Banks To Get a Tap on the Wrist

Here are some revealing figures: because of the housing boom and bust, created by the recklessness of the large banks and their associates: mortgage service companies, rating agencies, etc., there is $700 billion in negative equity in the housing market today. About 3.5 million Americans are homeless, 18.5 million homes sit vacant, and since 2007, more than 7.5 million homes have been foreclosed.

Here are some more revealing figures: last year, Wall Street lavished $147 billion on bonuses to its executives. Estimated assets of the six largest banks: $7.29-8.7 trillion (with a T) in 2010.

Meanwhile, Obama's US Attorney General Holder is pushing the 50 states' Attorneys General to sign on to a negotiated settlement with the banks, in which the banks will pay penalties to aid in restitution of the housing market they destroyed. The total penalties: $20 billion, a large figure, but compared to the amounts of money controlled by these banks, it's miniscule; compared to the damage they did, it's like swatting at a fly on a raging bull.

What makes this proposed settlement even more outrageous: the banks wouldn't pay that $20 billion out of their own pockets. "Paying" means they can raise the money by devaluing the Mortgage Backed Securities on their books (but owned by investors), not the mortgages owned by the banks. So, the banks would only pay a tiny fraction even of the bonuses they lavish on themselves, and they wouldn't even use their own money!

Besides the insignificant punishment: the important part for the banks is a guarantee against further investigations into the banks' wrongdoing. There are piles of evidence, and witnesses that crimes of fraud, theft and extortion were committed widely, against millions of homeowners and hundreds of thousands of investors. But with no more investigations, the banks can just keep on doing all the things they did before, like robosigning, fraudulent foreclosures, wrongful evictions and mis-allocation of funds.

Worse, the agreement pushed by Holder and probably supported by Obama, would grant the banks and their officers immunity from additional suits for damages: immunity for the corporations and people who drove this country into the ditch, and hugely enriched themselves in the process!

They might still be liable for criminal prosecution, but the terms haven't yet been agreed to.

No wonder New York's AG, Eric Schneiderman, and about nine other state AG's, refuse to sign on to the proposed settlement; more are considering joining them.

Why would Holder negotiate this? His former law firm works for five of the six banks. Why would Obama? Wall Street provided a large portion of his campaign funds in 2008. Super-pacs can raise unlimited amounts of money for his Republican opponent. If Obama blasts Wall Street rhetorically, but makes a deal with them, he could still raise enough to win.

So, our Roman Senators go scot-free, their dominance remains unchallenged and everyone else is impoverished--and has no recourse, just like fifth century Rome.