The Deutsch Bank-DOJ Dance

The DOJ continues to participate in this PR scheme to keep people from asking — “if everything was so illegal at the top of this food chain, why are we treating the bottom of the food chain as presumptively legal?”


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In the continuing charade that covers up the true nature of the crimes committed by the major banks, the DOJ has made a demand for $14 billion from Deutsch Bank for its issuing and underwriting of bogus mortgage bonds. The demand probably should have been 1,000 times higher and against all the connected banks — i.e., the fact that the major banks, while appearing to be competitors, were actually participating in an illegal “pool.”

The demand is meant for public relations so it looks like the department of justice is doing its job. They are not. And that is what Senator Elizabeth Warren is complaining about. And everyone on the inside knows that Deutsch will pay only a fraction of that demand, which satisfies investors who have committed their money to buying bank stocks.

The DOJ continues to participate in this PR scheme to keep people from asking — “if everything was so illegal at the top of this food chain, why are we treating the bottom of the food chain as presumptively legal?” The top is the investment banking and the bottom is the alleged “lending.” [I have recently come to the conclusion that the alleged “closings” were not loans, in any legal sense — something I am sure by critics will say is patently absurd. But there are many legal theories and doctrines between the words “loan” and “gift.”]

The dance and the music keep playing because nobody wants to stick a pin in the giant bubble known as the shadow banking market, where approximately $1 quadrillion dollars in nominal value is stored or traded. That market depends entirely upon the facial validity of the mortgage bonds and other instruments issued by nonexistent trusts. If it leaks out that the Government and the banks know full well that the nominal values in the  shadow banking market are an illusion then the entire market collapses like a black hole in physics. The fear is that if that happens all financial markets will freeze up and everyone will go broke.

My view is quite different but nobody can prove anything without acting. My view is that by sticking a pin in the bubble the major banks will collapse, the thousands of smaller banks will pick up the slack, and panic will only be as large as the Government lets it. In any event when the dust clears, the major banks will be gone and the financial landscape will once again be returned to a freely competitive level playing field. The living lie that is the financial market will be removed.

The “loans” will temporarily be some sort of unsecured liability and if the Government steps in and does what is right, the GSE’s will step in and create a viable creditor to enforce the liabilities of homeowners on a level playing field where the interests of the original investors are protected and where the retention of the property is at least possible for the homeowners. New notes and mortgages will be executed and title and protected interests will clear for at least a substantial portion of the public (homeowners and pensioners) that has been dragged into the quagmire by the tricks of arrogant bankers on Wall Street. Our economy would be based in truth instead of compounding lies and we would have the ability to restore household wealth the way Iceland did it, producing a robust economy. But what do I know — I could be wrong.

4 Responses

  1. Bottom of the food chain is the American public. Proof of why the government is complicit in the scam. Protecting the banks at all costs

  2. CREATE A VIABLE CREDITOR???? Kinda like Ocwen, et al do when they appoint themselves the “holder”? So FNMA getting a free house is okay???

  3. Niel, you are right, we would be more like Iceland, we wouldn’t just lay down, like the big banks got recovery from the government by scaring them, take away the ability to create fear, and stop them from freezing up money. We would persevere like “WE THE PEOPLE” always have. Popping that bubble, like Trump says, would make America Great again. This wouldn’t stop the big bank players from trying to jump ship and infect the smaller banks, but regulation would. New opportunities would open up and more Billionairs would be created maybe a handful of people would be able to leave the home to the kids that they were raised in, a merger concept a few of us non-greedy hardworking Americans live for.

  4. Wow in a perfect world Neil, unfortunately we are not iceland, but I have considered moving there. It would be a nice change in the weather from the florida heat and humidity and corruption that runs this state,

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