Fining the Banks

Goldman Sachs has evidently bought their way out of jail, as did the others, with a headline billion-dollar settlement for financial wrongdoing leading up to the 2008 financial crisis. Case closed, we are told.

  • DMB
  • Brett_McS

    Take it out of petty cash.

  • mauser 98

    …chicken feed

    Banks Launder Billions of Illegal Cartel Money While Snubbing Legal Marijuana Businesses

    Banks Financing Mexico Drug Gangs Admitted in Wells Fargo Deal

  • BillyHW

    From the top comment over at the link:

    “The big fairy tale here is that the mortgage bubble was caused by the banks. Not true. in 1968, the Democrats passed the Fair Housing Act, which established quotas for mortgages in “underserved” areas, while making the judgment that any shortfalls were due to racial discrimination, not low credit scores, low incomes, insufficient down payments or declining property values. They now had a tool to leverage the big lenders to make more minority loans, under threat of prosecution for racial discrimination. Carter used it to some extent, and Clinton used it a lot, along with another piece of Democrat social legislation, the Community Reinvestment Act. The net result was that big lenders, under threat of having to pay higher interest rates on money borrowed from the Fed, created both subprime loans(guaranteed to fail) and derivatives, in which good loans were packaged with the subprime loans and sold to other parties. As the loans started defaulting, the whole system collapsed. Not to mention that the bubble produced a lot of phony real estate values, resulting in a tidal wave of loans taken out on the overvalued properties. It was a perfect financial storm, created by Democrat social and racial engineering.

    Blaming the banks is not only wrong, but stupid.”

    • eMan14

      That is something I did not know about.

    • That history is bang on. The banks essentially had no choice but to “cheat” — it was financially unsustainable from the beginning because it was a failed socialist financial model. The fall-out from the eventual collapse included a lot of poor white people as well — everybody got screwed who signed on to it. If they want a repeat, then vote Bernie Sanders — he’ll bring the recession back in spades.

    • Norman_In_New_York

      That is only part of it. Millions of people who had maxed out their credit cards used refinancing mortgages to pay off those debts and got put into the subprime category. Then there were the property flippers, who thought values would keep rising as they took out multiple mortgages they could never afford with the expectation that they could sell the properties at a profit. Mortgage brokerages sprouted like weeds to huckster these transactions, including hustlers who cold-called their targets. They were abetted by rating agencies like Moody’s, who gave junk derivatives their highest ratings. Once property values started declining, the avalanche began. It is noteworthy that Republicans controlled the White House and both houses of Congress during the greatest growth of the bubble. Their steadfast denial of any responsibility for the crash helps explain the election of Obama and the appeal of Donald Trump to much of the party’s rank and file.

    • Brett_McS

      It’s no coincidence that Hollywood’s take on the crisis – The Big Short – (although quite a good film) completely ignores the political cause of the crisis and focusses solely on Wall Street’s reaction to it.

    • 57Dana

      The banks in effect participated in stealing taxpayers money, they share culpability. GS just admitted it and paid a fine (!), so it would be stupid to not blame the banks.

  • G

    Steal $5000 and you will go to jail.
    Steal $50,000,000,000 and they’ll never touch you. In fact you’ll have book deal and $20,000 a pop on the speaking circuit.

    • Norman_In_New_York

      Er, just ask Bernie Madoff. But he was a freelancer, which made him a safe and easy target.

      • Brett_McS

        This raises another issue which is analogous to the topic of this post:

        Bernie Madoff used a pyramid scheme to steel millions, but the real pyramid scheme – costing probably trillions in the end – is the welfare state.

  • Hard Little Machine

    Typically 64-74% of all fines go to the government and not to the parties that were harmed.