Welcome Bob Ivry (Bloomberg, Editor At Large) (Twitter) and Host Nomi Prins (NomiPrins.com) (Twitter)

The Seven Sins of Wall Street: Big Banks, Their Washington Lackeys, and the Next Financial Crisis

The Seven Sins of Wall Street: Big Banks, Their Washington Lackeys, and the Next Financial Crisis by Bob Ivry is both incredibly scary and ironically extremely funny – in a very dark way. This makes it essential reading for anyone with a finely tuned bullshit meter that doesn’t buy the notion that we’re all economically safer now than before the financial crisis of 2008 – which should be everyone. Ivry’s voice is appropriately sardonic and exasperated, his journalism and on-the-foreclosed-ground research, impeccable. His ability to empathize with readers that don’t hold a PhD in financial jargon (derivatives = “four syllables that launched a thousand naps”) allows him to render otherwise arcane topics simple enough to make you want to throw things at Jamie Dimon.

Most people living in the real world have a sense that the Wall-Street-Washington driven crisis hasn’t exactly evaporated into a haze of CEO repentance, or former politicians choosing to become gardeners rather than bagging plush jobs at elite financial firms. But Ivry’s book shows the ongoing crimes are much, MUCH worse than even the most alert or pessimistic of us think. Not only has there been no meaningful reform or jail terms for committing fraud in broad daylight, but the same Big Six banks at the core of the crisis, are back to their old, and some new tricks, with a pat on the back from Uncle Sam. They are bigger and badder than ever, despite public rhetoric to the contrary.

Ivry divides his book into chapters paralleling the seven sins – gluttony, wrath, envy, pride, lust, sloth, and greed. He doesn’t just excoriate the big bankers who played, and continue to play, freely and loosely with what he refers to as “Grandma’s money”, but embarks on an investigative search for the people living personal nightmares at the hands of these banks years after the “supposed” economic recovery and great reform myth of Dodd-Frank. Though the banks have supposedly repaid their bailout money with $20 billion interest to the American people (sure, no one got a check, but whatever), Ivry shines a harsh light on this irrelevant political babble. The big banks are not only bigger, but they are also “fail –i- er” he says. Take note, Stephen Colbert.

Ivry’s aim is “not to re-litigate the bailouts, but to illustrate their legacy.” As he writes,

In the months and years after the financial crisis, the top people in Wall Street and Washington had engineered a closed loop that insured their feet never touched the dirty ground. Wall Street would originate the mortgages, and Washington would buy them. The Treasury would sell debt, and Wall Street would buy it, then sell it back to the Federal Reserve. (This was called “quantitative easing.”) The Federal Reserve would print money, and mostly would use it to push up prices on stocks and all sorts of commodities. Bankers traded derivatives…without anyone in the outside world catching a glimpse of the details. Ordinary people only got in the way.

Ivry tells the tale of whistleblower Sherry Hunt at Citi Mortgage who supplied Dick Bowen, her boss, with much of the data he used to first blow the whistle on Citi Mortgage’s quality-control department failures post-crisis of 2008. Though she feared losing her job, as he actually did, and was demoted during the process of alerting the federal regulators to Citi’s ongoing frauds and cover-ups, she feared saying nothing more.

Ivry describes a January 2010 staff meeting, in which 1000 Citi Mortgage employees “gathered to listen to pep talks and sales reports. Then it came time to announce the workers of the month award. It went to the quality rebuttal crew.” Quality rebuttal was Citi’s way of stifling employees like Hunt who raised red flags about fraudulent practices.

Ivry’s more emotional passages relate to the efforts that Mark Pitman, fellow reporter-tour-du-force at Bloomberg, made to force the Federal Reserve to disclose details of the loans provided in particular to the Big Six US banks during the crisis that most of the media ignored. Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley got far less from TARP openly than they got from the Fed behind the scenes. The secrecy surrounding those extra trillions of dollars of loans was what Pittman sought to uncover. Pitman died too young, a moment Ivry captures poignantly, but Ivry continues to forge ahead unveiling ongoing secrets and deception – no longer at the heart of the 2008 financial crisis, but at the heart of its aftermath. Of Pittman, Ivry writes “He knew what was at stake. Not just money. Not just economic policy. Not just the functioning of the world financial system. But the future of capitalism. The credibility of democracy.”

Ivry reveals the myriad Big Six bank schemes that continue unabated; the shadiness still rampant in the mortgage market, how the Fed is permitting banks with FDIC deposit support to make leveraged bets with Grandma’s money on everything from arcane derivatives to aluminum to copper, the Obama assistance programs that assisted the banks and not borrowers, the disgusting remorseless of Wall Street.

Ivry introduces us to people like Rebecca Black, one of the borrowers forced to leave her home at 698 Hazelwood Road. Her lender, a division of JPMorgan Chase called EMC Mortgage was part of Bear Stearns before it was taken over – with government aid – by JPMorgan Chase in late 2008. As Ivry says, “overnight borrowing by J.P. Morgan Chase, peaked on October 1, 2008 at $68.6 billion. Jamie Dimon, the lender’s Chief Executive Officer, got $23 million in compensation for 2011.” All Rebecca Black got was the landscaping bill (for a house she could no longer afford, in the face of payments that blew up in her face, a by-product of some very shady practices.)

When Ivry visited Hazelwood Road in 2012, it was “four years after bad mortgages triggered a meltdown in the world’s most resilient economy.” At the time, “the biggest banks were reporting record profits and government agencies were trumpeting statistics showing a robust recovery.” On Hazelwood Road, there was just unnecessarily shattered lives, boarded homes and crime. After the 2008 financial crisis, “an economic and political apartheid had emerged,” Ivry writes,

Washington, in the form of the federal government and Federal Reserve, the country’s bank for banks, sacrificed the common good for the profit of the few.

And so the cycle of crime-and-no-punishment continues.

Ivry concludes with his stance “on the whole too big to fail thing: get rid of it. It’s anti-competitive and antidemocratic.” Ivry calls out the Dodd-Frank Act for the sham it is: an Act that did nothing to level the playing field in which the biggest banks enjoy the most government-perks, and the lion’s share of the ability to abuse, and extort from, ordinary citizens. His book is an eye-opener, a wake-up call for those in Washington to get their heads out of Wall Street’s asses, a state unthinkable for most politicians. But, it’s also a wake-up call to us, to be ever more vigilant with every one of our financial dealings, because the worst is yet to come.

 

[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]

144 Responses to “FDL Book Salon Welcomes Bob Ivry, The Seven Sins of Wall Street: Big Banks, Their Washington Lackeys, and the Next Financial Crisis”

BevW March 23rd, 2014 at 1:45 pm

Bob, Welcome to the Lake.

Nomi, Welcome back to the Lake.

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Nomi Prins March 23rd, 2014 at 1:55 pm

Hi Bev, Hi Bob!

It’s great to be back to the Lake. I’ve super excited about the salon for today.
Bob – The Seven Sins of Wall Street is an awesome book – a perfect balance of journalism, outrage and humor.

Five more minute to go….

dakine01 March 23rd, 2014 at 2:00 pm

Good afternoon Bob and welcome to Firedoglake this afternoon. Welcome back Nomi!

Bob, I have not had an opportunity to read your book but do have a comment. Folks here at Firedoglake have covered a lot of the problems with the financial meltdown, housing bubble, foreclosure fraud, etc including the piss poor response from DoJ and the politicians.

With all the crime and fraud perpetrated I think the most obnoxious aspect of the whole last few years has been the incessant whining from the banksters – with Jamie Dimon at the top of the list – whining about how they are not “loved” or how they are not “respected” and on and on. I’m not going to ask if they are really so clueless because I know they are exactly that clueless.

Nomi Prins March 23rd, 2014 at 2:00 pm

Hi everyone!!!

Welcome to today’s Salon for Bob Ivry’s The Seven Sins of Wall Street.
Bob, let’s get right into it – how did the idea of Seven Sins come about?

eCAHNomics March 23rd, 2014 at 2:04 pm

If the FRB were a public institution instead of a banking cartel, would that have made a difference?

Nomi Prins March 23rd, 2014 at 2:04 pm
In response to dakine01 @ 3

Hi !

Bob, that’s one of the more exasperating things about this post-crisis world that you capture so well in Seven Sins – these people do the crime, do no time and complain about lack of hugs – you cover exactly how many trillions of dollars of ‘hugs’ people like Dimon did get as compared to the beating that specific citizens took – is it cluelessness or a big middle finger to America?

Bob Ivry March 23rd, 2014 at 2:04 pm
In response to dakine01 @ 3

Thanks for having me! Very excited to hear what y’all have to say.

I think we all exist in bubbles. We socialize with people who are like us. We tend to discuss issues with people who agree with us. (Some of us try to broaden our vistas, for sure.) The bank executives are no different. So when the hedge fund billionaires say they’re oppressed, I think they honestly mean it. It’s a product of talking in an echo chamber, with like-minded folks, and the bellyaching gains in volume and the problems seem bigger than they are.

Is that an answer to the question?

Elliott March 23rd, 2014 at 2:06 pm

welcome to the lake

what is their most grievous sin? greed?

Bob Ivry March 23rd, 2014 at 2:06 pm
In response to Nomi Prins @ 4

I was just angry about what I found over the course of a few years of reporting. I slowly discovered that what I had to say might be unique. Certainly my sense of irony combined with the serious issues I was reporting on, that was a chance to do something a little different. My lack of reverence for Wall Street and Washington. I had a great time writing this book!

dakine01 March 23rd, 2014 at 2:07 pm
In response to Bob Ivry @ 7

I thin they need to study some history ad find out what real oppression is. When they talk about being “oppressed” they sound as out of touch as Marie Antoinette

BrandonJ March 23rd, 2014 at 2:08 pm

Hello everyone, glad to be here.

I would like to say I loved your book Bob. I finished it yesterday and it was such an amazing detail into things I wasn’t even aware of. It’s definitely one I will recommend for its educational value, along with its relevant analysis.

My question is whether the appointment of Janet Yellen to the Federal Reserve has changed anything in terms of the treatment of major banking institutions. She’s been in the news for a number of things and I am a bit cautious.

Bob Ivry March 23rd, 2014 at 2:08 pm
In response to eCAHNomics @ 5

Another great question. I’m not sure. Let me just say that the Fed has too much power and too little accountability. Not sure I want to wade in on the whole “should the Fed exist” question. As a reporter, I’m much better pointing out problems than I am in devising solutions. One thing I will say: since Janet Yellen took over as chairwoman, I’ve been reading about how the Fed might be “too transparent.” What a crock!!!

Nomi Prins March 23rd, 2014 at 2:09 pm
In response to Bob Ivry @ 9

What’s very unique about your book and showcases your passion for the topics covered, is the very many examples you provide of how this ‘crisis’ is far from over, and that banks are not just bigger but ‘fail-i-er’ and more crooked in scheming…can you just give us a few of the examples that most resonated with you?

Mauimom March 23rd, 2014 at 2:10 pm

Welcome, Bob.

As dakine mentioned @3, we here at the Lake have read and discussed a LOT about banister fraud, the “near crash,” etc. Yours is the most accessible book yet! Thank you for a work that educates both those first approaching these issues and those of us who are familiar with them.

Nomi Prins March 23rd, 2014 at 2:10 pm
In response to Bob Ivry @ 9

And as you write so well – reverence is WAY over-rated.

Bob Ivry March 23rd, 2014 at 2:11 pm
In response to Nomi Prins @ 6

A sense of entitlement a mile wide. So many folks have never had a crappy job in their lives. They went from prep school to Ivy League to law school (or business school) to Wall Street. Of course everybody else is lazy! Of course they deserve all their success! Nothing has shown them any different. I would say six months-a year as a cab driver or a house cleaner or a bus boy would be a great solution to this.

Bob Ivry March 23rd, 2014 at 2:11 pm
In response to dakine01 @ 10

Let them eat bailouts!

Mauimom March 23rd, 2014 at 2:11 pm
In response to Nomi Prins @ 13

Yes, the examples of “how this common person got screwed by what these guys did” — and the comparison to the Bad Guys walking away with no pain — is quite effective.

CTuttle March 23rd, 2014 at 2:11 pm
In response to Bob Ivry @ 7

Aloha, Bob and Nomi…! Bob, I loved the way you compared Barry Bond’s HR record with Jamie Dimon’s steroid driven track record…! ;-)

Teddy Partridge March 23rd, 2014 at 2:12 pm

Vigilant to what end, though, I wonder? What possible purpose can be served by being ever more vigilant?

Surely the banks will get whatever they want from their captured regulators and legislators, whenever they need it. One cannot expect public disapproval of any such favors to stand in the way of their being granted. It’s the (not new) way of the world.

I appreciate this book, and its framing is swell — sins, indeed. I simply wonder what purpose is served. Does the author believe this documentation will stop it from happening again? I imagine not.

Bob Ivry March 23rd, 2014 at 2:13 pm
In response to Elliott @ 8

Excessive pride makes all the other ones possible. Not much humility on the Street.

Bob Ivry March 23rd, 2014 at 2:15 pm
In response to BrandonJ @ 11

Thanks for complimenting the book. Please do recommend it. I appreciate that.

I think having a woman lead the most powerful financial institution in the world is a big deal. As for policy, I’m not an expert on this, but she wouldn’t have been appointed if she were going to shut the place down tomorrow.

Elliott March 23rd, 2014 at 2:16 pm
In response to Bob Ivry @ 17

ha! I qwikread that as
“let them eat baloney”
which they are full of

Mauimom March 23rd, 2014 at 2:16 pm

Early on in the book, you counter the meme that the banks were “forced” to make crappy loans to unqualified people. The bankers and wing-nuts love to repeat this, often including the condemnation of “those nasty Federal laws and regs made them do it,” and suggesting that the “unworthy” were people of color.

Thank you for your explanation that the BANKS and those securitizing mortgages were BEGGING for “products” to push out into the market, and they didn’t give much of a damn about the quality of those loans. Frankly, this can’t be hit hard enough, and should be thrown in the face of those blaming the “crash” on folks who “got in over their heads” or “bought HD tvs with their refinancing $$$.”

Of course the settlement of the various lawsuits, especially those related to robo-signing, has pushed the issues related to this off the table, allowing the banisters to continue their lying and whining.

Nomi Prins March 23rd, 2014 at 2:17 pm
In response to Bob Ivry @ 22

Bob, you do spend quite a bit of time on the story behind Mark Pittman’s pushing to get the Fed to open its books, so that the rest of us could see exactly how much help they were giving a banking system that screwed the country. How much extra aid did the Fed provide and how did that position these big six banks to be more powerful than ever?

Bob Ivry March 23rd, 2014 at 2:18 pm
In response to Nomi Prins @ 13

The more I researched, the more I found that the banks really do call the shots. Take for example the role of big banks in the commodity businesses. The law says they shouldn’t take deposits from you and me and also own coal mines, oil fields and metals warehouses. JPMorgan just went out and bought a commodity business. The Fed said, OK, but you have to sell it within a couple of years. JPMorgan aasked for an extension — twice — and the Fed said, well, OK. Now last week they sold it. Did they sell it because the Fed “got tough” with them, as some news stories have suggested? No, JPMorgan sold it because it was getting less profitable. And they’d had to pay out millions and millions in fines because of their misbehavior. The idea of the Fed cracking down on the banks is laughable.

eCAHNomics March 23rd, 2014 at 2:18 pm
In response to Bob Ivry @ 12

Not to mention that Bernanke is a stupid tool of ruling class.

Tried to read his essay collection on Great Depression, the one that is his claim to fame. Garbage. Maybe 9 essays, gave up after 2-1/2.

In the index Keynes is mentioned not at all & fiscal policy once. Or vice versa.

Bankers got what they wanted in Bernanke, Greenspan, 21% Volcker, Burns!

Rant over.

BrandonJ March 23rd, 2014 at 2:20 pm
In response to Bob Ivry @ 22

Thank you Bob, it was very well-written.

Interesting. I have the same sentiments.

After reading the major crimes the banks committed (and I’m sure are still making), I couldn’t help but think of public banking institutions. North Dakota already has one and Vermont is deciding on getting one too.

Would this present a threat to private banking or is it not enough?

Bob Ivry March 23rd, 2014 at 2:20 pm
In response to Mauimom @ 18

Thanks! A former colleague of mine, Susan Antilla, did a great story on the victims of Jordan Belfort, the real-life guy behind “The Wolf of Wall Street.” Totally absent from the movie! So many stories we hear about bad actors, and so rarely do we hear about the destruction in their wake.

Nomi Prins March 23rd, 2014 at 2:20 pm
In response to Bob Ivry @ 26

Yes – exactly, I saw how the press made it seem like JPM Chase sold their unit to a Swiss Company for $3.5 billion to comply with Dodd-Frank when really it was as you say, no longer profitable. Why does journalism make itself so naive?

dakine01 March 23rd, 2014 at 2:22 pm
In response to Nomi Prins @ 30

Reporting truth and facts becomes no more access?

eCAHNomics March 23rd, 2014 at 2:22 pm
In response to BrandonJ @ 28

Too bad few are supporting Warren’s legislation to put retail banking in USPS offices.

Bob Ivry March 23rd, 2014 at 2:22 pm
In response to Mauimom @ 24

Dean Starkman wrote a nice piece in the New Republic about blaming the victims of the crisis. Check it out: http://www.newrepublic.com/article/116919/big-lie-haunts-post-crash-economy

To me, what’s telling is who came out of the crisis doing well — doing better than ever, really. It wasn’t Rebecca Black or the other 7 million Americans who were foreclosed on.

Bob Ivry March 23rd, 2014 at 2:23 pm
In response to BrandonJ @ 28

I don’t know too much about it, but I’d like to see stuff like that and see if it succeeds, because things are so bad any new ideas are welcome.

Nomi Prins March 23rd, 2014 at 2:24 pm
In response to Bob Ivry @ 26

So agreed, the Fed has a book of over $4 trillion of securities it has bought from the banks, which frees up their capital to go about and speculate on the next best thing. Neither Obama, nor Lew (and obviously Geithner) seems to even mention this – it’s $4 trillion effectively stolen in broad daylight, 25% of the US debt tied up right there. Rhetorical question – but why? And why do most outlets and DC accept Bernanke/Yellen explanation that buying bonds somehow creates jobs?

Nomi Prins March 23rd, 2014 at 2:25 pm
In response to dakine01 @ 31

Good point, and then you have major network shows like Scandal shooting the journalists. Pop culture’s in on the access vs. truth issue too.

BrandonJ March 23rd, 2014 at 2:26 pm
In response to eCAHNomics @ 32

True, it’s a good idea. I remember walking in East Harlem and there’s barely banks there compared to where I live.

Bob Ivry March 23rd, 2014 at 2:26 pm
In response to Nomi Prins @ 30

“Why are reporters so credulous” is a great question and far above my ability to answer. I will say this, though. The right attitude is far more important than knowledge of a subject as far as a journalist goes. You can always learn what a credit default swap is (I did!). You can’t always teach the eye of the tiger, the innate skepticism you need to call bullshit when bullshit is all around. Readers can usually identify those kinds of journalists. I encourage everyone not in the journalism business to remember bylines. Folks in journalism certainly do. The reporters who are pissed off, skeptical and fearless are national treasures.

Mauimom March 23rd, 2014 at 2:27 pm
In response to Nomi Prins @ 25

In your discussion of Pittman [what a hero; they should make a movie about HIM], you make one of the most important statements book, re why finding and publishing info about what the Fed had REALLY funneled to the banks, matters:

How could taxpayers, who were ultimately on the hook, determine if this was the best use of the country’s treasure?

This question should be asked every day, and every time these clowns beg for more $$$.

Nomi Prins March 23rd, 2014 at 2:30 pm
In response to Bob Ivry @ 38

And you are one of those national treasures! – as much for your innate bull-shit meter, as the choices you make to hold up the Hazelwood Road stories for the world to see right next to the $23 million Jaime Dimon pocketed. I found Black’s story so upsetting. “Rebecca Black could afford the house. She couldn’t afford the mortgage.” whereas JPM Chase & others couldn’t afford their losses, but had so much more federal assistance. How did you come upon her?

Bob Ivry March 23rd, 2014 at 2:31 pm
In response to Nomi Prins @ 35

I think Bernanke (Fed chairman from 2006 to 2014) did what he could do in the face of political paralysis. I might surprise y’all and say he didn’t have too much of a choice. The Fed does not really have the tools for economic stimulus that Congress and the president do. That the Fed’s policies rewarded bankers for almost destroying capitalism has been very unfortunate, but Congress and the executive branch have done NOTHING. I say something in the book about Helicopter Ben’s shower of dollars only made it as far as the penthouses. Aside from homeowners who’ve been able to refinance their mortgages with rock-bottom interest rates, the Fed has been a boon to the wealthy and a wealth-sucker for the rest of us.

Mauimom March 23rd, 2014 at 2:31 pm
In response to Bob Ivry @ 33

I think you [we; all who discuss this] need to include BOTH elements: not just who came out : “winners” and who got screwed, but also who was responsible.

By suggesting that those who got screwed were in some measure “responsible” — they defaulted, they spent refinancing $$ on tvs — we take up the “discussion space” and don’t ever get around to the bankers & securities sellers who pumped up this bubble by creating tons and tons of worthless paper.

[N.b., for anyone who cares, Kentucky just edged out Wichita State.]

BrandonJ March 23rd, 2014 at 2:33 pm

I was confused on what is meant by borrowing advantage. How does that work? I remember reading it in the chapter, but the technical definitions went over my head.

Bob Ivry March 23rd, 2014 at 2:33 pm
In response to Mauimom @ 39

One of my biggest regrets is that Bloomberg’s lawsuit against the Fed and the biggest banks, which eventually made them reveal the extent of the bailouts was far, far bigger than TARP, didn’t get the attention it deserved. The Fed loaned the banks $1.2 trillion ON A SINGLE DAY in December 2008!!!! Morgan Stanley took $100 billion ON A SINGLE DAY. Citi got $95 billion, Bank of America $95 billion. This is the real scandal.

perris March 23rd, 2014 at 2:34 pm

so many people, even supposed liberals actually believe ss is going broke, and they are incredulous when I tell them it is absolutely not, they insist I prove it to them, which is easy enough, but because of cognitive dissonance the continue in their belief ss is going broke, the wealthy have won the war of the message

I’ll add to the message;

had we not redistributed middle class dollars over to the wealthy in the form of “tax cuts”, social security would be even more secure then it is already

Bob Ivry March 23rd, 2014 at 2:35 pm
In response to Mauimom @ 42

Thanks for the NCAA update! Kentucky as the underdog — weird.

Americans hated the bank bailouts. But they reserve their fiercest hatred for homeowners who couldn’t pay their mortgages. Not sure I understand this. It makes me shake my head almost every day. You should read the e-mails I get from folks who blame the borrowers for everything.

masaccio March 23rd, 2014 at 2:37 pm

Here’s a quote from William Isaac, former Chairman of the FDIC, in American Banker explaining how awful it is that the DOJ is trying to deal with abuses in the usury/payday loan business:

TARP did not resolve, and, in fact, fed the crisis. Moreover, the unnecessary and unwise use of taxpayer money to fund TARP led to the worst political and regulatory nightmare for the financial industry in modern history – and it’s far from over.

These guys never quit.

Nomi Prins March 23rd, 2014 at 2:37 pm
In response to Bob Ivry @ 44

That and the fact that Jamie Dimon was sitting at his Class A directorship position at the NY Fed, which was coordinating with the Fed and that was somehow okay. If a real person undergoes foreclosure their credit is ruined for years, if JPM Chase is facing its own liquidity crisis, it gets in on a trillion plus dollar tie-me-over. How is this even remotely democratic?

Bob Ivry March 23rd, 2014 at 2:38 pm
In response to BrandonJ @ 43

When the biggest banks have sold bonds, they get a lower interest rate from bond buyers. The bond buyers believe that the banks will never default on those loans because the government will bail them out. It’s like Fannie and Freddie before the crisis. If you’re guaranteed by the government to pay your debts, you get a break on your borrowing rate. Deniz Anginer and his colleagues did a great job showing that with the data. (Chapter 4: The Myth of Competence in “Seven Sins”.)

Bob Ivry March 23rd, 2014 at 2:40 pm
In response to perris @ 45

I compare it to climate denial. “It was cold this winter, how can we have global warming?” Same thing with economics. Maybe “Seven Sins” can help break the logjam. I’m cautiously optimistic.

perris March 23rd, 2014 at 2:40 pm
In response to Bob Ivry @ 41

The Fed does not really have the tools for economic stimulus that Congress and the president do.

the most depraved “tooL” the fed has happens to be the most powerful;

whenever the claim “the economy is heating up, we have to increase borrowing rates” what they REALLY mean is;

“labor is asking for higher wages and getting it, we can’t have that, let’s make it harder for small business to accommodate higher wages”

whenever the fed says “the economy is stable, we can keep borrowing rates low” what they really mean is;

“there are more qualified laborers then jobs, we can keep money cheap”

THAT’S the reason they are keeping rates down, and the fact that people are less out of work then in the past is the reason the fed is flirting with the idea of increasing rates

the last thing they want are laborers earning their value, can’t have none of THAT

Mauimom March 23rd, 2014 at 2:41 pm
In response to Bob Ivry @ 44

Every time we have a discussion here at the Book Salon about this topic, I ask the same question. Over these several years, I’ve never gotten a satisfactory answer.

I have never seen an adequate explanation of what would have happened — or what some feared would happen — if we hadn’t given all that money to the banks in 2008. Even though it’s beyond the scope of your book, you too let the assumption that “financial catastrophe was averted” slip on by. I really want to know what was feared, and why pouring money into the banks was the ONLY solution. Equally important is whether that “fear” scenario was rational or just a justification for their action. The “weapons of mass destruction” factor.

I recall the stories of Paulson running down the corridors of the White House, with his 3 page memo about how turning over all this money [without any controls] was the “only” solution . If he had any hair, it would have metaphorically been on fire.

But what was the rush, and what was the fear/ emergency?

Again, your question:

How could taxpayers, who were ultimately on the hook, determine if this was the best use of the country’s treasure?

Nomi Prins March 23rd, 2014 at 2:42 pm

Further on the topic of democracy (vs. say plutocracy), you quote the great Louis Brandeis: “We can either have democracy in this country or we can have great wealth concentrated in the hands of the few, but we can’t have both.” He said that a century ago, and yet, wealth consolidation is back to historic levels. What do you see in the future – more? Or how many crises does it take before Washington does something real about upholding democracy and preventing such imbalance and financial instability? When do we quit blaming the victim?

Mauimom March 23rd, 2014 at 2:42 pm
In response to Bob Ivry @ 49

That was a great chapter. I sure didn’t know about those issues. Thanks.

Bob Ivry March 23rd, 2014 at 2:43 pm
In response to masaccio @ 47

The bailout of the banking system has continued to this day. Low interest rates and the Fed’s bond-buying have been crutches to prop it up. As I say in the book, America needs strong banks. But banks need a strong America, too. I’m a little afraid what might happen when (if?) the Fed stimulus ends and the banks have to survive on their own. I’m even more worried about the rest of us. We haven’t gotten much in the way of stimulus and 57 percent of Americans in a poll a couple weeks said they think we’re still in recession.

Bob Ivry March 23rd, 2014 at 2:45 pm
In response to Nomi Prins @ 48

Nomi, we really do have a two-tier democracy, don’t we? When the attorney general of the U.S. tells Congress that the banks are too big to prosecute, that should worry us all. It means they are above the law! It confirms what those of us who’ve been following this issue already know. Some more cynical types have even said that the fines paid by the banks for their misbehavior are simply the government taking its cut. Certainly the bad behavior hasn’t stopped, nor will it as long as the laws don’t apply to them.

perris March 23rd, 2014 at 2:45 pm
In response to Mauimom @ 52

How could taxpayers, who were ultimately on the hook, determine if this was the best use of the country’s treasure?

I think there are very few people alive who believe “bonuses” equal to tarp payouts were the best use of my money

it was really absurd the “bailout” came without specific instructions for what the money must be used for’

taking my money, and lending it back to me at interest (which is what they were allowed to do) was not what I had in mind

DaveMoore March 23rd, 2014 at 2:47 pm

Bob: I am 62 and retired (also a Vietnam veteran). As I tell people, my fear is the entitled elites of Wall Street and politicians will cause a worse collapse. My fear, though, is the reaction will be one of revolution as in France or Russian. People are extremely pissed off, in my opinion. In other words the revolt will be very chaotic and bloody. The end result will be the end of our republic and a dictator. Do you think I am far off?

Bob Ivry March 23rd, 2014 at 2:48 pm
In response to Mauimom @ 52

Paulson’s first idea to “save” the banking industry was to buy bad loans, just like they did with the Resolution Trust Corp. during the S&L troubles in the late 1980s-early 1990s. I don’t wanna relitigate the bailouts (maybe my next book?) but I will say this: When Paulson-Bernanke-Geithner held emergency meetings to save the financial system, the only other people in the room were bank executives. No labor, no consumer, no academics, no WOMEN! What solution did they think would be arrived at?

Nomi Prins March 23rd, 2014 at 2:48 pm
In response to Bob Ivry @ 56

And that leaves us all prone to more disaster. We have the Fed plugging the holes now – and the DOJ with its tail between its legs in the most kind of interpretations for its own prosecutorial negligence – and the entire Obama administration not even mentioned fines or lack of prosecution in passing. Yet, we know in the past, there was bi-partisan support for at least reducing the big banks’ power over the national economy with the Glass-Steagall Act. We always had money in politics and wealthy influential financiers impacting Washington, why was the result so different then?

BrandonJ March 23rd, 2014 at 2:49 pm
In response to Bob Ivry @ 49

Thanks, now it’s clearer for me.

The major banking institutions won large under both Democratic and Republican administrations. Would change to the banking sector first start with a break from both of these parties?

Mauimom March 23rd, 2014 at 2:50 pm

When Paulson-Bernanke-Geithner held emergency meetings to save the financial system, the only other people in the room were bank executives. No labor, no consumer, no academics, no WOMEN! What solution did they think would be arrived at?

That’s a really good start on an “answer.”

Bob Ivry March 23rd, 2014 at 2:50 pm
In response to perris @ 57

I’m gonna quote the book — forgive me, but hey — and quote the billionaire J. Paul Getty, who said, “If the bank lends you $10,000, they own you, but if the bank lends you $10 billion, you own the bank.” The bank in 2008-09 was the U.S. government, and ever since then they’ve been making it very easy for their borrowers on Wall Street to survive and thrive.

Siun March 23rd, 2014 at 2:52 pm

Great book Bob. I keep thinking that the story of the TBTF and all somehow always split the bankers story from the story of those who it hurt … your book does such a good job of showing the direct connections and that really helps change the perspective.

perris March 23rd, 2014 at 2:53 pm

“If the bank lends you $10,000, they own you, but if the bank lends you $10 billion, you own the bank.”

Unless I print my own money, then evaporating assets mean nothing to me

Bob Ivry March 23rd, 2014 at 2:55 pm
In response to DaveMoore @ 58

I have a pitchfork in the garage.

Kidding!

This is a great question — will we have a Robespierre and a Reign of Terror? I sincerely hope it doesn’t come to that. In the last few months, since I wrote and submitted the manuscript for “Seven Sins,” I’ve thought a lot about the next financial crisis and more and more I’m convinced that the banks will be OK. It’s the rest of us that will experience crisis. The banks are so insulated. And the “next” crisis for so many Americans is simply an extension of the last one. Wall Street has recovered. Main Street has not.

Mauimom March 23rd, 2014 at 2:56 pm

Paulson’s first idea to “save” the banking industry was to buy bad loans, just like they did with the Resolution Trust Corp. during the S&L troubles in the late 1980s-early 1990s.

This whole approach is just more of “save the banks” and “don’t hold them responsible for their errors/crimes.”

If a bank has “bad loans,” the regulators ought to be going through and finding out WHY each loan is bad [yeah, I know, impossible, but bear with me].

* if the loan’s “bad” because someone has lost his/her job or has been hit with a catastrophic medical expense, that loan could be refinanced, possibly with the principle reduced;

* if the loan’s “bad” because of bad judgment by the originators, write that loan down on the bank’s books.

Feds “buying” bad loans just removes them from the books of the offending banks, and as we’ve seen, the Feds didn’t do any better at sorting out who should bear the burden of each loan’s “badness.” But the BANKS got away scott free, and got the crap off their balance sheets.

allan March 23rd, 2014 at 2:57 pm

Bob, I have not yet had a chance to read your book, and I’m looking forward to it.
But I’m wondering whether you discuss the distortions that the zero interest rate policy
has created throughout the markets, which then pop or deflate, leaving carnage in their wake.
Commodities. Iowa farmland. Emerging market bonds. …
Bernanke’s policy seems to have been “let a thousand bubbles bloom.”
Great for the Blankfeins and Dimons of the world, not so great for the rest of us.

spocko March 23rd, 2014 at 2:59 pm

Our very own masaccio was on the podcast Virtually Speaking discussing markets and he mentioned how people were put in jail after the S&L crisis but that rules were changed so that people got fined instead of going to jail.

He said that if a white collar worker knows that they can get a two year prison sentence for their actions, they will change their behavior.

What are the odds at this point in time that anyone will ever be prosecuted for crimes? Is there anything that we can do to make it happen?

perris March 23rd, 2014 at 2:59 pm
In response to allan @ 68

I believe zero interest rates was based largely on the fact that there was no wage pressure, actually wage pressure was negative, employers were lowering wages, thus zero interest

Bob Ivry March 23rd, 2014 at 3:00 pm
In response to Nomi Prins @ 60

Surprise answer: celebrity culture is so pervasive now. For members of Congress, there’s no bigger celebrity than Jamie Dimon, or Steve Schwarzman (billionaire CEO of the Blackstone Group), or Larry Fink (BlackRock CEO). The insider trading stories smack of voyeurism. The tales of excess (“Wolf of Wall Street” among them) have a perverse allure. A lot of us are trained to worship money and celebrity in a way that I think is, at least by degree, a new phenomenon. When Jamie Dimon goes to Washington, he’s revered. Like tourists in a fancy restaurant who want to impress the waiter, members of Congress want to be liked by a guy who makes $20 million a year and commands the biggest bank in the U.S. I’m not sure it’s more complicated than that.

Bob Ivry March 23rd, 2014 at 3:02 pm
In response to Mauimom @ 67

“Seven Sins of Wall Street” concerns itself almost exclusively with the bad behavior of the banks SINCE the 2008 crisis. I’m not sure anyone else has done a book like this one. Anyone know of any?

Mauimom March 23rd, 2014 at 3:02 pm
In response to Bob Ivry @ 66

One of the things I see as the “next crisis” is that as folks retire [I'm of that age] they will realize not only that they don’t have enough to support themselves, but also that what they DO have won’t do much for them.

Wait until they do the math on what even $200,000 will produce for you over 20 or 30 years. With interest rates low, with houses that have been foreclosed upon or lost significant value, with IRAs also down because they’ve been drained during unemployment [or grown kids' unemployment], with social security barely sufficient and under attack every day, I foresee an attempted exodus to permitted suicide states like Oregon and/or shock as Americans discover they CAN’T easily emigrate to lower cost/better health care foreign countries.

DaveMoore March 23rd, 2014 at 3:03 pm

Bob: Thanks for the answer. As a historian, I still worry of a repeat of 33-35. Evidently Roosevelt really feared a collapse–not to mention the funding of an overthrow by financial elites using Gen. Smedley Butler. Butler’s testimony is still classified, but rumors are the Walker and Bush families were involved in the funding. The Tea Party, funded by the Kochs, is “almost” similar but essentially a clown car at this point. It would be interesting if we had a Bonus Army march and see the reaction; obviously Occupy was suppressed, but they were disjointed and not a million converging on DC.

spocko March 23rd, 2014 at 3:03 pm

I asked Matt Taibbi at one of his book signings. “What are these people afraid of and what can we do to make that fear come true.”

He said. “Not journalists!” and laughed. Do you think anyone is afraid of what you have uncovered and published? Can what you reveal lead to any kind of actions?

DaveMoore March 23rd, 2014 at 3:05 pm
In response to Bob Ivry @ 71

I think the real surprise is that in 33, any person asked blamed the bankers. Thanks to nitwits like Limbaugh, et alia, via Fox, teachers and pensioners are blamed. Members of my own family repeat this nonsense, meaning they hate me at Thanksgiving dinners, etc.

spocko March 23rd, 2014 at 3:06 pm
In response to Mauimom @ 73

Okay, now you’ve really depressed me. The failure of the 401K program isn’t often told, but it was sold as this great thing. Of course it also assumed that you could keep adding to it with employment. Which didn’t always materialize and gets hard and harder as you get older.

Bob Ivry March 23rd, 2014 at 3:06 pm
In response to allan @ 68

Before Bloomberg News hired me in 2006 (at the age of 46), I had been a reporter for 30 years but I had never written a business story (OK, maybe two or three) and had very little knowledge of finance or banking or any of it. Even then, though, I knew that the U.S. economy had been weakened so much that the dot-com bubble had given way to the housing bubble and when the housing bubble burst, there would have to be another bubble to keep our unsustainable standard of living going. (Doesn’t it seem the only ones who DIDN’T know we were in a housing bubble were the folks at the Federal Reserve who could have done something about it?!) So we have, basically, the money bubble in the 2010s — as Nomi pointed out, $4 trillion from the Fed. Thanks, Uncle Ben! At Bloomberg News, we’re writing about it every day — the chase after yield in the zero-interest-rate environment. Riskier and … fail-ier.

Nomi Prins March 23rd, 2014 at 3:06 pm

Hence, your depiction of Dimon goes to Washington for his alleged spanking and instead gets asked for pearls of wisdom about the economy. It’s grotesque. This cult of celebrity trumps any past cult (or sensitivity) of humility. Do you see anything coming, or can you even envision a scenario, where this phenomenon would reverse even slightly? You have some suggestion in your book for breaking too big to fail from a citizens’ level – moving out accounts, etc. What else could cause real change?

Mauimom March 23rd, 2014 at 3:06 pm
In response to spocko @ 69

One of the best features of Bob’s book was the conclusion, which included things that can be done. Although many require political action — and we know that’s neither short-term nor promising — I was happy to see the suggestion [re "shrinking the banks"]:

Another way [to shrink banks] is for ordinary folks to shrink their stakes in them. They can close their savings and checking accounts, transfer their credit cards, refinance their mortgages — and switch them all to credit unions or smaller, community banks.

Bob, can you talk about what kind of reception this has gotten?

Bob Ivry March 23rd, 2014 at 3:07 pm
In response to Mauimom @ 73

Oh geez…

dakine01 March 23rd, 2014 at 3:10 pm
In response to Bob Ivry @ 78

(Doesn’t it seem the only ones who DIDN’T know we were in a housing bubble were the folks at the Federal Reserve who could have done something about it?!)

No, many of the ‘go-to’ economists (Always wrong but never in doubt) also missed the bubble. After all, they are presenting the preferred conventional wisdom (See earlier, i.e., reporters preferring access more than facts)

DaveMoore March 23rd, 2014 at 3:11 pm
In response to Mauimom @ 73

Mauimom: as a retiree you are reading my mind–and nightmares.

Bob Ivry March 23rd, 2014 at 3:11 pm
In response to Mauimom @ 80

Kind of a thimble’s worth of water tossed on the desert.

We have to throw the bum politicians out. The enormous influence of the banking industry doesn’t show up on the radar. I was on an MSNBC show last week (“The Cycle”) that’s co-hosted by Abby Huntsman, whose dad ran for president in 2012. Jon Huntsman called for breaking up the banks with a new Glass-Steagall, and I don’t think he ever polled out of the single digits percentage-wise.

That said, we have Senators Sherrod Brown of Ohio, David Vitter of Louisiana, Elizabeth Warren of Massachusetts, Democrats and a Republican, who are dogged in their pursuit of economic justice. We just need about 52 more!

Mauimom March 23rd, 2014 at 3:13 pm
In response to Bob Ivry @ 81

Sorry, but when I read story after story @ Gawker of folks who become unemployed at 50+, and when I do the math on what even a significant IRA will produce, I get pretty bleak in trying to figure out what folks will do as they get older and older, and there’s less and less of a “safety net” to protect them.

But please, forgive me if I detracted from your excellent points.

PS – Hawaii’s Senator, Brian Schatz, is quite good, so of course some Mainland establishment Dems decided to support a whimsy woman in the Dem. PRIMARY against him. He’s not as strong as Brown & Warren, but given re-election and some time, he should be. His instincts are quite good.

spocko March 23rd, 2014 at 3:14 pm
In response to DaveMoore @ 74

“Butler’s testimony is still classified”

What the hell?

BTW, you might want to check out a great Capra movie “Meet John Doe” with Gary Cooper and Barbara Stanwick
Rich people manipulating the media and a populist movement to gain more power.

perris March 23rd, 2014 at 3:14 pm
In response to Bob Ivry @ 78

the chase after yield in the zero-interest-rate environment. Riskier and … fail-ier.

scary, what can you do to keep your money up with inflation if not looking for yield?

Bob Ivry March 23rd, 2014 at 3:15 pm
In response to Nomi Prins @ 79

It will take a political coalition. I think the Fox News people have to sign on. It’s actually a great issue for them — bad Wall Street vs. Joe the Plumber. The Rand Paul supporters are already on board. The great thing about the legislation to audit the Fed in 2009 was the political marriage of Ron Paul (libertarian) and Alan Grayson (progressive Democrat). This is an issue that cuts across political affiliations. It’s really about fairness and market domination and equal protection under the law. So let’s get Bill O’Reilly and Sean Hannity and Rush Limbaugh angry about this, too. Then we might see some change.

Bob Ivry March 23rd, 2014 at 3:16 pm
In response to dakine01 @ 82

Yes, you’re right. Charles Ferguson’s Oscar-winning documentary “Inside Job” showed that a lot of economists are paid by corporations, banks and the Fed and are not transparent about it.

perris March 23rd, 2014 at 3:17 pm

I think the Fox News people have to sign on. It’s actually a great issue for them — bad Wall Street vs. Joe the Plumbe

not gonna happen, murdock and ailes are for whatever the banks are for

Bob Ivry March 23rd, 2014 at 3:18 pm
In response to Mauimom @ 85

I’ll take a look at Schatz. Thanks for the tip. I’m 54 years old, so not that far behind. Retirement even now seems like an impossibility. That’s why you have to buy my book! ;)

Mauimom March 23rd, 2014 at 3:19 pm
In response to perris @ 87

I keep thinking the “zero interest rate environment” is just another tool to drive ordinary folks into stocks. People look around and see that putting their $$ into CDs doesn’t even beat inflation, so “taking a chance” on stocks doesn’t seem so far-fetched.

Bob Ivry March 23rd, 2014 at 3:20 pm
In response to spocko @ 86

The Gilded Age — it’s not a new phenomenon. It’s just that it seems that rich people are richer than ever and poor people in America, though not as bad off as poor people in a lot of the world, are as stuck as ever. If only Pittman’s formulation, that if you work hard and keep out of trouble you ought to be able to get ahead, were true. If you’re happy being poor, that’s the best defense. Sadly.

Bob Ivry March 23rd, 2014 at 3:21 pm
In response to perris @ 90

Employees have been known to go against their bosses! And isn’t Murdoch about 112 years old?

Nomi Prins March 23rd, 2014 at 3:21 pm
In response to Bob Ivry @ 88

I love the idea of coalition, Bob!. The fact that the ‘liberal’ vs. ‘conservative’ box lines are drawn so generally, reduces the ability to get anything useful done, and change isn’t going to come from the Oval Office today under any party, nor from the Fed, the main regulatory body supposedly watching over, but instead providing sustenance to the banking industry. The first Congressional hearings that eventually produced Glass-Steagall happened under a Republican Congress and President. As you said in your book, we need to separate banks’ “dice games from Granny’s deposits.” We also need not to be discouraged because we know we’re right about this and keep pushing. Thanks for all you do on that regard, Bob!

Bob Ivry March 23rd, 2014 at 3:22 pm
In response to Mauimom @ 92

Definitely part of it. All-time highs in the S&P 500! The illusion of prosperity…

spocko March 23rd, 2014 at 3:22 pm

You mention whistleblower Sherry Hunt at Citi Mortgage.
What is her status now?

One thing that didn’t get a lot of attention were some new qui tam statues on the books from the SEC that would enable whistlerblowers to join with the federal prosecutors and sue the banks. They would get a portion of the penalties levied.

I’ve always thought that more should do this, especially since being a whistleblower often leads to tremendous hardship for them.

In my fantasy world a team of people who lost their jobs at Bear Sterns would work with someone like Elliot Spitzer to bring these cases against their old buddies who got their firm destroyed. It would be about sticking it to the people who busted them, as much as it was about the money.
A kind of “It takes a thief to know how thieves operate.”
deal.

CTuttle March 23rd, 2014 at 3:23 pm
In response to Mauimom @ 85

Colleen Hanabusa is a true DLC Tool, Go Schatz…! ;-)

Bob Ivry March 23rd, 2014 at 3:29 pm
In response to Nomi Prins @ 95

Thanks to you, too, Nomi. You know, I don’t consider myself a very sophisticated thinker on these subjects. I’m a reporter, not an economist or a philosopher or a political scientist or a mathematician. But I keep coming back to the simplest of solutions: MAKE THE BIGGEST BANKS SMALLER. SEPARATE THE DEPOSITS FROM THE CASINO. That way, banks can roll the dice, play roulette, whatever they want to do that’s legal, and if they get into a mess of trouble, there won’t be an emergency meeting at the New York Federal Reserve Bank to save the global financial system. Stockholders might suffer, and bondholders might suffer, and employees might suffer. But taxpayers and the rest of the world won’t be put in jeopardy because a few bank executives got too greedy. THE BANK EXECUTIVES WILL SUFFER, NOT THE REST OF US. Is it too simple? Glass-Steagall. Brown-Kaufman (the 2010 proposal to limit bank balance sheets to $500 billion). Two laws. Because what we have now is a myriad of regulations with committees and thousands of pages of rules that don’t address that simple core problem: the biggest banks are too big. Too big to fail, too big top prosecute, too big to be fair.

Mauimom March 23rd, 2014 at 3:30 pm
In response to Bob Ivry @ 91

I hope your “book tour” takes you to Politics & Prose in DC and Powell’s in Portland. Lots of good spots on the West Coast with customers who should welcome your work. And they’ll enjoy it once they buy.

Unfortunately, there’ s only one bookstore on all of Maui, and it’s an hour + half away from me. But Oahu??

Bob Ivry March 23rd, 2014 at 3:32 pm
In response to spocko @ 97

I like that idea!

Sherry Hunt is doing great. She got $31 million (before taxes and lawyers’ fees) for blowing the whistle on Citi’s fraudulent mortgage business. I just spoke to her a couple of weeks ago. Let’s just say that after living in Alaska and a lot of other cold places, she now lives where shoveling snow is not a problem!

Mauimom March 23rd, 2014 at 3:33 pm
In response to Bob Ivry @ 101

Good for her!! Please forward our thanks and appreciation for her work and dedication!!

DaveMoore March 23rd, 2014 at 3:34 pm
In response to spocko @ 97

Spocko: I agree. Unfortunately, I don’t see where our illustrious Attorney General would allow that. I had dealings with Holder as assistant to Reno and he didn’t mind selling me out. I told federal investigators who came to the Library of Congress and asked about Holocaust Loot, “We actually have a list and I have the documents. Would you like a copy?”

Bob Ivry March 23rd, 2014 at 3:35 pm
In response to CTuttle @ 98

As I say in the book, there are exceptions, but if you wanna stick it to Wall Street, there aren’t many candidates on either side of the aisle to vote for. In Chapter 3: Envy of “Seven Sins of Wall Street,” I detail a Senate hearing where members of both parties bowed to Jamie Dimon. Democrats have to fund their campaigns just like Republicans do! Party leadership puts freshmen on the House Financial Services Committee so they can fund their re-election campaigns. This is how our democracy works. A friend of mine calls it Crapitalism = crony + capitalism.

Bob Ivry March 23rd, 2014 at 3:36 pm
In response to Mauimom @ 100

Say the word and I’ll be in Hawaii TOMORROW. ;)

spocko March 23rd, 2014 at 3:38 pm

When I was doing some work with New York Communities for Change, Occupy the boardroom and the Home Defenders League, we tried to get stories like Rebecca Black’s in front of the executives and the media.

What is your goal for showing the repercussions of the bankers’ actions in your book?

Who specifically do you want to act?

Would it be helpful if you walked some of these execs through these stories? (Not that I think shaming works, but I would like to allow people to see their disconnect from their actions. And it’s why prosecution is important, because they aren’t going to sympathize or take responsibility.)

DaveMoore March 23rd, 2014 at 3:39 pm
In response to Bob Ivry @ 104

Jamie Dimond also kept flashing the cufflinks Obama gave him at the hearing. It was sick. He was even worse in the hallway.

BrandonJ March 23rd, 2014 at 3:39 pm

Why is it that banks can get away with these illegitimate practices? Banks have been found to take money from illegitimate criminal organizations like with the situation with HSBC taking money from the Mexican and Colombian drug cartels. It seems the line between legitimate and illegitimate is blurred with each thing banks do.

Forgive me for asking such a question, but it irritates me.

Bob Ivry March 23rd, 2014 at 3:39 pm

I’m too realistic to think that the capture and the unfairness will go away. But I’m also too idealistic not to try to throw my shoulder into the push against them.

Bob Ivry March 23rd, 2014 at 3:43 pm
In response to spocko @ 106

As a reporter, my main job is pointing out the problems. I’m not as good at solutions. But I’ll say this. It’s not a bad thing to make money. It’s not a bad thing to make a lot of money! What can be bad is the way that money is made. People have to realize that we’re all in the same boat. That doesn’t mean to cease being competitive. It does mean that ripping people off — people who are far less fortunate than you are to begin with — is an unsustainable way to amass wealth. Maybe that makes me a moralist, which I’m not happy about. But when was the last time you heard, unironically, the word “morality” when it comes to finance? This is not the way to build lasting wealth.

Nomi Prins March 23rd, 2014 at 3:43 pm
In response to Bob Ivry @ 104

True ,there are too few exceptions in Washington to combat the American policy of ‘crapitalism’, of which Dimon is the reining king. This quote towards the end of your book is so powerful “The drive to win is healthy’ the need to cheat in order to obliterate a crippled rival is pathology.” Very well said, Bob! The current system rewards the biggest financial socio-paths.

Bob Ivry March 23rd, 2014 at 3:44 pm
In response to Mauimom @ 102

I’d be happy to

Bob Ivry March 23rd, 2014 at 3:44 pm
In response to DaveMoore @ 107

Rule of thumb, Dave, and I’m sure you know it: Everything is worse in the hallway.

DaveMoore March 23rd, 2014 at 3:45 pm
In response to BrandonJ @ 108

Brandon: If I may add, while reading about this I notice the DOJ and feds were going after legal state medical marijuana with asset forfeiture. Real heavy handed. So why not for the bankers and cartels. Yes, great question.

Bob Ivry March 23rd, 2014 at 3:45 pm
In response to dakine01 @ 31

Access journalism is overrated. IMHO.

Mauimom March 23rd, 2014 at 3:46 pm

Bob, I want to say thank you again for such a great book. My son is a sportswriter, and I am a former English teacher, so I appreciate good writing. Even more I appreciate the clarity with which you organize and present things — makes it easier for me to recommend your work to those who are always asking me how they can become better informed.

This IS a complicated area, but the “bad guys” use complication as a justification for why we “ordinary people” just couldn’t understand this. You have proven them wrong.

Best of luck to you, and thanks again. Thank you also, Nomi, for your moderating.

dakine01 March 23rd, 2014 at 3:47 pm
In response to Bob Ivry @ 115

unfortunately, not for the 1%

Bob Ivry March 23rd, 2014 at 3:48 pm
In response to Nomi Prins @ 40

We identified Memphis as a place we wanted to write about because they had a lawsuit pending against Wells Fargo and predatory lending. I went down there and one of my contacts showed me Hazelwood Road, where a young man had been shot and killed on the street a few months before. There were so many empty houses! I went through the property records and came upon Rebecca Black.

Bob Ivry March 23rd, 2014 at 3:48 pm
In response to Mauimom @ 116

Thank you so much!

BrandonJ March 23rd, 2014 at 3:49 pm
In response to DaveMoore @ 114

Thanks, I’ve been reading on organized crime in class and why it appears. The HSBC settlement, which Matt Taibbi talked about, was one topic brought up and the idea of legitimate/illegitimate between cartels and banks is really fascinating.

Nomi Prins March 23rd, 2014 at 3:49 pm
In response to Mauimom @ 116

Thanks ! And I want to echo that Bob has written an excellent book, that brilliantly portrays both sides of the two Americas in the aftermath of the last financial crisis. It’s also a very fast read – because of its clarity and also because you really won’t want to put it down.

Nomi Prins March 23rd, 2014 at 3:50 pm
In response to Bob Ivry @ 118

Her’s is a poignant story that reflects the ongoing hardship of the impact of our uber-powerful banking system over individuals, communities, and cities. Great reporting too!

Bob Ivry March 23rd, 2014 at 3:51 pm
In response to BrandonJ @ 61

Somehow breaking politicians’ addiction to money would be a great first step, don’t you think?

BevW March 23rd, 2014 at 3:51 pm

As we come to the last minutes of this great Book Salon discussion. Any last thoughts?

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

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

Everyone, if you would like more information: Bob’s website, book and Twitter. Nomi’s website/books and Twitter.

Thanks all, Have a great week. If you would like to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

masaccio March 23rd, 2014 at 3:51 pm

As to fixing the problem, I’d suggest that everyone leave the megabanks. Let them run their nasty casino games with their own money.

Bob Ivry March 23rd, 2014 at 3:53 pm
In response to spocko @ 75

We did an article in November 2011 on the secret Fed bailouts and the Fed issued a six-page rebuttal. We immediately rebutted the rebuttal. I’m proud of that. But afraid? If you have $4 trillion on your balance sheet, are you afraid of anything?

Mauimom March 23rd, 2014 at 3:53 pm
In response to Nomi Prins @ 122

What gets me also is that you could take a fraction of what the banisters receive in compensation and right so much of the damage they’ve done. [Individual cases like Rebecca Black.]

But no-o-o-o-o.

spocko March 23rd, 2014 at 3:53 pm
In response to Bob Ivry @ 101

So now she can set up a company that brings qui tam cases through the system.
A friend of mine got the Qui tam laws in California passed and then used them to go after the big military contractors who were bilking the taxpayers with their “Star Wars” contracts that were BS.

The rich and powerful aren’t going to give up their money or power with out a fight. Qui tam laws are one way to do it.

I had always like the idea of taking money from the WS people based on their crimes and and use the money to get money from them. They would be funding their own demise. Because the US government doesn’t take the money seized from a few corporations for fraud and put it back into the SEC, does it? You know the cops got to keep some of that drug money for their fancy SWAT equipment, why not do the same with the banks? If the requlators aren’t going to use the money do to more and better regulation, then the people who got screwed and won can use their money to do it.
Some lawyers, whistleblowers, PIs, former cops, accounting people and Bill Black would make a nice team. The New Untouchables! Can’t get Jamie Diamond down for the financial crimes he committed? See what other crimes he committed in a different area, like DUI, or drugs. Because clearly they have all the financial bases covered with lawyers up the yahoo. OR start smaller and roll up to the big fish. But watch your back. Keep in mind the recent spate of “suicides” of JP Morgan people.

masaccio March 23rd, 2014 at 3:53 pm
In response to Bob Ivry @ 110

And what’s the problem with having moral sense to go with financial sense?

Bob Ivry March 23rd, 2014 at 3:54 pm
In response to BrandonJ @ 120

Cartel is a legal term, you know. I’m surprised the Justice Department or the Federal Trade Commission hasn’t gone after the biggest banks on the possibility of antitrust violations.

Nomi Prins March 23rd, 2014 at 3:55 pm

Bev,

Thanks for all your years of organizing these amazing salons.

FDL’ers

Thanks for all your comments and questions and awareness.

Bob,

I truly believe your book is a must-read for everyone – it is honest, accessible and important. Thank you for doing the work and beating the drum for fairness and true democracy.

Everyone,

Let’s keep on!

DaveMoore March 23rd, 2014 at 3:56 pm
In response to BrandonJ @ 120

Brandon: the other problem is marijuana dispensaries in California aren’t allowed to bank under the current law. Their cash is usually in the store. I read everything Matt writes and has written since The Exile.

Mauimom March 23rd, 2014 at 3:56 pm
In response to Bob Ivry @ 126

At least you’ve got Bloomberg as a platform, which is a pretty good start.

BrandonJ March 23rd, 2014 at 3:56 pm
In response to Bob Ivry @ 123

True, though I don’t have confidence in both parties based on numerous issues. I felt betrayed by the Democrats after supporting Obama and I never did enjoy the money found in the Republican Party.

Bob Ivry March 23rd, 2014 at 3:56 pm
In response to spocko @ 128

Spocko, you may not remember that Obama put together just such a mortgage “task force,” I think it was in 2010, with New York Attorney General Eric Schneiderman lea,ding it, and there was a lot of rhetoric about catching the bad guys. Not much more than a peep since.

Bob Ivry March 23rd, 2014 at 3:57 pm
In response to Mauimom @ 133

bloomberg.com everyone!

BrandonJ March 23rd, 2014 at 3:57 pm
In response to DaveMoore @ 132

It’s funny to see weed treated worse than tainted money by our federal government. So much for priorities.

DaveMoore March 23rd, 2014 at 3:58 pm

Nomi and Bob: Thanks for the great Book Salon. Hope your book is available for my Kindle.

Bob Ivry March 23rd, 2014 at 3:59 pm
In response to Nomi Prins @ 131

Are we done already? That went fast! Thanks Bev, for having me. Thanks Nomi for being so nice to me (remind everyone that you have a book coming out soon, too). And thanks everyone for the great questions and the support. The only failure is to stop trying.

Bob Ivry March 23rd, 2014 at 3:59 pm
In response to DaveMoore @ 138

It is. Search for me on amazon.

Elliott March 23rd, 2014 at 4:00 pm

thank you both! — and BevW

good luck with the virtuous book

BrandonJ March 23rd, 2014 at 4:01 pm

Thank you for this book. It was a fascinating read and I won’t forget what I learned.

Thanks everyone!

CTuttle March 23rd, 2014 at 4:03 pm
In response to Bob Ivry @ 130

RICO too, Bob…! ;-)

CTuttle March 23rd, 2014 at 4:04 pm

Mahalo Nui Loa, Bob, Nomi and Bev…! This was another awesome Book Salon…!

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