Greek Stress from April 17
But the impact on Greece of government cuts was far greater than expected. Like many European countries, the Greeks ran many economic activities, including medicine and other essential services, through the state, making physicians and other health care professionals government employees. When cuts were made in public sector pay and employment, it deeply affected the professional and middle classes.Regardless of which version you believe to be true, there is one thing that is certain: Greece was put in an impossible position when it agreed to a debt repayment plan that its economy could not support. These plans plunged it into a depression it still has not recovered from — and the problems have spread to other parts of Europe.
Over the course of several years, unemployment in Greece rose to over 25 percent. This was higher than unemployment in the United States during the Depression. Some said that Greece's black economy was making up the difference and things weren't that bad. That was true to some extent but not nearly as much as people thought, since the black economy was simply an extension of the rest of the economy, and business was bad everywhere. In fact the situation was worse than it appeared to be, since there were many government workers who were still employed but had had their wages cut drastically, many by as much as two-thirds.
The Greek story was repeated in Spain and, to a somewhat lesser extent, in Portugal, southern France and southern Italy. Mediterranean Europe had entered the European Union with the expectation that membership would raise its living standards to the level of northern Europe. The sovereign debt crisis hit them particularly hard because in the free trade zone, this region had found it difficult to develop its economies, as it would have normally. Therefore the first economic crisis devastated them.
The most important question in the world is whether conflict and war have actually been banished or whether this is merely an interlude, a seductive illusion. Europe is the single most prosperous region in the world. Its collective GDP is greater than that of the United States. It touches Asia, the Middle East and Africa. Another series of wars would change not only Europe, but the entire world.To even speak of war in Europe would have been preposterous a few years ago, and to many, it is preposterous today. But Ukraine is very much a part of Europe, as was Yugoslavia. Europeans' confidence that all this is behind them, the sense of European exceptionalism, may well be correct. But as Europe's institutions disintegrate, it is not too early to ask what comes next. History rarely provides the answer you expect — and certainly not the answer you hope for.
The Libor chart shows stress building in the EU financial system.As Mario Draghi prepares to push the European Central Bank into quantitative easing, he’s counting the cost of alienating its home nation.With the ECB president signaling that he’ll override German-led concerns on government bond purchases if needed, his institution is under attack in the country whose DNA inspired it. The outrage reflects concern that the Frankfurt-based central bank, which is modeled on the Bundesbank, is taking risks that its forerunner would never tolerate.
Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or both. The limits of tyrants are prescribed by the endurance of those whom they oppress.
I’m floored that Attorney General Eric Holder was willing to take a private meeting with JPMorgan Chase CEO Jaimie Dimon while the bank is under criminal investigation and negotiating an enormous civil (and possibly criminal) settlement. I can’t recall something like this meeting happening before. There’s not anything illegal about such a meeting, but the optics are really bad and underscore the privileged position of the too-big-to-fail banks…
Who else is able to call up the AG and just get a meeting like that when their firm is under criminal investigation? Do other citizens get talk things through mano-a-mano with the AG himself? That Dimon even thought to initiate direct contact with Holder suggests that he has no sense of his place in society–or perhaps that he in fact does. Bottom line is that Dimon (and JPM) shouldn’t get any more special treatment than any other citizen, but it sure looks like he did.But the whole point was to get special treatment. The criminal case went on hold. The settlement was structured to avoid court approval. Taibbi does not mention that the Administration acted as if it had really gotten a great deal by getting what looked like a really big dollar amount, but that was achieved via sleight of hand. The total was goosed up via throwing in a boatload of other claims, the biggest of which was Fannie/Freddie putback claims that constituted $4 billion of the $9 billion in total cash value of the deal. Holder took credit for that, when in fact that suit was launched by the much-pilloried Ed DeMarco of the FHFA (Taibbi correctly points out that the $4 billion of “consumer relief” that brought the headline total to $13 billion was show for the rubes). And JP Morgan admitted to pretty much nothing.
A few weeks later, in early 2007, she sent a long letter to another managing director, William Buell. In the letter, she warned Buell of the consequences of reselling these bad loans as securities and gave detailed descriptions of breakdowns in Chase’s diligence process.As we learn, Fleischmann told her story to the SEC, which instead refused to hear anything about Greenpoint. The US Attorney’s office in the Eastern District of California, by contrast, built a case using her evidence, which eventually led to the successful Dimon end-run. Worse, the DoJ almost certainly released Fleischmann’s name to JP Morgan; within days of the Dimon phone call, the Wall Street Journal ran a story stating that the government had a major female witness. And the Morgan bank looks to have successfully blackballed her, as job possibilities suddenly vaporized.
Fleischmann assumed this letter, which Chase lawyers would later jokingly nickname “The Howler” after the screaming missive from the Harry Potter books, would be enough to force the bank to stop selling the bad loans. “It used to be if you wrote a memo, they had to stop, because now there’s proof that they knew what they were doing,” she says. “But when the Justice Department doesn’t do anything, that stops being a deterrent. I just didn’t know that at the time.”
In October 2013, one of those investors – the Fort Worth Employees’ Retirement Fund – asked a federal judge to force Chase to grant access to a series of current and former employees, including Fleischmann, whose status as a key cooperator in the federal investigation had made headlines….
In response, Dorothy Spenner, an attorney representing Chase, told the court that Fleischmann was not a “relevant custodian.” In other words, she couldn’t testify to anything of importance. Federal Magistrate Judge James C. Francis IV took Chase’s lawyers at their word and rejected the Fort Worth retirees’ request for access to Fleischmann and her evidence.
Other investors bilked by Chase also tried to speak to Fleischmann. The Federal Home Loan Bank of Pittsburgh, which had sued Chase, asked the court to force Chase to turn over a copy of the draft civil complaint that was withheld after Holder’s scuttled press conference. The Pittsburgh litigants also specified that they wanted access to the name of the state’s cooperating witness: namely, Fleischmann.
In that case, the judge actually ordered Chase to turn over both the complaint and Fleischmann’s name. Chase stalled. Later in the fall, the judge ordered the bank to produce the information again; it stalled some more.
Then, in January 2014, Chase suddenly settled with the Pittsburgh bank out of court for an undisclosed amount. Months after being ordered to allow Fleischmann to talk, they once again paid a stiff price to keep her testimony out of the public eye.This story alone show that the claim that Obama and Holder made, that there was bad conduct in the mortgage market, but it didn’t rise to the level of criminal activity, is almost certainly a lie. Pretty much anyone familiar with the subprime market knew that, but now we have evidence that the government had concrete, powerful evidence plus a credible witness and chose to let a powerful bank off. The fact that the bank continued to engage in fraud after getting two warnings to senior managers, one in writing, would seem to rise to the level of criminality.