(PBS) What Happens to Lady Whistleblowers- The Derivatives Scandal of 1998
Mort Zuckerman
scientifi...@ostp.gov, pkru...@princeton.edu,
Stanle...@fiu.edu, emcsw...@niaid.nih.gov, afa...@niaid.nih.gov,
Spin...@yahoogroups.com, kshe...@calea.org, fit...@gmail.com,
patrick.f...@usdoj.gov, model...@sbcglobal.net,
jdr...@nejm.org, let...@courant.com, Jgerb...@cdc.gov,
michae...@po.state.ct.us, con...@po.state.ct.us, executive-
edi...@nytimes.com, managin...@nytimes.com, news-
ti...@nytimes.com, biz...@nytimes.com, for...@nytimes.com,
nati...@nytimes.com, dv...@cdc.gov, brigidc...@optonline.net,
tr...@hotmail.com, illino...@aol.com, jle...@courant.com,
tinaj...@yahoo.com, jhorn...@fff.org, thomas...@usdoj.gov,
thoma...@po.state.ct.us, kur...@washpost.com,
georg...@washpost.com, p...@allegorypress.com,
commissi...@po.state.ct.us, brans...@comcast.net,
vts...@comcast.net, o...@po.state.ct.us, freet...@charter.net,
scott....@po.state.ct.us, govern...@po.state.ct.us,
attorney...@po.state.ct.us, randall...@usdoj.gov,
Robert....@yale.edu, edi...@greenwich-post.com,
harol...@yale.edu, sedm...@nswbc.org, rrmcg...@aol.com,
fr...@nytimes.com, dpr...@stmartin.edu
Cc: fra...@ucia.gov, dr-ahma...@president.ir,
eugener...@washpost.com, afa...@niaid.nih.gov,
bmi...@newstimes.com, tr...@hotmail.com, rast...@aol.com,
billc...@gmail.com, amcg...@rms-law.com, rjmu...@aol.com,
paulcrai...@yahoo.com, sidney_b...@yahoo.com,
criminal...@usdoj.gov, karla.d...@usdoj.gov,
christophe...@usdoj.gov, richar...@yale.edu,
harol...@yale.edu, james.p...@yale.edu, inq...@aldf.com,
ly...@idsociety.org, meganm...@theatlantic.com
Subject: (PBS) What Happens to Lady Whistleblowers- The Derivatives
Scandal of 1998
Date: Nov 19, 2009 6:40 AM
http://www.pbs.org/wgbh/pages/frontline/warning/view/
Brookesly Born
Lady lawyer who blew the whistle
on Derivatives in 1998 gets bagged
by the Fed gang of Greenspan and his
cronies.
Blogged about by Krugman yesterday:
http://krugman.blogs.nytimes.com/2009/11/18/the-aig-report/?scp=2&sq=Krugman%20&st=cse
AIG was part of the Israeli-Lyme
cabal:
http://www.actionlyme.org/ALDF_BOARD.htm
(Who the hell *are* these ^^^ people?
Oh, a self-answering question.)
= = =
http://krugman.blogs.nytimes.com/2009/11/18/the-aig-report/?scp=2&sq=Krugman%20&st=cse
November 18, 2009, 4:21 am
The AIG report
At one level, there’s not much news in the SIGTARP (YHTMAAAIYP) report
on the AIG bailout: officials asked bankers to take a haircut, bankers
said Ni!, and that was that. But the report has renewed the debate
over whether officials could have extracted something. I say yes.
Yes, you can make the legal argument: the TARP isn’t a bankruptcy
court, so the Feds had only two choices: let AIG go into bankruptcy,
with possibly disastrous consequences, or pay up its contracts in
full.
But Wall Street doesn’t work like that, and never has.
Big financial institutions are a small club, with a shared interest in
sustaining the system. Ever since the days of JP Morgan it has been
standard practice, in times of crisis, to get major players together
in a room and get them to forgo short-term profit maximization on
behalf of the industry interests. It happened in the Panic of 1907; it
happened in the Latin American debt crisis of the 80s; it happened in
the LTCM bailout, which was financed by private firms, not the feds.
Also, individual banks are in a long-term relationship with the public
and the government. They have an interest in preserving that
relationship. The Epicurean Dealmaker offers an imaginary speech that
Tim Geithner an anonymous government official could have given:
[T]hose people and institutions in this room which did not help
us, which put their own narrow personal and corporate interests before
the interests of this nation and its people, will be remembered as
well.
And let me tell you something, gentlemen, banker to banker: you do
not want to be on that list. That list will be a world of pain. That
list will be Death.
Indeed. Bear Stearns famously refused to participate in the rescue of
LTCM — and it’s widely believed that the lingering bad feelings from
that exercise in free riding had a lot to do with the firm’s demise
last year.
So could the feds have negotiated a haircut? Yes. It might not have
been that much money, but it would have had a lot of symbolic
importance. And that matters.
Brad DeLong says that the loss of public trust due to the kid-gloves
treatment of bankers has raised the probability of another Great
Depression, because the public won’t support another round of bailouts
even if it becomes desperately necessary. I agree — but I think the
bigger cost is that we’ve greatly increased the chance of a Japanese-
style lost decade, with I would now give roughly even odds of
happening. Why? Because bank-friendly policies have squandered public
trust in all government action: try talking to the general public
about stimulus, and it’s all confounded in their minds with the deeply
unpopular bailouts.
By itself, the AIG story would be damaging enough. But it’s part of a
pattern — and that pattern has ended up undermining the economy’s
prospects, big time.
"[Real] scientists are *fiercely* independent. That's the good
news."-- NIH's Top Fool, Anthony Fauci