There’s a huge buzz out there among homeowner activists who are feeling vindicated for the hard work they’ve done over the past couple of years and in many cases even longer. The recent news inundating the headlines of blatant fraud on the part of lenders and servicers has offered proof that their actions and fight have not been in vain.

Thursday, May 6, 2010 will become a study for every financial college in America. In just 16 minutes, the Dow Jones Industrial Index dropped just under 1,000 points, the largest inter-day drop in history.

At first, a fat-finger trade made by Citigroup was blamed. Now, however, the blame is being laid on automatic triggers in the high-tech trading systems of Wall Street giants, like Goldman Sachs, Citigroup…basically any number of market makers.

The SEC accuses Goldman Sachs of fraud in a civil suit. An audit of Lehman Brothers reveals it used a shady accounting practice to conceal $50 billion in debts. An investigation of Wa-Mu shows it was rife with fraud, including fabricated loan documents. Clearly, these bankers can’t stop themselves from engaging in deceit to make money. And the “free market” has failed to moderate their reckless gambling. Strict regulation is crucial to prevent them from crashing the world economy again.

On October 12, 2007, the Dow Jones Industrial average hit an all-time high of 14,093. On March 6, 2009, it hit bottom (or so we hope), at 6,626, representing more than a fifty percent decline in a year and a half. Since then, it has risen to 10,800 and beyond over the course of one year. What happened in between represents one of the largest wealth redistribution events in our nation’s history, as millions upon millions of middle class Americans saw their savings decline by more than fifty percent, while the wealthy were there to buy up the stocks that no one else could afford at bargain basement prices. Executives of large Banks and Wall Street firms received huge bonuses along with Federal bailouts that allowed them to ride out the financial crisis in high style, while normal Americans were left worrying about their jobs, their homes, and their futures.

In the age of the bailout, blaming the revolving door between corporate lobbying and politics is so obvious that it has become almost cliche. But the reason why it is one of the greatest handicaps to our political system is critically important. The revolving door turns “survival of the fittest” on its head by masking failure, propping up underperforming companies, and hiding inefficiencies in the markets. The new study shows the extent to which political connections influenced how TARP bailout funds were paid out.

A new study by Economist Emmanuel Saez revealed this week that income inequality in the U.S. is more severe today than at any time since World War I, and the current recession is taking its heaviest toll on the worst-off members of our society.

This morning the NYT reports President Obama’s ready to throw the public option under the insurance companies limousines.

According to The Associated Press, Health and Human Services Secretary Kathleen Sebelius is suggesting the White House is ready to accept nonprofit insurance cooperatives instead of a government-run public option in a health overhaul plan.

Speaking on CNN’s “State of the Union,” Ms. Sebelius says Mr. Obama still believes there should be choice and competition” in the health insurance market — but that a public option is “not the essential element.”

This week, the Audit takes a close look at the Obama Administration’s proposed financial regulatory overhaul.

This week the Audit focuses on corporate efforts to evade taxes and President Obama’s plan to crack down on some of the most egregious practices.

March 19 (Bloomberg) — Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram Pandit and his lieutenants, after the U.S. government injected $45 billion of cash into the bank.