Thursday, June 20, 2013

Latest Evidence, #2a in a series

Back to the Taibbi again...

Remember that "climategate" furor a few years ago, where somebody leaked 50,000 e-mails from a British climate science center, and out of the 50,000 e-mails they found about three or four showing that graphs on public presentations (not the data, just the presentations) had been fudged? For clarity of presentation, not for pay or whatnot? Well it turns out the financial ratings agencies, in a far more widespread manner, have been fabricating the actual ratings on your retirement investments, out of whole cloth. In exchange for pay. Will these scandals receive the same outrage as the "climategate" revelations?

"The Last Mystery of 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 f*cking 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.

Ratings agencies are the glue that ostensibly holds the entire financial industry together. ...Their primary function is to help define what's safe to buy, and what isn't.
..."As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it ..." "From looking at the numbers it is quite obvious that we have just stuck our preverbal [sic] finger in the air!!" he fumed. ..."Remember the dream of being able to defend the model with sound empirical research?" he wrote on June 17th, 2005.

When this kind of stuff turns up simply in the discovery phase of a relatively low-level lawsuit, I have to start to wonder if we even need PRISM and ECHELON to eavesdrop on the bankers in order to catch them rigging our entire national economy for their own benefit. But one reason we should wiretap these banks, is to find out exactly how widespread this practice is. Is it really a "few bad apples" -- or do Americans get ripped off every other time they call their brokers on the phone? Is 0.05% of the market rigged, or is 50% of the market rigged? That knowledge makes a difference.

I still deal with people who tell me, "Well there are a few bad apples, but these investment banks and financial corporations got me my mortgage, they finance the jobs America needs, and they're taking care of my retirement, so I don't want to make waves."

I think the politicians and the bankers are not going to want to even get started down this road of surveillance, because just a half-@$$ed attempt is going to generate a lot more new material for leakers to leak to the press, leakers on the financial side just like Edward Snowden and Bradley Manning leaked military secrets about surveillance. The financiers aren't even going to want to start to go that route, especially having seen how the military leaks captured the public's attention. So I don't think the surveillance is going to happen, but I want to hear the politicians and the bankers make excuses for why they're not going to do this surveillance.

As I say elsewhere, what I want is to hear them make their excuses. I think, if we see the politicians and the investment bankers up there on TV explaining why _YOU_ need to be wiretapped but _THEY_ don't, then I think a lot more people are going to realize "these people are not doing anything for me, it's all for their own self-aggrandizement, and they're going to throw me under the bus the first chance they get". I think that will lead to more people paying down their mortgages, planting gardens and bartering with their neighbors, etc., in order to become more self-sufficient.

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