If you want to see a corrupt, dictatorial government in action, you don't need to sit glued to Al Jazeera's Live Feed on Egypt. It's right here in the US, and the government just gets away with breaking the law and ignoring the sub-humans (anyone who doesn't work for the government or the TBTF banks) each and every single instance.
This is just one of those, as recounted by Zero Hedge. It is about how Hank Paulson and Ben "Bernank" Bernanke illegally forced Ken Lewis, then-CEO of Bank of America, to go through with the purchase of Merrill Lynch without Ken Lewis invoking the MAC clause - that is, "Material Adverse Change" clause - and reneging on the deal.
Part from Zero Hedge:
Mr. Corngold: Before we do that, did you have an understanding of what powers the Treasury Department had to remove the board and/or the management of the bank?
The Witness: It was my understanding he said – that’s why I said I think he said government. I think – my impression is that was the language of the Fed used to use in Texas, basically saying, Don’t do something.
Mr. Corngold: You had an understanding that the Fed could remove the board and/or the management of a bank that it regulated if it found certain things.
A: Yes
Q: Do you know what it has to find?
A: They had been so strong about the fact that they strongly advised use not to do it and that it would cause harm to the bank and the system and they system wouldn’t be good for us, either – that it would damage the system. That’s kind of how it was being portrayed.
Q: Was this the first you heard about the government – to use your term – was considering that threat.
A: Yes
Q: Did you ask him, “By the way, what do you mean by that” – I’m sorry, the comment about the removal?
A: No. It was pretty clear.
Q: And at the time, did you sort of have that preexisting understanding of the Texas Fed way of communicating.
A: I had heard that at some point. I don’t know why that’s in my mind, but I’ve heard of that before that’s a way of telling you not to do something.
Q: Have you heard any kind of communication like that from a federal official to you before?
A: No
A: This was about just a shear magnitude of loss, and either you do it or you don’t. Behavioral changes, or whatever, wouldn’t fill that hole that we thought was $12 billion, which turned out to be $15 billion.
The bottom line, however, is that Ken Lewis wanted to hang on to the CEO job at Bank of America. He could have called their bluff and disclosed everything out in the open. That might have blown up the financial markets, but I doubt it. Merrill didn't have the kind of extensive reach that Lehman had. Even if that triggered the blowup, it might have been far better than what we have now - a market that has stopped pricing in anything meaningful, whether it is an on-going crisis in Egypt, dismal job numbers, housing market that keeps on collapsing, sovereign debt crisis, "non-core" inflation, skyrocketing commodities prices .... etc...etc... In other words, the market is dead.
Read the whole deposition at the link, and wonder aloud why isn't any of them, Hank, Ben, or Ken, in jail or permanent exile.
30-Day free trial by following the link.
Tokyo Time
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