The Phaserl


Obama Video: President Has His Facts Seriously Wrong on Financial Reform

by Pam Martens and Russ Martens, Wall Street on Parade:

On March 7 of this year, President Obama called the full Financial Stability Oversight Council (F-SOC) to the White House for a meeting. F-SOC was created under the 2010 financial reform legislation known as Dodd-Frank to monitor systemic risks building up in the financial system and, ideally, nip them in the bud before they got out of hand. Every major Wall Street bank regulator sits on F-SOC.

Immediately following his meeting with F-SOC on March 7, President Obama held a press conference (see video below) with the F-SOC members sitting around him at a large conference table. Sitting two seats away from the President was Mary Jo White, Chair of the Securities and Exchange Commission. Directly across the table was Thomas Curry, head of the Office of the Comptroller of the Currency (OCC) that oversees national banks, and Jack Lew, U.S. Treasury Secretary who Chairs F-SOC. All three of these individuals (and likely everyone else around the table with the possible exception of President Obama) is intimately aware that the vast majority of derivatives today are not traded in central clearinghouses as was promised under the 2010 Dodd-Frank legislation almost six years ago.

And yet, President Obama boldly stated to the press in attendance on March 7 that when it comes to derivatives “you have clearinghouses that account for the vast majority of trades taking place.”

The derivatives issue was a critical component of Dodd-Frank because opaque derivative trades led to the largest failure in U.S. history of an insurance company during the 2008 crash. It was discovered that major Wall Street banks had made the sprawling insurer, AIG, its insurer (counterparty) on derivatives called credit default swaps — effectively gambles by Wall Street banks that sectors and companies were going to blow up. Because AIG did not have the funds to make good on those bets, the U.S. government took over AIG with a $185 billion taxpayer backstop, which was correctly viewed by Main Street as another back door bailout of Wall Street. It was later revealed that major Wall Street and foreign banks and hedge funds received more than half of that money ($93.2 billion) for the derivatives bets they had made with AIG and securities loan transactions. The firms were paid 100 cents on the dollar even though AIG was using taxpayer money.

Public pressure eventually forced AIG to release a chart of these payments, showing just a narrow window of disbursements from September to December 2008. The chart shows that Goldman Sachs received $12.9 billion of the funds; Societe Generale received $11.9 billion; and Merrill Lynch and its new parent, Bank of America, received a combined $11.5 billion – to name just three of the banking recipients.

Read More @

Help us spread the ANTIDOTE to corporate propaganda.

Please follow SGT Report on Twitter & help share the message.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>