Post #392,007
7/16/14 7:51:03 PM
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Meh.
It was a huge fine - the largest civil penalty in the history of these things. More charges are possible. Be happy there was any press coverage at all - the reporters aren't going to get in the weeds like that, and neither are the press releases. Citi does a lot more than mortgage stuff. Their Q4 2006 (before the housing market started imploding) annual report is here. The DOJ press release talks about products being sold to investors, so it's probably appropriate to look at the "Corporate and Investment Banking" section of the Excel spreadsheet they provide. The total net income for the full year 2006 in that segment was $7.1B. Selling crap mortgages was only part of that business. It looks to me like the fine was in the ballpark of all of the profits that they made selling crap mortgage paper. (You're welcome to try to tease out the mortgage stuff from all the rest - it didn't jump out at me.) HTH. Cheers, Scott.
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Post #392,021
7/17/14 8:29:57 AM
7/17/14 8:31:44 AM
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I'm still not making myself clear.
I could well be wrong, but the fact that it's been reported the DOJ initially wanted $10 billion suggests the DOJ had done the analysis on what the bank made already. It would be highly illogical for them to suggest terms of settlement without a complete and thorough review of how much the bank made - including earnings to shareholders, bonuses and commissions to brokers and bank officials, profit to the bank itself through their own transactions and results from foreclosures, how much was lost to real Americans from the property values falling as a direct consequence of what the bank did, etc. Now, I admit that my father and mother were married when I was born, so I am barred from entering the financial sector, but I don't think all of that is available for public consumption. But it would be available to the DOJ and they should have summed that all up before making an offer of settlement. That would imply that DOJ knows what percentage of all monies gleaned by the bank the $4 billion represents. If DOJ doesn't know, they are completely incompetent. If they do know and don't tell us, well, I guess we know who they are protecting, don't we?
Edited by mmoffitt
July 17, 2014, 08:31:44 AM EDT
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Post #392,028
7/17/14 10:31:01 AM
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I think I understand you, I just don't see it as a big deal.
1) It was a negotiation. Citi offered $100M initially, IIRC. (See the Timeline in the FT story above, IIRC.) It doesn't matter if the DOJ knew that Citi made exactly, say, $10,010,101,010.01 all-told due to their fraud. They weren't going to get that - that's not the way negotiations work. 2) It really doesn't matter how much the bank as a whole made, which guy got what bonus, etc., for this settlement. Individuals are still potentially on the hook, and criminal charges can follow as well. I don't know where the DOJ number came from, but it's in the ballpark of their profits in this area over the time period in question from their previous quarterly reports. 3) The "Related Materials" links here lists the deals that Citi was involved in, how the consumer relief will work, etc., etc. No numbers on profits on the deals jumped out at me - maybe you'll have better luck. Someone who is interested can look at all the listed deals and investigate. It won't be a very productive exercise, though, it seems to me. FWIW. Cheers, Scott.
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Post #392,034
7/17/14 11:10:00 AM
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Two issues I have
Be happy there was any press coverage at all - the reporters aren't going to get in the weeds like that, and neither are the press releases. Isn't that a financial reporter's job? To get into the weeds like that? If all they're going to do is summarize the press releases, they're not adding anything to the process. They weren't going to get that - that's not the way negotiations work. When you're guilty, it's not supposed to be a negotiation. It's supposed to be a sentence.
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Post #392,035
7/17/14 11:12:50 AM
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A trial would have dragged out for years...
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Post #392,039
7/17/14 1:05:18 PM
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What's the "J" in "DOJ" stand for?
In the simplified terms a dumb ol' North Carolina boy like me can understand, here's how I see this. Every quarter for 5 years I steal $100 from you. I give drook $25, I give myself $25, I give my two kids $10 apiece and my wife $25. After "expenses" I've made a "profit" of $5.00 in any given quarter. So, you discover I've been stealing and decide to fine me $5.00 (a whole quarter's profit!) for the $2,000.00 I've stolen from you. That's a "just" settlement?
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Post #392,041
7/17/14 1:29:28 PM
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juice, as in who's got it
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
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Post #392,043
7/17/14 2:15:09 PM
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I thought Kato had "the juice"...
--
greg@gregfolkert.net
"No snowflake in an avalanche ever feels responsible." --Stanislaw Jerzy Lec
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Post #392,047
7/17/14 6:57:46 PM
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Your problem (and mine, repeatedly) is that we expect 'Reason' to be both common
and embraced by.. (well, at least some plurality of? 'Citizens.') Then we each have to ask-next, ~%What? of our total sample of biped-enounters includes someone who can parse the premeditated logic-failures (forget sweet-Reason) within any Legislative Act ever passed by er Legislatures?
[short form]
Lawyers (most-all of these are) and Bankers: have always placed back-doors into every 'contract' (well before IT invented the term.) Capitalism merely extended premeditated cupidity into every aspect of Life (thus inventing the liff ... lived by all the proles today.
[/short]
(I aver that Scott recalls (his version of this overriding Fact-of-liff) more-better than most of us chippies here.)
{sigh} ..and I need to do better, too: there are so Many examples of the baby-Justice strangled-in-crib which underlie the dis-USA's near-infinite philosophical dyslexia, thus the practical-Chaos du jour that, nobody could even spreadsheet the categories ... to begin filling-in. :-/
And Now: T.M.I. is assisting the Justice-stranglers of every odious stripe and odor (I've got some local skunks to decide how to deal with--the animal, that is--humanely but firmly.) Just scanning the multiplicity of overlapping 'petitions'--now multipying like Topsy--is a fair indicator of the Downside of ... hopes that the Intarweb "affords individuals' opinions to Be Heard!"
And just as with Rumpelstiltskin's Yellow-ribbon ploy: the sheer volume of Worthy Causes™ appears to lower-all-boats into the Sea of Noise. I see enough [+] results thus far.. to continue doing triage on the Venn-overlaps, while dev-nulling increasing numbers of contenders: For. A. While. [Unknowable: ~~so long as Signatures-in-quantity actually succeed, palpably.]
All want $$. (I will, rarely, send a $few re. suicidal-homo-sap-related Causes. I hope that others, on champagne-incomes, Will find enough Worthies in their In-boxes to shovel a little shit-against-the-Tide.)
Carrion. Reason is out-to-lunch. (if Lady Luck is also out-to-a luncheon with Studly Reason?)
..well ... you know.
But, methinks that when people~like-moi throw-in-the-towel, with some Finality: that will signal that the Elephants finally-have-become Noticed! all. the. way. down. to mouth-breather levels of (un-)consciousness.
There are several Words for that ~level.
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Post #392,060
7/17/14 9:55:04 PM
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I remember Enron, also too.
Was there a clearer example of fraud on a massive scale? Dunno. It declared bankruptcy on December 2, 2001. Ken Lay: On July 7, 2004, Lay was indicted by a grand jury on 11 counts of securities fraud and related charges.[1] On January 31, 2006, following four and a half years of preparation by government prosecutors, Lay's and Skilling's trial began in Houston. Lay was found guilty on May 25, 2006, of 10 counts against him; the judge dismissed the 11th. Because each count carried a maximum 5- to 10-year sentence, legal experts said Lay could have faced 20 to 30 years in prison.[2] However, he died while vacationing in Snowmass, Colorado, on July 5, 2006, about three and a half months before his scheduled October 23 sentencing.[3] Preliminary autopsy reports state that he died of a heart attack caused by coronary artery disease. As a result of his death, on October 17, 2006, the federal district court judge who presided over the case vacated Lay's conviction.[4][5] Jeff Skilling: In 2006 he was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving 14 years of a 24-year, four-month prison sentence at the Federal Correctional Institution (FCI) – Englewood in Littleton, Colorado.[1][2] The Supreme Court of the United States heard arguments in the appeal of the case March 1, 2010.[3][4] On June 24, 2010, the Supreme Court vacated part of Skilling's conviction and transferred the case back to the lower court for resentencing. During April 2011 a three-judge 5th Circuit Court panel ruled that the verdict would have been the same despite the legal issues being discussed, and Skilling's conviction was confirmed, however the court ruled Skilling should be resentenced.[5] Skilling appealed this new decision to the Supreme Court,[6] but the appeal was denied certiorari.[7] In 2013 the United States Department of Justice reached a deal with Skilling resulting in 10 years being cut from his sentence.[8] So roughly 3 years for an indictment, then 2 years for the trial to end, then another 7 years before all the appeals and deals. And at the end, Skilling got a reduced sentence, and Lay was (legally) never convicted. There's always a chance at acquittal, too. Or fines being thrown out or reduced (ala the Exxon Valdez). Justice is rarely perfect. Expecting it to be is a recipe for madness. It makes sense in this case for the DOJ to take the large fine, the promise of cooperation with investigations going forward, and the ability to file future indictments. My $0.02. Cheers, Scott.
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Post #392,070
7/18/14 1:05:40 AM
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Perfection is a straw-man; it's when it becomes $-Selective where
Justice's miscarriages become most-visibly like a bloody-corpse dragged through the street. That Law IS a pseudo-science, driven by massively-expensive procedures as makes its full-panoply simply impossible for a prole--is still denied by most practitioners, very-well-paid all--as well as by the "case-uninvolved" hierarchy.
Today.. via Web-random-chance for some Lucky ones: occasional travesties get so much publicity that, always grudgingly, some amelioration happens.
But the inertia is as large as in the military (or corporate?) mindsets: errors may take dozens of years in our Most-incarcerated/capita Super-jail, nationwide.
Case-at-hand here: is about the Obscenely-wealthy receiving a hand-slap-at very-best! while proles are hermetically sealed in confinement under regularly-revealed sadistic conditions.
So if it is exaggeration to add 'Murican Justice' to the list of The Broken? then maybe I don't understand 'broken.' (Here: even AFTER being readjudged-guilty: enough extra legal-$$ were spent until: Kenny-boy's cohort got his free pass. (Tell me this is not so typical as to be a near-Certainty in 2014.)
What we can never discern clearly--too much is at stake, $$ and beyond, to Power and ..simply self-concealment: is a means of determining the sub-mechanisms of the decreasing confidence that there is much 'Justice' to be had under Murican Law, on the AVERAGE (screw the outrageous outliers; often those victims are already dead-by-Cop.)
Somewhere on the list is the egregious disregard or very-delayed investigation of: prosecutor malpractice, quite apart from the %warped-Judges so rarely actually removed. Then there are those still locked-up for years AFTER evidence has cleared them of the crime sentenced-for, and various slow-wheels have already ground out that fact as being also Legal-fact.
You know these lists. Maybe 320M cannot govern-selves? NOR fairly-judge: (anyone?) Many trends seem asymptotic to such conclusions. The word unprecedented gets more ink today than in 1933. (I'll still "vote" but I won't spend more than a pittance in the foolhardy delusion that you can buy as much +propaganda? to defeat the -propaganda!!!!! funded by $Trillionaires (if grouped a few/$100B at a time.)
Will sooner go with Siva than with Unicorns prancing in green fields free-of Round-up™ (or helicopter-gunned wolves;) Siva at least, 'computes'. And yes, it's hard to shake off the jillion euphemisms which have led the gullible so far down the treadmill into Denial: the final stage before the roulette-wheel of mass-Action, any Action! at all, spins. If we aren't there yet.. I may still see it Begin: that's too-close for any comfort or even "comfort". (Abetting the mob-RAGE will certainly be: every recollection of a smug CIEIO bald-faced Lying-under-Oath ... with perfect-impunity. Remember?)
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Post #392,078
7/18/14 8:25:15 AM
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I didn't ask for perfection. I asked for candor.
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