(Updates fourth paragraph to include reference to ProPublica article containing Carmen Segarra's allegations.)
Probably most people would agree that the people paid by the U.S. government to regulate Wall Street have had their difficulties. Most people would probably also agree on two reasons those difficulties seem only to be growing: an ever-more complex financial system that regulators must have explained to them by the financiers who create it, and the ever-more common practice among regulators of leaving their government jobs for much higher paying jobs at the very banks they were once meant to regulate. Wall Street's regulators are people who are paid by Wall Street to accept Wall Street's explanations of itself, and who have little ability to defend themselves from those explanations.
Our financial regulatory system is obviously dysfunctional. But because the subject is so tedious, and the details so complicated, the public doesn't pay it much attention.
That may very well change today, for today -- Friday, Sept. 26 --- the radio program "This American Life" will air a jaw-dropping story about Wall Street regulation, and the public will have no trouble at all understanding it.
The reporter, Jake Bernstein, has obtained 46 hours of tape recordings, made secretly by a Federal Reserve employee, of conversations within the Fed, and between the Fed and Goldman Sachs. The Ray Rice video for the financial sector has arrived.
First, a bit of background -- which you might get equally well from today's broadcast as well as from this article by ProPublica. After the 2008 financial crisis, the New York Fed, now the chief U.S. bank regulator, commissioned a study of itself. This study, which the Fed also intended to keep to itself, set out to understand why the Fed hadn't spotted the insane and destructive behavior inside the big banks, and stopped it before it got out of control. The "discussion draft" of the Fed's internal study, led by a Columbia Business School professor and former banker named David Beim, was sent to the Fed on Aug. 18, 2009.
It's an extraordinary document. There is not space here to do it justice, but the gist is this: The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems.
Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them.
The report quotes Fed employees saying things like, "until I know what my boss thinks I don't want to tell you," and "no one feels individually accountable for financial crisis mistakes because management is through consensus." Beim was himself surprised that what he thought was going to be an investigation of financial failure was actually a story of cultural failure.
Read more: Michael Lewis on the occupational hazards of working on Wall Street
Any Fed manager who read the Beim report, and who wanted to fix his institution, or merely cover his ass, would instantly have set out to hire strong-willed, independent-minded people who were willing to speak their minds, and set them loose on our financial sector. The Fed does not appear to have done this, at least not intentionally. But in late 2011, as those managers staffed up to take on the greater bank regulatory role given to them by the Dodd-Frank legislation, they hired a bunch of new people and one of them was a strong-willed, independent-minded woman named Carmen Segarra.
I've never met Segarra, but she comes across on the broadcast as a likable combination of good-humored and principled. "This American Life" also interviewed people who had worked with her, before she arrived at the Fed, who describe her as smart and occasionally blunt, but never unprofessional. She is obviously bright and inquisitive: speaks four languages, holds degrees from Harvard, Cornell and Columbia. She is also obviously knowledgeable: Before going to work at the Fed, she worked directly, and successfully, for the legal and compliance departments of big banks. She went to work for the Fed after the financial crisis, she says, only because she thought she had the ability to help the Fed to fix the system.
In early 2012, Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (The people who regulate banks for the Fed are physically stationed inside the banks.)
The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that "once clients are wealthy enough certain consumer laws don't apply to them." After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement -- to which the regulator replied, "You didn't hear that."
This sort of thing occurred often enough -- Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact -- that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.
(How Segarra got herself fired by the Fed is interesting. In 2012, Goldman was rebuked by a Delaware judge for its behavior during a corporate acquisition. Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4 billion stake, and a Goldman banker had a big personal investment. The incident forced the Fed to ask Goldman to see its conflict of interest policy. It turned out that Goldman had no conflict of interest policy -- but when Segarra insisted on saying as much in her report, her bosses tried to get her to change her report. Under pressure, she finally agreed to change the language in her report, but she couldn't resist telling her boss that she wouldn't be changing her mind. Shortly after that encounter, she was fired.)
Read More: Michael Lewis on Deeb the Conquerer baring his soul before Mama
I don't want to spoil the revelations of "This American Life": It's far better to hear the actual sounds on the radio, as so much of the meaning of the piece is in the tones of the voices -- and, especially, in the breathtaking wussiness of the people at the Fed charged with regulating Goldman Sachs. But once you have listened to it -- as when you were faced with the newly unignorable truth of what actually happened to that NFL running back's fiancee in that elevator -- consider the following:
1. You sort of knew that the regulators were more or less controlled by the banks. Now you know.
2. The only reason you know is that one woman, Carmen Segarra, has been brave enough to fight the system. She has paid a great price to inform us all of the obvious. She has lost her job, undermined her career, and will no doubt also endure a lifetime of lawsuits and slander.
So what are you going to do about it? At this moment the Fed is probably telling itself that, like the financial crisis, this, too, will blow over. It shouldn't.
To contact the writer of this article: Michael Lewis at mlewis1@bloomberg.net.
To contact the editor responsible for this article: Marty Schenker at mschenker@bloomberg.net.
Michael Lewis is a Bloomberg View columnist. He is the
author of the best-sellers "Flash Boys: A Wall Street Revolt," "The
Blind Side: Evolution of a Game," "Moneyball: The Art of Winning an
Unfair Game" and "Liar's Poker," among other books.
After graduating from Princeton University and the London School of
Economics, Lewis worked on the bond desk at Salomon Brothers, an
experience he recounted in "Liar's Poker," his first book. He left the
financial world to become a journalist, writing on politics, finance and
more for the New Republic, the New York Times Magazine, Slate and other
publications. He is a contributing editor at Vanity Fair. Lewis is also
the author of "The Big Short: Inside the Doomsday Machine," "Home Game:
An Accidental Guide to Fatherhood" and "The New New Thing." He lives in
Berkeley, California.
Article List
Probably most people would agree that the people paid by the U.S. government to regulate Wall Street have had their difficulties. Most people would probably also agree on two reasons those difficulties seem only to be growing: an ever-more complex financial system that regulators must have explained to them by the financiers who create it, and the ever-more common practice among regulators of leaving their government jobs for much higher paying jobs at the very banks they were once meant to regulate. Wall Street's regulators are people who are paid by Wall Street to accept Wall Street's explanations of itself, and who have little ability to defend themselves from those explanations.
Our financial regulatory system is obviously dysfunctional. But because the subject is so tedious, and the details so complicated, the public doesn't pay it much attention.
That may very well change today, for today -- Friday, Sept. 26 --- the radio program "This American Life" will air a jaw-dropping story about Wall Street regulation, and the public will have no trouble at all understanding it.
The reporter, Jake Bernstein, has obtained 46 hours of tape recordings, made secretly by a Federal Reserve employee, of conversations within the Fed, and between the Fed and Goldman Sachs. The Ray Rice video for the financial sector has arrived.
First, a bit of background -- which you might get equally well from today's broadcast as well as from this article by ProPublica. After the 2008 financial crisis, the New York Fed, now the chief U.S. bank regulator, commissioned a study of itself. This study, which the Fed also intended to keep to itself, set out to understand why the Fed hadn't spotted the insane and destructive behavior inside the big banks, and stopped it before it got out of control. The "discussion draft" of the Fed's internal study, led by a Columbia Business School professor and former banker named David Beim, was sent to the Fed on Aug. 18, 2009.
It's an extraordinary document. There is not space here to do it justice, but the gist is this: The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems.
Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them.
The report quotes Fed employees saying things like, "until I know what my boss thinks I don't want to tell you," and "no one feels individually accountable for financial crisis mistakes because management is through consensus." Beim was himself surprised that what he thought was going to be an investigation of financial failure was actually a story of cultural failure.
Read more: Michael Lewis on the occupational hazards of working on Wall Street
Any Fed manager who read the Beim report, and who wanted to fix his institution, or merely cover his ass, would instantly have set out to hire strong-willed, independent-minded people who were willing to speak their minds, and set them loose on our financial sector. The Fed does not appear to have done this, at least not intentionally. But in late 2011, as those managers staffed up to take on the greater bank regulatory role given to them by the Dodd-Frank legislation, they hired a bunch of new people and one of them was a strong-willed, independent-minded woman named Carmen Segarra.
I've never met Segarra, but she comes across on the broadcast as a likable combination of good-humored and principled. "This American Life" also interviewed people who had worked with her, before she arrived at the Fed, who describe her as smart and occasionally blunt, but never unprofessional. She is obviously bright and inquisitive: speaks four languages, holds degrees from Harvard, Cornell and Columbia. She is also obviously knowledgeable: Before going to work at the Fed, she worked directly, and successfully, for the legal and compliance departments of big banks. She went to work for the Fed after the financial crisis, she says, only because she thought she had the ability to help the Fed to fix the system.
In early 2012, Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (The people who regulate banks for the Fed are physically stationed inside the banks.)
The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that "once clients are wealthy enough certain consumer laws don't apply to them." After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement -- to which the regulator replied, "You didn't hear that."
This sort of thing occurred often enough -- Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact -- that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.
(How Segarra got herself fired by the Fed is interesting. In 2012, Goldman was rebuked by a Delaware judge for its behavior during a corporate acquisition. Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4 billion stake, and a Goldman banker had a big personal investment. The incident forced the Fed to ask Goldman to see its conflict of interest policy. It turned out that Goldman had no conflict of interest policy -- but when Segarra insisted on saying as much in her report, her bosses tried to get her to change her report. Under pressure, she finally agreed to change the language in her report, but she couldn't resist telling her boss that she wouldn't be changing her mind. Shortly after that encounter, she was fired.)
Read More: Michael Lewis on Deeb the Conquerer baring his soul before Mama
I don't want to spoil the revelations of "This American Life": It's far better to hear the actual sounds on the radio, as so much of the meaning of the piece is in the tones of the voices -- and, especially, in the breathtaking wussiness of the people at the Fed charged with regulating Goldman Sachs. But once you have listened to it -- as when you were faced with the newly unignorable truth of what actually happened to that NFL running back's fiancee in that elevator -- consider the following:
1. You sort of knew that the regulators were more or less controlled by the banks. Now you know.
2. The only reason you know is that one woman, Carmen Segarra, has been brave enough to fight the system. She has paid a great price to inform us all of the obvious. She has lost her job, undermined her career, and will no doubt also endure a lifetime of lawsuits and slander.
So what are you going to do about it? At this moment the Fed is probably telling itself that, like the financial crisis, this, too, will blow over. It shouldn't.
To contact the editor responsible for this article: Marty Schenker at mschenker@bloomberg.net.
Michael Lewis Bloombergview.com - Articles by Michael Lewis
Michael Lewis is a Bloomberg View columnist. He is the
author of the best-sellers "Flash Boys: A Wall Street Revolt," "The
Blind Side: Evolution of a Game," "Moneyball: The Art of Winning an
Unfair Game" and "Liar's Poker," among other books.
After graduating from Princeton University and the London School of
Economics, Lewis worked on the bond desk at Salomon Brothers, an
experience he recounted in "Liar's Poker," his first book. He left the
financial world to become a journalist, writing on politics, finance and
more for the New Republic, the New York Times Magazine, Slate and other
publications. He is a contributing editor at Vanity Fair. Lewis is also
the author of "The Big Short: Inside the Doomsday Machine," "Home Game:
An Accidental Guide to Fatherhood" and "The New New Thing." He lives in
Berkeley, California.
Article List
My blog thread comments on COBRA's recent post:
Friday, April 11, 2014
March Monthly Update by Cobra
http://2012portal.blogspot.com/2014/04/march-monthly-update-by-cobra.html#comment-form~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Phoenix BoulayApril 13, 2014 at 8:46 PM
However, I was dismayed to hear about the influence of the threats made to President Obama and his family, resulting in him being compromised. I hope that this can be revealed when all comes to Light, and that he can regain his higher purpose and participation.
I found it very useful that below the video is a list of topics discussed, so you can go directly to that part of the interview if you are interested in specific information. However, listening in context may make things a lot easier to digest, as it did for me. ~PB
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
“There is A Serious Possibility We Have Been Visited By Other Civilizations” – X United Kingdom Defence Minister
http://www.collective-evolution.com/2014/01/26/there-is-a-serious-possibility-we-have-been-visited-by-other-civilizations-x-united-kingdom-defence-minister/
and
Former World Bank Senior Council Says A “Second Species” On Earth Controls Money & Religion
http://www.collective-evolution.com/2014/03/28/former-world-bank-senior-council-says-a-second-species-on-earth-controls-money-religion/
and of course we recall the former Canadian Defense Minister speaking out last summer:
"Canada's ex-defense minister: U.S. knows how aliens can make us greener"
Former Canadian defense minister Paul Hellyer says U.S. knows about UFOs and has even developed new forms of energy using technology from outer space invaders. These forms can allegedly save our planet.
http://www.cnet.com/news/canadas-ex-defense-minister-u-s-knows-how-aliens-can-make-us-greener/
Some of my more skeptical friends find this news startling, while most of us are probably going "...ho-hum, yah, nothing new here..." but it is good to see more of this in mainstream news, as it is seeding the concepts into a mass consciousness that still holds disbelief in, or distrust of, E.T.s.
I do think they need to make a distinction between benevolent E.T.s (Galactic Family) and those with a malevolent agenda. Of course, as with humans, not all are "bad" and not all are "good". As we move beyond dualism, all are to be included, all healed, all forgiven. Kind of mind-blowing, when you think of the enormity of what has transpired. But we all have played both dark and light roles.
Anyway, my point was that since people in high places or those who are or once were in a position to KNOW, are now speaking out, surely it is a sign that the cabal is on the way out. In the past, people were threatened and killed for daring to defy them. With Obama compromised, so many confirming the existence of E.T.s may well be the soft disclosure preceding any formal announcements to come at or after The Event.
Responding to Mitchell Tr. James
Phoenix BoulayApril 15, 2014 at 5:32 PM
Freia, I believe you are talking about Advanced Symbiotic Technology, which was mentioned by David Adair in a most fascinating interview.
-----------------------------------------------------------------------
David Adair at Area 51 - Advanced Symbiotic Technology
Published on Dec 28, 2013
https://www.youtube.com/watch?v=jqhLO4RZgdo
"Space technology transfer consultant and former rocket whiz kid David Adair speaks out for the first time on camera in this interview about his remarkable encounters with an alien engine, DOD agents, and Air Force General Curtis Lemay in 1971 at Groom Lake, Nevada (Area-51). Hear first hand testimony about advanced alien technology and our military's most closely guarded secrets surrounding the UFO phenomena.
Adair explains how at age 17 he built an electro-magnetic containment plasma fusion rocket engine and was invited by Air Force bigwigs to launch it at White Sands Missal Range. That led to his being taken to Area 51 where he saw an engine that was light years beyond anything on Earth - so sophisticated it responded to the thoughts and emotions of it's pilots.
Now, comfortable with the way UFO information is starting to be accepted by the American public, Adair has decided to reveal the amazing truth which he held to himself for over 25 years.
Also revealed are his meetings with renowned physicist Stephan Hawkings."
---------------------------------------------------------------------
I don't want to give it away, but suffice it to say that at that time, he also overheard the Military gentlemen discussing the potential use of his rockets for First Strike Nuclear Warhead capability. He was mortified!
You must listen to his story in his own words as to what happened next. Later in life, he became a consulting engineer for NASA, but his journey is nothing short of incredible, and he waited 25 years to tell it!
:D <3
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Phoenix BoulayApril 15, 2014 at 8:43 AM
Red Ice Radio - Karen Hudes -
Former World Bank Insider on the Corruption of the Global Elite
http://youtu.be/3cIDKZkLY7c
"I modeled Rule of Law inside the World Bank, and I didn't realize the corruption inside the World Bank was caused by corruption outside the World Bank,and that's a no-brainer, but at the time I just didn't know that we had a secret group of corrupt companies that thought they owned the world. And that's what we're up against. But I'm happy to tell that all of the countries of the world have banded together, formed a coalition and we are now taking back the world form that corrupt bunch...and who is that corrupt bunch?... " ~Karen Hudes (video 7:38 -transcript mine)
The RT video in the article cuts to the chase:
World Bank: Money Laundering Criminals | Interview with Whistleblower Karen Hudes
https://www.youtube.com/watch?v=c7E9SUwlooE
I'm sure many of you have also heard of this, it was on Kaulapele's blog and American Kabuki, via Gawker. More outing of the cabal:
"Wall Street genius" Mark Gorton publishes summary of "ruthless secret cabal that assassinated JFK and planned 9/11."
http://911blogger.com/news/2014-04-11/astounding-conspiracy-theories-wall-street-genius-mark-gorton
..and as previously mentioned, the recent 60 minutes interview with Michael Lewis:
Is the U.S. stock market rigged? The following script is from "Rigged" which aired on March 30, 2014.
http://www.cbsnews.com/news/is-the-us-stock-market-rigged/
So it would seem that we are well on our way. Victory of the Light!