Danny Schechter Dissects Wall Street in "Plunder: The Crime of Our Time"

[Joanne98]

For OpEdNews: Joan Brunwasser - Writer

My guest today is journalist and award-winning filmmaker, Danny Schechter. Welcome to OpEdNews, Danny. Your 2006 film, In Debt We Trust, explored the growth of consumer debt and correctly predicted economic collapse. For this, you were dismissed as a "doom and gloomer." Your latest film is Plunder, in which you examine Wall Street activity, not from a business or political perspective, but as a crime story. That certainly isn't the way the rest of the press has viewed it, other than focusing on Bernie Madoff and a few other technicolor villains. Aren't you exaggerating to make a point?



Exaggerating is in the eye of the beholder. If you are out of work, and being classified as permanently unemployed as in the "New Normal," or if you are a member of one of the 14 million families losing their homes, you might think I was understating the extent of the crisis and its impact on the lives of so many Americans.

In my film, and the companion book, The Crime Of Our Time (Plunderthecrimeofourtime.com) I argue, along with Senator Ted Kauffman and former bank regulator Bill Black, that fraud and crime are at the foundation of the crisis. The reason the media doesn't see it is the same reason they miss so much: a lack of context, background, and analysis.

When they think of fraud, they only reference securities laws designed to protect investors and which demand that intent be shown when buyers are misled. But this crisis goes deeper: it involves three industries working together--finance, real estate and insurance --as a collaborative cartel and real axis of evil. They pedal mortgages designed to fail (the FBI says mortgage fraud is pervasive), securitizing those mortgages as asset-backed financial products and selling them at inflated values to banks and financial institutions with bogus ratings and then insuring and leveraging the whole witches' brew. This combo of collusion was widespread, involved major institutions and cost us TRILLIONS of dollars. That's why I call it the Crime of Our Time. To understand it, you have to dig deeper as I have tried to do.


http://www.opednews.com/articles/Danny-Schechter-Dissects-W-by-Joan-Brunwasser-100813-154.html

[snot]

1. (True; but the greatest losses were caused by credit derivatives --

important not to lose sight of that part.)

[Joanne98]

2. Especially since there are over 600 trillion dollars of out-standing derivatives right now

Today there is a horrific derivatives bubble that threatens to destroy not only the U.S. economy but the entire world financial system as well, but unfortunately the vast majority of people do not understand it. When you say the word "derivatives" to most Americans, they have no idea what you are talking about. In fact, even most members of the U.S. Congress don't really seem to understand them. But you don't have to get into all the technicalities to understand the bigger picture. Basically, derivatives are financial instruments whose value depends upon or is derived from the price of something else. A derivative has no underlying value of its own. It is essentially a side bet. Originally, derivatives were mostly used to hedge risk and to offset the possibility of taking losses. But today it has gone way, way beyond that. Today the world financial system has become a gigantic casino where insanely large bets are made on anything and everything that you can possibly imagine.

The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe. Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.

Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars.
http://www.benzinga.com/10/08/417957/the-horrific-derivatives-bubble-that-could-one-day-destroy-the-entire-world-financial-s

[niyad]

3. I have been watching it in parts--a sobering, excellent piece

[AdHocSolver]

4. This plundering of the public by financial institutions has been rampant for at least twenty years.

One did not need media analysis to see what was going on. It was plain to see the fraud by anyone who cared to interpret what was reported in the newspapers.

The problem is that an ignorant and totally passive public is incapable of correctly interpreting "raw" data without handholding by the "pundits". When the public does pay attention, it is largely to the loudmouthed, right wing babbling of demagogues like O'Reilly and Beck.

Let's not forget the role of the Federal Reserve in this fraud and plundering, especially under Greenspan. The Fed's keeping the interest rates artificially low (even to this day) enabled the banks to defraud depositors for their own benefit and for Wall Street's benefit. Ridiculously low returns on deposits allowed Wall Street to gull people into gambling with their savings on a rigged stock market, and allowed real estate people to promote Adjustable Rate Mortgages ("balloon mortgages") that powered the real estate bubble.

The stock market is a rigged lottery in which a very small number of people win big (the insiders), and the rest are losers.

The real economy is independent of the stock market. All economies are demand driven, which means that there are a large number of people with money to spend. Therefore, for an economy to operate correctly requires that all people who want to work have jobs.

The usual measures of the economy trotted out by the pundits as economic indicators such as stock prices, GDP, interest rates, and the allegedly mild inflation rate (it is really much larger, but well hidden) are all irrelevant. Buzz words such as "free trade", "global economy", and the impressive sounding "stagflation" are all meaningless corporate slogans.

The only significant measure of an economy's health is the real employment level. Not the phony employment figures given out by the usual gaggle of economists and the government, but the real unemployment numbers.

The biggest problem with the U.S. economy is the huge trade deficit which is due primarily to the offshoring of jobs. The U.S. economic problems are due primarily to the corporations sending jobs offshore, and the solution is to eliminate NAFTA, the WTO, and that ilk, and impose equalizing tariffs and import quotas on goods manufactured in low wage countries. Moreover, the tax laws need to be rewritten so corporations can't hide profits in offshore tax havens.