Bill Black: Obama’s Latest Betrayal in Favor of the Big Banks: TISA

Yves here. I’ve taken the liberty of editing down Bill Black’s post slightly to bring readers more quickly to his correctly outraged discussion of the latest Wikileaks expose on a trade deal that has managed to go completely under the radar: the Trade in Services Agreement, otherwise known as TISA. We wrote about this troubling news when the story broke. Astonishingly, the mainstream media has taken no notice of this release. Black’s discussion is accessible to lay readers, and I hope you’ll circulate it in the interest of raising awareness of how the Administration intends to sell out the US to banks, Big Pharma, and other multinationals.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

Wikileaks has done the world a great service again by publishing a leak of an April 2014 (partial) draft of the Trade in Services Agreement (TISA).

Professor Jane Kelsey of the Faculty of Law, University of Auckland prepared an analysis of the leak that I recommend that everyone read. She, appropriately, emphasizes that any analysis must be tentative because we have only a partial, stale draft through the whistleblower(s).

My analysis is more limited in scope but is consistent with the thrust of her concerns.

Three TISA Paradoxes

Financial Deregulation is Criminogenic

The three “de’s” – deregulation, desupervision, and de facto decriminalization – has been critical to the three modern U.S. financial crises. The combination is intensely criminogenic and produces the fraud epidemics that drive our crises…..

The obvious question is why, since we know from repeated waves of the three “de’s” how disastrously this ends, we fail to “learn from experience” and finally follow the advice of effective financial regulators, white-collar criminologists, and top economists? The even more pointed question is why President Obama cannot “learn from experience.” It was his appointees to the FCIC who unanimously warned that the three “de’s” played a critical role in causing the crisis.

TISA is designed to replicate, indeed, optimize the criminogenic environment that made fraudulent financial CEOs wealthy by “looting” “their” banks. The (effective) “regulators in the field” figured this out by 1983 – over 30 years ago. We wrote up our findings in great detail. Top economists and top white-collar criminologists studying those findings a decade later (1993) agreed with the findings. Since the original findings in 1983, we have the (prevented) “liar’s” loans crisis of 1991 when federal S&L regulators based in California drove what were then a brand new product called “low doc” loans out of the regulated industry. That “second front” – while the S&L regulators were containing the S&L debacle – was dealt with so effectively that there was no resultant financial crisis. Indeed, it is only with the benefit of the current crisis that we can understand that the containment of the overall S&L debacle (driven primarily by fraudulent commercial real estate loans and investments) and the incipient crisis is liar’s loans prevented a crisis that would have become similar in scope to the current crisis. The S&L debacle was contained before it caused even a minor national recession.

In sum, we know not only that the three “de’s” are disastrous, but also that effective reregulation, resupervision, and restoration of effective prosecutions can be exceptionally effective and save tens of trillions of dollars in costs and 10 million American jobs by preventing the most destructive financial crises and resultant Great Recession. (Those savings would have been dramatically greater in the eurozone where one-third of the population is suffering from Great Depression levels of unemployment.)

The EU and Obama, therefore, should have several key areas of complete agreement in drafting TISA:

  1. It is essential, and urgent, to end the global financial regulatory race to the bottom
  2. It is essential, and urgent, to end the existing regulatory structure’s continuing hostility to effective regulation, supervision, and prosecution
  3. The systemically dangerous institutions (SDIs) (the so-called “too big to fail” banks) pose an intolerable global risk of financial crisis and should have been forced to shrink to a size where they no longer endanger the world’s economies and democracies
  4. It is essential, and urgent, to remove the perverse incentives created by modern executive and professional compensation
  5. Rehabilitate private discipline by requiring “independent” experts providing services to financial institutions to be owned in partnership form with joint and several liability and fully restore the fiduciary duties of loyalty and care that have been eviscerated by legislation and hostile judicial interpretations

I’ll discuss a limited aspect of what the draft TISA provides below, but it is sufficient for this paradox to make four points. First, none of the five vital and urgent reforms is contained in the draft. Second, there is not a single provision designed to make regulation, supervision, enforcement, or prosecution of private bankers and those that aid and abet their violations more effective. Third, virtually every provision is designed to make banking more criminogenic by increasing the three “de’s” and locking in the existing pathetically inadequate system. Fourth, the draft is designed as a one-way ratchet under which nations are only allowed to further loosen their already inadequate regulation, supervision, and prosecution systems.

The first paradox is that Obama, who cannot claim that he does not know better given the unanimous findings of his own FCIC appointees who investigated the causes of the crisis, is trying to recreate those causes, spur a race to the bottom among financial regulators, and make the causes of the past crisis global (rather than primarily limited to the U.S. and the EU). Obama, in the TISA draft, proposes to do everything that his own FCIC experts, white-collar criminologists, the top economists on the subject of criminogenic environments, and effective regulators with a track record of success have been telling Obama not to do for his entire term in office.

Even more insanely, Obama’s draft is designed to make it far more difficult for competent regulators to respond rapidly to a developing crisis and contain it as was done during the S&L debacle and during the surge of “liar’s” loans in 1990-1991 before it cause any crisis. The goal is to prevent a group of regulators from emulating our successful reregulation of the S&L industry and obtaining over 1,000 felony convictions in cases designated as “major” by the Department of Justice (DOJ). To obtain that result we made over 30,000 criminal referrals. In the current crisis, the anti-regulators who de-supervised banks made, at best, a handful of criminal referrals and the result is that six years after the collapse of the financial system not a single senior banker who led the three most destructive financial fraud epidemics in history has been prosecuted by DOJ. Bank CEOs love the three “de’s” because it allows them to become wealthy by “looting” with impunity. Looting, as Akerlof and Romer aptly emphasized, is a “sure thing” for the leaders of a bank.

“Transparency” for Bankers: Maximum Opaqueness for the Public and Congress

The TISA draft (Article X.16) is very clear about the second great paradox: bankers must be told everything that regulators are thinking about adopting and have ample opportunity to influence the regulators’ drafting of the rule. But TISA is an international secret that will remain an international secret for five years after it is adopted. Like the Trans-Pacific Partnership, the drafts are kept secret even from Congress. Indeed, TISA is “classified” so that those who might blow the whistle on the travesty may be prosecuted. The draft’s initial information contains this language:

Declassify on: Five years from entry into force of the TISA agreement….

It must be stored in a locked or secured building, room, or container.

I note this obvious, indefensible hypocrisy because it is illustrative of the entire draft. When the indefensible appears in a document like this it is because the drafters know that there is no one representing the other side and they can afford to be outrageously one-sided. It was clearly drafted by and for lobbyists for the SDIs. Any government officials involved in the drafting are simply scribes who will be rewarded on the other side of the revolving door. There is no pretense that the draft is a reasoned response to differing views. Only one set of views – literally the wish list of the largest, most criminal banks – is presented and it is presented in exceptionally extreme language. There is literally nothing in the draft designed to increase the regulatory protections afforded the public from private banks. There is literally nothing in the draft that increases restrictions on private banks.

As a lawyer I recognize exactly what happened because the draft reads exactly like how we draft a wish list. Obama is a lawyer. Mr. President, read the draft and it will be obvious to you that no one is representing the public. The President of Ecuador, Rafael Correa (an economist), was outraged when he learned of what the bankers were trying to achieve through TISA. Sadly, the U.S. played a disgraceful role in pushing TISA forward over Ecuador’s objections. If Obama were to admit that Ecuador was right, bring the U.S. back to representing the public rather than the looters, and make public the entire disgraceful draft TISA would collapse.

TISA’s drafting consists of a meeting of banking thieves who are successfully demanding a return to what Gramlich correctly described as “no cops on the beat.” If the street robbers of the world demanded that we remove the cops on the beat we would be enraged. Bankers and their neoclassical economist allies, however, regularly lobby for just such a boon to elite white-collar criminals. We have millennia of experience with what happens when we give the elites the power to loot with impunity.

The Paradox of Secrecy and “Prudential” Regulation

The third paradox is that as bad as the draft is I also know as a lawyer exactly how it will be defended. The defense will be simple: the draft will cause no harm because Article X.17 allows allow regulators to adopt rules for “prudential” purposes. Note that it does not require nations to adopt appropriate prudential rules to avoid creating the disastrous race to the bottom. As I explained, the TISA draft does not encourage or require any prudential measure. It does not even contain a vague and unenforceable suggestion that it might be a good thing to look for areas of regulatory or supervisory weakness and fix them.

Article X.17: Prudential Measures

1. Notwithstanding any other provision of the Agreement, a Party shall not be prevented from [PA, EU: taking] [US: adopting or maintaining] measures for prudential reasons, including for:

(a) the protection of investors, depositors, [PA, US financial market users], policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier; or

(b) to ensure the integrity and stability of a Party’s financial system.

2. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the Party’s commitments or obligations under the Agreement.

The Paradox of Withstanding a “Notwithstanding” Clause

The defense of TISA is obvious. The “notwithstanding” clause means that regardless of “any other provision” of TISA every nation has the absolute right to take financial regulatory and supervisory measures “for prudential reasons.” Further, the examples of such “reasons” are broad. The obvious conclusion is that TISA poses no barrier to important regulatory or supervisory actions.

But there are three non-obvious problems with that interpretation. First, why does Article 17.2 exist?

2. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the Party’s commitments or obligations under the Agreement.

The “notwithstanding” clause means that “such [prudential] measures” “conform with the provisions of [TISA]” by virtue of that clause. Article 17.2, however, indicates that regulations that the U.S. finds vital to adopt to “ensure the integrity and stability of [our] financial system” can be found invalid by some (as yet unspecified entity) on the grounds that the entity thinks are being used to “avoid [our] commitments or obligations under [TISA].” The unspecified entity is supposed to decide what the motive of those involved in adopting the rule or taking the supervisory action was. Almost any new banking regulation that the U.S. adopted to stem an epidemic of the forms of fraud that drive our financial crises could be interpreted as not “conforming with [TISA]” absent the “notwithstanding” clause. That means that virtually any rule the U.S. found essential to adopt to prevent the imminent collapse of the “stability of [our] financial system” could be declared a breach of TISA under paragraph 2 of Article 17.

What entity will be deciding whether U.S. banking rules were adopted in order to “avoid … commitments … under [TISA]? Article 20 says that a “dispute panel” will consider alleged violations of TISA. If this clause follows recent U.S. practices under Obama, and the bankers are explicitly lobbying to ensure that TISA does so, this means that a group of so-called “arbiters” will decide such disputes. The panel, if it follows current practices, will be subject to no rule of law and no effective right of appeal. They will operate in secret and will be composed primarily of lawyers with glaring conflicts of interest. The same lawyers who bring claims against nations on one day then serve as the “arbiters” on the next day deciding cases brought by their counterparts. These panels have issued orders to sovereign nations demanding that they take unconstitutional actions – and then proposed to fine the nations for refusing to violate their constitutions (and any civilized concept of due process). Remember, any foreign bank can ask such a panel to declare a banking regulation invalid that we have adopted because we have found that the foreign bank has engaged in conduct that poses a grave and imminent threat to the “integrity and stability” of our Nation and even the global financial system. Under TISA, we will lose all control and can be stripped of our sovereign duty to act to protect the American and world economies. A group of fervently anti-American lawyers who are viscerally opposed to banking rules because they became wealthy by representing banks making attacks on banking rules will control our fate. The (faux) arbitral panels claim the power to issue injunctions ordering a sovereign nation not to adopt rules and not to take supervisory actions even against criminal enterprises – and to issue damages against nations that refuse to comply with such orders.

Taken together, subparagraph 2 and the Article 20 “dispute panel” provisions explain the third terrible TISA paradox. The “notwithstanding” clause was inserted to make it appear to the credulous that TISA would have no effect on the ability to regulate banks. But we can see that when read together the protections of Article 17’s “notwithstanding” clause are illusory. TISA can destroy America’s ability to take the reregulatory, supervisory prosecutorial steps essential against the elite frauds that drive our recurrent, intensifying financial crises. The worst fraudulent CEOs controlling foreign banks operating in the U.S. would happily bribe a group of already morally crippled (faux) arbiters to declare U.S. banking rules a violation of TISA and to order the U.S. not to enforce its laws against even the most fraudulent bankers causing a grave crisis.

TISA is awful for honest bankers. Effective financial regulators are the essential “cops on the beat.” Only we have shown the ability to break the “Gresham’s” dynamic (bad ethics drives good ethics out of the markets and professions) that fraudulent CEOs create. When we break that dynamic we make it possible for honest bankers to prevail. TISA is good for only one group – dishonest bank executives.


That brings us back to the reason the bank CEOs have demanded that TISA be “classified” and kept from the public and even Congress. Indeed, the plan is to classify its provisions for five years after TISA is adopted. That delay is meant to make it politically possible for TISA to be adopted and then continue to protect heads of state from being thrown out of office by their enraged constituents.

But the prior discussion raises other questions. What if Article 17’s “notwithstanding” clause really meant what it appeared to say? What if TISA imposed no restrictions on the adoption of banking regulations? U.S. banking rules are entirely prudential. All of our S&L rules, supervisory actions, enforcement actions, and prosecutions were “prudential” under TISA’s definition. If there were no paragraph 2 to Article 17 and no Article 20 “dispute panels” the TISA exercise would be pointless. The U.S. would be able to adopt any financial rule, take any supervisory or enforcement action, and prosecute anyone regardless of any TISA provision.

Ask yourself this question: why would the bankers and heads of state have demanded, and received, “classified” treatment of a document that did not have any confidential information (there are no state secrets, no privacy issues, and nothing of proprietary value in the leaked TISA draft) and made no meaningful restriction on regulation and supervision due to the “nowithstanding” clause of Article 17? The demand for classified treatment makes it inescapable that the bankers and government officials involved in drafting TISA are trying to hide something they believe would outrage the public. The paradox is that the bankers’ and politicians’ rabid fear of disclosure to the public and Congress of TISA’s assault on regulation confirms beyond any reasonable doubt that subparagraph 2 of Article 17 and Article 20 combine to make TISA a grave threat to the global economy, workers, and honest bankers by making the financial world even more criminogenic.

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  1. trish

    “it will be obvious to you that no one is representing the public.” That’s Hope and Change Man essentially since his first day in office. He’s hasn’t represented the public, ever.
    He’s represented these banking thieves and all other assorted corporate kleptocrats since day one. Representation of the public is, has been as illusory as the TISA prudential regulatory allowances that aren’t. Prudential means only wish list protection.

    “Declassify on: Five years from entry into force of the TISA agreement….
    It must be stored in a locked or secured building, room, or container.”

    Wow. Where’s our watchdog press? I still think this when I read something so utterly egregious like this even though I know better. TISA is “classified” so that those who might blow the whistle may be prosecuted. No cops on the beat except for those who point out the criminality. This trend toward criminalizing all dissent is very very frightening!!!

    And (essentially) not a peep from the MSM. Aiding and abetting the the bankers and those revolving-door government officials involved trying (effectively, at this point) to hide something they know would outrage the public. Criminals, all.

    1. Banger

      We have to assume that everything on the MSM is a lie or misleading–the more we spread that idea the better. Not that true stories and great reporting doesn’t happen–it does happen but we have to be suspicious of anything we read, watch or hear in the mainstream particularly when it comes to significant stories.

      1. trish

        yes, good reporting does come out, but the exception not the rule and that says a lot.
        I see occasional pieces when scanning the NYT and I’m sure good stuff occasionally on NPR (but I can’t stand listening to the Dina-Temple-Raston-type-hack pieces interspersed with the it’s-all-about-us, feel-good pieces and so many liberal friends I know wear their NPR listening like scout badges, I can’t listen to it anymore), and other MSM.

        I’m a bit embarrassed to admit that it took me until well into middle age to become a more critical reader and hence more aware of what was going on (a gradual evolution, a maturity long time coming?), thanks to sites like counterpunch, truthdig, to greenwald (pre-Omidyar), a group of pando writers, here… many good ones…but at least my practically-adult kids are aware now, as they’re growing up into this world.

        Yes, one needs to be a critical reader of everything (non-fiction), read w/ a degree of skepticism, a discerning eye, expect evidence when necessary…but it’s nice to have some sources one can trust, plain good journalism. Wish they were mainstream. We’d be a whole lot better off.

    2. jgordon

      You see, I thought this was a big deal in the media because I have completely stopped paying attention to the MSM and only get my info from alternative media anymore. Nice to see that my lack of faith in the credibility of the corporate/government media has been rewarded yet again. It’s sad to say that Alex Jones runs a journalism outfit superior to all the MSM combined–and that’s not meant as compliment to Jones.

    3. mellon

      The MSM seems to have a media quarantine on all the FTAs in the US. What little coverage they have is exceedingly vague and wildly pro-FTA.

      Here is how Congresspeople can say they have not read it and get away with it.
      This just tells it all.. People need to read this:

      “In the US, there is a reading room arrangement where members of the US Congress (no staff permitted) have to leave empty-handed.”

      There are two new, I think TTIP/TISA documents- linked from this page. The EU services offer. Unfortunately, the US offer is secret. But it talks about it a bit in the EU one. For example the US is pushing hard for postal services “liberalization”.

  2. cnchal

    The obvious question is why, since we know from repeated waves of the three “de’s” how disastrously this ends,

    That’s easy. The criminals are writing the laws, which are secret from the victims. What? You didn’t know the criminals passed a law making locks illegal. Well, now you know, and you better get rid of those locks. We wouldn’t want to make the criminal’s heist any harder than dragging a giant sack of money.

  3. ifthethunderdontgetya™³²®©

    All this from a guy who ran against NAFTA…and then secretly resumed negotiations on ‘NAFTA on steroids’ less than a year after he was sworn in.

    Neither the GOP nor right-wing Dems in Congress made Obama do that. It’s a straight up sellout of his voters.

    1. Daikon

      No, Obama didn’t run against NAFTA. One of his aides told the Canadians O secretly supported NAFTA, and this leak was widely reported. Yet many progressives refused to look at reality and voted for O. They bear part of the responsibility for the sellout.

  4. Rodger Malcolm Mitchell

    The reason President Obama does not “learn” from experience is, very simply, he has been paid not to “learn.”

    Like most politicians, the President has been bribed via campaign contributions and promises of lucrative employment later. Then there is that Obama library which will require massive investment from the wealthy. Watch for billionaire Penny Pritzker, who already has received her reward from Obama, to lead the collections for a Chicago Obama Library.

    It’s the same reason why Obama has wanted to cut Social Security (in his “Grand Bargain’): He has been paid to widen the gap between the rich and the rest.

    Bottom line: The rich do not care about dollar income or wealth per se. They care about the GAP, for it is the gap that makes them rich. A man with a billion dollars would not be rich if everyone else had a billion dollars. But a man with a hundred dollars would be rich, if everyone else had but one dollar.

    The wealthy bribe politicians to widen the gap. Thus, politicians pretend the federal government can run short of dollars, so spending (which mostly benefits the middle and lower income/power groups) must be reduced. It is the gap that “required” FICA to be increased, and Social Security benefits to be decreased.

    All the mystery about government economic “ignorance,” can be explained by the gap. See: THE GAP

    [Additionally, the euro exists because of the gap — but that is another story.]

    1. hunkerdown

      Biden’s kid’s the corporate lawyer for a Ukrainian fracking concern which currently holds leases in the disputed territories. Somehow I don’t think these are the sort of people who put their nominal pretexts (i.e. constituents, i.e. us) ahead of their actual interests.

    2. christine

      6 years into an 8-year presidential stunt, most of the ills have already been committed and institutionalized. “I” would come way too late, unless accompanied by 1) a rewrite of our constitution, 2) a repeal of every presidential order signed since he came into power and 3) a dissolution of Congress and elections of new reps and senators.

      Anything short of that is mere huffing and puffing.

    3. Nathanael

      No, the time for the “I” word was back in 2002.

      We’re getting near the time to discuss the “R” word. I’m not happy about that.

  5. agkaiser

    The system will die of concentration of wealth. Many economic/political abuses, such as trade deals like TISA, will play a role. The fundamental intellectual flaw that dooms us, though, is the failure to understand that money is just marks on a ledger, paper or underutilized metal resources, without real wealth for it to represent and to give it value.

    TISA appears to exacerbate the general misunderstanding of the nature of money and accelerate our decline towards total cultural collapse and extinction. Environmental degradation, war and finance are all destructive forces that endanger us. Combined they’re the greatest threat the Human Race has ever faced.

  6. Chauncey Gardiner

    TISA, TTIP and TIP are all part of a continuing broad, coordinated, secretive attack ceding rights and powers under the Constitution and sovereignty to large transnational corporations and banks.

    The secrecy in which these negotiations and documents have been cloaked from public view and congressional oversight are the tell. That they are being negotiated behind closed doors and won’t be made available for viewing until many years after they are concluded and the politicians responsible have left office to their revolving door rewards is sufficient reason alone to oppose them.

    1. Banger

      Just another reason to resist I nay way possible the current system–I guess it needs to break before it can be fixed–we need to speed up the process.

      1. Vatch

        No, if the system breaks, things will probably get much worse, as described in The Shock Doctrine by Naomi Klein. Resistance, yes. Real change, yes. But don’t destroy the system. Instead, endeavor to fix it.

        1. Banger

          Theoretically, I agree with you–but how can it be “fixed”? Certainly not on the level of the federal government–do you really know how far gone the system is? For example, if you had dramatic and draconian changes to the Civil Service, you might be able to trust the federal government to manage reforms on the off chance that Congress and therefore the way we elect them would be even slightly interested in reform. Look, from a nuts and bolts perspective there isn’t any chance of reform without major breakdowns because all branches of gov’t particularly the fifth estate are totally intertwined with the corporate oligarchs. Now if the power elites could agree that reforms should happen then, yes, reform could happen within the system with time–but how likely is that? Not just because the elites are selfish a-holes but because they have major rivalries within their ranks which is the main reason Washington seems to be so divided and confused (except for a part of the TP, the issues aren’t ideological).

          1. Vatch

            It probably can’t be fixed, since most Americans are too sheep-like. Perhaps if more people would write to their Congress-critters demanding a restoration of the Glass Steagall banking laws, we would get some action. People should also write to Congress or to newspapers complaining about the lack of banker prosecutions over the past several years. I’ve done all of these, so my conscience is clear. I’ve even nagged friends and relatives to do the same, but with little success. Too many people either don’t care, or are convinced that their letters will be ignored. This is a self fulfilling prophecy: if most people don’t write, then the letters of the few who do write will be ignored.

            Whenever there is a Third Party political candidate, people should vote for that person. Again, friends and relatives are reluctant to do this, and so we get the same servants of oligarchy in office, year after year. People should vote Green or Libertarian — I prefer Green, but I will be also delighted if the Libertarians can increase their vote totals.

            Here’s an organization that might deserve support on the twisted issue of corporate personhood (thanks, Carla):



            1. Vatch

              That should be “I will also be delighted instead of “I will be also delighted”. Sometimes I type too fsat. :-)

            2. Lambert Strether

              Man, I hate that “sheeple” meme. It’s not only insulting, it’s disempowering, especially to activists. To be fair, it’s totally incomprehensible why people would think twice about following the liberals/”progressives”/left, given their track record since the mid-70s. Oh, wait…

          2. LucyLulu

            The problem with our system is that it isn’t in the best interest of the people who could fix the system to make the necessary changes. Politicians won’t pass campaign finance and lobby reform legislation when it means their income gets slashed to a meager $170K/yr. It would be karma and make for a nice fantasy if they could be paid minimum wage, and forbidden any other income, but that’s some really wild fantasy.

        2. Nathanael

          Oh, when the system breaks, it’ll be a bloody mess, obviously. But since the system can’t be fixed, why worry about that?

          Worry, rather, about how to build a new system as quickly as possible. Preferably *before* the collapse of the old system — a parallel set of institutions, which can serve as the basis of society after the old system collapses.

  7. F. Beard

    TISA can destroy America’s ability to take the reregulatory, supervisory prosecutorial steps essential against the elite frauds that drive our recurrent, intensifying financial crises. Bill Black

    Then remove all government privileges, both explicit and implicit, from the banks leaving them 100% private with 100% voluntary depositors. That will require a massive bailout of the entire population with new fiat so all but 100% voluntary depositors can flee the soon-to-be-uninsured banking cartel for a Postal Savings Service that makes no loans (and pays no interest).

    YOUR banks, Mr. Black, are themselves thieves by virtue of their extensive privileges from the government. Thus, saving one parasite (the banks) from another parasite (their CEOs) sounds like a waste of your time.

  8. impermanence

    The sad thing is that the bankers are doing exactly what everybody else would be doing if they had the opportunity.

    1. F. Beard

      That’s grossly unjust and very presumptuous of you.

      You could not pay me to be a banker since it is against my religious beliefs and because I despise the banking cartel.

      Besides, some people ARE content to live modestly.

    2. hunkerdown

      So we shouldn’t take the opportunity away from the bankers, or spoil their ability to enjoy it tranquilly?

    3. trish

      what nonsense.
      There are indeed individual differences (continuum scales, perhaps) re empathy, sense of justice, moral compass, need for power, etc. (I’m not arguing nature vs nurture here-both important- just that there are indeed differences), and I think there are certain types attracted to roles like investment banker, politician, law, as well as (on the other end of the spectrum, just to throw out hastily as an example) the peace corp, w/ lots in between, around, beyond. The sciences, the arts…. And within these particular roles, as well (don’t mean to overly simplify, just making a point.
      Anecdotal, perhaps, but anyone with kids (more than one) or a few siblings can see this (I have three and one is hugely self-absorbed, one is highly sensitive and empathetic, and one, with autism, is an odd mix of utter self-absorbtion and great empathy for all living things as long as they’re not humans. none desire to be hedge fund mngrs, corporate ceos, business majors. nurturing plays a role).

    4. Mark Stevens

      Not everyone is a sociopath. I could never starve a million people to make a million dollars by manipulating the price of food. I simply need one house, food, and security for my family along with the happiness that comes with true friends and the love I give and receive. I work to achieve this. I do not crave fame or fortune. I care about the light of those less fortunate. I understand that we are all born with unique abilities and limitations. I am aware of the advantages of those born into wealth vs those living in poverty.

      1. ambrit

        Mr. Stevens;
        The flaw in your otherwise excellent comment is that the realm of “High Wealth” seems to select for sociopaths. Once involved in the “High Wealth” milieu, impressionable youths are acculturated to a sociopathic lifestyle. Nature and nurture conspire to select for sociopathy in that social niche. I speak from personal experience. Mz Smiths quote from “The Great Gatsby” opening her post about Mexico is an excellent example of the reality. Fitzgerald knew the rich too, and wasn’t complimentary about them.

  9. flora

    J.P. Morgan put together the steel monopoly U.S. Steel a hundred years ago by consolidating successful steel businesses. The current TBTF financial firms are failures by any meaningful definition. They are insolvent without continued Fed propping up. They drain the real economy. TISA would create an international monopoly of failed financial businesses. How is that capitalism?

    1. Nathanael

      No, they really aren’t. If they were learning from experience, they would be more like Earl Grey, designing programs to *appease* the 99%. Where is the bread? Where are the circuses?

  10. don

    Fraud and abuse were not the main causes of the last financial crisis – it was imbalance in international capital flows, ‘enabled’ by the Fed. Right now, the Fed is again taking risks that may prove as disastrous as allowing the housing bubble.
    That said, we need to do something about compensation of traders. They are again making big money by taking tremendous risks, the downside for which they cannot effectively be held accountable.

    1. LucyLulu

      >>“Fraud and abuse were not the main causes of the last financial crisis”

      You must be new here?

    2. Nathanael

      Fraud and abuse were definitely the cause of the last financial crisis. We’ve studied this extensively and most of the evidence is in Naked Capitalism’s archives.

  11. LucyLulu

    Speaking of fraud and deception, Scneiderman files civil suit against Barclay’s related to “dark pool” trading.

    Barclays heavily promoted a service called Liquidity Profiling, which Barclays claimed was a “surveillance” system that tracked every trade in Barclays’ dark pool in order to identify predatory traders, rate them based on the objective characteristics of their trading behavior, and hold them accountable for engaging in predatory practices.

    Contrary to those promises, the complaint alleges that:

    – Barclays has never prohibited any trader from participating in its dark pool, regardless of how predatory its activity was determined to be;
    -Barclays did not regularly update the ratings of high-frequency trading firms monitored by Liquidity Profiling;
    -Barclays “overrode” certain Liquidity Profiling ratings – including for some of its own internal trading desks that engaged in high-frequency trading – by assigning safe ratings to traders that were otherwise determined to be toxic.

    The complaint further alleges that, contrary to Barclays’ representations that it protects clients from aggressive or predatory high-frequency trading in its dark pool, Barclays in fact operates its dark pool to favor high-frequency traders and has actively sought to attract them by giving them systematic advantages over others trading in the pool. As alleged in the complaint, this included:

    -Falsely underrepresenting the concentration of aggressive high-frequency trading in its dark pool;
    -Misrepresenting its “Liquidity Profiling” service – which Barclays claimed protected investors from predatory behavior – by failing to provide many of the benefits marketed with the service; and
    -Claiming that Barclays does not favor its own dark pool when routing client orders to trading venues, while in fact doing just that. As alleged in our Ccomplaint, Barclays falsified an analysis of how it routed a major client’s orders.

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