Monday Reads

Good Morning!

I attended a V to shining V party on Saturday night!  It was great to be out among active women’s rights advocates.  We also had some great snacks and games.  We got to “Pin the Probe on the Politician”.  Those pictures are of  Bobby Jindal, Bill Cassidy, and Rick Perry all appropriately pinned at various points.  I’m continuing my stump for Mary Landrieu and polls show that I’ve got to continue to work to find support and volunteers for her.

As Democratic Sen. Mary Landrieu defends her U.S. Senate seat in Louisiana, a new CNN/ORC International pollindicates the third-term incumbent carries a slim advantage over her closest GOP rival in the general election this November.

But this is Louisiana, and the election system can be complicated. There are nine candidates — Republicans, Democrats, and a Libertarian — on the ballot this November, and if no candidate crosses the 50% threshold, the race moves into a December runoff between the top two contenders.

Landrieu currently falls well below the 50% mark at 43% support among likely voters. Republican Rep. Bill Cassidy comes in second at 40%, according to the survey.

But the poll’s sampling error among likely voters is plus or minus four percentage points, meaning the two candidates are about even.

In a state with large swaths of conservative voters, Landrieu is considered one of the most vulnerable Democrats up for re-election this year. Republicans, eager to take control of the Senate, have focused on the race as a potential pick-up seat. The GOP needs a net gain of six seats to retake the majority.

If the horse race in Louisiana stays relatively the same, Landrieu and Cassidy would be the two candidates heading into the runoff — and that’s when things flip.

The poll indicates that Cassidy would fare slightly better in a runoff than Landrieu, 50%-47%.

“Keep in mind that the electorate in December is probably going to be smaller and quite a bit different from those who turn out to vote in November,” CNN Polling Director Keating Holland said.

I thought I’d bring up something that’s been intriguing me for a few days.  A whistle blower–Fed Employee–has pretty much charged the New York Fed with being captured by Goldman Sach’s. The story was first broke by ProPublica.   The woman was fired when she released a negative assessment of GS during an examination.

Barely a year removed from the devastation of the 2008 financial crisis, the president of the Federal Reserve Bank of New York faced a crossroads. Congress had set its sights on reform. The biggest banks in the nation had shown that their failure could threaten the entire financial system. Lawmakers wanted new safeguards.

This story was co-published with This American Life, from WBEZ Chicago.

Hear the radio version onthese stations or download the episode now.

The Federal Reserve, and, by dint of its location off Wall Street, the New York Fed, was the logical choice to head the effort. Except it had failed miserably in catching the meltdown.

New York Fed President William Dudley had to answer two questions quickly: Why had his institution blown it, and how could it do better? So he called in an outsider, a Columbia University finance professor named David Beim, and granted him unlimited access to investigate. In exchange, the results would remain secret.

After interviews with dozens of New York Fed employees, Beim learned something that surprised even him. The most daunting obstacle the New York Fed faced in overseeing the nation’s biggest financial institutions was its own culture. The New York Fed had become too risk-averse and deferential to the banks it supervised. Its examiners feared contradicting bosses, who too often forced their findings into an institutional consensus that watered down much of what they did.

The report didn’t only highlight problems. Beim provided a path forward. He urged the New York Fed to hire expert examiners who were unafraid to speak up and then encourage them to do so. It was essential, he said, to preventing the next crisis.

A year later, Congress gave the Federal Reserve even more oversight authority. And the New York Fed started hiring specialized examiners to station inside the too-big-to fail institutions, those that posed the most risk to the financial system.

One of the expert examiners it chose was Carmen Segarra.

Segarra appeared to be exactly what Beim ordered. Passionate and direct, schooled in the Ivy League and at the Sorbonne, she was a lawyer with more than 13 years of experience in compliance – the specialty of helping banks satisfy rules and regulations. The New York Fed placed her inside one of the biggest and, at the time, most controversial banks in the country, Goldman Sachs.

It did not go well. She was fired after only seven months.

So,I should remind you that I used to work for Fed Atlanta.  I should also tell you that I’ve thought the NYC Fed has been a prime example of regulatory capture.  You can go back into the files to see my dissections of the 2005 financial crisis as well as read my contempt for Gaithner.  But, anyway, this story has legs, as they say so I wanted to share some updates.

Segarra found three clear cases where Goldman appeared to be engaged in wrongdoing, but where Fed staff pushed back at her attempts to correct it. The latter two incidents have audio evidence from Segarra’s recordings corroborating them.

The wealthy clients incident

A senior Goldman executive, at a meeting with Fed officials early in Segarra’s tenure, expressed the view that “once clients were wealthy enough, certain consumer laws didn’t apply to them,” in Bernstein’s words; this is corroborated by minutes from the meeting in questions. When Segarra tried to look into the issue further, a Fed colleague protested, saying the executive didn’t say that, or if he did, that he didn’t mean it.

The Santander incident

In early January, Goldman was closing a deal with the Spanish bank Santander, the point of which, Fed regulators discerned, was to take risky assets off of Santander’s hands so as to increase its ratio of capital to assets so as to comply with European regulators. The deal required Goldman to notify the Fed about the deal and get it to sign off, which Goldman hadn’t done.

While Fed officials, including Michael Silva, initially sounded outraged, in the end Silva only brought it up once, at the very end of a meeting with Goldman officials, and in a tone that Segarra found overly deferential. She thought the debrief from the meeting with other Fed officials suggested the Fed feared Goldman retaliation if they were too aggressive. This was despite the fact that Goldman was required to hand over information and the Fed could punish it, including criminally, if it failed to comply.

The most forceful action they considered taking against Goldman for the deal was sending them a letter; Bernstein couldn’t confirm that one was ever sent.

The conflict of interest policy incident

The Fed requires banks like Goldman to have firmwide conflict of interest policies that fit certain requirements. Segarra concluded that Goldman lacked such a policy, not least because Goldman’s staffer in charge of managing conflicts of interest told her the firm’s policy had no definition of “conflict of interest.”

Silva agreed with her. But after he got pushback from another Fed examiner, he changed his view, just as Segarra was about to take regulatory action to force Goldman to adopt a real policy. Silva protested that the bank had a conflict of interest policy, but Bernstein notes that it was “just a few paragraphs long and very general .… We showed it to two experts: former Fed examiners familiar with the Fed’s guidance on this issue. They both said it wouldn’t qualify as a policy.”

Silva urged her to recant her statement that there was no policy, despite the fact that he could have easily overridden her. Segarra suggests this was because, to quote Bernstein, “if she submitted her conclusions, it would create a formal record that her bosses didn’t want.” Eventually, Segarra agreed to say there was was a policy, albeit a “very poor policy,” but privately insisted to Silva that there was “no way this is a policy.” A week later, she was fired.

Elizabeth Warren–the senator at the right place, right time and with the right amount of expertise is calling for investigations.   Notice both the Senator and the Whistle Blower are outspoken,intelligent, and obviously moral women.

An influential U.S. senator wants to hold hearings into “disturbing” issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc <gs.n>, a bank the Fed was tasked with policing.

Elizabeth Warren, a Democrat on the Senate Banking Committee, on Friday called for hearings after portions of the recordings from 2011 and 2012 were made public. Fellow Democrat Sherrod Brown, also a committee member, called for a “full and thorough investigation” into the allegations they raised.

I’m hoping this does lead to an investigation and perhaps a call for changes in laws and the regulatory regime. I see that Sherrod Brown from Ohio has also called for congressional investigations.

Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are both calling for Congress to investigate the New York Federal Reserve Bank after recently releasedsecret recordings show the central bank allegedly going light on firms it was supposed to regulate.

Warren and Brown, both members of the Senate Banking Committee, called for an investigation of the New York Fed after Carmen Segarra, a former examiner at the bank, released secretly recorded tapes that she claims show her superiors telling her to go easy on private banks. Segarra says that she was fired from her job in 2012 for refusing to overlook Goldman’s lack of a conflict of interest policy and other questionable practices that should have brought tougher regulatory scrutiny.

Finally, a right wing forced birth zygote fetishist who will fess up to wanting to kill doctors, women, nurses, and any one else who might be associated with an abortion.  We’ve always known they were pro death penalty for any one that steps out side their narrow world.  The National Review’s Kevin D. Williamson  wants them all  “shot or hung”.

So this morning on Twitter, this happened; National Review writer Kevin D. Williamson made the real “pro-life” agenda very, very clear, expressing his opinion that women who have abortions should be put to death — by hanging. And not just the women; he says the doctor who performs the abortion, the nurses who assist, and the hospital staff who enable it should also be executed.

This was not satire, or a “joke.” He really believes this, as you’ll see if you read the following Twitter collection from the bottom up.

Is it more or they just getting more out there and obvious all the time?  I think they just want women to shut up and go away.  Oh, in an interesting turn of events ABC’s Martha Raddatz cut off Rick Perry in mid conspiracy theory rant.  Do you suppose they’re actually going make a practice of this?

ABC News host Martha Raddatz on Sunday cut off Texas Gov. Rick Perry (R) after he spent four minutes defending a conspiracy theory that President Barack Obama was plotting to fill up the United States with undocumented immigrants.

Speaking to Fox News last week, Perry had asserted that the president was responsible for the growing crisis of women and children immigrants coming across the border.

“We either have an incredibly inept administration, or they’re in on this somehow or another,” Perry opined. “I mean I hate to be conspiratorial, but I mean how do you move that many people from Central America across Mexico and then into the United States without there being a fairly coordinated effort?”
During a Sunday interview on ABC News, host Martha Raddatz gave the Republican governor a chance to back away from his conspiracy theory.

“Governor, do you really believe there’s some sort of conspiracy to get people into the United States by the federal government, by the Obama administration?” Raddatz asked.

“When I have written a letter that is dated May of 2012, and I have yet to have a response from this administration, I will tell you they either are inept or don’t care, and that is my position,” Perry said, doubling down on the theory. “We have been bringing to the attention of President Obama and his administration since 2010, he received a letter from me on the tarmac… I have to believe that when you do not respond in any way, that you are either inept, or you have some ulterior motive of which you are functioning from.”

The former Republican presidential candidate added that his theory was proved by the fact that the president had not responded to his letter, and had not deployed drones to the border.

“Unless we secure our southern border, this is going to continue to be a massive amount of individuals that are coming to the United States,” Perry warned. “And, frankly, we don’t have a place to house them as it is. And if we have a major event, a hurricane that comes in to the Gulf Coast, I don’t have a place to be housing people who are displaced because this administration…”

At that point, Raddatz interrupted Perry and ended the interview.

I will once again point out that it was MARTHA Raddatz and not GEORGE that stepped in and actually acted embarrassed to question an obviously whacked set of answers to a legitimate question.

 I think I’m finding a pattern of a need for more women in positions that matter.

So, that’s it for me this morning!  What’s on your reading and blogging list today?