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      But he did! ALBANY — The Cuomo administration announced Wednesday that it would ban hydraulic fracturing in New York State, ending years of uncertainty by concluding that the controversial method of extracting gas from deep underground could contaminate the state’s air and water and pose inestimable public-health risks. “I cannot support high volume hydrauli […]
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      In light of the collapse of the Ruble I think it’s worth revisiting what controls exchange rates. Supply and Demand. Yeah, if you know something about the subject you’re probably shaking your head. Supply and Demand doesn’t set prices in many cases in the way that an Economics 101 course tells you. Such texts will [...]
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Lazy Saturday News and Views

Out of Town News, Harvard Sq., Cambridge, MA

Good Morning, Conflucians!!!!

It’s a gorgeous Saturday morning here in the Boston ‘burbs. I just love Spring!

Personally, I’m still mainly interested in the Blago-Rezko-Obama story, but there is some other news today.


ECONOMIC MELTDOWN

The New York Times informs us that Rating Agency Data Aided Wall Street in Mortgage Deals Yes, as you probably already guessed, the fix was in on those “complex investments” from the very beginning. The ratings agencies were collaborating with the investment banks to make sure all those “high risk” bets came out the way the banks wanted them to.

The rating agencies made public computer models that were used to devise ratings to make the process less secretive. That way, banks and others issuing bonds — companies and states, for instance — wouldn’t be surprised by a weak rating that could make it harder to sell the bonds or that would require them to offer a higher interest rate.

But by routinely sharing their models, the agencies in effect gave bankers the tools to tinker with their complicated mortgage deals until the models produced the desired ratings. [….]

But for Goldman and other banks, a road map to the right ratings wasn’t enough. Analysts from the agencies were hired to help construct the deals.

In 2005, for instance, Goldman hired Shin Yukawa, a ratings expert at Fitch, who later worked with the bank’s mortgage unit to devise the Abacus investments.

It really is time to break up these greedy “too big to fail” (TBTF) banks, but the Obama administration still defends their right to exist. Scarecrow at FDL has a great post on Larry Summers’ latest excuse for TBTF: Why Is Larry Summers Afraid of Having Many Small Banks? Summers says we can’t do that because that’s what was tried before the Great Depression, and it failed.

…if we broke up the megabanks and instead had many smaller regulated banks, it would be the end of America and the financial industry as we know it.

And that would be bad why? Scarecrow:

Funny, I always thought the smaller bank system, if that’s what it was, failed because Wall Street wasn’t sufficiently regulated, and the local bank runs happened because we didn’t have the FDIC at the time. So is Larry now saying that having the FDIC to take over smaller bank failures has been a failure?

And what’s he saying about needing diversified megabanks that lose money on risky stuff but loot, uh, borrow money from better managed activities? Surely he doesn’t mean to argue for letting the investment casino borrow from the government-guaranteed deposit-based divisions?

Reuters: Goldman emails: firm lauds profits from shorts

Goldman Sachs Group Inc officials discussed making “serious money” in 2007 off the subprime crisis as mortgages were starting to falter in rapid numbers, according to a collection of e-mails released by a Senate panel on Saturday.

“Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts,” Goldman Sachs Chief Executive Lloyd Blankfein said in an e-mail from November 2007.

“Sounds like we will make some serious money,” said Goldman Sachs executive Donald Mullen in a separate series of e-mails from October 2007 about the performance of deteriorating second-lien positions in a collateralized debt obligation, or CDO.

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This creek smells funny. How did we get here?

Shit_Creek_
Imagine you were rowing your boat gently down the stream and one of the oars got caught in the hatch. What would happen? Logic suggests that the current would slowly move you downstream as you spun the boat in circles.

O.K. Rowboats don’t have hatches, but Orrin Hatch is a creature and a feature of the ship of state and it is people of his intellectual and moral quality who are spinning the boat in circles when it’s clearly in need of proper direction. In fact, abandoning the first metaphor, they’ve piloted the US up the creek to where it is today. When you’re up this creek, you need a paddle, not an Orrin.

In response to Charles Schumer’s statement, that the Democrats can pass healthcare reform without Republican support:

Sen. Orrin Hatch (R-Utah), who joined Schumer on the show, said Democrats should not try to use reconciliation to force through a bill which could not overcome a filibuster in the Senate.

“If they use that, that would be an abuse of the process,” Hatch said. He also said creating a government health plan open to all would be a grave mistake. “If we do that, we’ll bankrupt the country.”

Earth to Orrin. What do you think you’ve been actively working at for the last 8 years? What do you think lying to the public to make a war in Iraq, and loosely regulating the financial community, have to do with the current economic situation?

The Republican Party set the stage for bankrupting the nation by adopting neo-conservatism as its political philosophy. Neo-conservatism, which is conservatism without moral and intellectual grounding, is bankrupt at the conceptual level, so it’s hardly surprising that Bush’s application of its principles gutted the economy of the nation. It’s also why so many Republicans continue working to bankrupt the nation by applying the principles they say prevent bankruptcy.

Ideologues whose brains can’t get beyond binaries are incapable of accepting the empirical world when it conflicts with their beliefs. One such belief is that public healthcare would bankrupt the economy, when every study ever published in The New England Journal of Medicine on the topic shows that public healthcare is more efficient and cost effective than private healthcare.

With people like Orrin at the helm, there is no reason to wonder why the country is up the creek. I can think of at least two good uses for a paddle.

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Open Thread: “Barack Obama is dumber than a bag of hammers.”

bagofhammers2 Now here’s a writer who tells it like it is. and he’s darkly funny too. David Michael Green writes:

Barack Obama is dumber than a bag of hammers.

I never thought I’d say that about the guy. I thought he would probably disappoint me with many of his policies. I thought he would probably fail to be bold enough for his times. I thought he might miss opportunities to do great things because of his seeming desire to be Mr. Rogers, complete with cardigan. But I never expected him to be really dumb.

But if you’re willing to risk the entirety of a potentially great presidency on making sure that a handful of already wealthy sociopaths who got rich destroying the global economy are not denied massive taxpayer-funded bonuses to keep them in jobs they’ve already completely mishandled, despite the fact that many of them took the money and left the job anyhow – if that’s you, and you’re the new president of the United States with a load of challenges and lots of public good will solidly behind you – well, then, you’re dumber than a bag of hammers.

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