What the bankers are doing to Detroit is criminal

Go read No Banker Left Behind at the NYTimes.  Let us recap, shall we?

The bankers, who had all of their bonuses protected and bailed out with our federal tax dollars when they blew up the world because people like Larry Summers argued that it was unfair to violate their compensation contracts, are bearing down on Detroit to pay outrageous sums of money on ill-advised derivatives transactions that will result in innocent Detroit municipal employees forfeiting up to 90% of their pensions.

I blame Obama.  Yes, I do.  If he had come into office committed to holding responsible the people who lied, conned and irresponsibly gambled away our money, we might well be on the road to real recovery right now.  Instead, he had people like Larry Summers and Tim Geithner advising him to go easy on the bankers because shoring up the banks was THE most important thing.

Screw everyone else.

What I really regret is that so many former Democrats went off in a rabid frenzy over some stupid birth certificate issue instead of focussing on the real offenses of this White House.  So much time and energy wasted over citizenship red herrings and vacations.  I’m not sure which is worse.  Stupid conservative leaning Democrats or banker lackeys in the Oval Office.

Whichever it is, Detroit’s employees shouldn’t have their lives ruined over it and I have yet to see Obama step up and prevent this unfolding tragedy from taking place.  Which only means one thing to the rest of us: if our own pension plans go belly up because of some stupid merger or incompetent pension fund manager or predatory bankers, we’re all equally screwed.  No one is going to step up and protect your deferred compensation for all your years of work.

The White House is just going to let the bankers drink your milk shake.

The Stuff You Learn From Your Kids: Flex Mex

Vi Hart,  a self described mathemusician does things with tortillas:

 

There’s much more where that came from.

Take that Larry Summers.

Geithner and Summers: Economic Disaster Deja Vu

g + s

Timothy Geithner’s profanity-laced rant against Sheila Bair and Mary Shapiro for their rational, reality-based concerns about increasing the power of Federal Reserve Bank, as opposed to increasing oversight of the system, should elicit a kind of déjà vu because the scenario has been played before. (Note: Increasing oversight does not mean policy disclosure.)

In 1997-8, Brooksley Born, the head of the Commodities Futures Trading Commission, tried to open a discussion about introducing oversight measures into the OTC derivatives market by producing a memo because she could see that:

“There was no transparency of these markets at all. No market oversight. No regulator knew what was happening,” Born says. “There was no reporting to anybody.”

Summers, Rubin’s deputy (and now director of the National Economic Council), said the memo had “cast the shadow of regulatory uncertainty over an otherwise thriving market, raising risks for the stability and competitiveness of American derivative trading.”

History, in the form of the role these derivatives played in this economic disaster, has proven that she was right to undertake that initiative. Unfortunately, Greenspan, Leavitt, Rubin, and Summers, to name some major players, were effective in pushing legislation that ended the CFTC’s ability to undertake oversight.

Born assailed the legislation, calling it an unprecedented move to undermine the independence of a federal agency. In eerily prescient testimony, she warned of potentially disastrous and widespread consequences for the public. “Losses resulting from misuse of OTC derivatives instruments or from sales practice abuses in the OTC derivatives market can affect many Americans,” she testified that July. “Many of us have interests in the corporations, mutual funds, pension funds, insurance companies, municipalities and other entities trading in these instruments.”

Notwithstanding, her concerns were dismissed and her ominous predictions came to pass.

Geithner is a protégé of Summers.

Is it not an ironic twist of fate, and a testament to Geithner’s blind faith against oversight, that he, like his mentor before him, is assailing intelligent, moral, qualified women for pointing out the  folly of his ways.

{Note: I defer all economic inquiries to our resident expert, Dakinikat.  My interest in the situation is the social dynamic.}

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How Much are We Paying Larry Summers for Insights Like This?

Larry Summers dozes off at White House meeting

Larry Summers dozes off at White House meeting

From Politico:

Of all the statistics pouring into the White House every day, top economic adviser Larry Summers highlighted one Friday to make his case that the economic free-fall has ended.

The number of people searching for the term “economic depression” on Google is down to normal levels, Summers said.

Searches for the term were up four-fold when the recession deepened in the earlier part of the year, and the recent shift goes to show consumer confidence is higher, Summers told the Peterson Institute for International Economics.

Gee thanks, Larry. Now I feel so much better about the surging unemployment figures, the skyrocketing rates of home foreclosures, and the increasing numbers of homeless families with children. If a Google search is Summers’ idea of a leading economic indicator, I want to know why my tax money is going to pay his salary.

Summers claims that the economy is “back from the abyss”

A somewhat more important indicator–the unemployment rate–isn’t as upbeat, though and has become a thorn in the administration’s side. (See: “The Job Market’s Grim Picture.”) It hit 9.5% in June, embarrassing the administration’s predictions that if their $787 billion stimulus were passed, the rate would peak a bit above 8%. Economists predict it will soon top 10%, erasing all the jobs created in the U.S. since the beginning of the decade.

“This is obviously a major area of concern,” says Summers, “But contrary to a significant amount of commentary, this does not provide a basis for concluding that the Recovery Act is falling short of its goals.” Summers points to the administration’s own forecast that only 10% of the job impact of the stimulus would take place in 2009.

Really? I guess if one of the administration’s goals was to create more profits for Goldman-Sachs, they are on track. What were the administration’s goals for the stimulus plan anyway? It doesn’t sound like creating jobs was in the top ten.

This is an open thread.

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To Paul K with love

So Krugman says:

The magazine cover effect

I’ve long been a believer in the magazine cover indicator: when you see a corporate chieftain on the cover of a glossy magazine, short the stock. Or as I once put it (I’d actually forgotten I’d said that), “Whom the Gods would destroy, they first put on the cover of Business Week.”

. . . . Presumably the same effect applies to, say, economists.

You have been warned.

Could he be talking about this from Tennessee Guerilla Women?

Newsweek Cover: “OBAMA IS WRONG: The Loyal Opposition of Paul Krugman”
Paul Krugman — who as far as I can see is right about everything — is on the cover of the forthcoming Newsweek. The choice of the cover story — Obama’s Nobel Headache — is explained in a letter to readers by Newsweek Editor Jon Meacham.

Joseph Cannon isn’t going to forget. . . . (and neither will I) Continue reading

Tuesday Ramblings plus a Caption This Photo!

CAPTION THIS PHOTO:

whitehouse

Write your caption in the comments section!

Hello my dearest Conflucians!  We’ve been doing a lot of money talk here at the blog.   Even though I don’t know jack about finance or economics like my more illustrious brethren here, I thought I’d add my two cents (about what we all have in our wallets and purses now) regarding the crisis.

So, anybody feel that Obama brand of Hope pouring through your soul?

Yeah, me neither.

Instead, I feel fear and cynicism all rolled up in a ball of “f__k you” and it’s the same kind I felt during the Bush 2.0 years.

Remember 7 years ago when Bush took office and brought us the Iraq war based on false information?  Yeah, and 7 years later we are still fighting that war.   BASED ON FALSE INFORMATION.   From my view at the bottom of the totem pole, I can’t shake the feeling that our financial meltdown is engineered the same exact way the Iraq War was.  And since it’s Tinfoil Tuesday (h/t to Stateofdisbelief), I’m betting that all this financial meltdown is an illusion made to appear like a crisis/catastrophe.  Here’s a quote from Conflucian Resident Economist DakiniKat that really stuck out at me:

The market seems to have stabilized for awhile as Ben Bernanke has been giving speeches and making appearances every where he can.  For those of you  that really want to take on empirical studies in Economics (econometrics and all), this is a part of a strategy he outlined in  Monetary Policy.

From my simplistic, peasant, lay-woman’s point of view, Wall Street is just some glorified Las Vegas gambling casino without the neon lights and flashy shows, although it very well could be.   It’s all speculation, opinion-based gambling.  For example, if there’s a rumor that corn farmers are scared that next years crops aren’t going to be as plentiful as last year, suddenly you see corn stock (pun intended) plummet and by the end of the day thousands of workers are laid off.   All based on speculation.  There’s no gradual or incremental adjustment to curtail the possible loss of corn, no riding out the storm, none of those things.  Actions are taken swiftly and severely in a matter of hours.  You punch in at 8 am, rumor gets released at 9:30am, stockbrokers go bezerk on the trading floor by 10:00am and you walk out with a pink slip by 5:00pm.   Who suffers?  You and me.  Who started the rumor?   No one will ever know (because no one is held accountable anymore), maybe a sugar ethanol lobbyist firm, who knows?   Then the fear/hope peddling cycle goes wash, rinse, repeat.

Yet in the same way Wall Street reacts to bad news via the government, all it takes are positive words and Wall Street shall be healed.  Here’s what Big Dawg said:

It used to be gospel in the nation’s power center: Presidents didn’t talk publicly about what the markets were doing. The notion was that anything a president said on this subject could be too easily misinterpreted, sending Wall Street into a dive.

Now, former President Clinton says he thinks President Barack Obama should talk more optimistically about the prospects that the nation will recover from its current deep economic woes.

Remember Obama’s quote regarding pressuring Congress to pass the stimulus package because a failure to act “could turn a crisis into a catastrophe.” President Obama learned that fearmongering got Bush 2.0 what he wanted, so he’s continuing the fear-peddling push.  Scare the masses into submission!  Worked for Stalin & Bush 2.0.  F__k Hope.

Color me a rainbow of stupid, but I ask myself the following questions:

  • If Wall Street is the gear that keeps America afloat since so many of our conglomerates which own everything trade publically, why do they depend on the government for morale-boosting if they are that powerful?
  • Why is it that Wall Street trading goes up when positive words are spewed by the President and the Cabinet, or it goes waaaay down when negative words are said, like “stimulus package?”
  • Who the f__k is really in control?  Is it truly Wall Street?  Who controls who?
  • And why is it that the only people that are benefiting from everything are banking conglomerates? And like MYIQ said below, where’s the money?
  • Bush 2.0′s agenda was clear as a bell.  Bush 2.0 started a war to get the oil speculators going batsh_t crazy and hike the price of gas and oil, which made Exxon-Mobil and other oil companies VERY happy while many families around the world choose between fuel or food.   But what is Obama’s agenda? Instead of oil, Obama is favoring the super elite global bankers.   What is it that global bankers want?
  • And what happens to us, the people who sweat and bleed to make this country the great place it should and could be?

Well, looks like Obama and the O Cabinet are heeding Big Dawg’s words, because some of the pesky peons that Hillary and Bill understand so well  (i.e. the people footing the bill a.k.a you and me) aren’t as drunk on the Hopium as Obama (and the media) would like.  Daily Telegraph from the UK has this to say:

Barack Obama goes upbeat on economy after popularity declines

President Barack Obama has launched an upbeat strategy over the economy in the face of approval ratings that have dipped below those of George W Bush at the same stage of his presidency.

As well as sounding more optimistic, the president will push more aggressively against Republican critics – painting them as belonging to a “party of no” – and sharply remind the public that the problems he has to cope with were very largely inherited from Mr Bush.

Mr Obama is changing his rhetorical course after criticism from fellow Democrats, including former President Bill Clinton, that he has sounded too negative in the first weeks of his presidency.

This week he will speak forcefully to Congress and the public about the need to pass his $3.6 trillion budget, which will double the national deficit, while stressing his belief that there is hope ahead.

The new president has already told an audience of business leaders that the economic crisis “is not as bad we think”. Over the weekend, Mr Obama assured investors of the soundness of investments in the US economy, after Chinese premier Wen Jiabao expressed his alarm about the safety of the “massive” number of US Treasury bonds Beijing was buying.

“There’s a reason why even in the midst of this economic crisis you’ve seen actual increases in investment flows here into the United States,” Mr Obama said. “I think it’s a recognition that the stability not only of our economic system, but also our political system, is extraordinary.

“I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States,” he added.

And of course, let’s make China super confident that their investment in the US of A is safe and sound.   Ni Hao, Wen Jiabao!  A-OK in the USA!  Mi casa es su casa, right Wen?

But wait, here comes Larry to add his input as well:

Lawrence Summers, chairman of the national economic council, exemplified the administration’s new approach with a populist swipe at AIG for paying in excess of $100 million in bonuses to staff, despite receiving $170 billion of taxpayers money.

“There are a lot of terrible things that have happened in the last 18 months, but what’s happened at AIG is the most outrageous,” he said on ABC on Sunday.

Mr Summers has also said Americans are showing “too much fear” about the economy.

Ok, let me stop right there.  Larry Summers???  Populist???  Outraged over AIG getting bonus money from the bailout???  BWAHHAHAHA!!!!   Slap on the wrist for AIG!  Bad little bankers!   Americans showing too much fear?  So it’s now OUR FAULT we’re feeling fear?  BTW, China, it’s not our corrupt government giving banking conglomerates unlimited amounts of money that’s at fault, it’s our citizens freaking out over nothing!  Nothing to see here.

Earth to Larry Summers:  When you are at your job and 1/2 of the workers on your floor are suddenly asked to leave at the bat of an eye, wouldn’t you be afraid?   When you’ve scrimped and saved for retirement only to watch that 401K lose 10-15 years worth of investment, with businesses suddenly shutting down, industries coming to a screeching halt, wouldn’t you be afraid?   It’s like RD said this morning:  it’s financial terrorism.  And with oligarchal and misogynist assholes like Larry Summers (among the many in Obama’s cabinet), running this whole speculation game from his cushy office, betting on fear/hope and gambling away the future of America like a craps game in the Bellagio, I’m very frightened.  And there is nothing Larry or his puppet prince president can do or say anything to change that except saying the words “I RESIGN FROM OFFICE, EFFECTIVE IMMEDIATELY.”

Despite the control the financial sector has on the White House, Wall Street also controls the financial sanctity of our nation.  If all they need are inspiring words to invest and trade confidently for our nation to prosper, I hope that they can see these:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

  • Thomas Jefferson, (Attributed)
    3rd president of US (1743 – 1826)
  • Let Thomas Jefferson repeat that last part again:

    The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

    And with the 2 or 3 bailouts (I’ve lost count) – WE, THE PEOPLE, are the owners of these institutions.  We always had the power, it’s just that the perception buttons of hope/fear is what controls Wall Street and in turn, Wall Street controls our livelihoods and/or survival.

    And I’m f__cking tired of it.

    I was going to post Rage Against the Machine’s – “Killing in the Name,”  but for some reason the video’s not showing in the preview, so here it is.

    The financial machine  is killing the name of life, liberty and the pursuit of happiness.  I don’t know what to do next, except the only thing people do when they’ve had enough.   Protest.

    PS:  To the Irish Conflucians, Happy St. Pat’s Day!

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    Saturday: Take an old cold tater and wait

    Protesting the H8 in CA

    Protesting the H8 in CA

    It’s funny how the people who manage to make their way to the top seem to think it is O. K. to do it by stepping on the heads of the people who helped them get there.  The passage of Proposition 8 in California, that defines marriage as between only a man and a woman, is the unpredictable fallout of the Obama victory.  Christian conserverative African Americans and Latinos turned out to establish a new pecking order.  Some of these people think that homosexuality is a behavioral choice even though there is a growing body of scientific evidence that it is not.  And if it is not, then how does one reconcile a loving god with the mandate to be forever celibate, forever consigned to the role of child in the family, forever unable to have a loving partner and family?

    For too long, religion has concentrated on proscriptions about sex, putting love, commitment and protection of families secondary.  This is what Proposition 8 puts into law.  It says, “We aren’t too concerned what you do after you are married, just as long as you have slot A and piece B.  As long as your anatomical features are correct, you and your family are entitled to the full protection of the law.  Gay couples and their children are not entitled to the full protection of the law because they might do something icky with their privates.  Of course, heterosexual couples might do something icky with theirs as well but it’s legal because they’re married and therefore, none of our business.”

    This is how the Obama presidency is starting.  One group of people get their long awaited triumph and then turn around and screw another demographic.  To those of us who have followed the campaign for months, this shouldn’t come as a surprise.  Obama made appearances with anti-gay people and made a point of reaching out to the evangelical community.  What he did was surreptitiously court the bigots in the religious community over issues of homosexuality and abortion.  He gave these groups tacit approval of their prejudices.  What makes his behavior different than that of a Republican like George Bush?  He got away with it because journalists completely failed us.  (Listen to the post-election Fresh Air interview with Bill Moyers if you can stomach it.  The blinders on these people need to come off and soon.)

    This is not an auspicious start to the era of Hope and Change! There are persistent rumors that Larry Summers may be nominated as Secretary of the Treasury as well.  This is the former president of Harvard that said that women are innately incapable of competing with men in math and science.*  Science had some recent articles saying Larry is full of it. (pending citations)  So, is the media going to pick up on this or are they going to continue to grind women to political pulp? We shall see.  But if he appoints Summers, there’s a good chance that gay people won’t be the only ones protesting.

    In other news:

    • Day care centers are seeing their clientele dwindle as parents cut costs.
    • Sarah Palin is engaged in an epic battle with the Bushies. It looks like the Bushies are still trying to blame their catastrophic failure as a party on her.  We shouldn’t let them get away with it.  If there is any hope for reforming the Republican party, it rests in people like Palin.
    • Anglachel covers Hillary’s newest initiatives.  It looks like Hillary is going to be a burr in Obama’s saddle for a long time in the Senate.  Take that Nancy! As Anglachel says:

    I love her line: “We are in a recession and we must act decisively and wisely to change course, hasten a recovery, and reform the broken economic policies that will be the sad and disastrous legacy of the Bush Administration.” More of this, please. More nicely, sweetly partisan knife twisting to ensure that Bush is never spoken of without BartCop’s tag line – Worst President Ever.

    *I just saw a reference to Larry Summers being a managing director of D. E. Shaw’s group.  This is an unusual group founded by David Shaw, a biophysicist, who made a killing in the stock market.  I’m not clear on how he did it but in the studies of proteins, there is a kind of sensitivity analysis that can be performed to observe what happens to a system when a small part of it is perturbed.  A satellite group of his is involved in a program I use at work called Desmond, which calculates protein molecular dynamics.  It kind of gives you a sense of what the hell their doing on Wall Street with all of the simulations.  The thing is, the simulations are only as good as the understanding of the system they are supposed to model.  Very interesting and very disturbing that Summers is tied to this group.  It must drive the female computational modelers in Shaw’s group up a frickin’ wall.

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