Burgess COMMENTARY

Peter Burgess

Banksters - William Black tells the real truth

Myfisto Pheles Myfisto Pheles

Transcript

English (Automatic Captions)

0:00down here mister William Carey black social professor of economics and law 0:05University of missouri-kansas City School 0:08by committee thank you are you 0:12aft earlier for a stern regulator 0:15you have one now in front of you and 0:19we need to be blunt and you haven't heard much bluntness 0:23in hours testimony we stopped 0:27non-prime crisis before it became a crisis 0:31in 1991 by supervisory actions 0:34we did so effectively that people have forgotten that even existed 0:38even though cause several hundred million dollars in losses but none to 0:42the taxpayers 0:43we did it by preemptive litigation 0:46ally and by supervision we broke 0:50a raging epidemic accounting control fraud 0:53without new legislation in the period 0:561984 through nineteen 86 1:00legislation would be helpful we sought legislation but we didn't get 1:03and we were able to stop 1:07that because we didn't simply continue business as usual 1:12Lehman's failure is a story in large part 1:16a fraud and it is fraud that begins 1:20at the absolute latest in 2001 1:24and that he is with their subprime and they're liars loan 1:29operation lehman was deleting 1:32purveyor up a liar's loans in the world 1:36for most of this decade 1:39studies on liars loans show 1:42incidents a fraud at ninety percent 1:46lehman soul this 1:49to the world with reps and warranties that there were no such brought 1:53if you want to know why we have 1:59a global crisis in large part it is before you 2:03but it hasn't been discussed today 2:06amazingly financial institution leaders 2:11are not engaged in risk 2:14when they can gauge in liars loan liars loans will cause 2:19a failure they lose money the only way to make money 2:23is to deceive others by selling bad paper 2:26and that will eventually lead to liability and failure as well 2:31when people cheat 2:34you cannot as a regulator continue business as usual 2:38they go into a different category and you must 2:42act completely differently as a regulator 2:46when we've gotten said sad excuse is the SEC 2:50were told their only twenty-four people in their comprehensive program 2:54who decided how many people there would be in a comprehensive program 2:58who decide the staffing the SEC did 3:01to say that we only had twenty-four people is not too great an excuse 3:05its to give an admission of criminal negligence except it's not criminal 3:10because you're a federal employee in the context 3:14up the FDIC Secretary Geithner testified today that this event 3:19pushed the financial system to the brink of collapse 3:22but Chairman Bernanke he testified we sent 3:27to people to be on site at lehman 3:32we sent 50 credit people two largest savings alone in america 3:37it had $30 billion in assets we had a whole lot less staff than the Fed does 3:43we forced out the CEO 3:46we replaced the CEO and we did that not through regulation 3:50but because have our leverage as creditors 3:53now I ask you who had more leverage its creditors 3:57in 2000 8 the Fed 4:01compared to the Federal Home Loan Bank of San Francisco nineteen years earlier 4:06incomprehensible greater leverage in the Fed 4:10and it simply was not use 4:14and we've heard ok so let's start with the 4:17the repos we have known 4:20since and Ron in 2001 that this 4:24is a common scam in which every major bank that was approached by an Ron 4:29agreed to help them deceive 4:32creditors and investors by doing these kind transactions 4:37and so what happened there was a proposal in 2004 4:41to stop it and the regulatory 4:44heads it wasn't interagency effort killed it 4:48they came out with something pathetic in 2006 4:53and stalled its implementation in 2007 but it's meaningless 4:57we have known for a decade that these are frauds 5:01we have known for a decade how to stop them 5:05all up the major regulatory agencies were complicit 5:08in that statement in destroying it we have a self-fulfilling 5:12policy regulatory failure because the leadership 5:17in this era we have the 5:20fed the Federal Reserve Bank New York finding that this is 5:24three-card Monte but what would you do 5:28as a regulator if you knew 5:31that one of the largest enterprises in the world when you're the nation's on a 5:34brick 5:35up collapse economic collapse is engaged in 5:38fraud three-card Monte would you continue business as usual 5:44that's what was done all they meant a lot 5:48they say that we didn't have a we only had a nuclear stick 5:52sounds pretty good step to use if you're on the bridge 5:55brink collapse in the system but 5:58that start with the third has to do the Fed is a central bank 6:02central banks for centuries have gotten rid 6:05up there heads a financial institutions 6:09the bank up England does it with a luncheon 6:13date the Board of Directors are invited 6:16they don't say no they are set down 6:20the head of the Bank of England says we have lost confidence 6:25in the CEO of your enterprise we believe that mister Jones 6:29would be an effective replacement 6:32and by 4 o'clock that day mister Jones 6:36is running the place and he has a mandate to clean 6:41up all the problems instead 6:44every day that Lehman remained under its leadership 6:49the expose your up the american people to Los 6:53grew by hundreds of millions of dollars on average 6:57Aurora was pumping out out up to three 7:00billion dollars a month in liars loans 7:04losses on those are running roughly 50 percent 7:08to 85 cents on the dollar 7:11it is critical not to do business as usual 7:16to change we've also heard from secretary Geitner 7:20and secretary for Nikki I search German blacky 7:23we couldn't deal with these lenders because we had no authority over them 7:29the Fed had unique authority since nineteen 7:33ninety 4 under holy per 7:36to regulate all mortgage lenders if finally used it 7:40in 2008 they could have stopped Aurora 7:44they could have stopped the subprime unit of Lehman 7:48that was really a liar slime places well as time went by 7:52thank you very much thank you very much 7:55ml much witness problem Wenger 7:59reiterate we ask her witness confines 8:02sold 25 minutes summarized

Describes fraud and liers loans in the economic crisis. Category Education License Standard YouTube License SHOW LESS COMMENTS • 314 Add a public comment... Top comments