Will Elizabeth Warren become the new Brooksley Born?

In an article published today in The Observer, it is reported that Elizabeth Warren, Chair of the Congressional Oversight Committee of the TARP program, will issue a report this week calling for the ouster of the chief executives of Citigroup, AIG and other institutions which have received government bailout funds.

Additionally, Professor Warren is reportedly also set to call for shareholders in those institutions to be "wiped out". "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade."

The article goes further:

Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said.

She said she did not want to be too hard on Geithner but that he must address the issues in the report. "The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous."

Professor Warren is, sadly, a rare case of a government official who takes her oversight responsibilities seriously and is willing to speak the truth publicly. It will be very interesting to see how this plays out in Congress, the administration and the press. In this regard, the case of Brooksley Born and her attempts to regulate derivatives swaps cannot be overlooked. It turns out that Brooksley Born had perfect foresight, but her warnings fell on deaf ears.

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You go girl!

She really is trying to get reality into the oversight committee and is that very rare bird who is statistically, reality based.

Common Good, when the actual report comes out I hope you review it and do a full bore blog post on it.

Warren is also using youtube and video overviews to communicate the complexities of TARP, oversight issues so you might check that out too.

I don't have their website off hand, but search on EP for Warren for I know I put up all of these links in past posts.

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FBI warns of financial crisis could cause economic collapse

FBI warns of mortgage fraud 'epidemic'

WASHINGTON (CNN) -- Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an "epidemic" of financial crimes which, if not curtailed, could become "the next S&L crisis."

Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and criminal groups whose fraudulent activities could cause multibillion-dollar losses to financial institutions.

"It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis," he said.

In the 1980s, many Savings and Loans failed because of poor management, risky loans and investments, and in some cases, fraud. Taxpayers were left with a $132 billion tab to cover federal guarantees to S&L customers.

The year this report was published and the above article date? 2004

Now tell me they did not foresee or know this was coming again.

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Is this FBI warning intended

Is this FBI warning intended as new news? Aren't we a little further along in this current crisis to be concerned about calling it the "next" S&L crisis? (Maybe they were referring to Saturday Night Live?);-)

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no and why it is in a comment instead of an Instapopulist/blog

This is old news. Just something I was reminded about when checking out reddit. I was submitting midtowng's latest blog post in reddit and noticed this was ranked "high up" as "new" news...

but it's very old news. the reason they are uprating this now 5 year old report is because so many are not claiming "no one could have foreseen this crisis" which is complete bullshit.

Not only did the FBI see it coming, they made as public as they could reports about it in trying to warn and do something....4 years before the fact.

"New" news of this magnitude would get an Instapopulist or a blog post.

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Good recollection.

You're right Robert, and Bill Black mentioned that very same thing in his discussion with Bill Moyers. The FBI pulled thousands of agents who had historically been assigned to track corporate fraud, and reassigned them to counter terrrorism in the wake of 9/11. My question (and I think Bill Black's as well) is, was this just coincidental or was it by design?

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agents pulled off corporate fraud, positions NOT filled again

I saw the same Moyers' program. One might understand the necessity of moving seasoned agents to a matter of greater priority in a crisis. However, 8 years after 9/11/2001, the corporate white collar fraud investigator positions had NOT been filled again. This is a bit too hard to excuse as simply "priority shifting" in a national emergencyp; it smacks of a deliberate manipulation -- an abandonment of any effort to enforce laws against corporate fraud.

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She is One Smart Cookie with Common Sense

Hope Obama gives her more responsibility. She is the only that seems to have some common sense. Obama should follow her recommendation to bring back the Bankruptcy Laws to Pre-2005.

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Brooksley Born...doubtful!

Elizabeth Warren's latest comments sound great, but isn't this the same Elizabeth Warren, who but a short time ago, suggested that there should be a further consolidation of the banks into just several mega-banks???????

Not the most wisest of suggestions.

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