How is it possible that after near three years of economic turmoil, with possibly hundreds of TRILLIONs down the rabbit hole — not that anyone is counting or apparently can count — that the geniuses who run our economy still don’t “get” that the sh*t has already hit the fan? How many more jobs and homes have to be lost?

Michael Moore is not the only one predicting a second crash. Paul Krugman is all out words excoriating the Administration for its tepidness. Nouriel Roubini, who forecast the first meltdown, now says we are in serious danger of a “double-dip,” a lethal combo of rising inflation and deeper recession.

Woe to us if we can’t see the handwriting on so many walls.

The people in the know know that nothing has been fixed, know that all the stimuli have barely stimulated, that the new jobs bill will never generate the number of jobs that are needed, and that the banks have obscenely been raking in oodles of money thanks to all the financing taxpayers pumped into their coffers.

Even as the Obamaites finally get around to proposing a measure to break up the big banks and erode the notion of financial institutions being too big to fail, we have the New York Times telling us that Congress does not have the “appetite” — that’s the word they use — to tackle even modest financial reforms.

The “appetite” is missing. In the real world of appetites, food companies are recalling unsafe products every day because the food we eat is subjected to federal inspections. Not so for financial products.

The reason? Politics of course, but also the jillions that the financial services industry  has “invested” in bill killing, compromise-making, and just plain corrupting the legislative process.

This past week, the Roosevelt Institute sponsored a conference over at the Time Warner Center called Make Markets Be Markets, published a book of essays and heard from a who’s who in the world of influential economists and analysts who gave high powered presentations, one after another, each more lucid than the next.

There was enough brainpower in the room to save the economy but, alas, no one seems to be listening. Some business media was there collecting sound bites but the urgency of the warnings did not transcend  the limits of the bubble of financial journalism.

For a long time, I wined about being ignored in not getting heard on the economic collapse, which of course, I am, but here were people with Nobel Prizes and PhDs and track records of making millions also being dissed and pissed.

Setting the stage was Joe Stiglitz who won a Nobel Prize for his work, and who left the World Bank with disgust over what they do. Stiglitz should be in Obama’s cabinet. Instead he is one of its critics.

The presentations started off with Simon Johnson, the former chief economist the IMF taking about the DOOM CYCLE — how we are just going around in cycles without really addressing the system nature of the crisis. He writes in the NY Times and on BaselineScenario.com which you should read every day. He calls the cycle “unsustainable and crazy” and says that “the destructive power of the down-cycle will overwhelm the restorative ability of government like  it did in 1929-31.”

Translation: Here we go again.

And then there was the super-articulate Raj Date who says we have to get rid of Frannie Mae and Freddy Mac before they get rid of our housing market. His analysis was detailed and textured. His conclusion simple: “they must be eliminated.” What is the Obama Administration doing about this? Nada.

It got better when the only woman on the panel, Harvard’s Elizabeth Warren mesmerized the room. She has become a TV fixture because of how charming, honest and forthright she has been in defending consumers from the rip offs that we are all menaced by. She is the chairperson of the House oversight committee on TARP and a leading advocate of an independent consumer protection agency. She is now watching as Senator Dodd and some of his GOP cronies try to bury it in the Federal Reserve Bank, a move that many of the conference criticized in light of the Fed’s history of doing so little to protect the rights of consumers.

After all the speakers presented their arguments, there were comments by George Soros, who also criticized the economics profession for missing the crisis, and businessman Jim Chanos who finally brought the discussion around to the presence of massive fraud and criminality in our financial markets. I spoke to that issue which I have just written a book on and made a film about when I got a chance to ask a question.

All too quietly, Wall Street firms are being sued for their many transgressions. A study by Gary Null found that over $430 billion has been paid to victimized parties by Wall Street firms in over 1500 cases.

Some examples:

• Bank of America has spent $14.9 billion to settle 15 cases alleging various charges such as securities violations and mismanagement;

• Citigroup has spent over $13.9 billion to settle 12 cases alleging various charges including abusive lending practices and involvement in fraudulent activities;

• Merrill Lynch has spent $12.2 billion to settle cases involving various allegations including negligence and mismanagement of funds;

• Morgan Stanley has spent over $5 billion to settle 11 cases involving various allegations including failure to disclose material information to customers;

• Wachovia has spent over $9.5 billion to resolve allegations including misleading investors and conflicts of interest;

• UBS has spent $19.5 billion to settle 6 cases with various charges including misleading investors.

So much information is now out there but to what effect? What more do we need to know?

There is a time for research and a time for advocacy, a time to try to lobby in the suites and a time for marching in the streets. Students on US campuses and workers in Greece have been battling the effects of the crisis.

It is now time to go after the causes.

The public is open to acting. The most recent Zogby poll reports:

• “32% of U.S. adults say they have “considered moving some or all of (their) banking from a large national bank to a community bank or credit union because (they) are unhappy with the policies or behavior of large national banks.”

• 14% have moved some of their banking in the past year from a large national bank to a community bank or credit union.

• 9% of all U.S. adults have moved some of their business from large national banks as a protest.

People are pissed, far angrier than the media lets on. The lines are being drawn. That hard rain is going to fall.

News Dissector Danny Schechter is a blogger, author and filmmaker. His latest work is Plunder: The Crime of Our Time on the financial crisis as a crime story.

WASHINGTON — The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

Calling it “basically no more than five rectangular strips of paper,” Fed chairman Ben Bernanke illustrates how much “$200″ is actually worth.

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world’s largest economy.

“Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we … if we …” said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. “You know what? It doesn’t matter. None of this — this so-called ‘money’ — really matters at all.”

“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”

Read More in the Onion

Americans United for Change and American Family Voices unveiled a new television ad today as part of a ramped up coalitional effort urging Congress to pass President Obama’s financial regulatory reform plan to make Wall Street more transparent and accountable and prevent another financial crisis. The new ad comes as Citi, one of the largest recipients of taxpayer dollars, revealed how Wall Street is fully back to business as usual by announcing plans to create “the first derivatives intended to pay out in the event of a financial crisis.”

With your help, we were able to reach our Kickstarter goal. I’ve been receiving some questions on whether you can still donate, and the answer is a resounding YES!

If you donate $20 or more by February 3rd, you will receive name credit on the “Plunder” DVD and on the film’s website.

So go here to donate, and if you’re still wondering what this is all about, read this.

Wall Street is NOT too big to JAIL.

— Ralph Bernardo, The Disinformation Company

A key question at the heart of the controversial bailout of AIG is just how much money the government lost. The Federal Reserve and Treasury Department have worked to keep that number secret and to conceal who was on the winning end.

An unredacted document obtained by the Huffington Post list the damage in detail. Goldman Sachs alone, for instance, got $14 billion in government money for assets worth $6 billion at the time — a de facto $8 billion subsidy, courtesy of taxpayers.

The list was produced as part of a congressional investigation led by the House Oversight and Government Reform Committee into the federal bailout of AIG.

The Federal Reserve Bank of New York, then led by now-Treasury Secretary Tim Geithner, purchased a slew of souring assets from the world’s biggest banks for 100 cents on the dollar in November and December 2008. A scathing report by a government watchdog held Geithner responsible for the overpayments.

The New York Fed initially pressured AIG to keep the list hidden from investors, regulators and the public. When it was eventually filed with the Securities and Exchange Commission, the SEC allowed the Fed and AIG to keep the details secret. A heavily-redacted version was made public last March.

Read More: Huffington Post

Watch out, Wall Street, the Financial Crisis Inquiry Commission is going to be writing a report that is due in December.

Major U.S. banks and securities firms are on pace to pay their people about $145 billion for 2009, a record sum that indicates how compensation is climbing despite fury over Wall Street’s pay culture.

An analysis by the Wall Street Journal shows that executives, traders, investment bankers, money managers and others at 38 top financial companies can expect to earn nearly 18% more than they did in 2008—and slightly more than in the record year of 2007. The conclusions are based on an examination of securities filings for the first nine months of 2009 and revenue estimates through year-end.

The rapid comeback of pay on Wall Street, which will be on display as companies report fourth-quarter results starting with J.P. Morgan Chase & Co. on Friday, has exposed the industry to a broadening mix of proposed crackdowns, including a 10-year, $90 billion bank tax described for the first time Thursday by President Barack Obama

In detailing the tax, Mr. Obama aimed some sharp words at bankers.

“I’d urge you to cover the costs of the [financial] rescue not by sticking it to your shareholders or your customers or fellow citizens with the bill, but by rolling back bonuses for top earners,” Mr. Obama said.

Read More: Wall Street Journal

He got it right last time.

Senator Byron Dorgan, Democrat of North Dakota, was one of eight senators who stood up to oppose the repeal of the Glass-Steagall act in 1999. That repeal, which was signed into law by President Clinton exactly 10 years ago today, broke down the barriers between commercial banking and investment banking, and led to the growth of behemoth financial firms that were able to take enormous risks with impunity, because they were “too big to fail.”

“I think we will in 10 years’ time look back and say we should not have done this,” Dorgan said back then. The video of his speech has become something of a cult favorite for wonks — ten years, a $700 billion bailout and a major financial crisis later.

It’s a new week, a new year, and some, erroneously believe a new decade. What’s not new is the stranglehold the banks have on our economy, quietly stashing billions for more bonuses, while still restricting the flow of credit. Bad loans have been supplanted by no loans.

Writers on the left continue to go after one bankster — the one we love to hate: Goldman Sachs, which has become the poster child for profiteering and even serving bad coffee in their cafeterias. Most ignore the rest of the avaricious industry which is still volatile with big pockets of insolvency and dependence of government bailout funds.

While the media has recently focused on the terror threat posed in Detroit, the terrifying reality in Detroit is generally ignored. The Associated Press reports:

DETROIT – One measure of how tough times are in the Motor City: Some of the offenders in jail don’t want to be released; some who do get out promptly re-offend to head back where there’s heat, health care and three meals a day.

“For the first time, I’m seeing guys make a conscious decision they’ll be better off in prison than in the community, homeless and hungry,” said Joseph Williams of New Creations Community Outreach, which assists ex-offenders.”

With TV pumping out a steady diet of football, foolishness and constantly shifting breaking news, the people broken by the economic crisis are largely being ignored.

Read more of Danny Schechter’s article on the Huffington Post

“I used to think of Wall Street as a financial center.
I now think of it as a crime scene.”
– Filmmaker Danny Schechter, Plunder (2009)

I am an old-fashioned “follow-the-money” journalist. As I’m writing this, most economists have learned to downplay fear and panic and up-play the “resilience” of the market. It’s a belief that all we need is confidence and then, all will be right with the world. Sadly, journalism has gone along with this charade by first denying the crisis and then avoiding investigating its architects and beneficiaries.

Three years ago, by choosing to be an “investigative” journalist, I made the film In Debt We Trust, with the idea in mind that I was examining “America before the Bubble bursts” (the subtitle of that film). My hope was I could transcend any political, partisan quibbles over the issue by warning of a credit crisis that would hurt people regardless of their politics. My effort was to examine how our economy had been restructured away from one that “makes things” into a service culture where credit card companies and mortgage firms finance our lifestyles—even when we can not afford them.

I did discover and illustrate in this film how subprime loans were ensnaring poor people, resulting in displacement and massive foreclosures. I even turned my continuing concern into a book called Plunder: Investigating Our Economic Calamity. In this, I warned of greater trouble ahead. The book came out in 2008, a week before Lehman Brothers went bankrupt.

After the so-called [stuff] hit the fan, what really tormented me was how poorly and superficially these issues were being covered by the mainstream media. Today more people, myself included, can confidently argue that Big Media was complicit in the crisis—by not reporting on what was really going on, and more so, taking billions in advertising revenues from dodgy lenders and greedy credit-card companies. The media was, without question, part of the problem.

And lately, the greatest media insult to inquiry came from Time magazine, by honoring Federal Reserve Chairman Ben Bernanke as 2009’s “Man of the Year”—not for bringing the crisis to an end but for ensuring it didn’t get as bad as it might have been. Never mind Bernanke’s refusal to act on the subprime, or rather “subcrime,” crisis when he had the chance to.

As I continued to re-examine my own view of this crisis, I asked myself and others informed on the subject—how could this happen?!? I began looking at the possibility that it was really a crime story, not just a business problem.

Not too long after I took this approach, “Ponzi King” Bernie Madoff surfaced as a bona-fide, white-collar criminal running a $65 billion-dollar scam. Madoff’s crimes started decades before our current global financial crisis, but his admission that “I knew what I was doing was wrong, indeed criminal” helped to foster my belief that this was crime, and not some “natural” economic event.

It was at this point I had enough conviction to start working on a documentary titled Plunder: The Crime Of Our Time—to make the case that our media and even our legal system are both ignoring. My approach is not to go after “bad men,” but a rotten system of fraudulent mortgages that first ripped off homeowners and then were bundled, securitized and resold with false values to banks and financial institutions. In the end, this gigantic complicated mess was insured by companies like AIG for the sole reason that they could be leveraged and borrowed against (in other words, to make tons of money).

This whole Three-Card Monte game ended up costing trillions of dollars to hundreds of millions of Americans who had no say in how this corrupt system really worked. Vanity Fair editor Graydon Carter aptly charged: “Never before have so few done so much to so many.” This is why I describe my current documentary as the “Crime of Our Time.”

My partners at GlobalVision and I have almost finished the film, and I’m very thrilled that The Disinformation Company is going to release Plunder in stores and online in April 2009. But before that can happens I need your help…

Plunder desperately needs a sound mix, color correction, the creation of DVD extras and authoring, all of which costs real money. The Disinformation Company is kicking in some of the funds, but with $3,000 more, we will be able to deliver the project, as we’d like to, for release.

If the guilty parties on Wall Street and in Washington are to be brought to justice and serve jail time, we must put maximum pressure on lawmakers, regulators, and attorney generals while the paper trail of evidence is still hot.

The recession may have been artificially-shortened and sweetened by the stimulus package, but thousands of people are still losing their jobs and their homes as a result of the fraudulent bailout, every day.

Please join me in pushing for a JAILOUT, not another bailout, for these criminals.

With as little as $20 you can really make a difference. Depending on your pledge I’ll give you anything from a free DVD of the finished film, to lunch with me on Wall Street (where I will gladly share my experience of making this film).

Thank you for your support,

Danny Schechter
News Dissector, Mediachannel.org

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see the chart here. Below, a guide to the pieces of the puzzle:

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government’s potential exposure from the PPIF is between $500 million and $1 trillion [PDF].

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.

To see how it all adds up, read it all on Before It’s News

There has been plenty of evidence that firms like Goldman Sachs have had such huge profits that their bonus payouts may be at all-time highs.

The federal government has systematically begun to control bank pay packages. The Treasury “pay czar” is effectively controlling compensation at companies which still owe TARP money. The Fed is pressuring other large financial firms to tie pay to risk.

None of those efforts seems to be working well, because bankers are ignoring the signals from Washington.

A new compensation survey described in the Wall Street Journal predicts that Wall Street incentive pay will rise 40% this year. For those in the fixed-income part of the industry, the increase could be closer to 60%.

Data about pay packages will be available, in some cases, as banks release their proxies. It is safe to say that the study and other data from Wall Street show that being a financier was very rewarding this year.

What is not so clear is whether there will be a “clash of the titans” of sorts between the CEOs of Wall Street’s biggest firms and Congress…

More on MSN Money

Some of New York’s biggest companies, including Wall Street giants Goldman Sachs and Citigroup, received doses of swine flu vaccine for at-risk employees, drawing criticism that the hard-to-find vaccine is going first to the privileged.

Hospitals, universities and the Federal Reserve Bank also got doses of the vaccine for employees who need it the most, such as pregnant women or chronically ill workers, according to the city’s health department.

In order to receive the vaccine, companies had to have their own medical staff. Distributing large doses of the vaccine to such businesses is “a great avenue for vaccinating people at risk,” said Jessica Scaperotti, spokeswoman for the city Department of Health and Mental Hygiene.

But critics said Wall Street firms should not have access to the vaccine before less wealthy Americans. “Vaccines should go to people who need them most, not people who happen to work on Wall Street,” Democratic Sen. Chris Dodd of Connecticut said Thursday.

“Wall Street banks have already taken so much from us. They’ve taken trillions of our tax dollars. They’ve taken away people’s homes who are struggling to pay the bills,” union official John VanDeventer wrote on the Web site of the 2 million-member Service Employees International Union. “But they should not be allowed to take away our health and well-being.”

Meanwhile, the director of the federal Centers for Disease Control and Prevention sent a letter Thursday to state and local health departments asking them to review their distribution plans and make sure the vaccine is getting to high-risk groups.

More on the AP via Google News

Lately I have been using the phrase “Corporate Communism” on my television show. I think it is an especially fitting term when discussing the current landscape in both our banking and health care systems.

As Americans, I believe we reject communism because it historically has allowed a tiny group of people to consolidate complete control over national resources (including people), in the process stifling competition, freedom and choice. It leaves its citizens stagnating under the perpetual broken systems with no natural motivation to innovate, improve services or reduce costs.

Lack of choice, lazy, unresponsive customer service, a culture of exploitation and a small powerbase formed by cronyism and nepotism are the hallmarks of a communist system that steals from its citizenry and a major reason why America spent half a century fighting a Cold War with the U.S.S.R.

And yet today we find ourselves as a country in two distinctly different categories: those who are forced to compete tooth and nail each day to provide value to society in return for income for ourselves and our families and those who would instead use our lawmaking apparatus to help themselves to our tax money and/or to protect themselves from true competition.

Read more of Dylan Ratigan’s article in the Huffington Post, and here’s a clip from his MSNBC program below:

Pledge via feedburner here for the candidates of your choosing. Help spread the word.

Other consumers may have no choice – Citibank has been closing some credit card accounts without reason or warning, damaging their customers credit ratings.

I cut-up my credit cards last night.

The Huffington Post reports:

Derivatives is one of the dirty words of the financial crisis. Though these often-risky bets were blamed by many for helping fuel the credit crunch and the downfall of Lehman Brothers and AIG, it seems that Wall Street has yet to learn its lesson.

U.S. commercial banks earned $5.2 billion trading derivatives in the second quarter of 2009, a 225 percent increase from the same period last year, according to the Treasury Department.

More than 1,100 banks now trade in derivatives, a 14 percent increase from last year. Four banks control the market: JPMorgan Chase, Goldman Sachs, Bank of America and Citibank account for 94 percent of the total derivatives reported to be held by U.S. commercial banks, according to national bank regulator the Office of the Comptroller of the Currency.

The credit risk posed by derivatives in the banking system now stands at $555 billion, a 37 percent increase from 2008. “By any standard these [credit] exposures remain very high,” Kathryn E. Dick, the OCC’s deputy comptroller for credit and market risk, said in a statement.

The complex financial instruments, which take the form of futures, forwards, options and swaps, derive their value from an underlying investment or commodity such as currency rates, oil futures and interest rates. They are designed to reduce the risk of loss for one party from the underlying asset.