Inauguration Day might turn out to be more entertaining than I hoped. From the White House straight to the Big House.
Schadenfreude, oh Schdenfreude
Du kannst mir sehr gefallen!
The walls are closing in. The sewer rats have fled. RU scared, Donny? Does the name Cyrus Vance Jr. give you the cold sweats? Quick, sue somebody! Better call Vlad
He’s already told you his plans for the immediate future. First he runs to Florida, next maybe the OTHER St. Petersburg. The hookers are cheap, and their bladders are weak.
The rotund one speaketh on October 16.
My whole life — what am I going to do? I’m going to say: “I lost to the worst candidate in the history of politics.” I’m not going to feel so good.
‘Maybe I’ll have to leave the country, I don’t know.’
Hudson on the Moscow was always Plan B, wasn’t it?
Last count there are 67 currently sealed indictments against the Trump Crime Organization waiting to be opened on January 21,2021. OH HAPPY DAY!!!
This is all great news that it appears prosecutors are actually moving forward with the low-hanging fruit of Trump’s criminality, but it does make me wonder how much better the world would be if the ultra-rich like Trump weren’t granted the free pass of decades of lawlessness until finally, maybe being held just a smidge accountable for real criminal acts? To use Trump U and the Trump Foundation charity as two easy examples, he made millions of dollars scamming people and stealing money from a purported charity for years, and the only price he had to pay was to write a check to cover a part of the money he stole. There was no risk in the criminal enterprise, because the worst consequence he faced was having to give (some) of the money back.
Same with the money laundering. It’s been pretty well accepted that the Trump organization existed to a large extent to launder money for Russian interests, and maybe a decade after the fact some prosecutors are now ramping up some interest in it.
Same with the stiffing of banks. If a normal person takes out a mortgage with fraudulent documentation, with no intent on ever paying it back, and then tells the bank to go screw themselves when they come asking for it, there are a lot more dire consequences than a settlement agreement where you get to keep the house and all the money the bank loaned you in the first place. And yet, our system enabled him to make that his central business model for the better part of forty years, and the federal prosecutors and NY AG’s office stood by and watched it happen.
I want to hear reporters ask on national TV if he’s on suicide watch.
I’m sure Trump still thinks the world of himself.
On the 28th day of Christmas, the DA gave to Trump, 67 indictments…
This is a known moral hazard in banking. The average Joe’s mortgage is a vanishingly small part of a bank’s portfolio, so calling the loan on any one individual (or siccing the law on the homeowner) poses little financial risk to a bank.
A $400M loan, however, can pose a serious threat to a bank, and provides incentive to the bank to work with the borrower to prevent default on the loan. Often a loan of this size, secured with the asset itself, is issued based on the interest, fees, and penalty revenue they expect to earn, not necessarily on the soundness of the borrower itself. The bank likely expects the asset to trade hands over the life of the loan, but as long as the new owner is able to make payments, the bank doesn’t care. If collateralized with the asset in question itself (i.e. real estate), the bank will generally feel it’s a good deal. If the value of the collateral depreciates (for example, commercial real estate values plummet, and $400M Trump Tower is now worth only $200M), then the bank is incentivized to renegotiate the loan so as not to lose $200M capital.
If the bank decided to report criminal fraud, they’d have to write off the loan amount. In this case, Deutsche Bank would have to write-off $400+M in order to start legal proceeding. Even with the Trillions DB has, they’ll be reluctant to write that off, especially if Trump is still making his interest payments. Hence the Manhattan DA going after Trump for (I assume) tax and banking fraud. Since he reported conflicting amounts to the tax authority and to the bank, one of the two had to be fraud.
The borrowers know this as well, which is the moral hazard. They know that, the bigger the loan, and the smaller the bank, the less likely the bank will want to write off the capital, and so can essentially extort the bank for ever more favorable loan terms. They also know a smaller bank is likely to be less sophisticated about these tactics, and more willing to cut a deal.
The same holds with negotiating big deals with states and municipalities (for example, Foxconn in Wisconsin). They are relying on their marks to be rubes who don’t understand what they are getting into, and will be reluctant to write off their losses, and so can be strong-armed into making concession after concession.
None of this is right, but the incentive structure means the bank is more likely to go after the little guy, and an underfunded government agency is less likely to look at individual borrower fraud than overall bank fraud.
Seems to be the exact same playbook for the IRS… sigh
I have dream that on Jan 20, Air Force One will be delayed leaving DC due to “weather” such that Biden will be sworn in while it is still in the air and instead of landing in Florida it lands at LaGuardia.
I ask myself this question all of the time. Why do we allow the rich to have an entirely separate set of laws from the rest of us? Why doesn’t mountains of evidence of ongoing criminality trigger a massive response from the officials charged with enforcing the laws? Why is it so easy to send someone to prison for years for shoplifting a quart of beer from a 7-11, and so hard to send someone to prison for defrauding others out of millions of dollars?
I have no answer as to the why of it, but I know that it is true.
Shorter version I’ve heard: if you borrowed $1-million from the bank, the bank owns you; if you borrowed $500-million from the bank, you own the bank.
$ <-- that thing, the more you have, the less laws apply to you.