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    A ticking time bomb from the big banks could cause the next recession -- but 'King of Debt' Trump doesn't care

    Maureen Nevin Duffy, DC Report @ Raw Story
    February 10, 2020

    Thanks for your support!

    This article was paid for by reader donations to Raw Story Investigates.

    Trump took a break from his war with congressional Democrats to slam the central bank (AFP Photo/TOM PENNINGTON)

    This article was paid for by Raw Story subscribers. Not a subscriber? Try us and go ad-free for $1. Prefer to give a one-time tip? Click here.

    Maureen Nevin Duffy, DC Report @ Raw Story

    The art of hiding multi-trillions of dollars of debt has found an eager accomplice, the businessman who once proudly proclaimed, "I love debt":  Donald J. Trump.


    The King of Debt is now in control of an obscure federal watchdog agency intended to prevent derivatives—complicate financial instruments that billionaire businessman Warren Buffett once described as "Weapons of Mass Destruction"—from causing the Great Recession of 2008. Intended is the keyword. The agency, the Commodity Futures Trading Commission (CFTC), was hog-tied by big money interests long before the first whiff of bank failure could drift from Wall Street's canyons.

    This December, Trump's hand-picked CFTC members marked a decade of financial recovery by voting 3-2 in favor of leaving a giant hole in the regulatory framework known as Dodd-Frank. The vote leaves the Big Four—Too Big to Fail—U.S. banks free to slip the riskiest of their debt-deferring derivative trades through that defensive wall at will. And, this sleight of hand pushes an unsuspecting public onto the firing line of another possible multi-trillion-dollar U.S. taxpayer bailout.

    Outstanding balances keep ballooning for car and tuition loans and credit cards. During 2016, banks opened 110 million new credit card accounts about 50% more than in 2010.

    As in the 2008 meltdown, the weapon of choice for manipulating and moving piles of bank-owned debt around the world is a type of derivative called a "swap." A swap can be as simple as a contract between two parties or a contingency laden nightmare, such as a "naked" credit default swap (CDS) for trading unfunded payment obligations, some of which are used as "insurance" guarantees. That guarantee is what banks can continue now to switch on and off at will.

    The Usual Suspects

    Instead of home mortgages, this time consumer debt holds our fate. Outstanding balances keep ballooning for car and tuition loans and credit cards—greatly enlarged by exotic trading on the debt itself. During 2016, banks opened 110 million new credit card accounts about 50% more than in 2010. Citigroup, JPMorgan Chase, Bank of America and Wells Fargo reported a combined loss of $12.5 billion from credit card loans in 2017. In June that same year, the Federal Reserve valued outstanding credit card loans at $1.02 trillion. Yet banks continue to shower subprime borrowers with fresh lines of credit.

    Despite the efforts of a severely hobbled CFTC, the swaps markets continue to grow and without the depth of transparency promised. Consider that the four big U.S. bank holding company swaps dealers: Citibank, JPMorgan Chase, Goldman Sachs and Bank of America handle close to 90% of U.S. swaps trades, representing a combined notional value of $300 trillion, while consumers stagger under debt and defaults mount higher than pre-2008. The big picture reveals "a financial infrastructure that mimics the failed financial engineering created in the mortgage markets leading up to the 2008 financial crash," says Professor Michael Greenberger, former deputy to the Clinton-era CFTC Chair Brooksley Born.

    'Dark Swaps'

    Greenberger, a former director of the Division of Trading and Markets, and current law school professor at the University of Maryland Carey School of Law, contends that "dealers have engineered a way to evade Dodd-Frank, by helping banks transfer trillions of dollars in liability in risky unfunded trading, by turning the regulations off at will." The world's debt burden is being "financialized," he says, as were mortgages in 2007. The tool this time is "dark swaps"' sold by the banks' foreign subsidiaries, into increasingly complex instruments. These are the very exposures from which the CFTC and Dodd-Frank were charged with protecting us.

    "The CFTC is totally controlled by Trump," Greenberger tells DCReport.org. Until another administration takes office the only recourse may be a state by state solution. Greenberger means the state attorneys general, "since the president can't fire them," he says. Short of that, since a chain of attempts to plug the loophole have been tried, undermined or overturned, Greenberger's last hope is the new administration, whose CFTC board could vote to close the loophole and spare the world another multi-trillion meltdown the U.S. taxpayer will suffer to pay.

    This article was paid for by Raw Story subscribers. Not a subscriber? Try us and go ad-free for $1. Prefer to give a one-time tip? Click here.

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    Survey: Will Melania leave Trump now that he's out of office ?

    'You're out of order': Interview with Trump campaign official breaks down over insurrection excuses

    Sarah K. Burris
    January 24, 2021

    MSNBC's Ari Melber did a Sunday evening special on the impeachment trial of President Donald Trump. His final interview was with the former president's campaign staffer Boris Epshteyn who revealed the only excuse that Republicans will have to justify Trump's innocence.

    Melber spent the hour outlining the case against Trump, citing the funds the $2.7 million in campaign spent to hold the rally in Washington and the statements from those arrested that they followed what the president told them.

    The excuse Epshteyn used is that Trump told his supporters to be "stay peaceful." It's a comment that comes after months of telling his supporters to act and to fight for their votes.

    The argument many have made is that using incendiary rhetoric for months, urging a crowd to "fight," a "trial by combat," and "walk to the Capitol."

    "Now it is up to Congress to confront this egregious assault on our democracy," he said. "And after this, we're going to walk down — and I'll be there with you — we're going to walk down ... to the Capitol and we're going to cheer on our brave senators and congressmen and women. We're probably not going to be cheering so much for some of them, because you'll never take back our country with weakness, you have to show strength.

    "We have come to demand that Congress do the right thing and only count the electors who have been lawfully slated, lawfully slated. I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard. Today we will see whether Republicans stand strong for [the] integrity of our elections, but whether or not they stand strong for our country, our country. Our country has been under siege for a long time, far longer than this four-year period."

    Epshteyn's argument is that nothing else that Trump said matters, only the word "peacefully."

    Melber's guests including a slate of former prosecutors described Trump's excuses as like yelling "fire" in a crowded theater. In an earlier interview, Rep. Stacey Plaskett (D-NY) described Trump as doing more than just yelling "fire" in the theater. She described the ex-president as bringing the matches and the gasoline, paying for the arsonists to meet at the Capitol, and telling them to burn it down with a brief comment that fire is bad.

    Epshteyn argued against Melber that he should "fire" the person who put together his clips reel because it didn't include Trump's comment about "peacefully and patriotically" attacking the capitol.

    "We're not here for your advice to do what we do," Melber said. "You're out of order."


    You're out of order www.youtube.com

    Impeachment officer details the case against Trump as the second trial begins

    Sarah K. Burris
    January 24, 2021

    Monday night, House impeachment officers will officially walk the Articles of Impeachment to the U.S. Senate and the process will officially begin as President Donald Trump is tried for a second time before the body.

    Speaking to MSNBCs Ari Melber on an impeachment special Sunday evening, a solemn Rep. Stacey Plaskett (D-NY) explained that this is not something the House members do lightly.

    "And then we'll begin the trial of our president, of former President Donald Trump in the Senate, for what we believe to be one of the most heinous crimes against our country in its existence," she said. "Something that the founders anticipated and put in guardrails against. That being a despot, drunk with power, trying to keep his grip on power and using the people of this country to try and stage an insurrection."

    She didn't intend to reveal the strategy for impeachment but explained that the attack on the Capitol Jan. 6 wasn't the beginning of Trump's efforts to incite violence against the legislature.

    "President Trump has engaged in a prolonged effort to overturn the results of the 2020 election and spent months spreading disinformation and the results falsely claiming that he had won by a landslide," she explained. "He stated it would be illegitimate to accept those results, and then he brought individuals to Washington, D.C. on Jan. 6. Make no mistake that that was an extremely important date in his mind and in our Constitution's time, because there was a time where the entire body of Congress along with the vice president would be present at the Capitol to fulfill our duties, that being to certificate five the election. And with that, he knew who the individuals were, who would be coming, what they would do and what hold he had over them."

    She described what happened as "foreseeable," in fact, Georgia elections official Gabriel Sterling warned that what Trump was doing would "get people killed." Indeed, five people were killed as a result of what happened on Jan. 6.

    "It's bad enough that we have a president who wanted to obstruct justice, who wanted to obstruct a free and fair election, who did not want the fulfillment of Constitution, but the worst part that he did it through the attack, assault, mayhem, vandalism, the attempted assassination of the vice president and the speaker of the House, potential attempt to kidnap members of congress and the fulfillment of felony murder as well. All for his own self-aggrandizement. Absolutely shameful," Plaskett said.

    See the full interview below:


    Presenting the articles of impeachment...... again www.youtube.com

    Will cops caught in Capitol attack finally motivate police chiefs to purge their ranks: Watchdog asks

    Sarah K. Burris
    January 24, 2021

    A former FBI special agent detailed in an Aug. 2020 report that white supremacists and militia members have infiltrated law enforcement ranks across the country. The abstract information didn't lead to a call from law enforcement leadership to look through their teams to purge possible problems. Now that off-duty law enforcement members were part of the Capitol insurrection, the Washington Post reported police chiefs are finally starting to act.

    "National Sheriffs' Association President David Mahoney said many police leaders have treated officers with extremist beliefs as outliers and have underestimated the damage they can inflict on the profession and the nation," the Post reported.

    "We saw the anti-government, anti-equality and racist comments coming out during the Obama administration. Shame on us for representing it as freedom of speech and for not recognizing it was chiseling away at our democracy," Mahoney said in an interview. "As we move forward, we need to make sure we are teaching our current staff members that they must have the courage to speak out when they know about another deputy's or officer's involvement. There should be no reference to the thin blue line."

    At least 12 Capitol Police are under investigation for their behavior during the attack on the building, including one officer seen taking selfies with insurrectionists. At least 14 off-duty officers didn't go inside the building, but they were there on Jan. 6.

    "They know who these bad apples are,'' said former FBI agent Michael German. "They learn about them when they are investigating white supremacists and militia groups."

    But legal experts and police watchdog groups have little hope of change. They've heard law enforcement commitments after police killed unarmed Black Americans like Michael Brown and Tamir Rice, young boys shot and killed by police in 2014.

    Georgetown Law professor Vida Johnson explained that "these officers are hiding in plain sight." Still, nothing has changed.

    "Until they're willing to . . . discipline officers, this is going to continue to be a problem, and it's one that's completely destabilizing the country and putting us at risk," she said.

    Read the full piece at the Washington Post. Washington Post.

     
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