In June of 2005, Citigroup agreed to pay $2 BILLION to settle a class-action suit brought by Enron stock and bond holders. It is the largest settlement to date over the high-flying Enron. Lehman Brothers agreeded to a $222.5 million and Bank of America agreed to $69 million earlier that year.
In March 2005, The Federal Reserve barred Citigroup Inc., the largest U.S. financial institution, from making major new acquisitions until it corrects regulatory problems that have gotten it into trouble in several countries. The unusual move by the central bank came less than a month after Citigroup, stung by a series of scandals in the United States and abroad.
In March 2004, Citigroup said it would pay around $3 Billion in settlement of the class action suit brought by investors of WorldCom, who had accused Citigroup of participating in financial fraud.
On Febr 2006, executives of GenRe and AIG were indicted for one count of conspiracy to commit securities fraud, four counts of securities fraud, two counts of causing false statements to be made to the Securities and Exchange Commission, four counts of wire fraud and two counts of mail fraud.
July 2, 2009 - If you think that the battle over stimulus spending vs. a free market economy is new, you’re wrong. Many of the economic problems faced by the country today are very similar to those faced by us in 1930’s. The government’s response to those issues years ago involved big government and big spending. The end result was a depression that lasted longer than any other economic downturn in US history. Unfortunately, our political leaders today don’t seem to have studied US history; at least they have not studied the economics of US history. And because of that, we appear to be headed down the same path today that we did 80 years ago. Just take a look at this cartoon from the Washington Post in 1934.
If you remember George H. W. Bush’s presidency, you probably remember the phrase, “Read my lips. No new taxes.” After uttering those words, he agreed to raise taxes. That mistake played a big role in his reelection campaign loss to Bill Clinton. Now it appears that Barack Obama is singing from the elder Bush’s hymnal; determined to move us from trickle down prosperity to trickle-up poverty.
June 29, 2009 - In 2003, federally chartered banks were sued more than 4,000 times by the states to enforce state lending laws. Then, in 2004, the Office of the Comptroller of the Currency issued a rule that essentially told the states that they could no longer file such suits. The rule stated that the OCC “does not grant state or other governmental authorities any right to inspect, superintend, direct, regulate or compel compliance by a national bank with respect to any law, regarding the content or conduct of activities authorized for national banks under Federal law." While the OCC agreed that state lending laws needed to be enforced, they stated that only the OCC had the authority to enforce those state laws; something which they failed to do. Today, the Supreme Court threw the OCC rule where it belongs; in the trash.
As Chairman of the House Financial Services Committee, Barney Frank is one of the few people who actually had an opportunity to do something about the mortgage meltdown before it happened. He failed. In fact, when President Bush called for more regulation of Fannie Mae and Freddie Mac, Frank openly opposed him. As it turns out, he was involved with a sexual liaison with a Fannie Mae executive. Then, when the housing market collapsed, Frank had the audacity to blame President Bush and every other regulatory agency; taking none of the blame himself. Now, even after it has become glaringly apparent that one of the primary reasons for the current economic crisis was relaxed lending standards, Frank is openly criticizing Fannie Mae and Freddie Mac for having lending standards that are too strict. So much for learning from experience.
There is no credible economic theory of which I am aware that says that government should consider a tax hike during an economic downturn. In fact, just the opposite. When the economy tanks, tax reductions are usually the order of the day. But in the current downturn, both state and federal legislators are considering some huge tax hikes. If they pass, you will be paying more for everything from utility bills to groceries. The only winners will be local, state and the federal governments. Here are just a few of the boneheaded ideas that legislators are working on.
June 23, 2009 - It is no secret that Americans pay more for pharmaceuticals than the citizens of any other nation. It is also no secret that unexpected medical bills are the leading cause of bankruptcy in the United States. So when the Chairman of the FTC says publically that certain pharmaceutical company practices are artificially inflating the cost of prescription drugs and costing consumers Billions of dollars annually, it’s time to take a look at those practices closely.
June 17, 2009 - Recently the White House released a report detailing its top 100 projects from the President’s stimulus package. The report was intended to highlight the “successes” of the stimulus bill and to show that all of the recent Washington spending is creating jobs and helping to drive the economy forward. But there is another side to the stimulus bill. A stupid side that proves that there are no limits to the imaginations of Washington’s politicians when it comes to spending. And those imaginations are being highlighted in a new report that has been released by Sen. Tom Coburn (R-OK).
The Real ID Act of 2005 is getting more and more opposition from states. A large portion of the reaction of states is being driven by the fact that the law will cost Billions of dollars to implement, and the federal government expects the states to foot the bill. But liberty and privacy groups nationwide are also opposed to the law which would essentially turn state driver’s licenses into a national ID card. Given the federal government’s inability to maintain the security of consumers data – they have leaked the names, addresses and social security numbers of millions of Americans – the law would be a very bad idea even if that were the only reason to oppose it. Unfortunately, the way that the government intends to use the law, your driver’s license would essentially become an internal passport. For anyone who is old enough to remember the Cold War, internal passports were one of the primary examples used to differentiate the Soviet Union from the freedom loving western world.
According to the US Bureau of Labor Statistics, new claims for unemployment fell to 601,000 last week. As bad as that number is, it is down from the prior week’s new claims of 625,000. There are currently 6.82 million people collecting unemployment benefits nationwide. That is a record number but it doesn’t tell the entire story. Unemployment numbers are far worse that those reported, and the Obama administration’s claim that it has created 150,000 new jobs through its so-called stimulus package is nothing but a rather insulting snow job being fed to taxpayers.
