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Battle Royale over Mortgage-gate
Settlement Plan: The Whole Bankrupt
System Is at Stake

Aug. 26, 2011 (EIRNS)—With nothing less than the whole pile of fraud-riddled mortgage-backed securities (and the derivatives piled on top of them) at stake, the Obama Administration and Wall St. are fighting tooth and nail to try to ram through a settlement of "mortgage-gate." They got the Iowa Attorney General to kick New York Attorney General Eric Schneiderman off the Executive Committee negotiating with the banks—but they still haven't gotten him (or his ally Delaware AG Beau Biden) out of the way of the settlement.

Sources tell EIR that one of the major weapons the Administration is using to keep the AGs in line is bribery, in particular the spoils of the settlement the guilty banks would be asked to offer, in return for immunity from prosecution. That sum is only $20 billion—but they figure the states are desperate.

Moving in to support Schneiderman this week was Rolling Stone magazine muckraker Matt Taibbi, who slams Obama in an article entitled "Obama Goes All Out for Dirty Banker Deal."

"This deal being cooked up is the ultimate Papal indulgence," Taibbi writes—and then reviews the ugly details, including the intervention by Fed board member Kathryn Wylde in favor of Wall St.

On the other side, not surprisingly, is the Wall St. Journal, which runs a large lead editorial today, complete with a (targetting) picture of Schneiderman. The ostensible subject is Bank of America, one of Schneiderman's major targets for the robo-signing fraud. The WSJ argues that the BofA, for which the Obama Administration just got Warren Buffett to pledge his support (in return for guarantees of hefty profits and [sources report] Federal backing), is a fine bank. It then proceeds to excoriate Schneiderman and Federal regulators for "plundering the financial industry"! No "actual victims of harm" from the robo-signing have been found, the editorial claims—so, Schneiderman should lay off!

It would all be humorous, if Wall St. (and its British financier cousins) did not have Barack Obama in their pocket. Get rid of him, and the prospects for actually solving the problem are good.