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POPSLeft Step Henceforth, elections are fought over which party is proposing the shiniest government bauble: If you think President-elect Obama's promise of federally subsidized day care was a relatively peripheral part of his platform, in Canada in the election before last it was the dominant issue. Yet America may be approaching its tipping point even more directly. In political terms, the message of the gazillion-dollar bipartisan bailout was a simple one: “Individual responsibility” and “self-reliance” are for chumps. If Goldman Sachs and AIG and Bear Stearns are getting government checks to “stay in their homes” (and boardrooms, and luxury corporate retreats), why shouldn't Peggy Joseph?
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POPSWe Blew It A look back in remorse on the conservative opportunity that was squandered. by P.J. O'Rourke
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POPSThe "Bailout" & The Banking Industry's Dirty Little Secret
. . . . still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.” Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same (anonymous) executive explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.
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POPSThe "miracle" of securitization This quiet little piece is probably the sharpest analysis of what actually went wrong with our financial system that I've read. Here's a money quote: ``Securitization was based on the premise that a fool was born every minute,'' Joseph Stiglitz, a professor of economics at Columbia University in New York, told a congressional committee on Oct. 21. ``Globalization meant that there was a global landscape on which they could search for those fools -- and they found them everywhere.''
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POPSRepublicans=Socialists for the rich Take from the poor and working class and give to the rich. A long held Republican tradition taken to the extreme by Bush and promised to escalate in a McCain/Palin adminstration
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POPSDon't blame deregulation Indeed, exactly contrary to Obama’s claims, the repeal of Glass-Steagall has helped to counter the current crisis. It allowed Bank of America to buy out Merrill Lynch, JP Morgan Chase to buy out Bear Stearns, and Barclays Bank to work on buying up the remains of Lehman Brothers. It allowed investment banks Goldman Sachs and Morgan Stanley to take up refuge as bank holding companies. If investment banks Bear Stearns and Lehman Brothers had diversified more into commercial banking, taking commercial deposits — as the Act’s repeal made possible — that might have provided them with the superior capital cushions needed to survive.
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POPSFinancial Crisis: Fed Becomes Rogue Power
The Fed under Bernanke does whatever it wants. There is little constraints on it by law, being a creature actually outside of government. The "central bank" is actually a consortium of private banks with authority to print money "from thin air", as it states here. The Federal Reserve is no more "federal" than Federal Express. The only reason the Fed Chairman Bernanke went to Congress for a Bailout Plan (by using Treas. Sec'y Paulson to front, and hiding behind Bush) was to cover his hindquarters, and gain "consent" (by fear and coercion) of Congress, and putting Americans on the hook with them. Note the article states that the Fed acted already on its own to bailout Bear Stearns and make other "loans" (print money) without Congress: The Bernanke Fed first invoked rarely used 1930s powers to intervene — with taxpayer backing — in March when it provided a $29 billion loan as part of JPMorgan Chase & Co.'s takeover of Bear Stearns. The Fed is now Czar.
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POPSBailout Price Tags Since 1971 A nice breakdown from the National Journal. Since 2001, the federal government's private sector bailouts add up to $1,032.4 billion. In the prior thirty years: $248.1 billion.
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POPSMarkets Fall: Government Throws Away More Money
You don't have to be a lawyer to know if someone is lying -- But when a lawyer catches a witness in a lie it is often the beginning of the end. What caught my eye in this clip is: the government (USA) "will begin paying interest on the reserves that banks leave on deposit." Humm....we print the money...we give the money to the banks at super low interest rates...now the banks can give us back the money and charge us interest!? The next big part of the plan is to buy unsecured loans for threatened banks that may go out of business. Humm...Note: Other countries are buying assets or Number One Preferred Stock...meaning they get paid first if these banks fail. Also, rather than seeking to "inspire confidence," some suggest it would be better to dole out the cash for every new loan the banks make...which is what we want them to actually do. Other lies: "optional," warrents; & "mark to market," valuations. While our house burns, these alleged "firefighters," are steali
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POPSThe Bailout, Fannie Mae and Freddie Mac, The Fed and Monetary Policy The Cato Institute has been following the crisis in financial markets since the very beginning. From the sub prime crisis to Fannie and Freddie to the $700 billion bailout, the recent financial events have given our analysts and experts plenty to talk and write about. We decided to pull together the op-eds, podcasts, reports, and publications from our scholars on this issue, so all these resources can exist in one place. We hope it’s a useful tool for your research. "The Bush Legacy: Deflation or Inflation?," "The Greenback and Commodity Prices," "Milton Friedman: Float or Fix?," "Washington Is Quietly Repudiating Its Debts," "The Greenback and Commodity Prices," "Polluted Markets," "The Fed Plays With Fire," "Greenspan's Bubbles," "Keep Complaining about the Economy, "Asset Bubbles and Their Consequences," more op-eds, podcasts, reports, and publications at link: http://www.cato.org/special/financial_crisis/
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POPSWhatWouldMcCain's2005 Mortg.Bill Have Done? McCain managed to predict the entire collapse that has forced the government to eat Fannie Mae and Freddie Mac, along with Bear Stearns and AIG. He hammers the falsification of financial records to benefit executives, including Franklin Raines and Jim Johnson, both of whom have worked as advisers to Barack Obama this year. McCain also noted the power of their lobbying efforts to forestall oversight over their business practices. He finishes with the warning that proved all too prescient over the past few days and weeks.
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POPSThe $55 Trillion Dollar Question a University of Maryland law professor and former director of trading and markets at the Commodity Futures Trading Commission. "If they couldn't keep passing the risk down the line, those guys would've been stopped in their tracks. The ultimate assurance for issuing all this stuff was, 'It's insured.'" Second, terror at the potential for a financial Ebola virus radiating out from a failing institution and infecting dozens or hundreds of other companies - all linked to one another by CDS and other instruments - was a major reason that regulators stepped in to bail out Bear Stearns and buy out AIG (AIG, Fortune 500), whose calamitous descent itself was triggered by losses on its CDS contracts (see "Hank's Last Stand"). "The big problem is that here are all these public companies - banks and corporations - and no one really knows what exposure they've got from the CDS contracts," says Frank Partnoy, former Morgan Stanley derivatives salesman.
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POPSWall Street Executives Scored $3 Billion as Banks Rose and Fell ......per employee, including an average bonus of $211,849. The five firms had combined net income of $93 billion during the five years through 2007. CEO Pay Doubled The $3.1 billion paid to the top five executives at the firms between 2003 and 2007 was about three times what JPMorgan spent to buy Bear Stearns. Goldman Sachs had the highest total, with $859 million, followed by Bear Stearns at $609 million. CEO pay at the five firms increased each year, doubling to $253 million in 2007, according to data compiled from company filings. Corporate Governance Rather than government regulation, the solution is in better corporate governance, Elson said. Companies should negotiate more aggressively with executives and should establish rules that encourage shareholders to protest excessive pay. The rescue package is not the place to have that debate, he said.
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POPSJPMorgan Buys WaMu Deposits; Regulators Seize Thrift David Bonderman's TPG Inc., which led a $7 billion capital infusion for WaMu earlier this year, lost most of its initial $2 billion investment. TPG, based in Forth Worth, Texas, said in a statement yesterday it was ``dissatisfied with the loss'' and that the WaMu investment was a ``small part of assets.'' New York-based JPMorgan, which separately announced plans to raise $8 billion by selling common stock, had its outlook lowered to negative by Moody's Investors Service. Moody's left its Aa2 rating on JPMorgan unchanged. JPMorgan won't acquire WaMu's liabilities, including claims by shareholders and subordinated and senior debt holders, the FDIC said. JPMorgan paid $10 a share for Bear Stearns in March as the New York-based securities firm teetered on the brink of bankruptcy. ``Having worked with Kerry Killinger for 10 years, I still absolutely cannot fathom where or why he went wrong, and what caused him to lead the company into taking the kinds of risks that they did.''
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POPSVery Corrupt Administration at Work We broke away from Britain for less in 1776. Read the Declaration of Independence and review the list of "repeated injuries and usurpations." Together they don't add up to this.
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POPSHow the democrats Created This Financial Crisis It is rediculous to see the democrats trying to blaime the GOP for this mess. It is clearly their fault by opposing this bill which would have prevented the Fannie Mae and Freddie Mac collapse. And to vote for ZerObama would assure more blunders at home and abroad.
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POPSThe True Cost of Rewarding Greedy Bankers Note the names of some of these great institutions that rewarded greed. Note the immediate cost to UK taxpayers. I would be interested to see figures relating to the taxes of US citizens' tax bills compares. (Oh, meanwhile, Barclays in London have just guaranteed 2.5 billion dollars in bonuses and salaries to a firm called Lehmans that they just bought a bit of.)
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