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The Last Mystery of the Financial Crisis

How corruption inside the ratings agencies played a critical role in the financial crisis:

"In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

"'Lord help our fucking scam . . . this has to be the stupidest place I have worked at,' writes one Standard & Poor's executive. 'As you know, I had difficulties explaining "HOW" we got to those numbers since there is no science behind it,' confesses a high-ranking S&P analyst. 'If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,' complains another senior S&P man. 'Let's hope we are all wealthy and retired by the time this house of card[s] falters,' ruminates one more."
PUBLISHED: June 24, 2013
LENGTH: 19 minutes (4949 words)

Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

What the Libor and ISDAfix scandals reveal about manipulation of the global economy by banks:

"All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system."
PUBLISHED: April 26, 2013
LENGTH: 15 minutes (3927 words)

Cruel and Unusual Punishment: The Shame of Three Strikes Laws

How a get-tough law in California led to life sentences for petty thieves and drug offenders—and how support for its repeal came more from Republicans than Democrats:

"Like wars, forest fires and bad marriages, really stupid laws are much easier to begin than they are to end. As the years passed and word of great masses of nonviolent inmates serving insanely disproportionate terms began to spread in the legal community, it became clear that any attempt to repair the damage done by Three Strikes would be a painstaking, ungainly process at best. The fear of being tabbed 'soft on crime' left politicians and prosecutors everywhere reluctant to lift their foot off the gas pedal for even a moment, and before long the Three Strikes punishment machine evolved into something that hurtled forward at light speed, but moved backward only with great effort, fractions of a millimeter at a time."
PUBLISHED: March 27, 2013
LENGTH: 25 minutes (6444 words)

Greed and Debt: The True Story of Mitt Romney and Bain Capital

A look at Mitt Romney's time at Bain Capital:

"Marc Wolpow, a former Bain colleague of Romney's, told reporters during Mitt's first Senate run that Romney erred in trying to sell his business as good for everyone. 'I believed he was making a mistake by framing himself as a job creator,' said Wolpow. 'That was not his or Bain's or the industry's primary objective. The objective of the LBO business is maximizing returns for investors.' When it comes to private equity, American workers – not to mention their families and communities – simply don't enter into the equation.

"Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in "management" fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren't crying: They'd made more than $100 million on a $5 million investment."
PUBLISHED: Aug. 29, 2012
LENGTH: 30 minutes (7745 words)

How Wall Street Killed Financial Reform

The many ways to dismantle a law: How the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act has been attacked and weakened since its passage in 2010:

"The fate of Dodd-Frank over the past two years is an object lesson in the government's inability to institute even the simplest and most obvious reforms, especially if those reforms happen to clash with powerful financial interests. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed. You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again. 'It's like a scorched-earth policy,' says Michael Greenberger, a former regulator who was heavily involved with the drafting of Dodd-Frank. 'It requires constant combat. And it never, ever ends.'"
PUBLISHED: May 11, 2012
LENGTH: 26 minutes (6625 words)

The People vs. Goldman Sachs

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.
PUBLISHED: May 11, 2011
LENGTH: 24 minutes (6039 words)

The Real Housewives of Wall Street

If you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches. Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division.
PUBLISHED: April 13, 2011
LENGTH: 12 minutes (3088 words)

Why Isn't Wall Street In Jail?

In the end, of course, it wasn't just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC.
PUBLISHED: Feb. 16, 2011
LENGTH: 24 minutes (6189 words)

Courts Helping Banks Screw Over Homeowners

The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This "rocket docket," as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby rinthine derivative deals of a type that didn't even exist when most of them were active members of the bench.
PUBLISHED: Nov. 10, 2010
LENGTH: 58 minutes (14560 words)