Friday, April 30, 2010

Legal chicanery and pitch darkness are the banker's stoutest allies.

Its show time again on Capital Hill, but this second round of show and tell won’t cut the muster! It will end as it always has, back to business as usual. Wall Street has gained to large a footprint in congress to be chastised in any meaningful manner. And there is no Ferdinand Pecora to take on the banks.

The hearings, like their counter part in the UK were and are for appearances, to placate rather than prosecute.

This show lacks the credibility of its famous counter part Ferdinand Pecora, and “sadly” there appears to be no real intent to prosecute anyone for anything, and there are a lot of good reasons to bring criminal charges.

What we are witnessing on Capital Hill is a fusillade to give the uneducated observer the appearance that something is going to be done about the banks and their reprehensible behavior. But don’t be misled! It will be back to business as usual as it has since the founding of the banking system. Banks tend to be corrupt, it is in their nature.

This is not the first time the Banks have produced chaos within our economy, and it will no doubt not be the last!

The bankers are involved in every aspect of their business even the agencies that oversee and control them, and from political office and its revolving door. Its always been the fox guarding the chickens, and over seeing other foxes. One has only to look back to the last fiasco the banks engineered to see where we are today.

Pecora launched a real investigation and interviewed such high-profile luminaries as Wall Street personalities Richard Whitney, president of the New York Stock Exchange, his brother, George Whitney (a partner in J.P. Morgan & Co.) and investment bankers Thomas W. Lamont, Otto H. Kahn, Albert H. Wiggin of Chase National Bank, and Charles E. Mitchell of National City Bank (now Citibank).

Even then Congress was on the payroll of the Morgan interests. But public outrage brought congress to its knees and meaningful regulation was passed. Glass Steagall held the banks in check until Greenspan watered it down on behalf of his real bosses, JP Morgan, and Morgan Guaranty Trust Co. another JP Morgan Company.

In his role at the FED, his primary function was to water down and rescind the Glass Steagall act, which he successfully accomplished.

Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, (sound familiar?) including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States) participated in stock offerings at steeply discounted rates.

Pecora also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, (as Goldman Sachs now stands accused) that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had helped themselves to $2.4 million in interest-free loans from the bank’s coffers.

Pecora's investigations highlighted the contrast between the lives of millions of Americans living in abject poverty and the high-rolling lives of such financiers as J.P. Morgan, Jr.

Under Pecora's insistent questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932;

And there were bombshells! New York Mayor Fiorello La Guardia’s revelations that a corporate publicist had over a ten-year period stuffed nearly $300,000 in the pocket of various journalists to ensure flattering coverage of certain companies. Today it’s members of Congress that accept money from the powerful Banking contingent.

Ferdinand Pecora, meticulously exposed Wall Street’s role in the crash. His famous inquisition of J.P. ‘Jack’ Morgan Jr., son of the financial titan, revealed the House of Morgan’s control over other financial institutions. There is no difference today, just different faces but the same mindset, and the same exertion of control by the same players. It will never end, until the American people stand up in numbers and say STOP.