[RD] 1,000,000 Obamas

[metalhead]

The hard stuff to prove...which really amounts to which humans become the human sacrifices...would only not bring the institutions to a halt if everyone working in those institutions was willing to cooperate in keeping them operating during the selection process. How much do you count on people just going on doing their jobs knowing that some of them are going to be thrown to the wolves? In a more likely reality the rats going over the side would have sunk the ship as they went.

You have a great deal more respect for the public than I do, by the way. As I recall, the vast majority of the public was more inclined to just pretend it never happened than to have a show trial and blame some designated scapegoats. Their "public trust" wouldn't have come through any better from dragging things out.

Maybe bringing those institutions to a halt is good for the country anyways. The job of bank executives is to figure out how best to extract wealth from people and the economy and turn it into profit for the bank. That's it. They contribute nothing of worth. If what you are saying is true, that is an added bonus.

People on their own may have moved on, but there was an orange sack of crap waiting to come in and remind them, among others, about how institutions failed to protect them. That's the thing - most people haven't been stewing about it for a decade, but that doesn't mean that you can't still make a lot of hay with it. Which most definitely is going to erode public faith in institutions, even if "the public" needs to be led to that conclusion.

 

[Gori the Grey]

As I recall, the vast majority of the public was more inclined to just pretend it never happened than to have a show trial and blame some designated scapegoats.

I'm not sure about this. To Lex's claim that the failure to pursue any kind of trial, we have what Farm Boy tried constantly to tell us during the campaign about people in his neck of the woods. Can't-be-bothered-to-enforce-the-laws Obama is part of what made people throw up their hands and what-the-hell it for Openly-Lawless Trump.

 

[Timsup2nothin]

I'm not sure about this. To Lex's claim that the failure to pursue any kind of trial, we have what Farm Boy tried constantly to tell us during the campaign about people in his neck of the woods. Can't-be-bothered-to-enforce-the-laws Obama is part of what made people throw up their hands and what-the-hell it for Openly-Lawless Trump.

Sure. But do you really believe that if they hadn't found "Can't be bothered to enforce the laws" Obama they'd have stopped looking? They wouldn't have found "armed the cartels through Fast and Furious" Obama or "let Hillary off the hook for Benggggghhhhhhazzzzzi" Obama or "Kenyan Communist Muslim" Obama or "uppity racist white hating" Obama or "mismanaged Katrina and left people to die" Obama or some other Obama demon that would have produced the same result?

 

[Lexicus]

If what you are saying is true, that is an added bonus.

It's not. We know it's not because there have been any number of investigations on the banks that patently have not "ground them to a halt." Those investigations haven't turned up criminal convictions not because there is no evidence of criminal wrongdoing but because DoJ's practice has been to encourage self-regulation by using a lighter touch. The most they'll do is slap the bank with a civil suit which results in a monetary payment that is treated by the criminals as a business expense.

 

[Timsup2nothin]

It's not. We know it's not because there have been any number of investigations on the banks that patently have not "ground them to a halt." Those investigations haven't turned up criminal convictions not because there is no evidence of criminal wrongdoing but because DoJ's practice has been to encourage self-regulation by using a lighter touch. The most they'll do is slap the bank with a civil suit which results in a monetary payment that is treated by the criminals as a business expense.

Unfortunately those investigations have not, ever, produced the kind of evidence required to move from "the bank did this (regulatory offense)" to "this individual did that (criminal act)." That's the investigation that would grind everything to a halt as individuals scurried to cover their own assets.

Are you advocating for "hold some particular high ranking executive criminally liable for regulatory crimes committed by the organization without any evidence tying said executive individually to the commission of any particular crime, based on their position? Or should we randomly choose a stockholder, through some sort of lottery process based on shares? Or since all shareholders technically "own the company" maybe we should just jail them all? Or should we move the opposite direction, call the regulatory violation a "criminal conspiracy" and just jail every employee from CEO on down to the janitors?

 

[Lexicus]

Unfortunately those investigations have not, ever, produced the kind of evidence required to move from "the bank did this (regulatory offense)" to "this individual did that (criminal act)." That's the investigation that would grind everything to a halt as individuals scurried to cover their own assets.

No, but, see, you're just wrong about this. I know you're wrong because William K Black, the former prosecutor who made his living prosecuting exactly these kinds of crimes, wrote that there was enough evidence introduced in testimony to the FCIC (Financial Crisis Inquiry Commission) to charge people with crimes, even without reckoning the kind of evidence that was uncovered by the actual civil investigations.

Are you advocating for "hold some particular high ranking executive criminally liable for regulatory crimes committed by the organization without any evidence tying said executive individually to the commission of any particular crime, based on their position? Or should we randomly choose a stockholder, through some sort of lottery process based on shares? Or since all shareholders technically "own the company" maybe we should just jail them all? Or should we move the opposite direction, call the regulatory violation a "criminal conspiracy" and just jail every employee from CEO on down to the janitors?

I'm talking about holding the banks' controlling officers criminally responsible for designing a scheme in which the bank's regular-level employees were induced by their own compensation structures to commit serial fraud. They should also be held criminally responsible for, in essence, blackmailing appraisers and insurers into committing fraud.

Incidentally, the shareholders were victims of this fraud.

 

[Gori the Grey]

Sure. But do you really believe that if they hadn't found "Can't be bothered to enforce the laws" Obama they'd have stopped looking? They wouldn't have found "armed the cartels through Fast and Furious" Obama or "let Hillary off the hook for Benggggghhhhhhazzzzzi" Obama or "Kenyan Communist Muslim" Obama or "uppity racist white hating" Obama or "mismanaged Katrina and left people to die" Obama or some other Obama demon that would have produced the same result?

Again, I'm going by what I heard Farm Boy saying: that this in particular, elites being held too important for them to be punished for the consequences of their ruinous greed, is what stuck in their craw.

I ponder endlessly on your questions. Was it all just fundamentally racism and the economic stuff just a cover for that? But Iowa is a data-point. They went twice for Obama and then for Trump. Obama was black when he elected him those two times; that didn't seem to be a block for them. There's something he actually did, I therefore conclude, that sent them into the arms of Trump.

 

[Timsup2nothin]

No, but, see, you're just wrong about this. I know you're wrong because William K Black, the former prosecutor who made his living prosecuting exactly these kinds of crimes, wrote that there was enough evidence introduced in testimony to the FCIC (Financial Crisis Inquiry Commission) to charge people with crimes, even without reckoning the kind of evidence that was uncovered by the actual civil investigations.

Charging means an investigation starts, not that it ends. Getting convictions is a whole other ball game. At trial, in an incredibly complex webwork of corporate decision making eliminating the reasonable doubt that this specific individual was originating and not just going along is hard.

And the shareholders as victims isn't relevant. They are still ownership, and if anyone is criminally liable for the behavior of a company wouldn't ownership be the obvious first choice?

 

[Timsup2nothin]

Again, I'm going by what I heard Farm Boy saying: that this in particular, elites being held too important for them to be punished for the consequences of their ruinous greed, is what stuck in their craw.

I ponder endlessly on your questions. Was it all just fundamentally racism and the economic stuff just a cover for that? But Iowa is a data-point. They went twice for Obama and then for Trump. Obama was black when he elected him those two times; that didn't seem to be a block for them. There's something he actually did, I therefore conclude, that sent them into the arms of Trump.

Actually did, or was actually blamed for?

 

[Lexicus]

And the shareholders as victims isn't relevant. They are still ownership, and if anyone is criminally liable for the behavior of a company wouldn't ownership be the obvious first choice?

It is relevant. These are not crimes committed by the organization, they are crimes committed by agents of the organization against the organization.

 

[Gori the Grey]

Actually did, or was actually blamed for?

I'm not sure I understand. If it was going to be done, it was going to be done at his initiative. That's the point in question in this discussion, isn't it: should he or shouldn't he?

I don't fault really fault him, because I know that in the same position, I'd have been weak and done the same thing.

 

[Timsup2nothin]

It is relevant. These are not crimes committed by the organization, they are crimes committed by agents of the organization against the organization.

You'd be very hard pressed to prove criminal intent. The organizations enjoyed tremendous profits...until they didn't. A "these investments didn't work out in the long run but seemed to make sense at the time" defense would be very hard to crack.

 

[Timsup2nothin]

I'm not sure I understand. If it was going to be done, it was going to be done at his initiative. That's the point in question in this discussion, isn't it: should he or shouldn't he?

I don't fault really fault him, because I know that in the same position, I'd have been weak and done the same thing.

Once again, since there is no sure way to know how the counterfactual recovery would have gone, I might consider that cautious but won't call it weak.

 

[Lexicus]

You'd be very hard pressed to prove criminal intent. The organizations enjoyed tremendous profits...until they didn't. A "these investments didn't work out in the long run but seemed to make sense at the time" defense would be very hard to crack.

Yes, but this is the whole point. A control fraud scheme creates massive short-term profits through accounting gimmicks, and the losses that follow are inevitable. And it would be child's play to show that, if the mortgage data had actually been reviewed (which it wasn't, purposely, and every mortgage not underwritten and then bundled into a security and then sold and resold represents multiple felonies at every stage of the process), those losses were entirely predictable.

It's not hard to prove criminal intent because the only reason anyone would do 90% of what the banks did in the financial crisis is to commit crimes. You don't issue liars' loans unless you intend to commit fraud. You don't buy securities that are based on liars' loans without even bothering to review the mortgage data that would demonstrate the presence of liars' loans unless you are going to commit fraud.

 

[Timsup2nothin]

Yes, but this is the whole point. A control fraud scheme creates massive short-term profits through accounting gimmicks, and the losses that follow are inevitable. And it would be child's play to show that, if the mortgage data had actually been reviewed (which it wasn't, purposely, and every mortgage not underwritten and then bundled into a security and then sold and resold represents multiple felonies at every stage of the process), those losses were entirely predictable.

Actually, they weren't predictable. If property values had continued to climb forever the losses wouldn't even have occurred since the collateral value would have been sufficient to provide offset.

 

[Lexicus]

Actually, they weren't predictable. If property values had continued to climb forever the losses wouldn't even have occurred since the collateral value would have been sufficient to provide offset.

LOL, property values were only climbing because there was an epidemic of appraisal fraud! The appraisers began circulating a petition in 2000 (!) stating that this was occurring, that fraudulent appraisals were being demanded by the banks and that appraisers who insisted on honest appraisals were being blacklisted.

 

[Timsup2nothin]

LOL, property values were only climbing because there was an epidemic of appraisal fraud! The appraisers began circulating a petition in 2000 (!) stating that this was occurring, that fraudulent appraisals were being demanded by the banks and that appraisers who insisted on honest appraisals were being blacklisted.

So? "They were only climbing because..." is a direct admission that they were climbing. Were "fraudulent" appraisals "being demanded"? Sure, by market forces. It is widely known in the industry that every bank wants as high an appraisal as they can justifiably get. Natural market forces would tend to work against unreasonably conservative appraisers. But where is this grand cabal that forced appraisers to go higher than could really be justified? How do you prove that this cabal was somehow communicating such demands, as opposed to successful appraisers just knowing that they needed to compete by making the highest appraisal that could be justified?

A memo telling an underling to "get the highest appraisal you can" isn't going to do it, because as stated that's what everyone already knows the bank wants.

A claim from a disgruntled appraiser that "even though many other appraisers provide higher values than me the only reason I'm going out of business is blacklisting by a conspiracy and has nothing to do with the possibility that I just might be wrong and everyone else might be right" isn't going to prove anything about anyone but the signatory, and all it proves about them is that they are unbearably arrogant.

Don't get me wrong, I agree that the outcome certainly seems to justify some sort of dramatic action...but that doesn't make a case in criminal court.

 

[Lexicus]

So? "They were only climbing because..." is a direct admission that they were climbing. Were "fraudulent" appraisals "being demanded"? Sure, by market forces. It is widely known in the industry that every bank wants as high an appraisal as they can justifiably get. Natural market forces would tend to work against unreasonably conservative appraisers. But where is this grand cabal that forced appraisers to go higher than could really be justified? How do you prove that this cabal was somehow communicating such demands, as opposed to successful appraisers just knowing that they needed to compete by making the highest appraisal that could be justified?

The petition was eventually signed by 11,000 appraisers, well over 1 in 10 in the US.

Additionally, we can quote from the FCIC report:

One 2003 survey found that 55% of the appraisers had felt pressed to inflate the value of homes; by 2006, this had climbed to 90%. The pressure came most frequently from the mortgage brokers, but appraisers reported it from real estate agents, lenders, and in many cases borrowers themselves. Most often, refusal to raise the appraisal meant losing the client

And commentary from Black:

A clarification is in order. The “client” was rarely the buyer because, for obvious reasons, we do not allow the borrower to select the appraiser. Even moderately-sized lenders have vastly greater power to successfully extort appraisers than does any residential borrower. It may be true that “many” borrowers tried to “pressure” appraisers to increase the appraisal, but the overwhelming source of such pressure was from lenders and their agents and virtually all of the successful pressure came from lenders and their agents.

And more from the report:

Nevertheless, in 2007 the New York State attorney general sued First American: relying on internal company documents, the complaint alleged the corporation improperly let Washington Mutual’s loan production staff “hand-pick appraisers who bring in appraisal values high enough to permit WaMu’s loans to close, and improperly permit[ted] WaMu to pressure . . . appraisers to change appraisal values that are too low to permit loans to close.

In short, it seems there are ways to detect such cabals and you could easily prove that it was communicating such demands via testimony from appraisers.

A claim from a disgruntled appraiser that "even though many other appraisers provide higher values than me the only reason I'm going out of business is blacklisting by a conspiracy and has nothing to do with the possibility that I just might be wrong and everyone else might be right" isn't going to prove anything about anyone but the signatory, and all it proves about them is that they are unbearably arrogant.

Given what actually happened, that the property values were patently inflated, it seems to me that any attempt to make this kind of argument would be laughed out of court.

Don't get me wrong, I agree that the outcome certainly seems to justify some sort of dramatic action...but that doesn't make a case in criminal court.

It really doesn't seem like you do

As for what case can be made in criminal court...again, I'll take the opinions of bank whistleblowers and former financial prosecutors over your opinions. Sorry. Pursuant to that, the whole article from Black I linked above is worth reading.

 

[Timsup2nothin]

Given what actually happened, that the property values were patently inflated, it seems to me that any attempt to make this kind of argument would be laughed out of court.

This, in a nutshell, is the flaw in your case. Any argument based on "given what happened" creates an immediate demand for proof that the accused knew it would happen, or at the very least a reasonable person in their position would have known. When you say "the property values were patently inflated" the counter is that "the market subsequently shifted but they were valid at the time," and all the crying and gnashing of teeth doesn't remove that reasonable doubt.

Sure, hyper conservative appraisers who consistently gave falsely low appraisals put themselves out of business. Boohoo for them. But the fact that the market did subsequently shift doesn't make them retroactively prescient.

 

[Lexicus]

This, in a nutshell, is the flaw in your case. Any argument based on "given what happened" creates an immediate demand for proof that the accused knew it would happen, or at the very least a reasonable person in their position would have known. When you say "the property values were patently inflated" the counter is that "the market subsequently shifted but they were valid at the time," and all the crying and gnashing of teeth doesn't remove that reasonable doubt.

If this (appraisal fraud) were the only crimes committed, you might be right...but this was only a small part of what happened.

Sure, hyper conservative appraisers who consistently gave falsely low appraisals put themselves out of business. Boohoo for them. But the fact that the market did subsequently shift doesn't make them retroactively prescient.

Yeah, so the fact that 90% of appraisers reported feeling pressured to inflate property values...in 2006...means...nothing to you? Nothing at all? Do you think it would mean nothing to a court, particularly coupled with specific testimony regarding the "handpicking" of appraisers who would play ball by lenders?