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Oscar Winner Charles Ferguson Rips Wall Street and Washington

Posted by Larry Doyle on February 28, 2011 5:28 AM |

Charles Ferguson

“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”

With those words last evening, Charles Ferguson, the winner of the Academy Award for Best Documentary for his film Inside Job, did a lot more than merely begin an acceptance speech. Ferguson touched the third rail and made a political statement. But did he really? Really? Not in my opinion. Ferguson spoke the truth.

When did the mere voicing of the truth become political? Perhaps in America 2011 those who speak the truth actually stand out because we hear so little of the prized virtue. That reality is a sad commentary on our society.

I commend Ferguson. Backstage he had even more to say.

Reuters reports, Financial Meltdown Documentary Wins Oscar:

Ferguson, a self-described “policy wonk” with a doctorate in political science, interviewed fund managers, central bankers and political advisers for his film, which uncovered an uncomfortably close professional relationship between academia and hedge funds.

But not everyone was willing to subject themselves to his pointed questions, including key players like Henry Paulson, the former CEO of Goldman Sachs and Treasury Secretary at the worst moments of the economic implosion.

He also expected more from the new government.

“The biggest surprise to me personally and biggest disappointment was that nobody in the Obama administration would speak with me even off the record — including people that I’ve known for many, many years,” Ferguson said backstage.

He believes Americans, who lost homes and jobs in the millions because of shady mortgage lending and bank collapses, are disappointed that “nothing has been done.”

“Unfortunately, I think that the reason is predominantly that the financial industry has become so politically powerful that it is able to inhibit the normal process of justice and law enforcement,” said Ferguson.

Please ponder this final statement for a minute. Is this the nation we want for our children?

Ferguson reiterates a common theme here at Sense on Cents. Technically, this theme is embodied by the term regulatory capture within the financial industry. Evidence is overwhelming that the industry has captured its regulators or, as Sense on Cents has often defined it, the two crowds on Wall Street and Washington have engaged in a deeply incestuous relationship.

Despite the trauma our nation has experienced, we see little evidence of this incestuous activity ending. Why? Why won’t the media take it on? Why won’t the new Congressional representatives take it on? Will it take an even larger crisis to end this incest?

Whom does America need to hear extensively from on this topic of regulatory capture? Sense on Cents is calling on the following individuals to address this topic IN DEPTH. They can address the body of work compiled in Sense on Cents/ Wall Street-Washington Incest.

1. Treasury Secretary Timothy Geithner
2. Federal Reserve Chair Ben Bernanke
3. Former Treasury Secretary Henry Paulson
4. Former Fed Chair Alan Greenspan
5. SEC Chair Mary Schapiro
6. CFTC Chairman Gary Gensler
7. Senators Dodd and Schumer, Congressmen Frank, Issa, and Baucus, and every other representative of the House and Senate Banking and Finance Committees for the last decade.
8. Former SEC Chair Christopher Cox
9. FINRA Head Richard Ketchum
10. JP Morgan CEO Jamie Dimon
11. Goldman Sachs CEO Lloyd Blankfein
12. Morgan Stanley CEO James Gorman
13. Credit Suisse CEO Brady Dougan
14. Bank of America CEO Brian Moynihan
15. President Barack Obama

There is no way this list is comprehensive, but it will certainly make for a good start.

Let’s stop with the bull$#*t!! America needs and deserves total truth, transparency, and integrity.

Unless and until the regulatory capture, that is the Wall Street-Washington incestuous relationship, is exposed and ended, I believe capitalism will never truly rebound and our nation as a whole will suffer. You think I’m exaggerating? Anything but. Why is that? When capital and investors are not properly protected, they will flee. When taxpayers are not properly protected, they grow angry.

What do I envision as the ultimate cost of all this incest? Higher interest rates. As the US Treasury needs to finance an ever growing deficit, the rate of interest it will need to pay will trend ever higher. Who pays? You know who pays. The American taxpayer.

You reap what you sow.

On that note, here’s to the United States of America. Who’s with me? Who needs to be added to the above list and questioned in publicly held, nationally broadcasted Congressional hearings?

Thank you and congratulations, Charles Ferguson.

Larry Doyle

Please subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own and not those of Greenwich Investment Management. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Brenda Johnson

    Carl Ferguson is my hero. That was the BEST oscar moment EVER. Thank you to the Academy. I now have more faith in them than….How can the Obama administration pretend to be for change with this list of characters??????????

  • Brenda Johnson

    Thank you Charles Ferguson, Thank you Academy. How can I hope for change with this list of characters??????

  • http://whatreallyhappened.com Michael Rivero

    The fraudulent mortgage-backed securities is the biggest financial fraud since the Great South Seas Company bubble of 1721. The United States Government, rather than jail the Wall Street crooks who created this mess, themselves invested in those same Wall Street firms, instead chose to offshore high paying jobs, setting Americans up to have their homes confiscated by the banks to cover the losses. The Government took your jobs so that the banks could take your homes to pay for the disaster.

    I am delighted that Ferguson won the award, because more Americans will be inclined to watch his documentary. I myself have yet to see it, and cannot say how complete it is in its analysis. But if Ferguson is chastising DC along with Wall Street, and talking about jail for the Wall Street crooks, then he appears to have covered most of the important bases.

  • http://dailybail.com Dr. Pitchfork

    Larry,

    Great post. I was very happy to hear that Ferguson won and that he said what he did. Glad, also, to see people like yourself still fighting the good fight, trying to spread the word, etc.

    Best,
    Dr. Pitchfork of The Daily Bail

  • Disgruntled BD

    Ferguson: “…financial industry…able to inhibit the normal process of justice and law enforcement.”

    Recent Madoff quote: “The whole government is a Ponzi scheme.” [New York magazine]

    Two expert opinions.

  • Huckleberry

    I’m with you. But I don’t know how many there are out there: I recently enjoyed a private screening of Ferguson’s movie… because I was the only person who bought a ticket!

    Tangent: Anyone skookum on this “Crack Up Boom” folks seem to be talking up all of a sudden?

    • LD

      Huck,

      “Crack Up Boom”? You piqued my interest.

      What Is a “Crack-Up Boom?”

      Von Mises:

      This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

      But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

      It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

      • TeakWoodKite

        The US in 1964?

      • Huckleberry

        I think I understand that. It would be one explanation for the sudden interest in foodstuffs, liquids, metals.

        However, whenever hyperinfaltionary Weimar Germany is brought up, I am reminded of all the times that the Munich Agreement has been brought up – and all the trouble the mis-application of that analogy has caused, in Vietnam, El Salvador and so on.

        I wonder: how long before we see a wiki entry for “Crack-Up Boom”?

  • john

    LD-As always, spot on. As a former idealist I sat up and listened intently when Ferguson began his acceptance speech. It is truly astounding what little justice has been served. I’ve aged and grown wiser. The truth is we send our worst to DC. The most corrupt and inept. I still wake up sometimes at 4am and wonder why isn’t Christopher Cox in jail? Why wasn’t Greenspan tried for treason? The list can go on for a long long time. All very sad.

  • Cheri

    Would love to see Ferguson do similar documentary on Monsanto and its crimes. As well as the FDA and big Pharma.

  • http://www.beruthless.net phil trupp

    For a long time I fought with editors over the phrase “criminal subculture” when referring to the Washington-Wall Street Gordian knot. My editors were horrified. “That’s libel,” I was informed. Well, no, it isn’t–neither legally nor metaphorically. I mention this only to show that in mainstream media, where I operate, there is palpable fear of Wall Street. It goes to advertising and other areas of concern to editorial boards. But these commercial concerns do not change the facts. Ferguson operated on the criminal subculture premise, as does Matt Tiabbi. And I continually push this idea against resistance. In my opinion, we won’t crack this culture of thievery and regulatory capture until the public steps up to its responsibility to UNDERSTAND what is happening in the financial industry, to EDUCATE itself and our children to these unpleasant realities, and than take the critical next step: To get mad as hell and DO something about it at the ballot box.

  • Tommy

    Please go to this link and support this effort.

    http://garrett.house.gov/News/DocumentSingle.aspx?DocumentID=225698

    This is something we can do to help the innocent Madoff investors, and any other innocent investors, who use a broker that’s a SIPC Member.

    Write your congress person and
    tell them to please support H.R. Bill 757.

    It’s time to stop the rot at the the top!
    This might be the first step.

  • John B

    On December 21, 2004 Raines accepted what he called “early retirement”[4] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.[5]

    Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[8] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses.[9]

    An editorial in The Wall Street Journal called it a “paltry settlement” which allowed Raines and the other two executives to “keep the bulk of their riches.”[10] In 2003 alone, Raines’s compensation was over $20 million.[11






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