{{snicker}}

Matt Taibbi writes:

Minds are changing on Too Big to Fail. A month ago, it was just something in the air. Now, it looks like we’re headed for a real legislative confrontation. And man, is the finance sector freaking.

Last week, on April 24th, Democratic Senator Sherrod Brown of Ohio and Louisiana Republican David Vitter introduced legislation called the “Terminating Bailouts for Taxpayer Fairness Act of 2013 Act,” or the “Brown-Vitter TBTF Act” for short. The bill is a gun aimed directly at the head of the Too-Big-To-Fail beast.

[...]

The S&P report, entitled “Brown-Vitter Bill: Game-Changing Regulation For U.S. Banks”, is so incredibly hysterical in its tone that, reading it, one cannot help but deduce that people on Wall Street are genuinely afraid of this bill. The paper essentially hints that forcing banks to retain more capital could lead to world financial collapse, the onset of a new Ice Age, mammoths roaming Nebraska, etc. “The ratings implications of the Brown-Vitter bill, if enacted, for all U.S. banks would be neutral to negative,” the report read. In the second paragraph, it reads:

If congress enacts the bill as proposed, Standard and Poor’s Ratings Services would have concerns about the economic impact on banks’ creditworthiness stemming from the transition to substantially higher capital requirements.

Having a ratings agency bent to monopolistic bank influence give a bad rating to a piece of legislation designed to . . . curb monopolistic bank influence is a bad surrealistic joke, like a Rene Magritte take on lobbying – Ceci nest pas une Too-Big-To-Fail!

Of course, the Democrats are bound to blow this one.  They always do.  Heavy sigh.

And why do they always manage to blow it?  Greg Sergeant at The PlumLine provides a clue:

The New York Times and CBS News have released new poll findings that again confirm what other polls have showed: Large majorities agree with the Democratic position, and disagree with the Republican position, on key issues facing the country. But before delving into those numbers, I wanted to highlight this quote from a Republican voter — given to the Times in a follow up interview — because it perfectly captures what is currently causing all the gridlock and stalemate in Washington:

“Rick Buckman, 52, a Republican and an electrical engineer from Dallas, Pa., said that while he supported stricter gun legislation, he did not necessarily approve of the president’s approach. “I was really ticked off that the law didn’t pass,” Mr. Buckman said. “But I thought it was wrong of President Obama to get in front of the public and use people who had been damaged by gun violence as props.””

Obviously one doesn’t want to read too much into what one voter says, but this is just perfect. This Republican supports stricter gun laws, and was “ticked off” that they didn’t pass. But to this voter, when Obama gets out there and advocates for what he supports, the president is just grandstanding. What’s more, this voter has been seduced by a ridiculous and lurid line pushed by far right Senators and right wing media — that there’s something nefarious and cynical about Obama’s alliance with Newtown families in pushing for gun control, even though better gun laws are exactly what those families want, and even though they themselves first contacted the White House to get involved in the campaign to push for it.

Greg then goes on to suggest that this is because the president can talk a good game but can’t really do anything at the executive level.

I’m not buying it.  I think the real reason voters like the one quoted turn against Obama and the Democrats is because the right wing noise machine knows that its audience LOVES kicking losers when they’re down.  It’s human nature.  Democrats are always forced to compromise.  If  Democrats get caught doing sexytime without a license, they’re forced to resign, unlike Republicans who manage to turn indiscretions into milestones on their journey to self-discovery.  And punching Dirty Fucking Hippies has become a national pastime.  Democrats are praised for decking their own.  It makes Democrats look weak and who the hell wants to sit with a bunch of fricking losers?  Kicking, punching and dissing weak people develops a momentum of its own.

I’ve said before that Democrats have to develop some muscularity, grow a unibrow and start taking prisoners.  Once we start screaming that we’re reinstituting Habeas Corpus, closing Guantanamo and approving Plan B for 2 year olds, whether right wing nuts like it or not, things will change.

Our biggest problem is convincing the student body types who populate the Democratic caucus to stop being such suckers and sell outs, and punch someone out.

Obama is like a “too big to fail” bank

He failed the stress test but the party heavy hitters feel obligated to save him no matter how badly he f^&*s up and can’t make the case.

We all know that left to his own devices, he’s going to screw up again and put all our economic lives in jeopardy.  It’s just that the party is so invested in him.

So, we see the spectacle of Joe Biden spending a good portion of the debate propping Obama up on foreign policy.  At some point, he ditched the script and just defended his party.

He scored on abortion.  It’s perfectly fine if you have a religious objection to it as long as you don’t seek to impose that religious doctrine on others.  He was a little vague on social security.  I would have liked to have heard a definitive stance against raising the retirement age.  It’s unclear if that is Obama’s policy speaking or Biden’s.

Afghanistan was a wash.  We should be out of there by now.  Otherwise, Biden owned foreign policy.  He smiled and laughed to mock Ryan but he could have been just funnin’ with the young’un.  Biden excels in this area.

I think he kicked Ryan’s ass on the economy and how Ryan’s plan would hurt the middle class.  He was very good at selling the pitch, addressing the camera, and by extension, us, directly.

It would be great if we could just declare the Obama presidency insolvent and nationalize the office for a better candidate.  I’d vote for Biden in a pinch.  Too bad he’s not on the top of the ticket.

Banks on Jello

Does anyone else get the sense that the financial system is so royally screwed up that it’s one butterfly’s wing flap away from collapsing?

Wall Street shut down this morning because of a number of unusual high volume trades, the LIBOR scandal keeps building, the former CEO of Citigroup says merging with Travellers was probably not such a good idea, while Steve Rattner says don’t break up the banks, write a better Dodd-Frank.  Here’s the money quote from Rattner’s piece today:

Because of pressure from Sheila C. Bair, then the chairwoman of the Federal Deposit Insurance Corporation, the primary responsibility for winding down failing institutions was given to the F.D.I.C., an agency woefully ill equipped to deal with complex global entities. The Federal Reserve Board would have been a far superior choice.

In April 2011, the F.D.I.C. published a hypothetical plan suggesting that it could wind down a global octopus like Lehman in a manner similar to the way in which it routinely takes over small community banks. The report was widely derided.

We need a Dodd-Frank do-over to create the right oversight apparatus for huge banks. Regulators will always be outnumbered by bankers, and they will never find every problem. But, like prison guards, regulators are essential, even if they are outnumbered. In a world of behemoth banks, it is wrong to think we can shrink ours to a size that eliminates the “too big to fail” problem without emasculating one of our most successful industries.

You know who else didn’t like the idea of Sheila Bair taking over the banks?  Tim Geithner.  But he pressured Bair to back them anyway, guaranteeing shareholders a lot of money Bair didn’t think they deserved.  She would have made shareholders take substantial haircuts.  I’m betting that Rattner and his friends wouldn’t have liked that very much which is why it was off the table almost from the beginning.

I’m not sure I like Rattner’s tone.  Is he saying that the FDIC, which has something like 80 years of experience taking over failing banks is incapable of dismantling these behemoths or is he just dissing Sheila Bair?  Maybe it was just bad timing to have a woman as head of the FDIC when a man would have been able to do his job without meddling and disrespect.  Or maybe the world of the political elite should be held accountable for the fact that its ingrained sexism appears to be behind some phenomenally bad decisions in the past 13 years.  There’s more than one account of Bair being called “hard to work with” and “not a team player”.  Those are code words, baby, for we don’t want to listen to her and we’re going to pull out the old sexist staples to knock her status down.  Well, it worked so well against Bair and Brooksley Born, Elizabeth Warren, Christina Roemer and Hillary Clinton.  The pattern is obvious.  They don’t even pretend to hide it anymore.

I don’t know but I’m getting really pissed that so many sensible women are ignored and trampled so that the big boys can keep playing their games uninterrupted.  That shit’s gotta stop or why bother appointing women at all??  Again, this is Obama’s responsibility.  He hired these guys. And it’s not like his female White House staff didn’t warn him about the disrespect shown them.  What has Obama done about it?

Then there’s Rattner’s statement that even if we regulate the banks, they’ll just find a way around the regulations.  I’m not sure what point he is trying to make here.  If he’s trying to put us at ease, it’s not working.  It’s probably time to stop treating banks as a blessed industry while everyone else is getting damned.

And then there are the uber wealthy who are starting to worry that the Sans Culottes are going to turn the country into some dystopian state.  Maybe we shouldn’t have taken so much, they muse while they take in the scenery from their mansions.

Yeah, maybe.  Only time will tell.

And then there is Tim Geithner.  It looks like we were right about him.  He knew all about the LIBOR interest rate fix.  According to Taibbi, it was a well known secret on Wall Street.  Everybody knew it but the American people, who put their faith in Obama and his treasury secretary.

All I can think about is the stress tests and the way that Geithner assured everyone that the banks were solvent.  Who knows what the truth is but all of the Obama administration’s policies were built around the fiction of the condition of the banking industry.  Maybe the regular American citizen didn’t know about the LIBOR interest rate fixes but it’s hard for me to believe that Obama didn’t know.  You have to ask yourself what Obama was thinking when the stimulus turned out to be too small, bankers’ asses were saved and not homeowners, and he treated every bank crisis with an ad hoc solution instead of regulation.  Without regulation, it could happen again.

It’s all very, very shaky.

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