Pam and Russ Martens — Wall Street Banks Sued Again for Conspiring to Control a Market

As summer draws to a close and the Wall Street titans enjoy the last of their lazy long weekends in the Hamptons, summering next door to the army of lawyers that keep them out of jail, it’s a curious time to be reading about a major new lawsuit that has the potential to shake Wall Streeters right down to their Gucci loafers. The charges include conspiracy to restrain trade in violation of the Sherman Act and unjust enrichment in a $1.7 trillion market.

Since the Senate hearings of the early 1930s, which examined the Wall Street practices and conspiracies that led to the 1929-1932 stock market collapse and Great Depression, there have been rumblings that Wall Street’s system for lending stock for traders to short is a viper’s nest of ripoffs. Now two major law firms, Quinn Emanuel Urquhart & Sullivan and Cohen Milstein are suing six of the largest Wall Street banks, alleging that they illegally colluded in this market. The defendants are the usual suspects: JPMorgan Chase, Goldman Sachs, Bank of America, Morgan Stanley, Credit Suisse, UBS and their stock lending units. (The only surprise here is that Citigroup is not named.)...

Wall Street On Parade
Wall Street Banks Sued Again for Conspiring to Control a Market
Pam Martens and Russ Martens

Matias Vernengo — The plutonomy is doing fine

Credit Suisse Global Wealth Report

Naked Keynesianism

The plutonomy is doing fine

Matias Vernengo | Associate Professor of Economics, Bucknell University

“We estimate that the top percentile now own half of all household assets in the world.” — 2015 Credit Suisse Global Wealth Report

Real-World Economics Review Blog
“We estimate that the top percentile now own half of all household assets in the world.” 2015 Credit Suisse Global Wealth Report

David F. Ruccio | Professor of Economics, University of Notre Dame

Pepe Escobar — Brave (Miserable) New Normal World

• For China this is a necessary stock market correction - not an economic implosion
• It's not a harbinger of a new global crisis - just a sign we never really got out of the last one
• The outlook for everyone is bleaker than many thought - but probably less so for China than Europe and even the US

Russia Insider
Brave (Miserable) New Normal World
Pepe Escobar

James Kwak — Why Is Credit Suisse Still Allowed to Do Business in the United States?

The conventional wisdom is that revoking a large bank’s license can trigger potential systemic consequences. But that's not the case here.

Credit Suisse, the gigantic Swiss bank, is clearly a criminal organization. In its guilty plea yesterday, Credit Suisse admitted that it has been actively helping Americans (and no doubt people from all around the world) evade taxes for years:

For decades prior to and through in or about 2009, . . . Credit Suisse did unlawfully, voluntary, intentionally, and knowingly conspire, combine, confederate, and agree together with others . . . to willfully aid, assist in, procure, counsel, and advise the preparation and presentation of false income tax returns and other documents to the Internal Revenue Service.

The Justice Department is crowing about its newfound willingness to convict major financial institutions, with Eric Holder claiming, “This case shows that no financial institution, no matter its size or global reach, is above the law.” The guilty plea certainly seems like a step forward from the neither-admit-nor-deny settlements that banks have counted on for the past decade. But there is a risk that the Credit Suisse deal—the guilty plea coupled with ample assurances that the admitted criminal will be allowed to remain in business—could become the new version of the deferred prosecution agreement: an outcome that makes everyone happy, yet punishes no one, and ultimately becomes just another cost of doing business.

There are two main ways to really punish criminals and deter wrongdoing in the future. One is criminal prosecutions of the individuals involved, ideally getting lower-level employees to cooperate and gathering evidence as far up the management hierarchy as possible. (There are ongoing prosecutions against several Credit Suisse employees.) The other is putting a bank out of business by revoking its license. Even if he escapes jail, no CEO wants that on his résumé. And it seems entirely appropriate for a bank that engages in a decades-long criminal conspiracy that costs U.S. taxpayers billions of dollars.

The Atlantic
Why Is Credit Suisse Still Allowed to Do Business in the United States?
James Kwak