Michael Lewis 60 Minutes Interview: Wall Street Bonuses 'A Very Elegant Form Of Theft' (VIDEO)

Michael Lewis, author of one of the defining books about Wall Street excess, "Liar's Poker," told 60 Minutes that bonuses at banks bailed out by the government are akin to "a very elegant form of theft."

[The big banks] have access to a zero percent loan in virtually unlimited quantities from the Federal Reserve. You can take that money and reinvest it in Treasury bonds or government agency securities and you will get the spread and you could do it over and over. You're essentially borrowing from the government ... and taking a cut.

Really what's going on is the people on the top of the firm want to make a lot of money and if they're going to make a lot of money, they have got to pay the people under them a lot of money,

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Comments

[noloader]

08:08 AM on 04/26/2010

Why are these economic terrorist being rewarded with bonuses rather than prison cells? Why is it that the economic terrorists on Wall Street have had no indictments? It seems the Hobbs Act covers their style of terrorism [1]. Trivially, even a layman would agree that plunging a nation into a recession qualifies as harming interstate commerce (not to mention world economies/foreign commerce, which the Act also covers). That would leave the "actual or attempted robbery or extortion." When reading the US Attorney General's Manual [1], pay attention to the definition of extortion (and the use of 'fear'), and think how this industry is based on risk management, and marketing the securities plays on an investor's fear of losing money, or fear of making less money in a competing instrument under market conditions (such as a 'bear market').

I've written to the US Attorney Generals Office and the FBI (the FBI is charged with investigating Hobbs Act allegations and offenses), but have yet to get a response. I suspect DoJ has no desire to prosecute these terrorists under criminal law.

JW
Pasadena, MD, US

[1] http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/131mcrm.htm

[zEthics]

03:30 PM on 03/15/2010

Stop Wall Street from Paying out our Retirement in Bonuses

My wife and I are like most Americans; our retirement savings have lost 50 percent or more of its value twice in the past decade. Our federal government has proven to be ineffective in preventing the last two financial crises. It would be a mistake to assume the federal government would prevent the next financial collapse.

Wall street and Corporate America is on Opium (OPM – other people’s money) as bonuses and executive compensation return to excessive levels after one of the most severe economic downturns in decades.

Public and private pension fund managers must do more to protect America’s retirement savings. Fund managers must demand that companies within their investment portfolio disclose information about the business practices of the company and its management team via an independent third party.

Improved internal transparency from an independent third party is perhaps the only safeguard Investors have against corruption, fraud and poor management.

Improved transparency from an independent third party would at least make it possible to 1) demonstrate the quality of the business and strength of the management team; 2) determine when the company is disclosing incomplete or inaccurate information; and, 3) avoid being blind-sided by fraud and misconduct.

Corporate governance reforms will remain illusive as long as the interests of management are misaligned with those of the investor; i.e., investors have something to lose.

[Slapmewhenitsover]

09:18 AM on 03/15/2010

I have waited all day, reading and watching, because I wanted to see what other had to say about this issue. However, the best I could come up with was "BLEH". I find myself tiring of the greedy nonsense I have been preaching against all of my life because there has not been any positive change occur over the past 50 years. Yes, we have technology along with modern conveniences that others before us did not and others around the world currently do not.

Still, I cannot enjoy my life because of the injustice I see heaped on people all over the world in the form of corporate exploitation. America may be the center of it, but it is certainly no more guilty than every other country in the world who is kicking and scratching for their own piece of the pie.

I really do not want to hear from anyone about being a pessimist either because this is reality. In the beginning, the middle and the end...we lose! I don't want to hear about the good spin someone is going to apply to the information that Lewis just reported to us either.

We saw that Bush was guilty as hell for his part, but Obama is definitely enabling these thieves and has essentially given them carte blanche along with the keys to the Treasury....The only hope I have now is that I hope they use a nice lubricant before the next insertion! This is getting painful...

[Cambridge9]

08:14 AM on 03/15/2010

Many years ago (during the time before Ray-gun) I watched a VERY high profile man being interviewed. He was asked what ht thought about having to pay such high taxes - and he answered - "I'm doing very nicely, thank you! I live a very nice lifestyle."

Who was the high profile person being interviewed? Frank Sinatra.

I think we would all agree that he DID still had enough money to live a very nice lifestyle.

Even Warren Buffett agrees that today's 17% for the very wealthy - as opposed to the 27% that his secretary has to pay - is WRONG.

[melton244]

08:12 AM on 03/15/2010

This past year of tossing the ball back and forth on healthcare reform l has been nothing but an effort to distract US all from the real truths that have been going on. Keep that masses occupied with something that we know will divide the masses even further. All the time having the hand on the throttle to steal of wealth of the world from the middle class, to put them back where they belong, We took their houses, now we 'll keep them from getting healthcare and so the 1% can reap more and more wealth to line their coffers. Next they will do it on immigration, another battle to further divide the masses while they can keep stealing the wealth for themselves....pretty cool plan. HUH?????

[NevaforLeadership]

09:43 AM on 03/15/2010

Melton244,

I support President Obama 100%. Of course the US needs healthcare reform now. He is the first president ever to steer healthcare reform through both houses. Now it's bogged down in amendment and reconciliation, mainly by Republicans intent on inserting right-to-life religious dogma, but shockingly by ultra left-wing democrats who, beyond all reason, insist on single-payer reform (euphemism for socialized medicine), when private healthcare gave the US the incredible healthcare facilities it has today; when Medicare, Medicare-D, Medicaid and Social Security are on track to bankrupt the US -- take up the entire budget -- within one or two decades -- without even factoring in a single-payer system.

"Single-payer" in itself is a misnomer; socialized medicine is funded by everyone with higher and higher taxes. It comes down to four options:

Paying extremely high taxes and becoming personally responsible for others' abuse or overuse of the sytem.

Paying high insurance premiums, at least based on your own circumstances, more than the circumstances of the unhealthy crowd.

Overhauling the entire system into a single-payer system, putting millions in the insurnce & peripheral industries out of work, and guaranteeing the end of cutting-edge healthcare in the US.

Going with Obama's plan as far as possible, with reduced premiums and far more extended coverage for far more Americans immediately, maintaining premium facilities, but signing on to healthy lifestyles.

The choice is obvious. Immediate reform now, fine tuned later.

All-or-nothing tactics always end up with nothing.

[NevaforLeadership]

09:57 AM on 03/15/2010

Melton 244,

About those houses.

We are completely and totally responsible for the circumstances in which we find ourselves. Every action we take and response to circumstances beyond our control determine how well we do in life. Until we understand that, we cannot move forward and improve our lives.

Most homes have been "taken away" because the "owners" signed mortgages that they did not understand. That is particularly shocking when one considers the size of the purchase. It does not in any way mitigate the culpability of unethical mortgage brokers and lenders, but it puts the responsibility squarely where it belongs, with both middle America that bought homes it could not afford and unprofessional shysters who thought nothing of taking advantage of the vulnerable.

At that stage, the traders, who traded the bundled mortgages as derivatives and made millions, weren't even in the picture. If home purchasers had acted responsibly and not purchased homes they could not afford, there would have been no sub-prime mortgages to mix into bundles of more sound mortgage backed securities. MBS's are not new. They have been bundled, bought and sold for years without problems, until people purchased homes they could not afford.

[NORBIT]

06:00 AM on 03/15/2010

LOL

Wall Street is WALKING ALL OVER the Big CHANGE President!!!!!

What a Disgrace for 'Progressives' - who are always preaching "for the people"!

[PhilipTaylor]

06:05 AM on 03/15/2010

What did they do to BUSH! BUSH was the MOST USELESS and CORRUPT PRES of all TIME!

[Kenneth Mundy]

11:26 AM on 03/15/2010

I agree I thought Bush could not be topped, but oBAMa is proving me wrong!

[PhilipTaylor]

05:21 AM on 03/15/2010

Our Top Tax Rate for 50 Years Before Reagan was 63% to 94% on incomes Over $550,000

HIGH Income People pay an EFFECTIVE RATE OF ONLY 17%!

If we raised that Upper Income Tax to 63% (LOW END of the 50 year History) OUR DEFICITS WOULD BE CURED!

[PhilipTaylor]

05:41 AM on 03/15/2010

The RICH want to KEEP their 17% EFFECTIVE TAX RATE!

They want to KEEP THEIR MASSIVE INCOMES and USURY (INTEREST DEBT PR1S0NS)!

They plan to TE_AR DOWN S0CIAL SECUR1TY and MED1CARE leaving HARD WORKING Older People to P0VERTY and DE_ATH!

A Top Tax Rate of 63% on Income over $550,000 would Balance the BUDGET and return us to what we had BEFORE REAGAN BEGAN RUINING AMERICA and BUSH II FINISHED THE JOB!

[PhilipTaylor]

05:18 AM on 03/15/2010

LET'S GET SOME PERSPECTIVE: Bonuses and

$_ 79,000,000,000,000 = JPM - Toxic Derivatives Hidden “0FF-B00KS”

$_ 50,000,000,000,000 = G0LDMAN - Toxic Derivatives Hidden “0FF-B00KS” Up $2 Trillion

$___ 146,000,000,000 = 4th Quarter 2009 Bonuses Wall Street paid themselves

Note: BANKS Gave themselves More than the DEFICITS of all 50 States Combined - Next!

$___ 142,000,000,000 = Total Debt of the 50 US States

$_____ 5,000,000,000 = Ten Years Wall Street BUYING OF VOTES FROM CONGRESS

$________95,764,000 = ONE YEAR PAY for all Members of Congress

$_________7,500,000 = Average Wall Street Cost to Buy a Senator for 4 years

$_________6,000,000 = Wall Street TOXIC WASTE spread to Average American Family

$_________1,860,000 = Average Wall Street Cost to Buy a House Member for 4 years

$__________ 400,000 = One Year Pay for President of USA

$___________ 46,326 = Average American’s Income - Down NOW!

$_______________67 = From Government to Wall Street for every $1 to Main Street

[PhilipTaylor]

04:56 AM on 03/15/2010

2009 Volcker Interview - Criticizes Wall Street incomes and covers many other topics:

Video Worth watching - full of "down to earth Volckerisms"

http://www.youtube.com/watch?v=MaWcAm0g_2k&NR=1

[Carolab]

04:59 AM on 03/15/2010

Here is an excellent video that explains why we must END THE FED.

http://www.informationliberation.com/?id=26471

Populist lawyer, Gary Fielder, presents “The Gig Is Up: Money, the Federal Reserve and You. Live from Wolfe Hall at The University of Colorado School of Law, on December 4, 2008, Mr. Fielder, a criminal and constitutional lawyer from Denver, Colorado, presents a power point and video presentation on the creation of money with an historical analysis of our current banking system. With quotes from Ben Franklin, Thomas Jefferson, Abe Lincoln, Ron Paul, Dennis Kucinich and many others, Fielder makes his case to abolish the Federal Reserve and return to a sound and honest money system.

Produced by Jack Creamer, Side 3 Studios, Denver, Colorado. Video edits by Jonathan Ellinoff. Technical Assistant, Rye Miller. This video is for educational purposes only. Admission was not charged, nor will any effort be made to profit from its production or sale. The DVD is free.

[PhilipTaylor]

06:05 AM on 03/15/2010

The Council on Foreign Relations (CFR): Private group recommending to US President on Foreign/International Policy.

1. Considered 'the most influential foreign-policy think tank.' Website: www.cfr.org
2. Publishes Journal Foreign Affairs, they call preeminent Journal on US foreign Affairs.
3. David Rockefeller Studies Program with PG Peterson& David Rockefeller-Directors Emeriti
4. Mission is to better understand the world and the foreign policy choices facing the US
5. Members are from the FINANCIAL EL1TES and their Flunkies
6. Guides Development of next generation of foreign policy leaders.
7. Holds international meetings attended by government officials and global leaders.
8. Uses David Rockefeller Studies Program as Think Tank =Fifty scholars on International issues
9. Influences and GUIDES US International Policy shaping International agenda.
10. Makes Recommendations to Presidential Administration
11. Testifies before Congress
12. Serves as a resource to the diplomatic community
13. Interacts with the Media
14. Authors Reports and Op-Eds on foreign policy issues. Says they share all Gov. policy papers
15. Publishes Independent Task Forces to produce reports findings and policy prescriptions!
16. Like the FED, The Council stated under President Woodrow Wilson
17. Produces documents analyzing political, economic, and social policies
18. Outlined Wilson Fourteen Points for peace after WW I’s end. Obviously FAILED!
19. Like Bank of England equals the FED-The Council equals the Chatham House in London.
20. Participants at Wilson sponsored meeting: PaulWarburg and HerbertHoover
21. Sister to the Institute of International Affairs, in London, formed in 1922

[PhilipTaylor]

06:06 AM on 03/15/2010

22. Council welcomes Jews and African Americans - About 75% Jews
23. Like the FED its proceedings were almost universally private and confidential.
24. 50% of Government officials surveyed were found to be more members of the Council.
25. Air Force officers study with Council’s Scholars at the Harold Pratt House
26. Seven American presidents have addressed the Council: Clinton&GW Bush while in Office.
27. Says discussions at HQ remain Confidential allowing testing of new ideas on members
28. 1939 Council produced Strictly Confidential War and Peace Studies, funded by Rockefeller
29. Study group coined term "containment" and influenced US foreign policy for 7 presidents
30. “Whatever Eisenhower knows about economics, he has learned at the study group meetings."
31. Eisenhower draw many Cabinet members from CFR ranks and become a CFR member.
32. Council chose Kissinger to head "Nuclear Weapons and Foreign Policy" and resulted in book
33. Council said US could work with Vietnam’s Ho to guide movement away from Communism!
34. Council is responsible for “mutual deterrence, arms control, nuclear non-proliferation.”
35. Kissinger wrote about China and became Secretary of State and a secret trip to Beijing.
36. David Rockefeller and Kissinger were involved in Iran hostage crisis damaging Rockefeller
37. Started 2008 "International Institutions and Global Governance:World Order in 21st Century"
38. New World Order aims to set up Global Institutions to foster Global Governance

[melton244]

05:05 AM on 03/15/2010

http://dunwalke.com/

Have you read this? shocking

[Carolab]

05:36 AM on 03/15/2010

I really enjoy Catherine Austin Fitts. This article is way heavy on bashing Clinton though and really veers away from Bushco.

I know she worked for Repubs (Poppy) first.

Still, a very detailed account with a lot of information I didn't know such as the Cornell connection.

[maxhardon]

04:14 AM on 03/15/2010

Pardodn me for saying so, but when you go to Moodys with a stack of mortgages in your hand that you know are junk, and you somehow manipulate things to get an AAA rating on your security package, then that is securities fraud.

Securities fraud is against the law, but don't hold your breath waiting for someone to prosecute Goldman or anyone else for this, they are quite obviously above the law.

[Carolab]

05:09 AM on 03/15/2010

Holding companies that owned broker-dealers were treated like other “unregulated” companies to which parties extend credit based on their own judgments without the assurance provided by regulatory oversight of a company’s financial condition. In practice, the “independent check” on such financial condition became the rating agencies. In order to conduct their wide-ranging financial activities, the large investment bank holding companies managed their leverage and overall financial condition to achieve at least the “A” credit rating considered necessary for such activities.

http://en.wikipedia.org/wiki/Net_capital_rule

"The SEC modification in 2004 is the primary reason for all of the losses that have occurred," Mr. Pickard, who is now a senior partner at the Washington, D.C.-based law firm Pickard & Djinis, said.

Barry Ritholtz, called the 2004 rule change "a hornets nest" that "proves the importance of having stringent rules in place."

The SEC said it has no plans to re-examine the impact of the 2004 changes to the net capital rule, and last week, it put out a proposal to revise the rule once again. This time, it is looking to remove the requirement that broker dealers maintain a certain rating from the ratings agencies.

"The SEC doesn't want to appear they are endorsing the efficacy of ratings agencies, but once again, they are going to simply cause more problems down the road," Mr. Pickard said.

http://www.nysun.com/business/ex-sec-official-blames-agency-for-blow-up/86130/

[Carolab]

05:10 AM on 03/15/2010

Learn about the changes to the Net Capital Rule in 2004 and how the ratings agencies played into it.

Also, learn about how the Net Capital Rule changes that took place in September 2008 made matters worse.

http://www.nysun.com/business/ex-sec-official-blames-agency-for-blow-up/86130/

[PhilipTaylor]

05:35 AM on 03/15/2010

Carol they are coming after Social Security and Medicare:

They want top KEEP their 17% effective Tax Rate and HACK at AMERICAN'S RETIREMENT!

Peter G. Peterson and David R0ckefe11er are at the CENTER OF IT!

http://www.pgpf.org/

http://www.iousathemovie.com/press/iousacnn/

http://en.wikipedia.org/wiki/Council_on_Foreign_Relations

http://www.muckety.com/maps/2037,1268,145922,95635,21524.png

http://www.muckety.com/Query?name=Peter+G.+Peterson+and+David+Rockefeller+Jr.+and+rothschild&prev=Peter+G.+Peterson+and+David+Rockefeller+Jr.+and+rothschild&SearchResult=2037&SearchResult=1268&SearchResult=145922&SearchResult=95635&SearchResult=21524&graph=MucketyMap

[melton244]

04:12 AM on 03/15/2010

http://www.alternet.org/story/146026/the_video_that_will_put_geithner_behind_bars_

[mcostello]

01:42 AM on 03/15/2010

Duhhhhhh.......
It is a house of cards, and all of our retirements are being siphoned off.
Read up about an old Roman punishment called "proscription". Wiki Cornelius Sulla

[melton244]

11:21 PM on 03/14/2010

http://dunwalke.com/

this is a very fascinating site that another poster( sorry I don't recall who) posted today. But thanks for sharing this. I think most of you will find this as impressive as well.

[LLeGrande]

11:11 PM on 03/14/2010

It's been clear to me for months now - that this Wall Street scam is nothing less than a fixed betting parlour.

This interview showed the reality of what was happening. The best of the worst sub-prime loans were 'securitized' first. As time went on, the bags of garbage which were being securitized were becoming more and more putrid, until the end when there was basically no garbage in the bag which could even be called garbage. How did these crooks sell this garbage? By getting these incompetents at the rating agencies (Standard & Poors, for example) to rate a bologna sandwich as a prime roast beef sandwich for the right fee.

Equally importantly, why did our populist president, Mr. Obama, get in bed with these Wall Street crooks? The answer to that was answered by Willie Sutton many decades ago when asked why he robbed banks - because that's where the money is. Our elected politicians gravitize themselves to the supply of money, just as gravity brings a rock from the sky to the earth.

Get mad, America - this debacle is not over until a stop is put to it. And this timid administration along with members of Congress who are owned by these Wall Street money pigs, will not put a stop to this because the do not have the courage to do so. Is Senator Dodd, for example, setting himself up for his Wall Street super job after failing as an unelectible Democratic Senator?

[Trapster]

10:23 PM on 03/14/2010

IT'S NOT CAPITALISM ANYMORE!!! Really, it's not! Our system is perverted and a lot of Americans are starting to get a clue.
Without a good education and knowledge of psychology (sociopaths) finance (accounting) economics (supply/demand/speculation) politics (dirty dealing/ backstabbing/no honor for most) we will fail to check the madness. Even then I'm concerned.
So what do you say we start a website for volunteers to run for office--resumes and background checks validated? A list of questions to answer and a letter to the people of the state on why they want to be in office. Next election we write-in the name of the candidate we liked best and absolutely NOT vote for anyone on the ballot. Could it work? I think we'd all be better off. We'd probably select someone with more honor. A rough idea and it''s needs more refinement but I think there's something to this ---. More brainstorming please!

[Wendy Davis]

10:45 PM on 03/14/2010

I am right behind you! What also may work is offering rewards and plea bargains to anyone who comes forward with information leading to charges of fraud and worse. I am certain someone somewhere stated: This is how it will work." and the ending is where we are.

Present potential candidates on YOU TUBE and leave the rest to the citizens. Big media won't zero in on a leader who would not work with them (for them). Consider this the ~mob~ you are dealing with. Reputations are ruined rather than lives taken but in the end, is there a difference?

[melton244]

11:53 PM on 03/14/2010

http://dunwalke.com/5_Leveraged_Buyouts.htm

Have you read this....posted by a blogger today.

[HamletsMill]

06:43 AM on 03/15/2010

See my post to Trapster above you on this thread.

http://www.youtube.com/watch?v=8aWe6808u9w

[maxhardon]

04:31 AM on 03/15/2010

It's only capitalism as long as the banks make money. When they lose money it's socialism. You don't have to be Alan Greenspan to realize that.