Thursday April 24, 2014
Still Raising The Bars (Instead Of Being Behind Them)Bill Annett Salem-News.com
(DAYTONA BEACH, FL) - Neither. And I'll tell you why. But first, here's a little story from the annals of Canadiana, an illustration of what passes for justice in that red Mercatorian blob to the North of us, which the average American thinks consists of nothing but Mounties, Eskimos and Montreal night clubs. This bit of colonial law - as diluted by social workers - is a microcosm if you will - and even if you won't - of the law west of the East River. I.e. Wall Street.
A few years back, 1982 to be exact, an enterprising child rapist named Clifford Olsom conned the RCMP into paying him $100,000 (actually as sustenance for his wife and kiddies, while he was taking a sabbatical in the slammer) in return for which he would tell the cops where the bodies were buried - the 11 kids he had raped and murdered.
They did, and he did, after which he toddled off to a five-star prison, where he divided his time between acquiring a law degree on the taxpayers, and drafting his speech for the parole board, which was his due after 25 years (a little more than two years for each murder). That hearing never convened, thanks to his untimely (but widely cheered) death from colon cancer (allegedly) about a year ago. One hopes that instead the actuality had to do with the boys in the prison yard and that old stockade gag about having fallen down a slight of stairs.
And for at least the last six years, he had been collecting Canada's munificent Pension Plan and Old Age Security - oh, 15 grand a year - not the moon but not bad for a lifer.
Sound familiar, American students? It should. Because although it's small potatoes by comparison, it's close to the same playbook we've thrilled to as spectators of what's gone down on Wall Street in recent years, with the exception that here the perps are still at large and making even more money than ever - in fact, they're still stacking the deck.
In the American version, bigger and classier, of course, the Mounties' part is played by Hank Paulson, Tim Geitner and two Presidents, while in the role of the single perp we substitute Goldman Sachs, Credit Suisse, JPMorgan Chase and the rest of the Boyz on the Street.
The reasoning behind the payola (since every body knows where the bodies are buried) goes something like this: it's as if the Attorney General were to say, "I know these Mafia guys are guilty as hell, but if we were to prosecute it would be catastrophic for vast stretches of Bergen County, N.J. and much of the Lower East Side south of 34th Street. It would mean the end of the olive oil market as we know it, and our diplomatic relations with Sicily would be set back 50 years."
Is this, the heist of the Century, being eagerly debated by those two tired campaigners for truth and justice - Obama and Romney - in this never-ending political soap opera, where Obama is the repetitive story line and Romney is the commercial? Nary a word.
Writing in the New Yorker (November 5), Greg Smith, a graduate cum disgust from Goldman Sachs, like a priest disillusioned by the Vatican's criminality, puts it like this:
Two years after the enactment of Dodd-Frank "financial reform" legislation, to which Obama points with pride and Romney promises to dismantle on his first day in the Oval Office(although on alternate days he insists he won't), the fact is that barely a third of Dodd-Frank's regulatory provisions have been finalized and three quarters of its imposed deadlines have been missed. Meanwhile, Wall Street lobbyists, says Smith, have spent a paltry $300 million "trying to kill - or at least insert loopholes into - key rules that would ensure greater transparency in derivatives and bar banks from betting against their own customers."
Five of the nation's biggest banks are larger than they were when all the desperate hand-wringing was going on because the sky was falling and the end was nigh. Something like Clifford Olson, who never had it so good just prior to his dubious death. Except that Wall Street's cancer is not endemic, but lingers in the society that was infected.
And as the sun sinks slowly in the West on Election Eve, Treasury Department staffers reach the end of their term and slouch toward Goldman Sachs (like Auden's "rough beast," its hour come round at last) to be born again. And JPMorgan Chase, having lobbied heavily for a Dodd-Frank loophole around proprietary trading, succeeds in dropping $6 billion in stupid trading which they then claimed as a hedge, and the cretins who did it leave with golden parachutes to spend more time with their families.
Popular mythology notwithstanding, hedge funds represent less than 5% of the market. The market is primarily made up of private households, pension funds , charities and foundations entrusted with your savings, retirement funds and 401(k)s - trillions invested with Wall Street banks. When dice-rolling traders make a mistake, as they did recently with a Libor bet - guess who suffers?
And the recent Facebook fiasco, when the Man in The Golden Tee-shirt pulled the ultimate con on three-piece suiters in the most prestigious houses, $19 billion went up in smoke - and I hope you weren't among the rampaging suckers who paid $38 a share for that inflated miracle stock back in the merry month of May. That's how smart Wall Street can be. Of course they didn't lose; they made the underwriting commission on the total IPO.
They rarely do, because as Smith puts it, "it (Wall Street) knows who is on every side of a trade. It can effectively see everyone's cards. Therefore, it can bet smarter with its own money. And given the lax industry regulation (Dodd-Frank undressed) there is maximum temptation to try to exploit unsophisticated investors and conflicts of interest."
As you go to the poll on November 6, Greg Smith says you should remember how, after the Crash of '29, the Senate enacted real reforms and held banks responsible for abusive practices, and there was peace in the valley for years afterward. And he says that you should ask "Why don't today's Senate, House and presidential candidates have the guts to do the same thing?"
I go a tad farther. I say, "How come some of these guys who conducted the greatest caper in financial history - like that small-town boy, the late Clifford Olson - how come they haven't been sent to the slammer?"
Short answer: because the judges, the jurists, the jurors are all on the take - that $300 mill I mentioned. No wonder that the 2012 election issues are confined to biggies like abortions and Lybia and voter suppression.
Just as, on Clifford Olson's rap sheet over 20 years, sexual atrocity was never mentioned.
Bill Annett grew up a writing brat; his father, Ross Annett, at a time when Scott Fitzgerald and P.G. Wodehouse were regular contributors, wrote the longest series of short stories in the Saturday Evening Post's history, with the sole exception of the unsinkable Tugboat Annie.
At 18, Bill's first short story was included in the anthology “Canadian Short Stories.” Alarmed, his father enrolled Bill in law school in Manitoba to ensure his going straight. For a time, it worked, although Bill did an arabesque into an English major, followed, logically, by corporation finance, investment banking and business administration at NYU and the Wharton School. He added G.I. education in the Army's CID at Fort Dix, New Jersey during the Korean altercation.
He also contributed to The American Banker and Venture in New York, INC. in Boston, the International Mining Journal in London, Hong Kong Business, Financial Times and Financial Post in Toronto.
Bill has written six books, including a page-turner on mutual funds, a send-up on the securities industry, three corporate histories and a novel, the latter no doubt inspired by his current occupation in Daytona Beach as a law-abiding beach comber.
You can write to Bill Annett at this address: email@example.com
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