Welcome Jeff Connaughton (JeffConnaughton.com) and Host, William K. Black (UMKC) (NewEconomicPerspectives.org)

The Payoff: Why Wall Street Always Wins

“Mad, Blind, or a Coward”: Jeff Connaughton channels Camus’ The Plague

Jeff Connaughton has authored a powerful, and chilling insider’s perspective on the financial crisis and the pathetic governmental response to it. The second part of his title sums up the result and the first half explains why Wall Street always wins. Many, perhaps most Americans are likely to agree with both parts of Connaughton’s title so this book will not transform the public’s view of the issues. The public largely has this set of issues correct. Connaughton gives the readers unique access to the facts because he had a front row seat to many of the key discussions and he has the analytical abilities and expertise to explain the significance of those facts.

Reading Connaughton’s account evoked in me the comments of Dr. Rieux in Albert Camus’ The Plague.

All I say is that on this earth there are pestilences and there are victims — and as far as possible one must refuse to be on the side of the pestilence.

[W]hen you see the suffering and pain that it brings, you have to be mad, blind or a coward to resign yourself to the plague.

Connaughton shows us that the leaders of both parties were – and are – mad, blind, and cowards. They have sided with those that caused the pestilence and resigned our nation to a series of financial and moral plagues.

Readers who pick up The Payoff should buckle up first – it will be a bumpy ride regardless of your political affiliations. There are a few heroes, but the title warns that Wall Street Always Wins even when the folks with courage and a commitment to the public interest stand up to the banksters. Hannah Arendt famously described the “banality of evil” during the Holocaust. Connaughton describes the banditry of the banal. Connaughton shows that the system is so rotten, so rigged in favor of Wall Street, that evil individuals are unnecessary to produce catastrophe. No one has to be (formally) bribed. Theoclassical economic dogma has led to regulatory and prosecutorial leaders committed to not regulating and not prosecuting the banksters.

Dogma is so dangerous because it is the death of true reasoning. It excludes alternatives so fully that the alternatives are no longer even understood to exist. The most critical assumptions are implicit. Explicit assumptions should inherently prompt the question of whether they are justified. We are not even aware that we are making assumptions when we make them implicitly. Neither the author nor the reader can feel any need to question whether an unrecognized implicit assumption is justified.

Connaughton is a superb guide because he has such varied career. He’s got an MBA and a JD from two of the top schools in the world and did so well that he achieved one of the juiciest judicial clerkships. He’s worked as an investment banker with two top firms. He ran a lobbying firm. He was an important aide to (then) Senator Biden, President Clinton, and Senator Ted Kaufman. He is also candid. Republican and Democrats alike will cringe as they read his account of why Wall Street always wins.

For the sake of brevity I will only discuss two examples from the book. The clearest examples of an insanely dangerous and destructive policy that any rational system would eliminate are the systemically dangerous institutions (SDIs). The SDIs are treated as “too big to fail.” Eliminating SDIs would provide a win-win-win-win. They pose a systemic risk of global collapse. They make “free” markets impossible for the implicit federal guarantee of their general creditors means that they can borrow at a significantly lower interest rate than their smaller competitors. I had the privilege of hosting the book salon for the three (very conservative) NYU Stern School authors of Guaranteed to Fail. Their simile for the extent of the competitive advantage this implicit federal subsidy provides is that it is “like bringing a gun to a knife fight.” The NYU authors’ conclusion was that there was nothing “free” about housing finance markets due to the SDIs. A wide range of scholars have used the same phrase to describe the inherent degradation of democracy caused by SDIs – crony capitalism. The additional good news is that the SDIs are far too large to be efficient. We would make finance more efficient if we shrank the SDIs to the point that they no longer posed a systemic risk. Progressives, conservatives, and libertarians often share this four-part indictment of the SDIs, so one needs Connaughton’s insider perspective to understand why an essential action with so many vital benefits not only did not occur but is not even an issue. Neither major party proposes to do anything about the SDIs. Connaughton provides a telling vignette that shows that “serious” officials consider any crack down on the SDIs to be illegitimate.

“Senator Diane Feinstein … asked [Senator] Durbin … ‘What’s this [Brown-Kaufman amendment to end the SDIs]’? [Durbin replied]: ‘To break up the banks.’ Giving the thumbs-down sign, Feinstein said bemusedly: ‘This is still America, isn’t it?’”

Serious, experienced Democratic Senators like Feinstein and Durbin consider any effort to protect Americans from global systemic crises and our democracy from crony capitalism to be un-American. In the name of “free” markets we must allow the inherent elimination of any possibility of “free” markets. To propose the one reform that would be any real financial regulator’s top priority is to be treated with contempt by the Senate Democratic leadership. Yes, political contributions from the finance industry are important and Connaughton repeatedly shows us why this is so. But anyone who has met with prominent American politicians knows that the degree of acceptance of the mantra “what’s good for Wall Street is good for America” among the leadership of both parties is our nation’s most important barrier to fixing the catastrophe that is Wall Street. Connaughton shows us that this absurd identification remained intact despite widespread fraud by Wall Street elites who grew wealthy by driving the greatest economic crisis since the Great Depression. He shows that a purportedly “reform” administration led by a “progressive” president acted to protect the elite frauds from sanctions and to make them even wealthier through bailouts.

As a former financial regulator and Justice Department attorney (my spouse, June Carbone, was also a DoJ attorney) the pages that were most painful for me to read were Connaughton’s explanation of how the professionals who run DoJ and the SEC were repeatedly complicit in providing de facto immunity to the Wall Street elites who drove the crisis. Connaughton confirms the insider views of Neil Barofsky and Sheila Bair in their recent books about the important and pernicious role that Treasury Secretary Timothy Geithner played in securing that immunity as a deliberate policy.

Connaughton’s tale is vastly more damning because he, as a legal professional working for years as a leading staffer for the Senate Judiciary Committee understood the institutions and the key people. He emphasizes a point I have often made – our nation is blessed with something that is rare globally. We have scores of prosecutors and investigators who are willing and able to take on the most elite white-collar frauds and corrupt officials. They routinely take on the best criminal defense lawyers in the world with unlimited budgets – and generally win. Biden, Kaufman, and Connaughton know these people on a first name basis, which makes Connaughton’s book an essential reading for anyone who wishes to understand the financial crisis and why our response to the Great Recession has been a national disgrace.

Our nation is also blessed with hundreds of experienced financial regulators who are nearly unique globally because of their willingness and skill in taking on elite frauds and their lawyers and allied professionals. Connaughton makes it clear that the Bush and Obama administrations have overwhelmingly refused to take advantage of this talent in order to hold accountable the elite Wall Street frauds who grew wealthy by driving the financial crisis and the Great Recession. Connaughton takes us inside the SEC to see why that agency’s leadership has adopted policies that guarantee failure. We owe him a great debt for his service to the nation and for making his account of what went wrong public in this book.

[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions. Please take other conversations to a previous thread. - bev]

155 Responses to “FDL Book Salon Welcomes Jeff Connaughton, The Payoff: Why Wall Street Always Wins”

BevW October 21st, 2012 at 1:56 pm

Jeff, Welcome to the Lake.

Bill, Welcome back to the Lake, and thank you for Hosting today’s Book Salon.

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Jeff Connaughton October 21st, 2012 at 2:01 pm
In response to BevW @ 1

Thanks, Bev, and thank you to FDL for hosting me and for having this discussion.

I want to especially thank Bill Black for agreeing to host and for taking the time to write such an intelligent and generous post. His thoughts about the book make me wish I had known him well enough to ask him to read it in draft and give me his comments, as his powerful points illuminate key aspects of the facts and story in important ways. And of course his background and expertise in prosecuting financial crimes is nonpareil.

I know you’re all book lovers, or you wouldn’t be here. But I also know few people can find the time to read every financial reform book, especially when every week we can read Bill’s not-to-be-missed blog posts about unfolding issues and, as another example, David Dayen’s excellent posts about something that often just happened even hours ago. I know I spend much of my day reading several superb financial and legal bloggers, hoping that I can stay as current as possible on complex developments I care about.

Which leads me to ask: What good is memoir? I’m not qualified to answer that from a literary perspective, only a practical one. As a former Senate and White House staffer and then long-time lobbyist, I went back into government after the financial crisis and was profoundly disappointed by what I experienced. Yes, Bill wrote a strong case for why my book deserves to be read, even though the public intuitively understands what is wrong with DC and many of you understand it in considerable detail.

Even so, if the book never enters the mainstream, and is never read by people who aren’t already following these issues closely, perhaps “The Payoff” will ultimately be filed on the library’s shelf of “futile gestures.” I’ve already joked, with my lobbyist friends, that I probably should have lit myself on fire on the deck at Morton’s at Connecticut and L Street, where I often used to smoke cigars and drink scotch with those friends. At least that way, newspapers around the country might have run the headline — “Former Lobbyist Protests the Financial Elites Who Now Run Washington” — and my buddies could have reached over and lit up another smoke.

Alas, I was only willing to immolate myself professionally in DC, knowing that my prior years in lobbying had already provided me with enough of a nest egg that I could comfortably transition to another city, life and profession. As I wrote in the book, there are powerful reasons to remain silent in DC. Members of the Blue Team are well compensated (indirectly) when they circle the wagons and shoot at the Red Team. I knew that if I deigned to bluntly criticize Democrats, I had best take off my blue jersey and skedaddle long before publication date. But, among other things which I saw from a front-row seat, the failure to prosecute Wall Street crimes was too unconscionable, too great a stain on the American justice system, for me to remain silent.

This pressure to remain silent or to keep these kinds of conversations on the margins is especially true now during an intense presidential election campaign. For the most part, partisan loyalists are blindly tribal. With two weeks to go before Election Day, few partisans want to be dispassionate, self-critical and honest about their own party’s shortcomings (indeed, I still sometimes succumb to the pressure to add after every verse the refrain “The Republicans Are Worse”). It’s all about getting reelected. And for the most part, the public seems to have compartmentalized the financial crisis and financial reforms from the Obama-Romney choice. Neither candidate is talking about Wall Street (much). Therefore the media is not talking about it.

Yet I’ve broken free of thinking like a partisan. I never saw the need to restore some semblance of law-and-order to Wall Street and finding the best solutions to prevent the next financial crisis as left-right issues. Progress will require a change in view and increased activism by people across the political spectrum.

For reasons Bill discussed, I knew my book wouldn’t add value unless I laid bare the entire Washington culture, sharing much of what I’d seen and heard during my 25 years in Washington – how Washington had changed in that time and how it had changed me. This book was written to give you more facts (anecdotes, really) and analysis from which you can draw inferences to affirm your current views or perhaps alter your beliefs about what exactly caused governmental systemic failure to deal effectively with financial systemic failure. And to give to the broader reading public – to the extent my book ever reaches that public – a compelling narrative and clear reasons to stand up to both political parties and insist on breaking the control of the financial elites. Reform will take many people writing many books and blogs and giving many speeches, but it will mostly take citizens and other non-Wall Street power centers becoming educated and active in many different ways.

I do take special pride in the book’s brief retelling of my becoming acquainted with Bill, which brings me back to why I am so pleased he was willing to host. In early 2009, when I became chief of staff to then U.S. Senator Ted Kaufman (who, by the way, is the true hero of my book), my response to Bill’s expertise was to value it and promote it in private meetings with senior officials of the Department of Justice. Finding the correct path to pursuing complex financial crimes seemed simple in concept (though admittedly difficult in reality).

1. In early 2009, I didn’t know Bill from Adam.
2. I began reading Bill’s ideas.
3. Those ideas made sense to me, and his credentials bolstered his credibility.
4. So I picked up the phone and called Bill for his advice.
5. In person, Bill was very convincing on what was the correct course for pursuing financial crimes.
6. So I tried to get the Justice Department to follow Bill’s advice based on Bill’s experience. As did Senator Kaufman.
7. As time passed, I asked myself, why aren’t others heeding Bill’s wisdom?
8. Has something about the legal and regulatory system, its culture, or its leadership changed so dramatically that even those officials who agreed with Bill find themselves unable (or unwilling) to implement his advice?

In short, in 2009, I said often: “Hey, this guy Bill Black seems to know what he’s talking about. Why don’t we do some or all of what he recommends?” Here we are 3 ½ years later. And we know the system didn’t. And there’s really no good excuse for why it didn’t. And all of that, I believed, deserves to be aired out and debated in detail.

DWBartoo October 21st, 2012 at 2:01 pm

Thank you, Jeff and Bill, for joining us this evening.

Your time and perspectives are much appreciated.


dakine01 October 21st, 2012 at 2:01 pm

Good afternoon Jeff and Bill and welcome to FDL this afternoon

Jeff, I have not read your book so forgive me if you address this in there but it almost seems that the SDI banks Bill discusses in the intro are almost in a self-referential deal, rather like how CEO salaries keep increasing since the CEOs are all compared with each other and since Boards of Directors believe all CEOs are from Lake Woebegone and above average, all CEOs get paid above average.

How I see this working with the SDI banks is based on at least one set of arguments that the US needs these large banks to compete with “global” big banks like UBS, Bank of England, RBS, Credit Suisse, etc and all the other big banks around the world claim they need to be big to compete with US banks so Voila! all big banks need to be big cuz all the other big banks are big.

Or am I missing something here?

Elliott October 21st, 2012 at 2:03 pm

Welcome to the Lake.

It’s a sad tale you tell.

What are some things we can do to fight back?

DWBartoo October 21st, 2012 at 2:07 pm

Superb opening statement, Jeff.

Failure to prosecute Wall Street IS unconscionable.

As is the failure to prosecute torture and beginning a war based upon obvious lies …

For the Democrats to call the latter, “policy differences” which should not be prosecuted, is most telling.

Given that neither legacy party will prosecute Wall Street criminal fraud, or move to break up the banks and so on, might you speculate about how long you imagine we “have” until another “bailout” becomes “necessary”?


Gitcheegumee October 21st, 2012 at 2:10 pm

Wall Street IS our de facto government now,DW,IMHO.

Does the government EVER prosecute itself?

(BTW,whenever Bill Black is here, so am I….)

Special thanks to the guest author today for his noble effort and coming to this Salon to inform all of us.

Jeff Connaughton October 21st, 2012 at 2:11 pm
In response to dakine01 @ 4

Just the other day I heard Roger Altman say we need megabanks for US banks to compete globally. That every major industrialized nation has banks of this size. But the truth is no studies — even by the Federal Reserve under Alan Greenspan, as he has said publicly — has ever found economies of scale that justify banks with assets greater than $100 billion. We simply don’t need gigantic megabanks. Even those who want to scale back these TBTF banks are not proposing that they be capped at unreasonably small sizes, we’d still be left with gigantic global banks.

Jeff Connaughton October 21st, 2012 at 2:14 pm
In response to DWBartoo @ 6

It’s hard to speculate on when the next crisis will hit, but I noticed at the signing of Dodd-Frank none of the principals were willing to claim that we’d never have another financial crisis. Even prominent banks say they can occur in cycles as short as a few years time. I do think bank regulators have been chastened to crack down a bit, but even Sec Geithner has already complained about Wall Street’s “amnesia.”

Mauimom October 21st, 2012 at 2:14 pm

Welcome, Jeff, and thank you Bill, for hosting. What an honor to have both of you here.

Jeff, you ask, “what good is a memoir?” Well, I guess that depends on what the memoir brings — and yours has brought a lot.

Let me just make a couple of personal notes: I’m OLD. I worked for Rep. Dave Obey {D-WI] during his first term, when he replaced Mel Laird. After law school, I worked in private practice in LA, and then at the SEC [Corporation Finance, not Enforcement]. And I read Bill and David Dayen religiously, plus Naked Capitalism. So the tales you tell are not foreign to me.

However, your recounting of the personal failures of so many — Biden, Dodd [who's surprised there?], Mikulski [again, anyone who's had her as their senator is not surprised], Holder, Obama, the entire administration crew — it leaves one discouraged an depressed, but at least not feeling crazy. These people ARE terrible!!!

So, my first answer to your question would be: your memoir allows readers to share your experience, to benefit from your telling of what you’ve seen, to gain a better understanding of just HOW stacked the deck is against us.

Gitcheegumee October 21st, 2012 at 2:15 pm

They make “free” markets impossible for the implicit federal guarantee of their general creditors means that they can borrow at a significantly lower interest rate than their smaller competitors..

NOTE: So isn’t that the point of the existence and creation of yet larger and larger”banks”?

DWBartoo October 21st, 2012 at 2:15 pm
In response to Gitcheegumee @ 7

Aye, Gitcheegumee.

My agreement with ALL that you say is complete.

Merely seeking to see if Jeff essentially agrees.


BevW October 21st, 2012 at 2:15 pm

Bill will be with us in a minute.

Peterr October 21st, 2012 at 2:15 pm

Jeff, thanks for a fine “pull back the curtains” look at DC.

I’m only halfway through, as your book has a way of grabbing me and making me pause — sometimes to ponder what you’ve described, and other times to dig elsewhere to learn more about something you wrote.

At the moment, I’m struck by the observation made to you by a former Biden staffer, when Biden declined to make a phone call on your behalf to help you get a job. “Jeff, the difference between Ted Kennedy, who has spent decades promoting his former staff into government jobs, and Joe Biden, is Kennedy believes in force projection. Kennedy Democrats share an ideology. Biden is only about himself becoming president, he doesn’t care about force projection, so he never helps his former staff get jobs.”

You summarized this observation like this: “In other words, the late Ted Kennedy cultivated and promoted staff not just because he was a decent boss, but because he had an ideological agenda and the staff served it across Washington. In contrast, Biden is a pragmatist. His ambitions, I was coming to understand, were mainly about himself.” (p. 100)

At Kennedy’s death, many described the passing of an era. What I realize in reading this item from your book is that the era that has passed is one in which there was a strong guiding purpose to political leaders, and in its wake has come the era of pragmatists.

The nation cannot survive on this kind of pragmatism, and I fear that to expect serious investigations of systemic fraud from pragmatic executive branch workers is to wish for a unicorn.

Do you have any glimpses of leaders who are willing to pursue not simply pragmatic ends but lofty goals and ideals?

Jeff Connaughton October 21st, 2012 at 2:15 pm
In response to Gitcheegumee @ 7

I stil have not read it but someone told me Chris Cox of all people gave a speech on his way out the door of the SEC in 2008 that because the sovereign had invested capital in the banks, the sovereign could never be expected to prosecute itself. That was prescient.

William Black October 21st, 2012 at 2:16 pm
In response to BevW @ 1

Triumphed over internet connectivity gremlins (finally). Welcome to the Lake Jeff.


Gitcheegumee October 21st, 2012 at 2:17 pm

Reminiscent of “Apres moi,le deluge”…n’cest pas??

William Black October 21st, 2012 at 2:18 pm

In Memoriam: George McGovern died today at the age of 90 – outliving the reporter who the New York Times assigned to compose his obituary by six years! McGovern was a B24 Liberator pilot in World War II in the European theater of operations. On his 30th mission his plane suffered severe combat damage and his navigator was killed. He was awarded the DFC for successfully crash landing the Liberator and saving the remainder of his crew. McGovern is famous for being correct about a wide range of the most important policy issues as a member of the House and the Senate. He became nationally known when he ran as the Democratic nominee for President against Richard Nixon. McGovern energized a national movement of (largely) younger, progressive Democrats. Bill Clinton and Hillary Rodham were two of his volunteers. His campaign, however, was a fiasco, leading to an electoral rout. The Clintons (Ms. Rodham later changed her family name in response to political criticism in Arkansas) eventually interpreted the lessons of this rout (and Senator Mondale’s heavy defeat in 1984) as proof that the Democratic Party had moved much too far to the left. The Clintons became leaders in the Democratic Leadership Council (DLC), whose mission was to move the Party sharply to the right. The irony was that George McGovern lived the values the DLC championed – he was the warrior who risked his life for the nation, the frugal son of a pastor whose personal life involved devotion to one wife, and a self-reliant man who grew up on the prairie with such a thirst for knowledge that he stuck with his studies and received a Ph.D. in history from Northwestern. Being (largely) Irish, I urge us all to celebrate McGovern’s life.

Bill Black

Jeff Connaughton October 21st, 2012 at 2:18 pm
In response to Elliott @ 5

As for fighting back, I wanted my book out during election season because that’s the only time elected officials listen intently to their constituents. Press your Member of Congress for detailed answers on standing up to Wall Street crimes and breaking up the TBTF banks. That may sound naive. But I hope that at some point non-financial corporate America will also wake up: financial instability is not good for the economy. It takes power to defeat power in DC, and it’s going to take citizen power and the business community to become “fed up” with Wall Street.

Jeff Connaughton October 21st, 2012 at 2:18 pm
In response to William Black @ 16

thanks, Bill.

Mauimom October 21st, 2012 at 2:19 pm

It’s hard to speculate on when the next crisis will hit

In that regard, I’d like to revisit a question I ask every time this topic comes up, but for which I never get an answer. Could you [and/or Bill] talk some about what “great crisis” was “averted” in 2008-09 by plying the banks with all of that taxpayer money? Paulson is running down the hall with his 3 page memo about how HE should be given billions to distribute to the banks, and the financial end of the world is predicted, but really, what did they fear? And what other path(s) could they have taken when confronted with the massive fraud and mismanagement?

We all know that no effective controls or oversight were baked into the “rescue” bill, but what, exactly were they afraid would happen? And weren’t there other ways to deal with the situation?

I ask because we all know the “bad behavior” has not stopped, and those clowns will be back for ANOTHER bailout — with similar dire predictions/threats if it’s not provided to them.

Suzanne October 21st, 2012 at 2:20 pm

wow. i’m still reading your book (while trying to keep my blood pressure down) but that comment, wow.

thank you

Jeff Connaughton October 21st, 2012 at 2:21 pm
In response to Peterr @ 14

You’ll find later in the book that I highly praised Bill Clinton. Indeed, I served him in 1995, perhaps one of the last times a president truly stood up to Wall Street, when he vetoed the Private Securities Litigation Reform Act. But Congress overrode his veto. And you know what happened in President Clinton’s second term. It’s hard to be an idealist politician in the age of Citizens United, but yes there are hundreds of people in DC who work hard every day to do the right thing for all Americans.

dakine01 October 21st, 2012 at 2:21 pm
In response to William Black @ 18
DWBartoo October 21st, 2012 at 2:21 pm

The sovereign, Jeff, according to the concept of “sovereign immunity”, which is a very old “perspective”, predating the Magna Carta, holds that ” … the sovereign can do no wrong …”, thus it cannot, ever, examine itself with the notion of holding itself to any meaningful account.


William Black October 21st, 2012 at 2:23 pm
In response to Suzanne @ 22

I don’t think anyone, ever, can promise that legislation can prevent future crises. Jeff’s book shows how great the peril is of all three of the “three de’s” — deregulation, desupervision, and de facto decriminalization. Even if the laws are great someone has to enforce them vigorously and when the regulatory “competition in laxity” rules that vigor will be destroyed.

Jeff Connaughton October 21st, 2012 at 2:23 pm
In response to Mauimom @ 10

thanks. I hate to depress everyone with depressing tales, but there are probably other people in Washington who would say “Jeff you expected too much from a system that involves two parties, 535 members of Congress, and deeply divided views on priorities for the country and solutions.”

emptywheel October 21st, 2012 at 2:23 pm

Though if you look at which banks are now leading destinations for tax haven money, US banks lead the list, having surpassed the Swiss banks during the recovery.

We’re profiting off the looting of both our own and other countries. There is that!

Welcome to the Lake.

Cynthia Kouril October 21st, 2012 at 2:24 pm

Helicoptering in from a trip to the supermar=ket, Have to go back and read Bi;;’s post ad the comment thread, but lett me welcome both of you to the Lake.

Bill I am a HUGE fan.

Jeff, I really REALLY enjoyed you bopk. I love behind the scenes, fly on the wall books and yours fed my gossip loving soul. It was such a guilty pleasure.

For those who have not read it, it reads more like a thriller than a non fiction work. Jeff, you have found a second calling.

Jeff Connaughton October 21st, 2012 at 2:25 pm

Yes, I also want to acknowledge George McGovern’s life. He actually came to the University of Alabama in 1980 for an event at the same time as Joe Biden. I was very young to be able to sit and hear Senators McGovern and Biden talking with one another.

William Black October 21st, 2012 at 2:26 pm

In your intro you emphasize the change in the DC political world over the course of your career. That is my impression as well, but I have less experience and it is more episodic. What are the key changes so saw and experienced?

DWBartoo October 21st, 2012 at 2:27 pm
In response to William Black @ 26

What inspires this “competition in laxity”, Bill?

Is it simply a “bug” or does it become a “feature” when money, in astounding amounts, liberally “spread around” is able to “buy” the “government” in a “revolving-door” culture?

Always wonderful to “see” you, here, by the way.


Mauimom October 21st, 2012 at 2:27 pm

I think your “tales” involving Biden are instructive: I don’t know that anyone ever considered him other than a fan of banks [Deleware, after all], but to hear he’s such a personal cold fish [see Peterr's comment @ 14, above], particularly while he’s currently being lionized for his “real guy” persona, is a shock.

I agree with Peterr and was struck by your telling of the “force projection” story.

Jeff Connaughton October 21st, 2012 at 2:27 pm
In response to Mauimom @ 21

I have to recommend Sheila Bair’s book on that question: ie, what did TARP accomplish. Her view, as I understand it, was both that it was a cover for mainly helping Citigroup, but also that in a time of crisis, one tends to overshoot with buckets of solutions (dollars) to stem the fire.

Peterr October 21st, 2012 at 2:28 pm

Jeff, your comment here makes me wonder about Thomas Hoenig’s move from president of the KC Fed to the #2 at the FDIC.

In March 2009, while he was still head of the KC Fed, Hoenig gave a speech calling for TBTF banks to be broken up. He pointed to the FDIC’s handling of Continental Illinois in 1984 as a model for banking regulators using their power to restore confidence and stability at a time when both were in short supply.

Bill is famous at FDL for his dim views of the regulators at the Fed, so it really stood out for me when a Fed president called for more oversight and accountability. When Hoenig retired from the Fed and took the #2 job at the post-Bair FDIC, I wondered what he might have in mind for this new job.

My hopes at the time were that Hoenig’s experience at the Fed might help the FDIC dig into the big banks, as Hoenig might know where the metaphorical bodies are buried from his days at the Fed. Is that wishful thinking, or is Hoenig helping push things forward from his new perch?

emptywheel October 21st, 2012 at 2:28 pm

One of my MoCs–Carl Levin–keeps putting together cases that DOJ throws out the window. And local folks appear to be prepping for his retirement. So we may well lose his PSI work after 2014.

Gitcheegumee October 21st, 2012 at 2:29 pm

Whenever the dicussion arise of speaking power to Wall STreet I think of FDR’s 1936 reelection campaqign speech where he welocmed the hatred of Wall Street-deja vu ALL over again.*

Speech at Madison Square Garden (October 31, 1936)—Miller Center


Speech at Madison Square Garden (October 31, 1936). Franklin Delano Roosevelt. On the eve of the 1936 election, President Franklin Roosevelt defends the …

How very telling that the present Dims NEVER mention the legacy opf FDR-and what a digrace and disservice that they are allowed to do so.

And Bill,ya beat me to a comment re: Mc Govern. Anothyer forgotten and diminshed hero…

William Black October 21st, 2012 at 2:30 pm
In response to Cynthia Kouril @ 29

Even though “Wall Street always wins” is a mighty depressing title, Jeff shows that even now there are people fighting back and that they sometimes diminish greatly how much Wall Street wins at our expense. We owe folks like Jeff and Ted Kaufman a great deal of thanks for their efforts. As folks have often read me observe, our motto became: “It is not necessary to hope in order to persevere.”

emptywheel October 21st, 2012 at 2:31 pm
In response to Mauimom @ 33

Well, he’s a real guy compared to Obama.

DWBartoo October 21st, 2012 at 2:31 pm
In response to Mauimom @ 33

Yes, it were useful to broader understanding if more of the people who regard Biden as “wise”, might understand his “seasoning”.

Agreeing with you, Mauimom, and with Peterr.


Jeff Connaughton October 21st, 2012 at 2:31 pm
In response to William Black @ 31

As for Washington changing over 25 years, I think of the late Sen Moynihan’s “defining deviancy down.” There used to be norms that now simply have eroded. Another book claimed that Henry Kissinger and Clark Clifford were the first public servants who really transitioned to making piles of money. Since then, it’s been katy bar the door. And another small example, at fundraisers, it used to be verbotten to bring up issues. Now elected officials have too much money to raise in too little time — at the fundraising table, it’s one at a time: “What do you care about?” So just like on Wall Street, as benefits exploded and costs of certain behaviors eroded, people started making different rational choices. And the culture changed dramatically. The money in Washington has become so staggering that former public servants are almost automatically able to become rich — in one way or another.

DWBartoo October 21st, 2012 at 2:32 pm

Ah, “foaming the runway for the banks” … as some have properly put it, Jeff.


William Black October 21st, 2012 at 2:33 pm
In response to DWBartoo @ 32

Good to “see” all my friends at the Lake, particularly in Jeff’s company. The industry deliberately creates the competition in laxity — playing the regulators off against each other in order to produce a “race to the bottom.” It is, of course, crazy to engage in such a race because the only way to win a race to the bottom is to refuse to race. (Fyi: the computer figures this out in the movie Wargames.)

Jeff Connaughton October 21st, 2012 at 2:34 pm
In response to Mauimom @ 33

My point of telling the Biden story was really to emphasize my willingness to endure as a “Biden guy” because DC is like a feudal system, with lords and serfs. You have to be attached to a person in power. And for decades, even though I never made it into Biden’s inner circle (and perhaps politicians need to be cautious about that), I still portrayed myself publicly as a Biden guy. It was meant to be an echo of Wall Street fraud. There are informal frauds perpetrated in DC every day, and I wanted to be my own critic on that front.

emptywheel October 21st, 2012 at 2:35 pm


When you talked about DOJ waiting to be fed stuff, I thought about FinCEN notifications. There were a lot of notifications tied to the crisis (though most of the mortgage fraud ones were retrospective–they’re just now being put through the system). Still, in numerical terms, there are orders of magnitude more of those than the terror and cyber SARs that both Admins focus on. I get the focus on terror, sort of. But you get a clear sense w/FinCEN data–even what we see–that the govt is focusing increasing attention on shrinking problems, even while the finance stuff explodes.

I get why that stuff can’t be shared. But it does seem like an area where there could be more oversight. (If, of course, there weren’t so much political fearmongering placed on terror and cyber). Any suggestions on this front?

Gitcheegumee October 21st, 2012 at 2:35 pm

If I may be so bold, another change in the last quarter century is that lobbyists are now writing the laws….

Jeff Connaughton October 21st, 2012 at 2:36 pm
In response to emptywheel @ 36

Levin and his staff are superb.

Mauimom October 21st, 2012 at 2:36 pm

Jeff, you note that both Obama and Biden were/are “financially illiterate.” In wondering why Obama turned to Wall Street from the beginning, you report that Kaufman speculated there was “no one in the Obama financial team to offer a different viewpoint.”

What’s so shameful here is that Bill was around. Krugman was around. Steiglitz was around. And Obama + his ship of fools chose not to listen to those with experience & wisdom.

Any chance that the Great Pumpkin will appear and Obama will listen up in Term Two?

emptywheel October 21st, 2012 at 2:37 pm

And that former war hero who had been investigating financial fraud, John Kerry, pulled his punches w/Clifford.

William Black October 21st, 2012 at 2:38 pm
In response to Mauimom @ 33

(Then) Representative Tom Carper was very helpful to one of our reregulatory efforts during the S&L debacle. He served as Governor and now as Senator. He too has become a generally reliable ally of the banks against efforts at serious deregulation. (He eventually led the DLC and its efforts to pull the Democratic Party to the right.) Incorporation in Delaware is so critical to the State (another form of the competition in laxity) that senior Delaware officials typically are extremely solicitous of corporate interests.

emptywheel October 21st, 2012 at 2:39 pm

Agree. The Blankfein non-prosecution was one of the more heartbreaking ones.

But Senators–the ones who are as smart as Levin–aren’t incented to use their smarts to conduct oversight like that.

Jeff Connaughton October 21st, 2012 at 2:39 pm
In response to Gitcheegumee @ 46

Yes, there was a great Bloomberg article not long ago about the law firm Davis Polk and how it played an essential role in summarizing the issues in Dodd-Frank. These bills became so complicated that “outside counsel” played too strong a hand in drafting them (always further defining terms and loopholes until — in the end — the very industry that helped craft the laws complains the whole darn thing is too complex).

Kaufman had great wisdom on this point. Now was not a time for vague legislation that kicks the can back to the regulators. We need to pass simple bright lines that solved the structural conflicts of interest on Wall Street. That’s what his Senate forebears did in the 1930s. Instead, Dodd Frank — while including some good provisions — did a lot of reshuffling of existing regulatory powers in a complicated way.

bluedot12 October 21st, 2012 at 2:41 pm
In response to William Black @ 18

The DLC adopted what they thought were centrist positions in an effort to win elections. Clinton succeeded. Now we have his goldilocks years that arguably resulted in a recession under Bush. The move to the center has been so far it is now hard to see much difference between democrats and republicans. It seems we have all become captured by the same neoliberal political and economic philosophy. So now the crooks on WS go free and they set the agenda. Is there no way back?

Mauimom October 21st, 2012 at 2:43 pm

Even if we were so fortunate as to have “good laws,” your book makes clear that without motivated prosecutors and FUNDING [no thanks to you, Sen. Mikulski], the laws can’t protect us

Peterr October 21st, 2012 at 2:43 pm

The phrase “shitty deal” comes to mind.

Which leads to another point you make in the book: the lack of criminal charges in the banking meltdown is stunning.

What would it take to pry some cases from the civil division to the criminal division at DOJ? The departure of Holder and Breuer? The departure of Geithner? Better pipelines from the SEC/Treasury?

Jeff Connaughton October 21st, 2012 at 2:43 pm
In response to emptywheel @ 45

No good suggestions but I did watch a May 2012 oversight hearing of the Senate Judiciary Committee with FBI Director Mueller. It’s clear that cyber is becoming almost the foremost FBI priority, and Senators were falling all over themselves to ask if the FBI had everything it needed to fight cyber threats. Nary a word about financial crimes from the panel. There are industries inside the beltway that are always pushing for more funding on the terror and cyber fronts, existential threats to America. The only industry in DC that cares about financial fraud is Wall Street, and its care is to prevent action.

Jeff Connaughton October 21st, 2012 at 2:44 pm
In response to Mauimom @ 48

Senator Dorgan reportedly said to Obama during the 2008 transition “You picked the wrong people!” I don’t have much faith that Obama will pick tough law enforcement and regulators in his second term, though we can always hope and try to pressure him to do so. “Personnel is policy” is a truism in DC.

DWBartoo October 21st, 2012 at 2:45 pm

“Rational choices” absent fundamental principle are “pragmatic” only in the most narrow of selfish and self-serving intent.

That principle is no longer of moment, suggests that the prevailing expression of the political class that the Constitution is “merely a piece of paper”, aside from “money” is the true “currency” of the land.

I note that you are somewhat more respectful than I regarding that political class and, given that this is a Presidential election year, do you imagine, and I apologize if you find this question in poor taste or off topic, that, despite what you are revealing, in your book and here, in this discussion, today, that you will, nevertheless, “support” President Obama and the Democrats? If so, then might you be willing to explain why?

I ask this question because many here, at Firedoglake, are convinced that ideas other than those of the legacy parties, and those parties themselves, that is, that other political parties more represent the conscience (and the heart) of many, here – who are taken to rather unpleasant task for those convictions when they share such convictions and concerns.


William Black October 21st, 2012 at 2:45 pm

Interesting. Three white-collar criminologists (Gil Geis, Henry Pontell, and I) proposed article for publication using “defining deviancy down” in the elite white-collar crime context. Geis is one of the two most famous and respected white-collar criminologists in the world. Pontell is one of the top five. I’m not chopped liver. We’re reasonably sure from the nature of the comments that a right wing peer reviewer who is one of the leaders in seeking to minimize the damage elite frauds cause dinged the article.

William Black October 21st, 2012 at 2:47 pm

One of the very destructive aspects of the “Reinventing government” movement (led by VP Gore) was the demand that the government cease “imposing” regulation on firms. This was the birth of “reg-neg” — the idea that we should “negotiate” proposed regulations with the banks.

Mauimom October 21st, 2012 at 2:48 pm

Bill, Jeff refers to your observations about the “fear of going after the banks.” [---> they will collapse]

Could you talk some about this?

And BTW, if the banks “would collapse” if their fraudulent dealings were exposed, what does that say about them? They’re all Enron, just hoping to avoid discovery?

RevBev October 21st, 2012 at 2:49 pm
In response to William Black @ 59

Are there no other options for publication?

DWBartoo October 21st, 2012 at 2:49 pm

Ah, then it is much easier to understand, Jeff, why DC (and here I mean all of the political class, including the media, who are a part of that class, as is, as well, the judicial “branch”) has little apparent compunction about turning all of civil society into, as Emptywheel has long termed it, a “neofeudal” economy, to the enduring benefit of the elite few.


Jeff Connaughton October 21st, 2012 at 2:49 pm
In response to Peterr @ 35

I’m as hopeful as you about that. But I’m not really in the loop to know.

Daniel Tarullo, the Federal Reserve governor who is considered the smartest on bank regulation, recently gave a speech in which he said Dodd-Frank fails to contain a limit on organic growth of megabanks. So he suggested Congress consider placing a cap on non-deposit liabilities. That’s basically Brown-Kaufman. And today the WaPo endorsed the idea.

Here’s Tarullo:


To the extent that a growing systemic footprint increases perceptions of at least some residual too-big-to-fail quality in such a firm, notwithstanding the panoply of measures in Dodd-Frank and our regulations, there may be funding advantages for the firm, which reinforces the impulse to grow. There is, then, a case to be made for specifying an upper bound.
In these circumstances, however, with the potentially important consequences of such an upper bound and of the need to balance different interests and social goals, it would be most appropriate for Congress to legislate on the subject. If it chooses to do so, there would be merit in its adopting a simpler policy instrument, rather than relying on indirect, incomplete policy measures such as administrative calculation of potentially complex financial stability footprints. The idea along these lines that seems to have the most promise would limit the non-deposit liabilities of financial firms to a specified percentage of U.S. gross domestic product, as calculated on a lagged, averaged basis. In addition to the virtue of simplicity, this approach has the advantage of tying the limitation on growth of financial firms to the growth of the national economy and its capacity to absorb losses, as well as to the extent of a firm’s dependence on funding from sources other than the stable base of deposits. While Section 622 of Dodd-Frank contains a financial sector concentration limit, it is based on a somewhat awkward and potentially shifting metric of the aggregated consolidated liabilities of all “financial companies.”
Of course, the difficult question would be the applicable percentage of GDP. The answer would depend on a judgment as to how much of an impact the economy could absorb. It would also entail a judgment as to how large and complex a firm needs to be in order to achieve significant economies of scale and scope that carry social benefit. Depending on the answers to these questions, there may be a need to balance the relevant costs and benefits. There would also be important secondary questions such as whether to exclude from a firm’s calculated liabilities only insured deposits and which asset base to use in calculating non-deposit liabilities. And depending on how Congress answered all these questions, there could well be need for defining transition periods and compliance margins. Even good answers to all these questions would produce a policy instrument that could seem excessively blunt to some. But this is a debate well worth having.

Peterr October 21st, 2012 at 2:50 pm
In response to RevBev @ 62

Marcy could probably make some room for a guest post at Emptywheel . . . and the peer review in the comments would be a thing to behold.

William Black October 21st, 2012 at 2:50 pm
In response to bluedot12 @ 53

Yes, the idea that neoliberal dogma is considered “centrist” — when it is actually an ultra-extreme and anti-scientific cult exemplifies why we suffer recurrent, intensifying financial crises.

Jeff Connaughton October 21st, 2012 at 2:51 pm

And here is today’s Wash Post editorial: (oops sorry the link didn’t copy)

Message from sender:
Shrinking the nation’s biggest banks

DWBartoo October 21st, 2012 at 2:52 pm
In response to RevBev @ 62

A most important question, Rev Bev, for its “answer” is a window to the limits, or not, of possibility … and of extending the educational “outreach” critical to rational and informed understanding of necessary change.


William Black October 21st, 2012 at 2:52 pm
In response to RevBev @ 62

Yep, next book. Fyi, Sutherland, a giant in his field who created the term “white-collar crime” was unable to publish his book (which had tables on the hundreds of corporations where there was public record information that they had violated the law)for two decades. Things are no longer that bad.

Mauimom October 21st, 2012 at 2:52 pm
In response to Peterr @ 65

I think the “peer review” of the “reviewer” who dinged Bill’s article is what would REALLY be the thing to behold!!

Gitcheegumee October 21st, 2012 at 2:54 pm

Reply to Maui mom @#61

Interesting you use the Enron analogy,since Phil Gramm’s wife -Wendy-was on the Board of Endrun,er,Enron.

Ya know,Gramm-Leach -Blyely Act that repealed Glass Stegall and took most tegs of Wall Street?

The SAME Phil Gramm that went to work for Swiss TBTF bank UBS when he left Congress…

Peterr October 21st, 2012 at 2:55 pm
In response to Mauimom @ 61

Part of the problem is that such an investigation would reveal the culpability of Congress in creating the conditions that allowed the frauds to flourish, such as the effect of the repeal of Glass-Steagall.

If going after the big banks means opening up that episode of Congressional expertise and putting congressional failures on the front page, the big banks will not be gone after.

DWBartoo October 21st, 2012 at 2:55 pm
In response to Peterr @ 65

That would, indeed, be something to behold, Peterr.

A most superb suggestion.


William Black October 21st, 2012 at 2:55 pm
In response to Mauimom @ 61

In truth, I have never understood the concern and I have great difficulty believing that those that spread it acutally believe it. It is facially insane to leave the frauds who grew wealthy by causing the financial crisis and the Great Depression in charge of many of the nation’s largest financial institutions. One of the strong features of Jeff’s book is that he focuses the reader on this insanity.

Mauimom October 21st, 2012 at 2:55 pm
In response to Gitcheegumee @ 72

Oh yeah, those criminals’ pics are up at MY post office.

Jeff Connaughton October 21st, 2012 at 2:56 pm
In response to DWBartoo @ 58

This is a tough question. As I said in the epilogue, it’s time to stand on principle, not vote for the least bad candidate. The longer I’ve been away from DC, the more I understand why fewer people choose to self-identify as a Democrat or Republican. I want action on the issues I care about the most. But the political system doesn’t currently provide me with a good choice. And it’s frustrating not to see an immediate political action plan that can make a difference. Just so I won’t dodge your question, I’m impressed by the massive amounts of small donor contributions flooding into the Obama campaign, and see how much Wall Street money is flooding to Mitt Romney. I suppose in the end I have more hope that Obama will get tougher on Wall Street in a second term than I have hope that Romney will in a first term. But I’m eager to confront conservatives, moderates, liberals, everyone: Why does an out-of-control Wall Street benefit any of us?

mzchief October 21st, 2012 at 2:57 pm

Former public servants and their family members appear to be off buying cities. Auster-ified City of Portland, OR has about $0.5 billion USD in a just-revealed fund and there’s an extraordinary race on by Mary Nolan (husband, Mark S. Gardiner of Western Financial Group LLC [projects financed w bonds])— and “endorsed” by Henry M[erritt] Paulson III (son of Hank)— for a city commissioner position.

Gitcheegumee October 21st, 2012 at 2:58 pm


That should have read ..repealed Glass Steagall and removed most of the REGS off Wall Street…

(Is there no edit button,or is it just my PC?)

Mauimom October 21st, 2012 at 2:58 pm
In response to William Black @ 75

It is facially insane to leave the frauds who grew wealthy by causing the financial crisis and the Great Depression in charge of mmany of the nation’s largest financial institutions

Almost as insane as inviting them to White House dinners, putting them in your cabinet, and generally telling hoi polloi not to be jealous of their wealth.

Jeff Connaughton October 21st, 2012 at 2:59 pm
In response to Mauimom @ 61

As for fear of going after the banks, I quote Bill on that early in the book. That the Administration was setting up a false choice: we could have the financial system recover or we could enforce the law and perhaps further destabilize an already fragile banking system. It was a false choice because individuals were responsible, and individuals could have been targeted, investigated and prosecuted — without jeopardizing the bank for which they used to work. Bill’s piece on Lanny Breuer’s recent speech on this point was devastating.

RevBev October 21st, 2012 at 2:59 pm
In response to Peterr @ 73

There really has to be a way. If we could do Watergate….I know the times are different, but there must be a few honest souls. Maybe lame-ducks.

Mauimom October 21st, 2012 at 3:00 pm
In response to RevBev @ 82

And as Bill knows, we could do the S&L crisis.

Hell, one of the individuals who “survived” that even ran for president!!

DWBartoo October 21st, 2012 at 3:01 pm

How much of an “impact” the economy (and civil society, as well, one hopes) could absorb …

Are we not in the midst of an impromptu test “case”, even at this moment?

Do the “measures” of such a thing concern themselves with all of society, and not merely the impact on those who can afford the services of “lobbyists”?

DC seems, to many, noting the “esteem in which Congress (rightly, in my estimation) is currently held, to be rather remote and “insulated” from the reality of the many.

How do you consider that situation might impact such “figuring” as Congress might engage in, Jeff?


Gitcheegumee October 21st, 2012 at 3:02 pm

No0t to mention, that some of the TBTF institutions are actually quite effective laundromats.

WHO wants all THAT dirty laundry aired?

Peterr October 21st, 2012 at 3:02 pm

Jeff, what kind of reaction have you gotten on the book from old contacts (members, staffers, lobbyists, etc) on Capitol Hill?

I would imagine that some are angry as hell, but suspect there are probably a few other who thought “Damn, I wish I had the guts to lay things all out like this.”

Cynthia Kouril October 21st, 2012 at 3:04 pm
In response to William Black @ 38

I think that Jeff may be onto something when he say that it may take none Wall Street companies to get the attention of Congress and the Executive Branch.

Other than auto, most other businesses have not enjoyed a bailout (yes, I know big oil has always lived off the gov’t teat)and it may be that big business has enough lobbyists and a load enough megaphone to be heard.

DWBartoo October 21st, 2012 at 3:05 pm

Thank you for your thoughtful response, Jeff, and I hope that your book might encourage a broader and deeper discussion of many issues, even beyond Wall Street, even including civil rights and endless war … a conversation, if it may be reasoned and rational, which this society most desperately needs, and frankly, deserves. A democracy owes itself nothing less. Even one bemused with empire and toying with world hegemony. Not forgetting little details like global climate change, of course.


William Black October 21st, 2012 at 3:07 pm
In response to mzchief @ 78

Actually, corporations are literally trying to buy a city in Latin America. Equally amazingly, the national government (which came to power indirectly as a result of a coup that the U.S. and the IMF praised) is trying to sell the city to them. At this juncture, a panel of the national Supreme Court has ruled the proposed sale unconstitutional. (The full court may reverse the panel.) I wrote a column about it.

Reality has caught up with science fiction.

CTuttle October 21st, 2012 at 3:07 pm
In response to Mauimom @ 76

…those criminals’ pics are up at MY post office.

*heh* I’ll betcha that Occupy Maui posted ‘em…! They are a noisy bunch…! ;-)

Mahalo, Bill and Jeff for all your efforts in exposing the sheer corruption…!

Cynthia Kouril October 21st, 2012 at 3:07 pm
In response to emptywheel @ 45

Marcy, You do know how very very few FBI agents are assigned to financial crime these days, and those are mostly tied up doing cases involving rich people ripping off other rich people, like insider trading cases.

Which is not to suggest that insider trading cases are not important, just that they are not often the fodder of systemic collapse

Jeff Connaughton October 21st, 2012 at 3:08 pm
In response to DWBartoo @ 84

What I tried to show in my book is that corporate America — through fundraising and hiring through the revolving door and with its analyses and lobbyists — are positioned at every lever of power in DC that affects the corporate bottom line to ensure they have access and an ability to advocate their position. At the same time, when elected officials run for reelection, voters and polls tend to show that they care about other issues. So it’s only when the public official is weighing a strong voter reaction in the balance that he doesn’t tend — not always, but often — to throw corporate america its bone (because the public isn’t really paying attention to that issue).

Here, on Wall Street reform, because the Republicans were against doing anything, all the pressure the Democrats felt was simply to pass something they could call financial reform. A few Democrats fought it as not nearly strong enough. And yet hear we are in campaign season, and I don’t think Wall Street reform is being discussed much at all — though Obama has run some ads saying he’s tougher on Wall Street than Romney.

DWBartoo October 21st, 2012 at 3:08 pm
In response to Cynthia Kouril @ 87

One wonders, Cynthia, why big business did not (those businesses which were not big insurance or not beholding to big insurance) did not join with the people in seeking a better health care outcome?

Quite perplexing, really, even pragmatically …


Jeff Connaughton October 21st, 2012 at 3:11 pm
In response to Peterr @ 86

The reaction from staff, lobbyist and other friends has been generally supportive. But also “I can’t believe you wrote that.” The idea of speaking the truth candidly about one’s own party simply does not compute. One Senate chief of staff read a HuffPo piece I did 6 months ago and said “It was great in so many ways. But you’ll never get a job in the Obama administration now.” I had to remind him I had never been offered one and I had moved to Georgia more than a year earlier. But yes my close friends have been supportive.

Gitcheegumee October 21st, 2012 at 3:12 pm
In response to William Black @ 89

M., Black, do you know or have you come across any info that addresses the sale (or lease)of national parks ,forests or public trusts to private or foreign entities?

William Black October 21st, 2012 at 3:12 pm
In response to RevBev @ 82

This is one of the many points that Jeff and I share — our nation is blessed with many folks, including lots of skilled professionals, who are willing and able to take on the most powerful forces who aid the financial and moral plague. You’ll know that we have a president dedicated to the nation and the rule of law when you see people like Mike Patriarca appointed to run financial regulation.

I’m interested in Jeff’s take on the following point: I worked closely for years with the three senior colleagues who I joined in meeting with the “Keating Five.” To this day, I do not know the party affiliation (if any) of any of those three colleagues. Party was irrelevant to us as regulators. We embarrassed prominent politicians from both parties.

mzchief October 21st, 2012 at 3:15 pm
In response to William Black @ 89

Ugh. I’m seeing one of your article about Honduras. Guess the US-backed coup isn’t over.

William Black October 21st, 2012 at 3:16 pm
In response to Cynthia Kouril @ 91

It’s actually worse than that. A very large proportion of the very scarce resource is being used to go after relatively minor frauds committed by individuals. The FBI is proud, for example, that 60% of its mortgage fraud cases involve transactions that are over $1 million — two California houses. That means that 40% of the mortgage fraud cases involve a single home. There were over two million fraudulent mortgages made in 2006, so this prosecution “strategy” guarantees failure and diverts attention from the elite frauds.

Jeff Connaughton October 21st, 2012 at 3:17 pm
In response to William Black @ 96

I talked to a former Naval officer who was a financial industry guy who did good government service at a couple of agencies. He emailed me about why not have the equivalent of a Naval Reserve for regulators, people with skills and experience who can be called up for duty in times of crisis. A noble and nonpartisan idea. The military — don’t let me overstate this point! – seems to adapt to different management lessons because of continuity, better than a Republic that reinvents itself every 2 years with elections. Yes I feel very strongly that these are pragmatic not ideological issues. But as i’ve said, we don’t have a two-party system when it comes to Wall Street, we have an ongoing contribution party.

Peterr October 21st, 2012 at 3:17 pm

I like your characterization of The Permanent Class in DC, much as various bloggers speak of The Villagers and the Very Serious People. You capture the sense that politicians come and politicians go, but the lobbyists, staffers, and such endure.

I have been surprised, though, that while the DC media make cameo appearances, you don’t seem to say much about their place in the Permanent Class. Tim Russert’s testimony at the Libby trial revealed a great deal about how he and much of the DC media are as much a part of the Permanent Class as the members of Congress and their staffers.

If you get into this later in the book, I’ll get it your answer there, but if not, what is your impression of the role of the media in perpetuating (or, in rare instances, uncovering) the DC system you describe?

Mauimom October 21st, 2012 at 3:18 pm

Let me ask my question from #21 above in a slightly different manner:

We have an entire “emergency preparedness” industry in this country. They tell us how to prepare for hurricanes floods, etc.

Why can’t we develop a Financial Emergency Preparedness Plan”? You KNOW the fraudsters will be back howling for rescue money, predicting that the world will end if they’re not given it. Why can’t we be doing some thinking NOW, imagining, “if they come to us with THIS dire scenario, instead of giving them $$$, we’ll do the following.” If they come to us with THAT dire scenario, we’ll try this plan [again, instead of bailing them out].”

It feels like waiting for the Easter Bunny, Tooth Fairy or Great Pumpkin to think these criminals [or the guys who are supposed to prosecute them] are ever going to “reform themselves.”

DWBartoo October 21st, 2012 at 3:20 pm

The public is not paying attention because they are not intended to pay attention, were the media to actually do its necessary “job” in a democracy, then the people WOULD know what is going on, in detail sufficient to give or withhold informed consent.

When a government knowingly colludes with “interests” inimical to the well-being of the people, it MUST rely on ignorance and distraction to ensure that such collusion will neither be detected, understood, nor held to account. That requires the assistance of propagandists, which role the media, in general, (now essentially owned by six corporations, incidentally) is happy and willing to provide.

Indeed, the people have an obligation to push for the truth, but when much of it may be hidden, in “plain sight” or tucked away behind the door of “states secrets” it must be understood that such deception, for such it is, is deliberate and intentional.

We did not “get” where we “are” by accident, but by mutually beneficial design … the confluence of “interests”, long at diligent “work”.


Cynthia Kouril October 21st, 2012 at 3:20 pm
In response to William Black @ 98

I cannot tell how frustrated freinds at FBI are about this. Agents and midlevel people there WANT to do these cases. Although denizens’ of 26 Federal Plaza in NYC think they are opposed to OWS because of the traffic jams that ruin their commute, on substance, they sound a lot alike when it comes to bankster accountability

RevBev October 21st, 2012 at 3:20 pm
In response to William Black @ 96

Sounds like a bit of hope. Moyers’ piece was on Plutocracy this week. Maybe some people will start paying attention. I thought one of the earliest disheartening signs was the selection of Geitner who can’t even pay his own taxes.

William Black October 21st, 2012 at 3:20 pm
In response to mzchief @ 97

The Honduran city they are trying to sell is named Puerto Castilla. The CEO of the proposed purchaser is a devotee of “Austrian economics” — a group that considers Ayn Rand nsufficiently pure in her disdain for democracy.

William Black October 21st, 2012 at 3:24 pm

Yes, for all its many issues, the U.S. military realizes that when leaders screw up people die. Procurement problems are legion (pun intended), but the military at least believes that one needs to test an idea (e.g., high frequency trading) before making it the norm. They also train and have contingency plans.

Gitcheegumee October 21st, 2012 at 3:25 pm
In response to DWBartoo @ 102

We did not “get” where we “are” by accident, but by mutually beneficial design … the confluence of “interests” long at diligent “work…

i.e., presstitutes

Peterr October 21st, 2012 at 3:25 pm

If only you could come up with the name of a well-regarded former banking regulator who has moved into academia, who might be able to approach his or her dean, to try to put such an institute together. . .

emptywheel October 21st, 2012 at 3:25 pm

Speaking of recent speeches, did you see Holder gave an award to the folks who gave the banks immunity w/the foreclosure fraud settlement?

Jeff Connaughton October 21st, 2012 at 3:25 pm
In response to Peterr @ 100

The media’s role in the permanent class is an excellent question. I know someone who is writing a book on that very issue, and i’ve shared my thoughts. Yes, while Kaufman got some good press while he was making his TBTF speeches, I do feel like reporters are dependent on their sources. And when a reporter who covers DoJ or the SEC writes a negative story, they put at risk their access to high-level sources. “Working the refs” is one of the most important roles of high level public officials. And so I do believe the media is part of the Permanent Class. Not that my book deserves front-page coverage, but I’ve definitely heard from reporters who said their editors decided to kill a piece on my book. That may simply be because there are other books (Bair, Barofsky) to cover, or presidential topics. But the media decides the agenda, and i do feel like this discussion has been marginalized by the media.

On the other hand, the New Yorker is going to run a profile on my career tomorrow. Please make sure you get a copy. It’s by George Packer. This is the first big piece to be written on me, after several very good ones by a few columnists and excellent bloggers. But I’ll be interested to see the New Yorker tomorrow and the reaction from the rest of the media.

DWBartoo October 21st, 2012 at 3:25 pm
In response to William Black @ 105

Why is that not surprising?

Thank you, Bill, for all that you bring to our attention and conscience.


Jeff Connaughton October 21st, 2012 at 3:27 pm
In response to emptywheel @ 109

Yes, I saw the critique of Holder’s awards.

masaccio October 21st, 2012 at 3:27 pm

Jeff, I cannot understand why there were no prosecutions in the wake of the final report of the FCIC, which lays out several specific frauds and the mechanism for proving them. Have either you or Senator Kaufman talked privately with Eric Holder about his false claim that there was bad behavior but no crimes on Wall Street?

DWBartoo October 21st, 2012 at 3:28 pm
In response to Gitcheegumee @ 107

Now, Gitchee, don’t make me laugh, I’m trying, very hard, to be serious.

“Presstitutes” … spot on!


Gitcheegumee October 21st, 2012 at 3:30 pm

I will definitely buy your book..and,also check out the New Yorker piece.

BTW, its beyond shameful how world class reporter(and contributor to New Yorker) Sy Hersh has been maligned of late…

bigbrother October 21st, 2012 at 3:31 pm

I lost my home in the S&L debacle. Many paid for their crimes. But The Housing bubble took a massive collusion to steal 1/3 of retirement funds and 1/3 of home equities. Such a massive theft unaddressed devastated the whole global economy and put millions on the streets and millions without paychecks. This is a different nation to live in. I want to read your book and agree with Bill Black totally. I hope you sell a lot of books.

Jeff Connaughton October 21st, 2012 at 3:32 pm
In response to masaccio @ 113

I never talked privately with Holder, only with Lanny Breuer, the Asst Attorney General for the Criminal Division.

You can’t really see behind the veil at the Justice Dept. We didn’t ask about specific cases. But it was clear to me that the bank regulatory agencies were being no help (and perhaps were a hindrance since they often had knowledge), that the FBI was focused on small fry and simply didn’t have the resources to focus on the higher-level securitiizations, and that DoJ basically punted the job to the SEC to use civil actions and extract (relatively paltry) civil fines.

William Black October 21st, 2012 at 3:33 pm

One of the other things about the military, which we emulated during the S&L crisis, was recognizing when something was an emergency and one had to diverge from SOP. One of the amazing differences between the regulatory responses to the crises was that the S&L reregulation began in 1983 — one year after the Garn-St Germain (deregulation) Act of 1982 when the agency realized it was faced with a crisis. The 1982 Act was passed with only one dissenting vote in each chamber, so it was a staggering “in your face” move for the regulators to take the position that deregulation was producing a disaster.

Jeff, during this crisis, when did the regulators recognize that they were facing an crisis that required them to deviate from SOP? My sense is that it didn’t happen until 2008 (when anyone sentient could recognize a crisis) nearly a decade after Gramm-Leach-Bliley (1999) and the Commodities Futures Modernization Act (2000).

DWBartoo October 21st, 2012 at 3:35 pm

That is what David Dayen, an exceptionally fine journalist who works here, at FDL, has long said and written. Are you familiar with his extensive work on this topic, Jeff?


Gitcheegumee October 21st, 2012 at 3:35 pm
In response to bigbrother @ 116

If you ever have time, and its definitely worth it,imho,Google up a Youtube of George Carlin’s performance of “The Big Club-Who REALLY owns America”.

Done several years ago,this performance is absolutely prophetic,I tell ya.

Classic Carlin!

Jeff Connaughton October 21st, 2012 at 3:36 pm
In response to bigbrother @ 116

For al the good Bill did in putting S&L executives behind bars, I wonder if even the most powerful of those people even compared in rank in the plutocracy to Wall Street executives. Bill ran the right game plan and put up huge numbers against the S&L industry. Wall Street today is magnitudes more powerful. There simply wasn’t the will. Yet I remember Bill telling me there wasn’t such will in the reg agencies in the late 1980s until Congress really rattled their chain. Kaufman was a freshman (transitory) Senator. He rattled as hard as he could. But Congress never really yanked the bank agencies, FBI and DoJ to say: GET ON THIS.

William Black October 21st, 2012 at 3:39 pm
In response to Peterr @ 108

Hah. That’s not how institutes are created. Few public universities have remotely enough money to fund such an insitute. One needs outside financing. The Institute for Fraud Prevention (I was its executive director) only lasted for a few years because the original donors (the Association of Certified Fraud Examiners (ACFE) and the American Institute of Certified Public Accountants (AICPA) became discouraged that they were unable to secure any other donors. We sent letters to roughly the twenty largest financial institutions asking them for an opportunity to pitch them on why fraud posed major risks to our nation (this occurred in 2005 and 2006). Not a single one of the largest institutions even responded to our letters, despite the prestige of the ACFE and AICPA.

Peterr October 21st, 2012 at 3:39 pm

In the joint post-mortem on the failure of WaMu conducted by the IGs from Treasury and the FDIC, one of the recommendations was that the FDIC be given the authority to be able to dig into the books of any bank for whom they insure deposits, regardless of which regulator the bank had chosen while regulator-shopping. After lots of back and forth, the FDIC won that battle.

That was in July 2010. Are you aware of any effects of this change in the culture at the other regulatory agencies? Somehow, just the fact that the FDIC can look over their shoulders ought to make at least some of them try a little harder to do their jobs.

Jeff Connaughton October 21st, 2012 at 3:40 pm
In response to William Black @ 118

I didn’t arrive on the scene until Jan 2009. But Kaufman was very vivid about a briefing by Bernanke and Geithner to the freshman Senators in early March 2009. He said you could see that they were deeply concerned (scared) as they didn’t know where the CDOs and credit default swaps ended. There were problems in Iceland, RBS, etc. Kaufman compared it to the roots of a tree knocking up a driveway, but when you started digging, you realized the roots went everywhere. Not long after that meeting, the Dow hit its financial crisis low. And I think the impression was formed at that time that the international financial system is so fragile, we shouldn’t throw a single banker in the brig until we’ve righted the financial ship. So when things should have been getting organized, centralized, staffed at DoJ — our govt was paralyzed by fear. That’s the most benign explanation I can give to the utterly passive approach adopted by DoJ.

Gitcheegumee October 21st, 2012 at 3:41 pm

Do you address the proliferation of fusion centers?

That they now share and coordinate not only private financial info and police info with crime fighting orgs, but now are allowing corporate entities to access this priviledged info?

Jeff Connaughton October 21st, 2012 at 3:42 pm
In response to DWBartoo @ 119

I read David Dayen as often as I can. He’s a machine. I joked with him that his posts convinced me not to become a blogger, he’s too good, too quick and too smart. I can’t get up at 3am in the morning to compete with him!

DWBartoo October 21st, 2012 at 3:42 pm
In response to William Black @ 122

A most “interesting” history, Bill, thank you for sharing it.

That is in the period when certain “interests” were studiously ignoring, for whatever “reasons”, what was going on …


Jeff Connaughton October 21st, 2012 at 3:43 pm
In response to Peterr @ 123

Senator Carl Levin’s hearings in the Permanent Subcommittee on Investigations illustrated how the Office of Thrift Supervision had become virtually a fraud enabler.

The second hearing showed that OTS had failed abjectly to regulate WaMu and to protect the public from the consequences of WaMu’s excessive risk-taking and toleration of widespread fraud. Although WaMu accounted for 25 percent of OTS’s regulatory portfolio, OTS adopted a laissez-fair approach. OTS’s front-line examiners had identified the high prevalence of fraud and weak internal controls at WaMu, yet the OTS leadership did virtually nothing to address the situation. In fact, OTS advocated for WaMu with other regulators and, in 2007 and 2008, had actively thwarted an investigation of WaMu by the FDIC. The explanation for OTS’s complete abdication of regulatory responsibility may be that it was dependent on WaMu’s user fees for 12-15 percent of its budget. The hearing exposed the spectacle of a regulator competing for business (WaMu and other banks could choose whether its primary regulator would be OTS or the FDIC) by currying favor with the very entity it was supposed to regulate, just so it wouldn’t lose the revenue stream to another regulator. This was more than the perhaps inevitable coziness that comes from long interaction. This was a system structured to make regulatory capture inevitable. (p 78)

Dodd-Frank ended this regulatory conflict of interest problem.

Peterr October 21st, 2012 at 3:44 pm
In response to William Black @ 122

Not a single bank was interested? I’m shocked. Shocked, I tell you . . .

(And I’m quite familiar with how institutes are put together. As you say, it comes down to donors. But I wonder: would the Stowers family and folks at American Century be interested in something like you describe?)

Jeff Connaughton October 21st, 2012 at 3:44 pm
In response to Gitcheegumee @ 125

No i’m not on top of that issue at all. Please share a link if you have one.

DWBartoo October 21st, 2012 at 3:45 pm

Actually, David is a series of clones, fifteen or twenty, likely.

In my experience, Jeff, only Marcy Wheeler is in his league, both depth and “production-wise”.


William Black October 21st, 2012 at 3:46 pm

You’re quite right that these are far bigger predators. The largest S&L frauds were only in the $30 billion (assets) range. But the political power of the S&L frauds was extraordinary. We forced the S&L frauds to bring out their political patrons (e.g., the Keating Five and Speaker Wright) in the crudest fashion. That exposed them to what eventually became a devastating political counter-attack, particularly as our prosecutions, civil suits, and tough enforcement actions filled the public record with evidence of their frauds (which journalists could quote without fear of being sued for libel). All of this created the political space for a (brief) window of substantive reform. By not taking on the control frauds, the current crop of regulators and prosecutors allowed the frauds and their poltical allies to hide safely in the reeds.

Gitcheegumee October 21st, 2012 at 3:49 pm
In response to Gitcheegumee @ 125

As a matter of fact,the Electronic Frontier Foundation just a week , or so, ago ran a piece on a negative Senate Report finding… in spite of which,Holder increased the fusion center’s powers.

BTW, Marcy Wheeler(Emptywheel) is quoted in the article:

New Senate Report: Counterterrorism “Fusion Centers” Invade …

by Trevor Timm – in 317 Google+ circles – More by Trevor Timm

Oct 9, 2012 – New Senate Report: Counterterrorism “Fusion Centers” Invade Innocent Americans’ Privacy and Don’t Stop Terrorism. The Department of

William Black October 21st, 2012 at 3:50 pm
In response to Peterr @ 123

The FDIC already had this “backup” statutory authority. The problem with the use of this authority had three parts. First, the FDIC’s sister agencies hated the FDIC’s backup authority and eviscerated it by refusing to cooperate and entering into an agreement with the FDIC greatly limiting the power. Second, the FDIC staff was cut by more than 3/4 from its peak. It lacked the resources to examine the banks it had primary regulatory authority over, much less examine other banks. Third, while Bair was the one-eyed woman in the valley of the blind regulators she was no where near as tough as regulators like Mike Patriarca and Joe Selby from the S&L era.

Jeff Connaughton October 21st, 2012 at 3:51 pm

We haven’t talked about HFT.

Explaining HFT in non-technical terms was the most difficult challenge in the book. I think Ted Kaufman has the best non-technical answer as to why we should care:

1. Whenever there’s been a lot of change – HFT trading volume has exploded in a few short years
2. There’s no transparency and therefore no effective regulation – the SEC admits its miles behind in collecting data to understand HFT and has no current ability to monitor trading in microseconds across 60 different trading venues
3. Things can go “boom” – just like with derivatives

As Ted – a former mechanical engineer – also likes to say, when you build a rocket, and it blows up on the launching pad, and you don’t change the rocket’s design, it’s only a matter of time before the rocket falls down again. We’ve had the Flash Crash – when the market dropped 1000 points and rebounded within 20 minutes – and we continue to have mini-flash crashes in individual stocks. We’ve done nothing to change our fragmented market structure and a set of rules that favors efficiency of trading (therefore we get a lot of high-speed trading) over other market values (like capital formation – see effects on IPO markets).

So what does this mean for average investors? There’s been a loss of confidence and people have pulled their money out of the stock markets. That’s lead several reporters to wonder out loud whether stories that scare investors out of the market are causing more harm than HFT itself, because retail investors have missed out on the recovery in stocks. What’s a few pennies being sliced off every trade of a long-term small investor compared to missing out on a 20 percent upward move?

So there’s a push in this debate to quantify – just how harmful is it? Should we really be so worried? Shouldn’t we all continue to invest in stocks as we save for our retirement?

First, because of the opacity of the market and the complete lack of data, it’s very difficult to quantify whether HFT significantly harms investors. From a law enforcement perspective, I’d just like the SEC to have a consolidated audit trail that provides them with the capacity to detect manipulation. Currently it doesn’t exist.

Second, as HFT spreads into other financial instruments and into other markets, you see an increasing correlation in all asset classes as computerized trading strategies converge. In times of crises, the correlation increases (and ebbs as crises dissipate). All of this computerized trading could lead to a much larger Flash Crash, especially if these trading strategies are being financed with short-term leverage and we have another bank-run-like situation where short-term liabilities need to contract – causing HFT to have to pull back and triggering a mass withdrawal of liquidity in various markets globally. Some people are saying that kind of Flash Crash – across markets and borders – is only a matter of time.

Foreign regulators are being more aggressive than U.S. regulators. Germany recently acted to regulate HFT. In foreign markets, there’s less “toothpaste out of the tube” so they can make corrections before their markets become as fragmented as those in the US and dominated by HFT.

Third, there are studies showing that the IPO market has suffered because we now have a market that favors short-term trading and competition that has narrowed spreads but not a sufficient “tick size” to support small-cap stocks. These studies argue we need a pilot market with larger spreads (somewhat counterintuitive) to provide economic incentive for sell-side research and brokers to support innovative companies that are small in size as they begin to trade publicly.

Bottom line: I didn’t see any boldness at the SEC to catch up and corral these issues.

After we studied the issue for a year, we sent a long letter with our proposed solutions. Anyone who reads it all the way through gets a free book.

Ideas include: Stop exchanges and other venues from catering to HFT with information and speed not available to the average investor.

Stop the technology race, there’s no social utility, with market order rest periods (a “speed limit” if you will). End liquidity rebates.

And, as I propose in my books epilogue, impose a tiny user fee on message/order traffic and dedicate the funds raised to better monitoring and policing by the SEC. For long-term investors, such a user fee would be pennies. For those high speed traders who send tens of thousands of orders and cancellations every second, it would take a significant bite out of their business model.


DWBartoo October 21st, 2012 at 3:51 pm

This has been a most excellent and vitally important Book Salon.

Thank you, Jeff for spending time with us, and I hope that you might drop by from time to time as your schedule and opportunity might permit.

Bill, It is always a pleasure and an education to encounter you here.

Bev, my great appreciation to you, as always.

And, what can I say?

My especial thanks to all of the freedom fighters who gather here to share reasoned and rational insight, concern, conviction, and conscience.


masaccio October 21st, 2012 at 3:54 pm

It may be that part of the problem is that liberals honor those conventions. When the executive branch isn’t enforcing the law, why are do we have to honor the rules, especially when we know the republicans won’t follow any convention that interferes with their demands.

Of course, no one believes a word from Lanny Breuer’s lips.

William Black October 21st, 2012 at 3:54 pm

Amen. I would also add that while HFT might conceivably aid a particular investor there is no reason to believe that it would help investors as a group and every reason to believe that its crises will harm investors as a group.

BevW October 21st, 2012 at 3:55 pm

As we come to the end of this great Book Salon discussion,

Jeff, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book and and Wall Street.

Bill, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Jeff’s website (JeffConnaughton.com) and book (The Payoff)

Bill’s website (New Economic Perspectives)

Thanks all, Have a great week.

If you would like to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

William Black October 21st, 2012 at 3:56 pm
In response to masaccio @ 137

By most accounts, Holder is considerably worse than Breuer. Holder’s DOJ obstructed the Financial Crisis Inquiry Commission’s efforts to investigate the crisis.

masaccio October 21st, 2012 at 3:56 pm

I could live with that in the short term, but Lanny Breuer and Eric Holder go farther: they actively defend the cheats and liars on Wall Street.

Jeff Connaughton October 21st, 2012 at 3:56 pm
In response to BevW @ 139

Thanks for having me and thanks especially to Bill. You’re the best.

dakine01 October 21st, 2012 at 3:57 pm
In response to William Black @ 138

It sure seems that a transaction tax would go a very long way toward curbing HFT but as always, I might be an id10t

gigi3 October 21st, 2012 at 3:58 pm
In response to Gitcheegumee @ 133

Here is the gov document on fusion center sharing of information with the private sector through the ISE.


“Information Sharing Environment Enterprise Architecture Framework (ISE-EAF)
The ISE outlines the enterprise architecture framework for sharing terrorism information among all appropriate local, state, tribal, and federal entities and the private sector through the use of policy guidelines and technologies.”

Peterr October 21st, 2012 at 3:58 pm

You left out the additional danger of HFT — and it’s one that the banks and Wall Street ought to worry about.

Imagine what a malevolent actor could do to Wall Street with a deliberate HFT attack . . .

William Black October 21st, 2012 at 3:58 pm
In response to BevW @ 139

Bev, Jeff,

It was a privilege to be able to host a salon by one of the public servants who did the public proud. Thanks to all the readers that make the Lake such a warm environment for a substantive discussion.

Peterr October 21st, 2012 at 4:00 pm
In response to William Black @ 140

Was that obstruction, I wonder, with the explicit approval of the White House, or merely their unspoken support?

Mauimom October 21st, 2012 at 4:01 pm

Around here we refer to him as “the Dayen brothers.” He writes as if he’s two people.

Gitcheegumee October 21st, 2012 at 4:01 pm
In response to gigi3 @ 144

THANK you,dear one!

Gitcheegumee October 21st, 2012 at 4:03 pm

Bev, may we remind everyone that comments can be made for another 24 hours?

Elliott October 21st, 2012 at 4:06 pm

What a wonderful discussion, thank you

RevBev October 21st, 2012 at 4:06 pm
In response to BevW @ 139

Bev: On the Glenn Smith thread I made a suggestion for a Salon choice. There is a new book about Ann Richards that he says is quite good. I think she is a topic that would interest alot of people here. I hope you will check it out. Thanks.

mzchief October 21st, 2012 at 4:06 pm
In response to William Black @ 105

Thank you for the information. I had made these notes (here, here) previously.

Great salon! Thank you everyone!!

Cynthia Kouril October 21st, 2012 at 4:08 pm

The thing about HFT, is that it it’s like a rogue genie in bottle; once you unleash it, it moves so fast it can cause a flash crash before its handlers have time to react and turn it off

gigi3 October 21st, 2012 at 4:10 pm
In response to Gitcheegumee @ 149

You’re welcome. It is a rather interesting, between the lines, read.

Sorry but the comments are closed on this post