Archive for the ‘Too Big To Fail’ Category

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‘Break Up The Banks’ is Latest Chart-Topper

Thursday, February 7th, 2013

This post by Roy Oppeneim was originally published in Yahoo! Homes and is being redistributed on South Florida Law Blog with their permission.

Bruce SpringsteenMy friends, the drumbeat is growing louder and louder. Each and every day another voice is joining the chorus.

Soon, I hope, it will be impossible for even the most devout pro-Wall Street politician to ignore.

It’s time to end Too Big To Fail, and there’s only one way to do that. Get out the hammer and break up the banks. Make them manageable and accountable, and remove the stranglehold they have on our economy, our politicians, and our government.

I’ve been banging away at my little cymbal, telling anyone who would listen that breaking up the banks is the path regulators ought to be taking. But I’m not exactly one to carry a tune, so not much has changed.

Bruce Springsteen (aka The Boss), who has always had the pulse of the working man, has championed a return to community banking. Even that didn’t have much impact on the national conversation.

Thankfully more and more rational voices are joining Springsteen’s “band.” The latest is author Michael Lewis. While reviewing former Goldman Sachs executive Greg Smith’s new book, Lewis comes to this conclusion: “The financial sector is already so gummed up by government subsidies that market forces no longer operate within it… Along with the other too-big-to-fail firms, Goldman needs to be busted up into smaller pieces.”

Michael and I must have been drinking from the same fountain in Econ 101 in college. (I sat behind him throwing the occasional spitball.)
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Posted in Big Banks, Goldman Sachs, Too Big To Fail | 4 Comments »

HSBC Too Big To Jail, Too Big To Nail

Saturday, December 15th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo Homes! and is being republished on South Florida Law Blog with their permission.

money launderingThe banks are too big to jail.

The Department of Justice, as much as they will try to tell you otherwise, believes it.

When push came to shove, prosecutors did not have the stones to do what is right, and what is absolutely necessary.

Wall Street has been given the road map to the land of Business As Usual. Just get as big as you want, do whatever you want, and have no fear of being caught. You will still be off-limits from criminal prosecution.

By choosing not to indict HSBC for money laundering, and instead handing them a nearly $2 billion settlement in order to defer prosecution, that is what the DOJ is effectively saying.

HSBC didn’t get handcuffs. They got a tax write off, otherwise known as the cost of doing business in today’s banking industry. Are we really supposed to call that a deterrent?

What’s troubling, and not the least bit ironic, is this is the same government that screams that homeowners who strategically default are creating a moral hazard.

That is exactly what federal prosecutors have done by not seeking an indictment. They have created a moral hazard on Wall Street, a slippery slope that will only get worse unless the DOJ reverses direction.

And this hazard will have a much greater impact on the real estate market than when a homeowner decided to walk away from a worthless underwater mortgage.

Edward DeMarco, acting director of the Federal Housing Finance Agency, has repeatedly made the argument that it is wrong for Fannie Mae or Freddie Mac to offer principal reduction to someone who is behind on their mortgage because it will encourage other homeowners to engage in risky behavior in order to benefit financially.
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Posted in HSBC, Too Big To Fail | No Comments »

Redefining Economic Homicide: How To Hold The Bankers Responsible

Friday, November 30th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

Money in HandcuffsActions have consequences. It is a simple notion, but in the broad sense of the economic meltdown here in the United States, it is one that has often failed to play out.

We have been led to believe that banks are not only ‘Too Big To Fail,’ but also ‘Too Big To Jail” and that their employees will not be held liable for the misdeeds performed in pursuit of the almighty dollar.

We have managed to jail the Bernie Madoffs and Allen Stanfords of the world but we are still grasping on how we can hold the vast Wall Street financial complex responsible for their institutional misdeeds.

And while Ponzi schemers and the like have affected many, many people, our government has failed to hold the larger corporations responsible for a housing and financial collapse that the banks should have seen coming.

But I believe it can be done, and if you take a long hard long across the globe, and even here in the US, you’ll find that governments are starting to redefine a corporation’s culpability, liability and responsibility to the public.

Why? I believe that the very definition of corporate crime is being looked at in a new light. No longer is it simply viewed as white-collar crime, but rather a form of economic homicide. This is no longer just a matter of money lost or bottom lines being padded, there are real victims whose lives have been devastated and in some cases, lost to a company’s culpability and wanton disregard of their reckless actions.
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Posted in Too Big To Fail, Yahoo! Homes | No Comments »

Presidential Debates Let Wall Street Off the Hook

Friday, October 26th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

So we’ve managed to get through all three presidential debates.

But although the presidential election is (thankfully) in the home stretch, did we really learn anything new about either President Barack Obama or Gov. Mitt Romney?

And more importantly, what everyone should be asking is why neither candidate refused to acknowledge the 900-pound gorillas in the room. They were there, but they got a cursory glance at best. These issues are glaring and obvious, yet it is as if they did not exist. It is the reason why many voters are still scratching their heads and asking the following questions.

Why isn’t housing the No. 1 domestic economic issue in this campaign?

Both the president and Romney spent exceedingly too much time on the national debt, when our economy starts and ends with housing. For the first time since the Great Depression, the real estate market has not pulled the economy out of recession. Structurally that is huge, because it was in fact the real estate market that caused the recession in the first place.

But more importantly, the recession was caused by greed and a confluence of people falling asleep at the switch. You have the government that has not properly regulated the banks, who have used their cozy relationship with the regulators to grow larger and more powerful as our nation’s leaders stood idly by.

And now you are left with entire industries, including Wall Street, effectively overshadowing the role of government. At times it seems like moral character has been checked at the foot of Wall Street.
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Posted in Mitt Romney, President Barack Obama, Presidential Election, Too Big To Fail, Wall Street | No Comments »

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