Citigroup

The Party People of Wall Street

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Bill Moyers & Michael Winship (Common Dreams) | RS_News | January 31 2012

OPINION | A week or so ago, we read in The New York Times about what in the Gilded Age of the Roman Empire was known as a bacchanal – a big blowout at which the imperial swells got together and whooped it up. [The St. Regis Hotel in Manhattan was the site of a black-tie dinner for Kappa Beta Phi, whose members were told “what happens at the St. Regis stays at the St. Regis.” (John Marshall Mantel for The New York Times))] The St. Regis Hotel in Manhattan was the site of a black-tie dinner for Kappa Beta Phi, whose members were told “what happens at the St. Regis stays at the St. Regis.”

This one occurred here in Manhattan at the annual black-tie dinner and induction ceremony for Kappa Beta Phi. That’s the very exclusive Wall Street fraternity of billionaire bankers, and private equity and hedge fund predators. People like Wilbur Ross, the vulture capitalist; Robert Benmosche, the CEO of AIG, the insurance giant that received tens of billions in bailout money; and Alan “Ace” Greenberg, former chairman of Bear Stearns, the failed investment bank bought by JPMorgan Chase.

They got together at the St. Regis Hotel off Fifth Avenue to eat rack of lamb, drink and haze their newest members, who are made to dress in drag, sing and perform skits while braving the insults, wine-soaked napkins and petit fours – those fancy little frosted cakes – hurled at them by the old guard. In other words, a gilt-edged Animal House, food fight and all.

This year, the butt of many a joke were the protesters of Occupy Wall Street. In one of the sketches, the bond specialist James Lebenthal scolded a demonstrator with a face tattoo, “Go home, wash that off your face and get back to work.” And in another, a member – dressed like a protester – was told, “You’re pathetic, you liberal. You need a bath!”

Pretty hilarious stuff. The whole affair’s reminiscent of the wingdings the robber barons used to throw during America’s own Gilded Age a century and a half ago, when great wealth amassed at the top, far from the squalor and misery of working stiffs. Guests would arrive in the glittering mansions for costume balls that rivaled Versailles, reinforcing the sense of superiority and the virtue of a ruling class that depended on the toil and sweat of working people.

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The Washington-Wall Street Revolving Door Just Keeps Spinning Along

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We’ve already made our choice for the best headline of the year, so far:

“Citigroup Replaces JPMorgan as White House Chief of Staff.”

President Barack Obama with new chief of staff Jack Lew, formerly of Citigroup (Photo: AP /Charles Dharapak)

Bill Moyers & Michael Winship – When we saw it on the website Gawker.com we had to smile — but the smile didn’t last long. There’s simply too much truth in that headline; it says a lot about how Wall Street and Washington have colluded to create the winner-take-all economy that rewards the very few at the expense of everyone else.

The story behind it is that Jack Lew is President Obama’s new chief of staff — arguably the most powerful office in the White House that isn’t shaped like an oval. He used to work for the giant banking conglomerate Citigroup. His predecessor as chief of staff is Bill Daley, who used to work at the giant banking conglomerate JPMorgan Chase, where he was maestro of the bank’s global lobbying and chief liaison to the White House.

Daley replaced Obama’s first chief of staff, Rahm Emanuel, who once worked as a rainmaker for the investment bank now known as Wasserstein & Company, where in less than three years he was paid a reported eighteen and a half million dollars.

The new guy, Jack Lew – said by those who know to be a skilled and principled public servant – ran hedge funds and private equity at Citigroup, which means he’s a member of the Wall Street gang, too. His last job was as head of President Obama’s Office of Management and Budget, where he replaced Peter Orzag, who now works as vice chairman for global banking at – hold onto your deposit slip — Citigroup.

Still with us? It’s startling the number of high-ranking Obama officials who have spun through the revolving door between the White House and the sacred halls of investment banking. Sure, you can argue that it makes sense that the chief executive of the nation would look to other executives for the expertise you need to build back from the disastrous collapse of the banks in the final year of the Bush Administration.

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Cozy Relationship Between Banksters And Administrations Pays Dividends

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Ted Rall (RallBlog) | RS_News
December 1 2011

OPINION | Forget Herman Cain’s 9-9-9. The battle cry for every American ought to be 7-7-7.

7-7-7: for the $7.7 trillion the Bush and Obama Administrations secretly funneled to the banksters.

Remember the $700 billion bailout that prompted rage from right to left? Which inspired millions to join the Tea Party and the Occupy movements? Turns out that that was a mere drop in the bucket, less than a tenth of what the Federal Reserve Bank doled out to the big banks.

Bloomberg Markets Magazine reports a shocking story that emerged from tens of thousands of documents released under the Freedom of Information Act: by March 2009, the Fed shelled out $7.77 trillion “to rescuing the financial system, more than half the value of everything produced in the U.S. that year.”

The U.S. national debt is currently a record $14 trillion.

We knew that the Fed and the White House were pawns of Wall Street. What’s new is the scale of the conspiracy.

Even the most jaded financial reporters were stunned at the extent of collusion: “The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.”

Citigroup earned an extra $1.8 billion by reinvesting the Fed’s below-market loans. Bank of America made $1.5 billion.

Bear in mind, that’s only through March 2009.

“Many Americans are struggling to understand why banks deserve such preferential treatment while millions of homeowners are being denied assistance and are at increasing risk of foreclosure,” wrote Representative Elijah Cummings, a ranking member of the House Committee on Oversight and Government Reform who is demanding an investigation.

Indeed we are.

This stinks. It’s terrible economics. And it’s unbelievably cruel.

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Massachusetts Files Major Foreclosure-Abuse Lawsuit

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Tim McLaughlin & Aruna Viswanatha (Reuters) | RS_News
December 2 2011

Bank of AmericaThe Massachusetts attorney general has filed a lawsuit against five large U.S. banks accusing them of deceptive foreclosure practices, a signal of ebbing confidence that a multi-state agreement can be worked out.

Attorney General Martha Coakley said on Thursday she filed the lawsuit partly because it has been taking too long to hammer out a nationwide settlement.

For more than a year, state and federal officials have been negotiating a deal in which banks would pay billions of dollars in fines – to go toward housing relief – in exchange for legal protection against future suits.

The Massachusetts lawsuit, filed in state court in Boston, accuses Bank of America Corp, JPMorgan Chase & Co Inc, Citigroup Inc, Wells Fargo & Co and GMAC of deceptive foreclosure practices, such as using robo-signers and false documents.

“Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law,” Coakley said in a statement.

The attorney general in Iowa, Tom Miller, who is leading the negotiations for the states, said in a statement they hope to reach a settlement “soon.” He also said Coakley had indicated she is still open to joining the settlement.

“We’re optimistic that we’ll settle on terms that will be in the interests of Massachusetts,” Miller said.

However, analysts said Coakley’s lawsuit is a bad sign for banks, which hope a deal with states and federal authorities could help the industry move beyond the legal fallout that has dogged it since the peak of the financial crisis.

“I can’t say anything is dead, but it sure looks like this is a negative. The banks are going to have these suits out there for years.” said Paul Miller, a bank analyst with FBR Capital Markets.

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Too Big to Jail

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by Robert Scheer (Truthdig) | Common Dreams
November 3 2011

Can we all agree that a $1 billion swindle represents a lot of money, and the fact that Citigroup agreed last week to pay a $285 million fine to settle SEC charges for “misleading investors” demonstrates a damning admission of culpability?

Former Citigroup Chief Executive Officer Charles Prince, left, and former Treasury Secretary Robert Rubin

So why has Robert Rubin, the onetime treasury secretary who went on to become Citigroup chairman during the time of the corporation’s financial shenanigans, never been held accountable for this and other deep damage done to the U.S. economy on his watch?

Rubin’s tenure atop the world of high finance began when he was co-chairman of Goldman Sachs, before he became Bill Clinton’s treasury secretary and pushed through the reversal of the Glass-Steagall Act, an action that legalized the formation of Citigroup and other “too big to fail” banking conglomerates.

Rubin’s destructive impact on the economy in enabling these giant corporate banks to run amok was far greater than that of swindler Bernard Madoff, who sits in prison under a 150-year sentence while Rubin sits on the Harvard Board of Overseers, as chairman of the Council on Foreign Relations and as a leader of the Brookings Institution’s Hamilton Project.

Rubin was rewarded for his efforts on behalf of Citigroup with a top job as chairman of the bank’s executive committee and at least $126 million in compensation. That was “compensation” for steering the bank to the point of a bankruptcy avoided only by a $45 billion taxpayer bailout and a further guarantee of $300 billion of the bank’s toxic assets.

Those toxic assets and other collateralized debt obligations and credit default swaps were exempted from government regulation by the Commodity Futures Modernization Act, which Rubin helped design while he was treasury secretary and which was turned into law when Rubin protégé Lawrence Summers took over that Cabinet post.

In arguing that the derivatives market in housing mortgages and other debt obligations required no government oversight, Summers told Congress, “First, the parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies. … Second, given the nature of the underlying assets—namely supplies of financial exchange and other financial instruments—there would seem to be little scope for market manipulation. …”

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