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Archive for July 21st, 2011

Chris Christie, as US Attorney, sat on US-based Murdoch hacking scandal

Posted by Charles II on July 21, 2011

Via Hunter at DailyKos, Jim Edwards at CBS Interactive has what could be an explosive allegation involving the sitting governor of New Jersey, Chris Christie, and the now-publisher of the NY Post.

The computer of advertising company Floorgraphics [FGI] was hacked to obtain information about one of its clients (Smuckers), and traced the hacker to News America Marketing of Connecticut. The hacking caused it to lose clients and it was ultimately sold to News America Marketing in what certainly looked like the settlement of FGI’s lawsuit against News America Marketing. News Marketing America was forced to settle two other suits filed by Insignia and Valassis for an eye-popping $625M total. Take it away, Jim Edwards:

FGI also alerted former U.S. Attorney Chris Christie (now governor of New Jersey) and former U.S. Attorney General Alberto Gonzalez asking for an investigation of the hacking. When the company got no response, it asked former U.S. Sen. Jon Corzine, current U.S. Sen. Frank Lautenberg, and U.S. Rep. Rush Holt to write to Christie and Gonzalez again, asking for an update. (Download the FGI v. News hacking memos here.) Christie’s former commercial crimes chief, Deborah Gramiccioni (neé Goldklang, pictured) responded that the case was:

…under review by Assistant U.S. Attorneys in our Commercial Crimes Unit. Because the above-references matter may involve fraud, we are also forwarding copies of your letter and the attached information to the Febreal Bureau of Investigation for review.

Nothing came of the probe. Gramiccioni, now Christie’s director of state authorities, did not respond to a request for comment.

At the time FGI’s competitors were allegedly hacked, the CEO of News America Marketing was Paul Carlucci (pictured), who is now also publisher of the New York Post.

Posted in capitalism as cancer, Media machine, Rupert Murdoch | 2 Comments »

The Fed Audit

Posted by Charles II on July 21, 2011

Thanks to Bernie Sanders, the GAO did an audit of the Fed’s actions during the financial crisis. What this audit shows is that, of the securities from the financial crisis remaining on the Fed’s books, the only major category are Agency Mortgage Backed Securities. These are mortgages purchased by Fannie Mae and Freddie Mac for bundling into bonds which could be sold on the open market. They were not officially guaranteed by the USG at the time of issue.

Since the Congress then guaranteed these with the full faith and credit of the Treasury (after the collapse), the Fed can claim no losses. But in fact it is holding a face value of $1.2T in mortgages (see Appendix 1). These appear to be worth $909B (see Table 1), meaning that the US taxpayer subsidized the mortgage crisis to the tune of $300B.

Then there’s Maiden Lane I, II, and III for Bear Stearns and AIG, which have balances totaling $43B, and another $13B for TALF, which provided loans to buy asset backed securities (Table 1).

From the report:

As of July 2011, most of the Federal Reserve Board’s emergency loan programs have closed and all of those that have closed have closed without losses. Moreover, currently, the Federal Reserve Board does not project any losses on FRBNY’s outstanding loans to TALF borrowers and the Maiden Lane SPVs.

It’s puzzling to me why they don’t close Maiden Lane and TALF if they don’t have any losses. But $56B is a relatively minor point in this fiasco.

The summary provided by Sanders suggests that nothing really serious was discovered (other than the massive socialism-for-the-rich that was inherent in the bailout). The main thing is the Fed is too casual in excluding conflicts of interest, and some of the private contractors it employed may have profited from sweetheart loans.

The Fed is a walking conflict of interest, run by the banks for the banks. Thanks to Senator Sanders for making them open their books. That alone will have a deterrent effect.

Posted in capitalism as cancer, financial crisis, mortgage crisis | Comments Off on The Fed Audit

 
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