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Is Eric Schneiderman Selling Out? Committee to 'Investigate' Financial Fraud Has Some Dark Implications

The aim of getting Schneiderman on board with an Administration “investigation” may very well be to undermine another effort by 15 Democrat attorneys generals.

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It would appear big aim of setting up this committee (and the uncertainty as to whether Schneiderman is now going to join the settlement deal) is to create disarray among the dissenting AGs. I’m sure it is no coincidence that there is a conference call scheduled for 11:00 AM tomorrow among the Democratic AGs. Delaware’s Biden as of Tuesday afternoon said he was not supporting a settlement, and there is good reason to think at least Masto of Nevada, who has been the most aggressive so far, will hold firm.

It would be better if I were proven wrong, but this looks to be yet another clever Obama gambit to neutralize his opposition. With all the same key actors in place – Geithner, Walsh, Holder – there is no reason to believe the Administration has had a change of heart until there is compelling evidence otherwise.

Yves Smith is the founder of Naked Capitalism and the author of 'ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.'