William Black Slams Financial Commission For Failing to Use the “F” Word (Fraud) … “Elites Can Now Commit White Collar Crime with Near Impunity”

 

I’ve previously noted that the Financial Crisis Inquiry Commission was a whitewash. See this and this.

Tuesday, senior S&L regulator William K. Black slammed the FCIC for failing to call out fraud. As Black told Real News:

  • The Commission was unwilling to use the “F” word (“fraud”)
  • “They’ve drawn the picture of the horse, but they refuse to call it a ‘horse'”
  • The Commission’s conclusions could only have occurred with fraud by the most senior ranks of the big banks
  • They made millions of liars loans, with an incidence of fraud of 90%
  • There was an epidemic of appraisal fraud. Only lenders and their agents can induce appraisals to commit fraud. They deliberately inflate appraisals to make the loans look safer, and then then to sell the loans for a higher price. Attorney General Cuomo found that Washing Mutual had a “black list” of appraisers they wouldn’t use. Appraisers got on the black list by refusing to inflate appraisals
  • Nobel price winning economist George Akeroloff showed that if banks (1) grow like crazy, (2) Make bad loans at premium yields, (3) use high leverage and (4) keep small loan loss reserves, it is a “sure thing” that there will be record profits on paper which will make the top executives rich, and cause the bank to fail
  • Indeed, we’ve known of this dynamic for “hundreds of years”
  • The only reasons you’d have millions of liars loans was to create fictional accounting income and loot the institutions
  • There were 1,000 felony convictions before the S&L commission made its findings. In addition, had several thousand major enforcement actions by regulators. And nearly 1,000 civil suits
  • By contrast today, there have been zero criminal prosecutions of any senior lending officers that made liars loans at major institutions, next to no enforcement actions, and next to no civil suits. Because the prosecutions have not occured, the public records have not been developed. And so the FCIC knows 1/100th as much about this crisis as the S&L commission knew about S&L crisis
  • This crisis is maybe 40 times as large as S&L crisis. However, the number of FBI agents assigned to look at white collar crime is much smaller than during the S&L period
  • “The elites can now commit white collar crime with near impunity”
  • The result is catastrophic to our nation. And not just our nation, but nations worldwide.

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