit guarantee for what is a small saving in the overall scheme of European finances. Even if policymakers row back from taxing small depositors in Cyprus, the damage has been done," said Tristan Cooper, analyst at the fund managers Fidelity Worldwide.

They can try and undo the damage all they want.

It's baked in now.

When the shit hits the fan, they burn depositors before they burn bond holders.

A commenter on The Guardian story writes:

Disgusting theft of peoples savings by the EU. The bail out - like all the bailouts - does not go to the cyprus - it goes straight to the creditors i.e. other banks. Ordinary people are being robbed in order to preserve their profits and bonuses. The talk of money laundering is pure smokescreen - a huge proportion of the money flowing the city of london is dodgey.

This is the sort of shit that corrupt dictatorships pull - how much longer are we going to let the bankers and their political puppets ravage our societies?

A very good question.

How much longer are we going to let the bankers and their political puppets ravage our societies? 

Cyprus Banks Closed Until Thursday

Because everything is under control, you see:

BERLIN — European fears of renewed economic crisis flared Monday as officials took the unprecedented step of targeting bank deposits in Cyprus to pay part of the price tag of a bailout for the troubled island nation.

The proposal to tax all bank deposits, which must be approved by Cyprus’s parliament, sparked a bank run on the tiny nation and raised questions about whether a precedent was being set that could expose other European deposits in future bailouts. Amid turmoil in the country and uncertain parliamentary support, Cypriot leaders delayed a vote on the proposal until Tuesday and shuttered banks until Thursday to avoid further deposit losses. Finance officials from the 17-nation euro zone were scheduled to confer by telephone Monday to discuss the situation.

The Guardian reports the Cypriot government will not hold the bailout vote tomorrow, as there are not enough votes right now to pass it:

The Greek TV station Antenna is reporting that Cyprus president Nicos Anastasiades was planing to tell the Eurogroup tonight that he doesn't have enough support to get the bailout deal approved by parliament.

That won't come as a shock to anyone - especially with his own coalition partner, DIKO, demanding changes (see 7.17pm).

Eurozone finance ministers were due to start holding a videoconference call to discuss Cyprus an hour ago. No news flashes yet....

The videoconference call among Eurozone ministers is now over. Here are the headlines:

Eurogroup gives Cyprus 'leeway' over savings tax

Breaking: Eurozone finance ministers have ended their video conference call on the Cyprus crisis.
And the big news is that the Eurogroup have apparently agreed to give Cyprus more flexibility on its bank levy. As long as it hits the €5.8bn target. And it appears that tomorrow's vote in parliament still goes ahead.
That's according to a source in the Greek finance minister, interviewed by Reuters.
Here are the latest snaps off the Reuters terminal:
• EUROGROUP MEETING ON CYPRUS OVER, EUROGROUP GIVES CYPRUS MORE FLEXIBILITY ON BANK LEVY - GREEK FINMIN SOURCE
• EUROGROUP TO SAY THAT CYPRUS SHOULD SAFEGUARD PROTECTION OF DEPOSITORS BELOW 100,000 EUROS - GREEK FINMIN SOURCE
• CYPRUS PARLIAMENTARY VOTE ON BANK LEVY TO TAKE PLACE ON TUESDAY, AS PLANNED - GREEK FIN MIN SOURCE
• CYPRUS SHOULD STILL RAISE 5.8 BILLION EUROS FROM THE BANK LEVY AS PLANNED - GREEK FINANCE MINISTRY SOURCE

And The Guardian posted a note from JP Morgan Chase analysts on the meaning of all of this:

JP Morgan: material risks from Cyprus

Analysts at JP Morgan have just published a new research note, warning that the financial markets have underestimated the risks posed by Cyprus.
They suggest that investors could be wrong to think the current deadlock over the bailout will be resolved, or that the eurozone's long-term "crisis management framework" remains intact.
With Cyprus, the rest of the eurozone, and Moscow all at odds over the plan, the near-term risks are 'material', JP Morgan warned.
Cyprus's fundamental problem, the bank says, is that it is "politically impossible to impose the extent of losses on insured depositors [those with less than €100,000 in the bank] that the weekend agreement envisaged".
This leaves Cyprus with three options, none very pleasant:

Option A could be to recalibrate the pain so that insured depositors do not need to pay anything, while uninsured depositors pay around 15.4% of their deposits.

The difficulty (and the main reason why this approach was not tried initially) is that the burden would fall disproportionately on
Russian institutions and individuals. Russian influence is Cyprus is considerable; and statements from President Putin indicate that he would be extremely hostile to such an approach. There is some possibility that Russia would respond to a larger haircut by refusing to roll its existing €2.5bn loan to Cyprus; meaning that this option would still leave a significant shortfall. In such a scenario, either the haircut on uninsured deposits would need to be around 21.8%, or further Troika funding would need to be found.

Option B could be to go straight to requesting additional support from the Troika.

The Eurogroup is holding a further conference call this evening, which is likely to investigate the near-term implications of the Cypriot agreement. In our view, a significant amendment of the terms of the deals (which calls for €5.8bn to be found from deposit haircuts) is unlikely.
Politically, it could be very difficult for Germany in particular to make any kind of U-turn (especially since part of the purpose of the whole exercise has been to demonstrate the Government's hard-line to domestic voters). The Eurogroup could propose looking at different parts of the capital structure, but this could risk compounding the existing error by creating additional uncertainties. Finance Ministers may look for other
forms of funding, but their task looks difficult (it is possible that Cyprus will revisit the idea of securitising future gas revenues, which we were surprised was not utilised in the initial proposal).

Option C could be to tweak the current pain distribution so that less of the burden falls on the insureds.

The Government has already proposed staggering the burden so that depositors with less than ?100,000 pay 3%,those with less than €500,000 pay 10% and those with more than €500,000 pay 15%. To our mind, this looks like shifting deckchairs.

And in the long term... JP Morgan argues that the "breach of faith between Euro area policymakers and regional depositors" will remain.

They're trying their best to undo the damage the initial agreement did.

Even if they're able to do that (and that's still a big if), having already let the "bail in" cat out of the bag and tried to stick mom and pop depositors with some of the bank bail out bill will not be forgotten for a long, long time.

You can bet the next time some banks in Spain, Italy, Portugal or France need bailing out, people will run to the exits with all the cash they can get out of those banks no matter what the ECB, EC and IMF says to try and reassure them.

That's what JP Morgan Chase means when they say the "breach of faith between Euro area policymakers and regional depositors" will remain long term.

Eurozone Crisis Test Case

Neil Irwin at Wonkblog on the events in Cyprus:

In a lot of ways, it is separate from the rest of the euro zone, and not just geographically. Its population is a mere 1.1 million (the Greek population is 10 times as large). It has an unwieldy banking system with liabilities equal to eight times its economic output, versus 3.5 times for the euro zone as a whole. Many of those deposits are held by wealthy Russians who use Cyprus as a convenient place to park money.

Those are the reasons the IMF has insisted on losses for depositors — those, and the fact that rescuing Cyprus’s finances without the 5.8 billion-euro contribution represented by depositors’ losses would have meant a bailout approximately equivalent to the country’s annual economic output, too much for the fund to stomach.

“The challenges we were facing in Cyprus were of an exceptional nature,” said Jeroen Dijsselbloem, the Dutch finance minister who helped engineer the plan, according to the Financial Times. “Therefore, unique measures were determined to be necessary.”

The European Central Bank will now be on high alert, monitoring activity in Greece, Spain and beyond for evidence that the Cyprus precedent will result in new runs on those nations’ banks. Expect a flood of central bank liquidity into those nations if there is any hint that depositors across Europe seem to be thinking that Cyprus is the new normal and that their seemingly safe bank deposits could be reduced 10 percent without warning.

The best the rest of the world can hope for is that Cyprus’s case is sufficiently unique that it won’t spark panic in Athens and Madrid (or in Lisbon, Dublin and Rome).

For the past six months, the global financial markets have become increasingly complacent, convinced that the euro-zone crisis is, for practical purposes, over. Cyprus is the test of whether that is correct, or whether the complacency was instead misplaced.

In other words, if there is going to be a new wave of crisis in Europe, historians will be able to trace its starting point back to today’s Cyprus bank bailout.

And Tero Kuittinen at Forbes:

Europeans are trying to come to grips with the shocking decision of Cyprus to abruptly declare a stiff levy on bank deposits, even those under 100’000 euros. Everyone is now waiting for Monday morning and how depositors in Southern Europe will react to the sudden realization that 7-10% of their savings could be abruptly confiscated on any given weekend. Photos of Cypriots lining up in front of ATM’s that no longer work will be splashed across the Sunday editions of European newspapers.

The sheer weirdness of the Cyprus move means that European leaders must deliver two conflicting messages simultaneously. First, they must argue that the sudden bank account levy was absolutely necessary right now. Second, they must convince Europeans that it will never, ever be repeated.

The President of Cyprus has already delivered a dramatic statement. According to it, not confiscating some of bank deposits would have meant that the banking system of Cyprus would have collapsed immediately. That’s it. The only two options right now were allowing the banking system collapse or implementing the 6.75 – 9.90% shock levy on savings accounts. Needless to say, very few people in Europe had any idea that Cyprus is facing these two drastic options in March 2013.

Yet on the very same day, the European Union Economic and Monetary Commissioner Olli Rehn stated that there won’t be a repeat of the tax on bank deposits that was imposed as a part of Cyprus’s aid program. He bluntly claimed that “there is no concrete case where it should be considered.”

How can both statements be credible? How can regular EU citizens with savings accounts in the Mediterranean banks possibly gauge the risk level accurately? The messaging challenge here is profound. By the time the Spanish and Portuguese banks open on Monday morning, Europeans must believe that A) The Cyprus crisis was so acute and dreadful that the unprecedented savings tax was the only possible alternative and B) Another similar situation will never materialize, so there is no reason to pull money out of southern banks.

The Club Med economies simply cannot handle another crisis of confidence. During the calm month of January, Spanish retail sales plunged by -10% and the December sales collapse was recently revised to -11%. Multinational companies from McDonald’s to Tiffany have started warning about weakening European trends. Apple‘s Christmas quarter weakness stemmed partly from a pronounced European revenue growth slow-down over the past three quarters. Qualcomm recently downgraded the North American 3G/4G device volume growth to under 2% in 2012; the consumer electronics industry can hardly absorb a new European consumer sentiment crisis without a significant hit to global growth trends.

How is EU going to thread this needle? The next 48 hours are going to be pivotal. By making its move on Saturday, EU has given Europeans time to fret and mull over the Cyprus shock for most of the weekend. There will be no shortage of bank line pics on Twitter come Monday morning.

Monday and Tuesday are going to be very interesting days to watch the markets.

Just as a reminder, the bank runs and bank failures during the Depression came a couple of years after the market crash.

Bank Run In Cyprus

Everywhere you look lately, you see stories about how the economy has turned around. 

The Dow is at an all-time high, first time jobless claims are near a post-recession low, the real estate market is beginning to boom again, foreclosures are falling sharply.

And yet, you have a thing like this:

ATHENS — In a move that could set off new fears of contagion across the euro zone, anxious depositors lined up at cash machines in Cyprus on Saturday to withdraw money hours after European officials in Brussels required that part of a new 10 billion euro bailout must be paid for directly from the bank accounts of ordinary savers.

The move — a first in the three-year-old European financial crisis — revived fears that bank runs could be set off elsewhere in the euro zone, especially after a top European official on Saturday declined to rule out similar measures on depositors in countries beyond Cyprus. 

Under an emergency deal reached early Saturday in Brussels, a one-time tax of 9.9 percent is to be levied on Cypriot bank deposits of more than 100,000 euros effective Tuesday, hitting wealthy depositors — mostly Russians who have put vast sums into Cyprus banks in recent years. But even deposits under that amount would be taxed at 6.75 percent, meaning that Cyprus’s creditors will be taking money directly from pensioners, workers and regular depositors to pay off the bailout tab. 

“What the deal reflects is that being an unsecured or even secured depositor in euro area banks is not as safe as it used to be,” said Jacob Kirkegaard, an economist and European specialist at the Peterson Institute for International Economics in Washington. “We are in a new world.”

Market Oracle puts this in some perspective:

Overnight last night, the Eurogroup (Eurozone executive committee) negotiated a deal for a bailout of the banking system in Cyprus. As part of the deal, a one-time, one-off levy on depositors was agreed: deposits below €100,000 are subject to a 6.75% levy, while those over €100,000 are subject to a 9.99% "fine".

While none of the timing is surprising - late Friday, early Saturday is always the ideal time to push such measures down people's throats -, neither did it come as a surprise that a bank run ensued as soon as those few Cypriot banks that do business on Saturday mornings, opened their doors.

This had been foreseen, of course. And so capital controls had been set up beforehand. In this case, limited deposit withdrawals and a full suspension of internet banking. The justification for all this can be found in the large amounts of Russian - allegedly black market - deposits in Cyprus. But while that may be presented as justification, it's by no means not where the potential fall-out will halt.

After all, what's to say that what can be done to depositors in Cyprus' banks, cannot just as easily be repeated for Greek, Italian, Spanish ones? If the EU wasn't yet scared enough of Beppe Grillo and his still surging popularity, now would be a good time to start being afraid. While everyone's focus is on the Russian mob, nobody (just read the press reports today) talks about the law-abiding Cypriots who see their hard earned savings wealth forcibly taken from them. Nobody but the likes of Grillo, that is. Who said earlier this week that (northern) Europe would drop Italy like a stone once German, French and Dutch banks have shed their risky Italian assets.

Besides, if you think the Russian deposit holders are fatally wounded right now, think again. They've seen this coming for at least 6 months, they've had all the time they need to move assets around, and, if anything, will simply use this decision to launder a lot of capital, and happily pay a 10% fee for the honor.

Cyprus is small, and the hope is that hardly anyone will notice what happens there, or be interested. But throughout the Eurozone over the past five years, deposit guarantees have risen, in a so far pretty successful attempt to prevent bank runs. Overnight, that model has now been thrown out with the bathwater. And all of Europe should be wary of what happened. A precedent has been set, and what's good for the goose fits the gander.

Not that German, French, Dutch depositors will lose sleep right this moment, but then that's precisely the idea. The EU core nations have so far been able to convince their citizens that they are rich and their economies recovering, and everything's under control. Moreover, the story that Russian criminals get a 10% haircut goes down well among the respectable citizenry. What happens if and when Italy or Spain need a bailout like Cyprus is not even considered. But maybe that's not so smart.

The Cyprus bailout was ostensibly executed to "save the Eurozone”. And it was presented as a one-off. But so was Greece and its forced haircuts for investors. You can only have so many one-offs and remain credible. European economies are all still deteriorating, though admittedly there are a few choice German numbers that are not all bad. But there can be no doubt that pressure on the EU/Eurogroup to step in again in some country will arise some time soon. Will that country's depositors leave their money in the bank when that threat becomes real, or will they take it out? What would you do now the Cyprus example is in place?

Don't worry, the economy is turning around.

Ignore the signs from abroad.

Law-abiding Cypriots having their money taken forcibly from them late Friday/early Saturday?

That could never happen here.

Go back to sleep, America.

You're government has it all under control.

You're safe, and so's your money - if you have any.

Just keep spending.

Run up those credit cards again.

Buy that house you've had your eye on.

It's all turned around and everything's swell in Barack Obama's Bank of America, er, United States of America.

Corzine, Top Execs To Get Away With MF Global Robbery

Leave the poor 1% robber barons alone!!!!!! They work really, really hard and sometimes they just, you know make mistakes:

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

Just more evidence of how crooked and corrupt this country is.

Michael Fiorillo likes to say this is what a banana republic looks like.

He is exactly right.

No Wonder Occupy Was So Threatening To Them

Naomi Wolf:

Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers' fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters' list of demands.

But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week's headlines make such a conclusion, sadly, inevitable.

Indeed - the fixing of LIBOR and the fact that regulators including the current Secretary of the Treasury and then head of the Federal Reserve Bank of New York did nothing serious to stop it and never exposed it to the public is the biggest example of a system that is rigged beyond measure.

If they fixed LIBOR and the regulators knew it and did little to nothing to stop it, then frankly nothing in the financial system can be trusted, no one in the financial world can be trusted, no one in regulation or government can be trusted to put things right.

The system is rigged and rotten to the core.

Naomi Wolf is quite right when she says no wonders the criminals in power reacted so violently to the Occupy protests.

They know they're standing on dominoes that are tottering.

The crookedness and criminality are so widespread that they are too difficult to hide anymore.

And so the oligarchs respond with violence and repression and control.

Expect to see much more of this from the elite and their security apparatus as the rot at the core of the system continues to become apparent:

Hundreds of Los Angeles police in riot gear, shooting rubber bullets, clashed with Occupy L.A. protesters and street artists attending a sidewalk chalk-drawing event dubbed "Free Chalk for Free Speech" as part of the monthly L.A. ArtWalk. Several injuries and 19 arrests, mostly for "vandalism." For drawing in chalk, in the rain? Overreact much?

Ah yes - using rubber bullets on protesters armed with chalk.

That's where we're at today.

And soon, the drones.

16 Banks Conspired To Fix LIBOR Rates

The business model of the banks is to lie and steal and cheat and screw - that's it:



One or two banks couldn't have colluded to fix the LIBOR rate. As Matt Taibbi and Eliot Spitzer point out, because of the way that LIBOR is calculated, either all or almost all of the banks had to have conspired to fix the rates.

And LIBOR is quite literally the center of the financial universe. If LIBOR rates are corrupted, then what in the financial world isn't?

Joe Nocera writes of the scandal today in his column:

Britain and America have reacted to the Libor scandal in completely different ways. Britain is in an utter frenzy over it, with wall-to-wall coverage, and the most respectable, pro-business publications expressing outrage. Yes, Barclays is a British bank, and the first word in Libor is “London.” But still: The Economist ran a headline about the scandal that read, in its entirety, “Banksters.”

Yet, on these shores, the reaction has been mainly a shrug. Perhaps we’re suffering from bank-scandal fatigue, having lived through Bank of America’s various travails, and the Goldman Sachs revelations, and, most recently, the big JPMorgan Chase trading loss. Or maybe Libor is just hard to gets one’s head around.

But the Brits have this one right. They may not understand the intricacies of Libor any better than we do, but they sense, powerfully, that banks have once again made a mockery of the role that society entrusts to them.

“Why has the scandal created outrage in Britain? Because it truly is outrageous,” said Karen Petrou, the managing partner of Federal Financial Analytics. “They weren’t supposed to be fixing that rate — no matter what the reason.”

She continued: “If I give you my money, I need to be able to trust you with it. If you can only be trusted via regulation, then you might as well be a utility. And if banks can’t be trusted to manage their trading desks, then we need to rethink our whole model of banking.” Petrou is not an advocate of returning to the days of Glass-Steagall, the Depression-era law that separated investment banking and commercial banking. But with the Libor scandal, she said, she could certainly understand the growing calls for it.

Barclays, of course, is hardly the only big bank that manipulated Libor for fun and profit. It is simply the first to admit its wrongdoing and settle with the government. The word is that just about every big bank is under investigation for playing games with Libor, including JPMorgan Chase, Citigroup and other American-based financial giants.

Which means there is going to be a lot more opportunities for Americans to become outraged over this scandal. And, maybe, to finally summon the will to change banking once and for all.

Until Katie and Tom are tied to the scandal, it doesn't look much like Americans care about this.

Just as Americans have been rather uninterested in the Murdoch hacking scandal in Britain and refuse to ask a question like "If Murdoch's minions felt safe enough to act in such corrupt and criminal ways over in Britain, is it reasonable to assume that they acted the same way here?", Americans seem uninterested in this LIBOR scandal that quite literally means, as Taibbi said a friend of his put it, "the world is built on quicksand."

So what if the loan and credit card interest rates they pay are tied to a fixed LIBOR rate.

What's going on with Katie and Tom?

When Do Some Bankers Go To Jail?

These guys at all the major banks are being implicated in the LIBOR fixing scandal.

And it looks like members of the Cameron government are involved in the cover-up.

Shade of Murdoch/hacking from last summer.

Only worse - much, much worse.

At what point is somebody in power going to be held accountable for this stuff?

Until you put some of these fuckers into jail, this shit is going to continue.

Although I'm not sure even throwing bankers and their political fixers into jail is going to stop the corruption.

I'm actually with George Carlin on this - might be time to bring on the Monday Night Crucifixtions.

Something needs to be done.

These Masters of the Universe brought the world economy to the brink of collapse in 2008.

It seems quite clear that if they continue to be granted the freedom to steal with impunity, they will bring the world economy to collapse next time around.

Student Loan Debt Bomb

Three fair jobs reports have the Obama people doing high fives over the economy.

No high fives here, however:

Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.

In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.

...

The amount of student borrowing skyrocketed from $100 billion in 2010 to $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account. Together, these balances come to $85 billion, or roughly 10 percent of the total outstanding student loan balance.

College seniors who graduated with student loans individually owed an average of $25,250, up 5 percent from the previous year, according to a study by Brewer’s group. Parents are responsible, on average, for $34,000 in student loans, a figure that rises to about $50,000 over a standard 10-year repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, a 5.6 percent increase from 1992 and 1993.

A report last year by the Pew Research Center and the Chronicle of Higher Education warned that public anxiety over college costs is at an all-time high. Moreover, “low income college graduates or those burdened by student loan debt are questioning the value of their degrees,” saying the cost of college has delayed other life decisions, the report said.

But of course the people at the USDOE and the NYCDOE are going to begin tracking both schools and individual teachers on college attendance and readiness, so the point of whether college is good or not for individual students right out of high school is moot.

College For All is good for the bankers - and that's what matters these days

Until people start going belly-up on their students loans.

Not to worry, though - there's a government bailout waiting at the end of the line for the banksters.

As for the Millenium Generation, there's a shackle and chain waiting to be tied around their legs for the rest of their lives as they consistently have to go back to college to be "re-trained" for the latest technology advances and compete for employment in an economy that is increasingly rigged against them:

Stef Gray, a Hunter College graduate from New York who has paid $300 in forbearance fees to the company since May, organized the petition drive in hopes of persuading Sallie Mae to drop the fee, just as Bank of America and other financial institutions dropped unpopular fees in the face of Internet protests.

Gray, 23, who lives in Brooklyn, has become a symbol of the plight of young Americans saddled with debt. With both her parents deceased, Gray has put herself through school with part-time jobs and three private loans with Sallie Mae.

Since graduating in May with a master’s degree in geographic information systems, Gray has been unable to find full-time employment. Instead, she says, she has gotten by with temporary jobs and waitressing. Without a steady income, she says, it has been impossible to make the $700 monthly payments on her $40,000 in loans. Nor has she been able to consolidate the loans or negotiate more favorable terms with Sallie Mae.

Every time she deferred a payment on the three loans, Sallie Mae slapped her with a $50 forbearance fee for each loan — a total of $150.

“That may not sound like a lot of money to some,” she said. “But for me, with no parents, struggling to get by without a job and not receiving any unemployment, that’s a lot of money.” Because of the compounding effect of the interest rate on the unpaid portion of her loan and related penalties, Gray says, her original $40,000 loan has grown to $65,000. “The interest is snowballing,” she said.

Morning in Obama's America.

Going to be one bad day for a long time to come...

Morgan Stanley Banker Stabs Cab Driver On Way Home From Charity Auction, Still Has His Job

Can you imagine the outrage if this had been a teacher:

A high-ranking Morgan Stanley banker has been put on leave after being charged with bias-motivated intimidation and assault in a case involving a late-night taxi ride.

William Bryan Jennings, 47, was charged with second-degree assault, theft of services and intimidation by bias or bigotry for allegedly stabbing a Middle Eastern cab driver in December and making racially charged statements on his way home from the bank’s charity auction, a spokesman for the police department in Darien, Conn., said Friday.

A spokesman for Morgan Stanley confirmed the charges and Mr. Jennings’s leave.

Mr. Jennings, the Americas co-head of fixed income and capital markets for Morgan Stanley, refused to pay a cab fare for a ride back to his home in Darien from a charity event in New York in the early hours of Dec. 22, according to his lawyer, Eugene Riccio. Police say Mr. Jennings balked at the amount of the fare, using racial slurs and threatening the driver, then stabbed the driver’s hand with a pen knife when the driver reached through a partition into the back seat.

Here is what Jennings said happened:

In an interview on Friday afternoon, Mr. Riccio denied that his client had stabbed the cab driver or used racial epithets, and said that Mr. Jennings had been “taken against his will” when he refused to pay what he considered an outrageous fare.

According to Mr. Riccio, the driver, while stopped in the driveway of Mr. Jennings’ house, demanded $294 for the hour-long ride from Manhattan to Darien, where Mr. Jennings lives. Mr. Jennings, who has taken similar cab rides “many times over the years” and is “familiar with generally what it costs,” refused to pay the full amount, which was roughly double what he was accustomed to paying.

The driver then threatened to drive Mr. Jennings back to New York City if he didn’t pay the fare, Mr. Riccio said. Mr. Jennings tried to exit the car, but found the doors locked from the inside.

“He couldn’t get the door open,” Mr. Riccio said.

At that point, the driver sped away, with Mr. Jennings still inside, Mr. Riccio said. Mr. Jennings demanded to be let out of the car, then removed the knife from his bag as the driver neared a Connecticut Turnpike on-ramp. Mr. Riccio characterized the knife as a “pen knife” Mr. Jennings “uses for fishing,” and said that after the driver grabbed the knife, Mr. Jennings was able to exit the car and run roughly a mile back to his house.

Mr. Jennings did not come forward to police immediately because, Mr. Riccio said, he had “fear for his safety and that of his family.”

According to his 2001 New York Times wedding announcement, Mr. Jennings is a Williams College graduate and holds an M.B.A. from Northwestern.

As for why Mr. Jennings decided to take a taxi home to Connecticut after the charity auction, Mr. Riccio said that another mode of transportation “fell through,” and said Mr. Jennings took “what transportation was available to him.”

Mr. Jennings was released on $9,500 bail and is set to appear in court next week.

This happened in December.

It's now March.

Jennings the violent criminal by night has been working his Wall Street criminal job by day since the incident.

I love the excuse for why he didn't come forth to claim he had been "kidnapped" by the cabbie:

Mr. Jennings did not come forward to police immediately because, Mr. Riccio said, he had “fear for his safety and that of his family.”

Uh, huh - sure.

In the end, this guy thought he could get away with this because a) he is a bankster b) he works for Morgan Stanley and c) the government treats people from either of those categories with impunity.

As a matter of fact, so does the press.

Now had Jennings been a teacher, the story would have been front page in the Post the next day and the Murdoch hacksters would have been calling for his firing sans trial and conviction.

Once again, another example of the dual system we have in America for banksters and everybody else.

But also the dual system we have in this country for teachers and everybody else.

If you're a teacher, you are presumed guilty until you can prove your innocence.

Just ask this teacher from Graphics.

He was arrested for allegedly touching a student, the chancellor says he is outraged over this incident, and yet prosecutors agreed to the teacher's release without bail which is a move that, according to the anti-teacher NY Post:

Signalled the potentially iffy status of the case

Too bad his name and face were all over the media, the chancellor has already indicated he thinks he's guilty of the charges and the cops made sure to perp walk him into the precinct.

Guess he should have been a Morgan Stanley bankster.

Then he would have gotten the kid glove treatment and Chancellor Walcott would have said he deserves a presumption of innocence until he is proven guilty.

Hey Cuomo - Here's Your "Crisis In Accountability"

And guess what?

It isn't in public education:

Wall Street stocks and profits took a beating in 2011. But there is one corner of the Street that took a lighter hit: the compensation paid to chief executives.

Three big banks disclosed on Friday what their top executives will receive in deferred stock for their work in 2011. Such stock is expected to make up most of their bonus as banks are increasingly paying employees more in deferred stock. Those awards to top bank executives are coming as lower-level employees are finding out that their own bonuses will be much smaller than a year ago.

Brian Foley, a compensation expert in White Plains, said that for top executives, he would have expected “the belt to come in a few more notches” this year given the banks’ lackluster stock performance. He added that executive suite pay packages this year might further lower morale inside the banks.

“A lot of people in the middle took big hits this year,” he said. “It could create some big ‘us versus them issues’ as to why the rank and file are taking a bigger hit than the senior executives.”

It seems the people running the big banks - you know, the zombie banks that were so loaded down with debt that they had to be bailed out with billions in federal money and billions more in 0% interest free "loans" from Uncle Ben Bernanke and his Merry Fedsters - are still partying like it's 1999.

Bad year at the bank?

So what - I'm getting my big bonus and pay, says Jamie Dimon:

Shares of Citigroup’s rival, JPMorgan Chase, also had a rough year, falling almost 22 percent. Still, JPMorgan’s chief executive, Jamie Dimon, was awarded $17 million in equity-linked stock for his work in 2011, according to a regulatory filing. Last year Mr. Dimon received $17 million in equity awards around this time of year and his total pay for the year came to $23 million. His total pay is expected to be roughly the same this year, according to a person close to company but not authorized to speak on the record.

Where's the accountability there?

Ah, there is none.

This is very simply about people in power squeezing all the profit and productivity they can out of those under them and paying themselves lavishly no matter how their companies do.

The next time Cuomo says teachers are unaccountable, somebody in the press who doesn't have his or her lips around Cuomo's ass ought to ask our good governor what about accountability for the banksters?

Dana Milbank Discovers How Crooked The Banks Are First Hand

I repost in full for those of you out there who think the banks are only foreclosing upon or mistreating deadbeat customers:

The problem in the nation's housing market now isn't subprime lending. It's subpar lenders.

Last fall, my wife and I refinanced our mortgage with Citibank. Sixty days later, we received a "cancellation notice" from our homeowners insurance company "for non-payment of premium."

Turns out Citibank, which had been collecting hundreds of dollars a month from us to pay the insurer, hadn't made the payments. It was, I later learned, one of the usual tricks mortgage servicers use to squeeze more cash out of their customers. About a month later, I learned of another trick: Citibank informed us that it was increasing our monthly payment by nearly $300.

Along the way, a simple refi became a months-long odyssey: rates misquoted, interest charged on a phantom account, legal documents issued in wrong names, a mortgage officer who disappeared for days at a time (first it was his birthday, then his laptop was in the shop), a bounced check from Citibank's own title company, and the freezing of our bank accounts.

For me, this amounts to no more than the hassle of arguing with Citibank to fix its "mistakes." But consumer advocates tell me these are typical of the screw-ups by the big banks that service home mortgages. And these errors - accidental or otherwise - are driving large numbers of people into default and foreclosure when it otherwise would not have happened.

It's a bad situation - and the new majority in the House is poised to make it even worse.

Republicans are aiming to repeal the Home Affordable Modification Program, the Obama administration's main response to the foreclosure crisis. The program, by all accounts, has been disappointing, helping only about 600,000 homeowners of the 3 million to 4 million projected. But its failure, watchdog groups say, was caused by the mortgage servicers' ineptitude - lost paperwork, bad accounting and the like - and lack of concern about whether the mortgages they service (but don't own) go into default. Rather than crack down on the banks, the House Republicans would kill the one program that, at least in theory, gives borrowers some chance of avoiding foreclosure.

"If you take that away, you've got nothing," says Julia Gordon, senior policy counsel at the Center for Responsible Lending. "The servicers can just do whatever they want."

That's the last thing the struggling housing market needs. Because banks quickly resell mortgages, they don't much care how the loans perform; their job is to extract the maximum in fees.

This is how we wound up with the robo-signing scandal, in which servicers erroneously forced homeowners into foreclosure. This, too, is why there has been an epidemic of misapplied payments, bogus fees and mismanagement of escrow accounts for tax and insurance. If a borrower's homeowners insurance lapses, the servicer can "force-place" the borrower with a more expensive insurer, sometimes receiving kickbacks.

The nascent Consumer Financial Protection Bureau, created by the Dodd-Frank legislation, could rein in these abuses - which explains why the banks, in concert with House Republicans, have been working to strip funding and responsibility from the new agency. This, combined with the repeal of Obama's foreclosure program, would leave the mortgage servicers supervised only nominally by the anemic Office of the Comptroller of the Currency.

My wife and I are reasonably savvy consumers - she has a brand-name MBA, and I began my career as a business reporter for the Wall Street Journal - but we were no match for a bungling bank. After five months of trying, we still haven't been able to resolve all of Citibank's mistakes - nearly all of them, curiously, in the bank's favor.

Of all the miscues, the highlight was when we were handed, at closing, a large check that we didn't want for a new home-equity line of credit. I tried to redeposit it into the home-equity account but was told that the account did not yet exist. I tried to deposit it into my checking account, and the check was returned unpaid - while interest accrued.

That so much can go wrong with such a simple refinance doesn't bode well for the 5.5 million homeowners in default (on top of the 3 million already foreclosed). It's impossible to know for sure, but by some estimates, half of them are victims of some form of servicers' errors.

"What happened to you," Ira Rheingold of the National Association of Consumer Advocates told me, "happens to people every single day." And it will continue, with its resulting drag on the economy, unless and until the big banks can be brought to heel.

Good to see this story show up in the bastion of conventional wisdom - the Washington Post - and see it happen to a certified member of the Village Elite.

Perhaps now other Village Eliters will be less inclined to take the part of the banksters over the poor schulbs getting screwed over by them every day.