Comments for "CBS Face the Nation: Geithner on PPIP"

Press Briefing with Treasury Secretary Geithner, HUD Secretary Donovan, and FDIC Chairman Bair

These are necessary but not sufficient conditions to help address the housing crisis. So the President is announcing today a very comprehensive plan of initiatives to help make housing more affordable and help, again, arrest this very damaging spiral we're seeing in the housing markets as a whole.

hong konger --
The supply and demand curves for new money aren't touching. Sometimes, we just have to accept that there is no price at which a good will sell. Hence, Krugman's reference to economics being turned upside down.

You neglect a negative price, an assumption taken too lightly in economics

"Making houses more affordable" is a good objective, however, it has to be achieved through broader increase of income and not via wider availability of cheap credit

Banks may be getting smarter. Just got a notice on a Visa card that the limit has been cut in half. Always used it as a bill paying service, with the balance paid in full each month. Of course, I won't be able to abscond with as much money now, so there is a downside.

in the context of the crisis that we now face? It's nonsense because people who are able to meet the three-C's of credit via standard underwriting most certainly can get mortgage loans, and just about any other kind of loan for that matter.

It's doublespeak: making houses more affordable so we can stop the prices from falling. Really, this is a PR trick to try and "connect with main street." Most readers of this blog are beyond these lame attempts.

The American consumer is suffering from debt exhaustion, debt overdose and debt burden. The collapse in demand for debt is part of the cure. The cure impairs the banks. There is no getting around these fundamentals. The current and previous administrations have only ever had one strategy; play for time. They probably honestly believe that if they can hold the system together long enough it will cure itself. And why not? Every "reputable" economist of every persuasion has repeated the mantra that the modern economy is self correcting. I know that's not true and suspect I'm not alone on this blog in holding that opinion. Problem is despite the general consensus here being correct for years policy makers will not accept the solutions offered.

yippeeee the handle field remember's all my aliases!!

What in the world is Geithner talking about when he says things like this....

"Just as an example, you know, if you had to sell your home tomorrow, in a world where nobody could get a mortgage to buy your home, you’d have to sell at an enormously low price. "

...in the context of the crisis that we now face? It's nonsense because people who are able to meet the three-C's of credit via standard underwriting most certainly can get mortgage loans, and just about any other kind of loan for that matter.

Housing prices went in the tank because the lenders ran out of unqualified buyers that could not meet honest underwriting guidelines (and the housing bubble needed lots and lots of buyers competing for the supply of houses) as was beginning to be required once the people who had already been granted liar/NINJA loans began defaulting. And it wasn't just the liar/NINJA loans, it was also the alt-A and prime borrowers who bought into a severely inflated housing market and who later found themselves looking for work, underwater on their mortgage and/or facing a reset on the option-ARM that made it possible for them to get into their overpriced home (based on the gamble the prices would continue to rise and they could refinance forever) in the first place.

Geithner is either an idiot, a liar or is helping push a line that helps loot taxpayers for no reason other than lining the pockets of banking conglomerates and Wall Street. Heck, maybe he is some of all of those things. Whatever he is, I want him gone. (Of course that won't help because he isn't doing what he is doing without Obama's explicit approval. The buck stops at the top.)

Most comments are rants by idiots!

Geithner is not a "delusional lying sack of shit". He is a delusional, lying sack of shit.

Hey! let's all talk like Timmay!:

"We are establishing the boundaries that will guide the process towards the goal of describing a plan that will coordinate the actions leading to.... "

MrM
You could make housing affordable simply by stepping aside at this point in time, letting prices fall until inventory clears. We've already gone through the hard part, suffering years of over priced housing

Of course we are supposed to ignore " sell at an enormously low price" and if Geithner doesn't know that house prices were/are enormously over-priced, then we have the wrong man in that office.
But to suggest that these "troubled " assets are anything close to a miss priced house is deliberately misleading...suggesting that the wrong man is the con artist.
The reason they are not assets of any kind but liabilities is in the demonstration that even among these banks intimately familiar with the details they are concealing, (Krugman's "some banks") ... they don't want any more of these suckers. They call it illiquidity...but that describes their brains...which they have the audacity to think might also be infecting ours.

While we dither with these insolvent banks, the real story of rising unemployment and the genuine systemic collapse continues to unfold...because nationalization means the currently wealthy powerful interests might have to make an adjustment.

So will 12% national unemployment be enough to make that adjustment?

Press Briefing with Treasury Secretary Geithner, HUD Secretary Donovan, and FDIC Chairman Bair

These are necessary but not sufficient conditions to help address the housing crisis. So the President is announcing today a very comprehensive plan of initiatives to help make housing more affordable and help, again, arrest this very damaging spiral we're seeing in the housing markets as a whole.

hong konger --
The supply and demand curves for new money aren't touching. Sometimes, we just have to accept that there is no price at which a good will sell. Hence, Krugman's reference to economics being turned upside down.

You neglect a negative price, an assumption taken too lightly in economics

"Making houses more affordable" is a good objective, however, it has to be achieved through broader increase of income and not via wider availability of cheap credit

Banks may be getting smarter. Just got a notice on a Visa card that the limit has been cut in half. Always used it as a bill paying service, with the balance paid in full each month. Of course, I won't be able to abscond with as much money now, so there is a downside.

in the context of the crisis that we now face? It's nonsense because people who are able to meet the three-C's of credit via standard underwriting most certainly can get mortgage loans, and just about any other kind of loan for that matter.

It's doublespeak: making houses more affordable so we can stop the prices from falling. Really, this is a PR trick to try and "connect with main street." Most readers of this blog are beyond these lame attempts.

The American consumer is suffering from debt exhaustion, debt overdose and debt burden. The collapse in demand for debt is part of the cure. The cure impairs the banks. There is no getting around these fundamentals. The current and previous administrations have only ever had one strategy; play for time. They probably honestly believe that if they can hold the system together long enough it will cure itself. And why not? Every "reputable" economist of every persuasion has repeated the mantra that the modern economy is self correcting. I know that's not true and suspect I'm not alone on this blog in holding that opinion. Problem is despite the general consensus here being correct for years policy makers will not accept the solutions offered.

yippeeee the handle field remember's all my aliases!!

Wow, Face The Nation os so hard hitting. It really challenges these crooks. Quality programming like this is what makes this country great and distinguishes the USA from all the other imposter nations around the world.

Hey! let's all talk like Timmay!:

"Wait, let's take a step back. First, again, you have to realize, going forward, a plan is needed, before recovery can take place, all options are on the table."

"How many more houses would be sold at an interest rte of =1%?"

a lot, but it eventually would create another bubble. Or it would chase away all of the private capital out of mortgage lending. So all of the loans would be originated by government and for "government goals" at the expense of taxpayers.

Yes, but a interest rate of 1% would be capitulation, it would show that deflation has arrived. Isn't that the crux of the matter? No one is willing to believe that the largest credit bubble in history will end with falling prices no matter what is done by the kleptocrats. Right now, it's always better to wait another month and get a lower price. Minus a 2 for 1 dollar split tomorrow morning, it's game set and match. A few months ago someone also made the point. As an investor with $320K, would you rather lend out to one buyer who puts 20% down on $400K at 1% or two two buyers each putting 20% down on a $200K at 6%.

Would it create another bubble? I would say no. If credit is given out by current ability to pay obligations (full doc loans) instead of future ability to pay off the debt via price increases (no doc, fraud), we'll never see another housing bubble in our life times.

can you name any modern economy which has failed so completely that it no longer exists?

The United States' 'Free Market' economy? Just kidding.

Ah Robert Reich the Union booster. His policies would cause more unemployment higher inflation and lower productivity. Move along....

what we need is a fed window where home owners can take their houses and get cash on full mark to model valuation

then the home owners can default, use 8% of the cash with a match from the treasury and a loan from the fed to buy their house back at market value, and pocket half the profit which they graciously agree to share with the treasury using the rest to go out and buy SUVs and go on club med vacations!

voila instant GDP

The "normal" functioning of the market would be for all publicly traded companies to stiff their creditors and go bankrupt, and for every bank to swallow every insured deposit and then fail. Corporate bankruptcy is free money, which can be easily realized if the "regulators" don't keep up or are bought off.

FYI, Robert Reich is calling this a Depression:

http://robertreich.blogspot.com/2009/04/its-depression.html

EHP-

I didn't neglect it at all. I'm speaking merely in terms of old money (previously purchased goods) and new money (which hasn't purchased anything yet).

Sometimes, there is no price that will clear a market. Therefore, the curves don't touch.

Ah Timmy, what a fool. Things must work quickly, or else ...

Japanese GDP increased mainly due to temp gov't spending increases. Increasing the deficit but not necessarily raising rates.

Every "reputable" economist of every persuasion has repeated the mantra that the modern economy is self correcting

of course, they're reputable because the bank pays them $2mm/year, and buys them plenty of media time.

I trust all of you are developing personal strategies to cope with the economic consequences of this farce.

Reptillian

Tell that to the city of Vallejo, CA

To reset the banking system:

1. "Liquify" Treasury Direct. Name your maturity, even overnight. (You can already name your denomination)
2. Sell the program: teaser rates, no fee debit cards (paperless), no commission...
3. Drop FDIC ins. back to $100,000, limit 3 accounts.
4. let the market use significant judgment
5. New lending regulations, rein in the FED.

We are becoming a Dollar store nation!

Analysts bullish on Family Dollar Stores

http://www.forbes.com/feeds/ap/2009/04/02/ap6248480.html

"Ah Robert Reich the Union booster."

I wonder whether we don't need more and stronger unions. We have a situation where WalMart -- the biggest employer? -- pays their workers so little that they find it necessary to get food stamps and go without health insurance. The taxpayers are subsidizing that sort of corporate behavior.

Anonymous wrote on Sun, 04/05/2009 - 10:58am.

Most comments are rants by idiots!

Q. E. D.

mp

Say what you want but gold to 1200 this year.

I propose that in exchange for continuation of US military protection of Japan, Japan must retire some of the US Treasuries that it holds. Not much to ask given that on its own Japan stands helpless before North Korea's construction of ICBM capability.

It occurs to me that in practically every lending climate, if you have to sell your home (or anything else for that matter) tomorrow, you're likely to take a bath.

Rept

Oh yeah and GM, Ford, Chrysler etc.

"Also I hope you spelled your name wrong on purpose."

Yeah. It is a deliberate misspelling. I am not a lizard!

Sportsfan did you catch this?

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

Icouldatoldya

Kung Fu Panda wrote on Sun, 04/05/2009 - 12:02pm.

I propose that in exchange for continuation of US military protection of Japan, Japan must retire some of the US Treasuries that it holds. Not much to ask given that on its own Japan stands helpless before North Korea's construction of ICBM capability.

I propose that instead spending money on more military protection we offer North Korea free food for it's citizens on the basis that it is handed out by US civilians inside the North Korean borders. Those US civilians will not be allowed to proselytize, but actions speak louder than words. We can't save the world, but we can definitely choose better paths to demonstrate our ideas.

"The collapse in demand for debt is part of the cure"
----

It's fascinating that you don't include "higher incomes" as another cure.

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 11:50am.

Ah Robert Reich the Union booster. His policies would cause more unemployment higher inflation and lower productivity. Move along....

---

gosh i cant remember, why was our standard of living 30 years ago the envy of the world, what with all those unions and stuff

oh yeah thats right the financial service sector was 4 percent of corporate profits back then not 40 percent as it was before the crash

and

we didnt ask american workers to compete with wage slaves in totalitarian countries where people work for 8 dollars a day

anyone who advocates un-impeded trade between poor and rich countries without basic human rights and a shared currency is just screwing the middle class by arbitraging the the poverty around the world

theres your class warfare

sportsfan

how many times can someone lie to you and you will continue to believe them?

I see from the transcript that Geithner expressly denied any efforts to circumvent the Congressional limitation on executive compensation in firms receiving TARP funds:

CR reported without comment on the WaPo article that raised this issue at

http://www.calculatedriskblog.com/2009/04/bailout-potomac-two-step.html

The current transcript reads:

SCHIEFFER: Let me ask you about one more thing. As Will Rogers once said, all I know about this is what I read in the newspapers. But the Washington Post has reported that even after all the outrage about the bonuses at AIG, that the Treasury Department is working out an arrangement now to set up new some sort of entity where they can funnel money to this entity and then it can give the money to these companies and banks that need help. And in doing that, it allows the banks and their executives to evade and go around limits that had been placed on executive compensation by the Congress. Is that right?

GEITHNER: No, that’s not true, Bob. Now, our obligation is to apply the laws that Congress just passed on executive comp, and we’re going to do that.

Now, we’re also going to make sure these programs are as effective as possible in making credit more available to businesses and families across the country. Now, the way the legislative process works is Congress legislates. We have an obligation then to design and put out regulations for applying that. We’ll put those out in draft. The American people have the chance to evaluate those and assess and comment on those. We’re working with Congress as we do this. And -- but again, our obligation is to apply those laws, and we’re going to do that because it is very important to us that every dollar of assistance we provide doesn’t -- goes to expand lending.

SCHIEFFER: But are you saying to me -- and we’ll close with this -- that every limit that Congress has put on executive compensation, that you’re going to see that that’s enforced and that these -- there’s not going to be a way to get around that?

GEITHNER: Absolutely, because we want the American taxpayers -- this is going to generate greater lending, not providing excess compensation.

My comment: He better stick to that position now.

Reptillian

Enjoyed the link but just remember "Hope" is not an investment Strategy. Also I hope you spelled your name wrong on purpose.

Gold at 1200, but an ounce will buy 4 barrels of oil.

Mock Turtle

BS argument. Wages of both Management and Workers increased exponentially in the auto companies. Management faster than workers but the truth is none of these people were struggling to day-to-day. They bankrupted themselves. Autos under invested in their factories to fund pensions and as a result they have the oldest least efficient operations in the world. We may have the best autoworkers but yet no one wants their contracts. Something is wrong here.

Other examples.

Why don't we have electronic recorders in courts? Unions. Court reporters can make 100k a year and thousands are spent on court cases that never happen because there are not enough court reporters.

The Union movement has never demonstrated in the streets to protest unfair wages overseas.

Two words Vallejo CA

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 12:12pm.

sportsfan

how many times can someone lie to you and you will continue to believe them?

---

um uh ...ive been married for 29 years

does that answer your question?

" I think the whole system just went beserk during the Bush Administration.."
---

How quickly we forget Enron, Worldcom, etc, when we're beholden to our partisan beliefs.
It would be nice to see somebody get a clue someday.

"I propose that in exchange for continuation of US military protection of Japan, Japan must retire some of the US Treasuries that it holds."

Treasury can call its bonds. It's happened before. That gets treasury out of an obligation to pay rates higher than the current rate.

"Why don't we have electronic recorders in courts?"

I watched Minnesota recount all their hand-marked paper ballots. Long and cumbersome process. Electronic voting would have been simple. Sure.

One feature of the new comments I like over the JS-Kit is that it is easy to come back to the comments after following someone's video (or other) link. I can use my browser's (Safari) back arrow. Even better in that respect, however, was Haloscan's feature of simply opening a new window to view the link.

Hearing Geithner talk at hearings, I was struck by the idea that he uses jargon that you'd exect to hear at a technology company: innovation, product, design, architecture, ...

We might be better off if bankers became the old, conservative, stodgy people that they used to be.

yogi, yes, I read it when it was linked earlier.

I can't say anything in the article was especially shocking to me. I have assumed fraud in the highest financial circles for many years, perhaps decades. I think the whole system just went beserk during the Bush Administration..

"Hearing Geithner talk at hearings, I was struck by the idea that he uses jargon that you'd exect to hear at a technology company: innovation, product, design, architecture, ..."

It's a symptom of his delusional state of mind. Tech. is so much sexier than banking/economics.

Broward Horne, I can't think of anyone more desperately in need of a clue than you.

Sportsfan:

"As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.

So you're with me now these might be voidable?

Yogi

Electronic recorders are more accurate. If the next 20 years of your life hung in the balance you would want accuracy. Believe me.

Geithner is a sniveling snake, a con artists' puppet, a money launderer extraordinaire. There will be no economy until the money laundering stops.

Of course they're more accurate, look at Nixon's tapes...

Enron, buddy.

there it is, son.

Deal with it.

Obama gonna save me!
Obama gonna save me!

Because he's a good democrat, not an evil republican!

hahahahahaha.

Yoji

thanks for making my point. Accurate, and indisputable

GEITHNER: Absolutely, because we want the American taxpayers -- this is going to generate greater lending, not providing excess compensation.

My comment: He better stick to that position now.
sportsfan

Stick to what position? He has a habit of breaking off mid sentence to start listing talking points. He never actually says anything.

"Haloscan's feature of simply opening a new window to view the link."

You can get that effect by right-clicking on the link. Then you'll have the option of opening the link in a new window or tab. Works with Firefox, anyway. But it is something that the commenting system could do automatically.

Broward

Let them live in their delusion. Who are you to stomp on their investment strategies? Besides celebrity worship can be a wonderful distraction.

So you're with me now these might be voidable?

Having "one [unnamed] source" allege that "there may be" documents that "could prove" that AIG never intended to pay doesn't strike me as being anywhere close to voiding the contracts. As I just said:

I have assumed fraud in the highest financial circles for many years, perhaps decades.

Not many financial fraud cases involving the highest levels ever get prosecuted.

Even with electronic recorders, you have to pay someone to maintain them out of the reach of the prosecutor, the judge and the defendant, and enough so that they won't take bribes.

Geithner is a tax cheat. Anything that follows from that declaration of fact is icing. Look for the IRS hiring MANY auditors in the next few years as people get creative on their taxes. They will have to bring the fear factor back into the equation to ensure the govt is getting their cut.

When did the social stigma about receiving government aid, i.e.food stamps, disappear? I am not knocking a social safety net and am happy if I need some assistance at some point it will be there, but when did people stop caring about the perception of needing assistance?

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 12:20pm.

Mock Turtle

BS argument. Wages of both Management and Workers increased exponentially in the auto companies. Management faster than workers but the truth is none of these people were struggling to day-to-day. They bankrupted themselves. Autos under invested in their factories to fund pensions and as a result they have the oldest least efficient operations in the world. We may have the best autoworkers but yet no one wants their contracts. Something is wrong here.

---

i agree auto workers wages and benefits were fat and juicy

but you just chose one of the most extreme examples to make your case

and as you may notice the japanese companies paid wages to their auto workers on a par with GM and Ford

heres a report from bloomburg news

"Sluggish wage growth may undermine the economy, especially as the stimulus from this year's federal tax refunds fades, interest rates rise and higher energy costs begin to bite, said Jared Bernstein, an economist at the Economic Policy Institute, a Washington group that researches labor issues.

`Wage Recession'

``If we don't start seeing a greater increase in labor income, the recovery could easily stumble,'' Bernstein said.

Wage gains have been curbed by a loss of 1.5 million jobs since January 2001 and productivity gains of more than 4 percent in each of the past two years, the first time that's happened since records were kept in 1947."

http://www.bloomberg.com/apps/news?pid=10000103&sid=aCttIAcLPoXs&refer=us

you can call BS all you want...the facts show corporate profits, concentration of great wealth and a shrinking middle class

Uh, Tim, there were 27 minutes erased.

So you're with me now these might be voidable?

Having "one [unnamed] source" allege that "there may be" documents that "could prove" that AIG never intended to pay doesn't strike me as being anywhere close to voiding the contracts. As I just said:

I have assumed fraud in the highest financial circles for many years, perhaps decades.

Not many financial fraud cases involving the highest levels ever get prosecuted.

Even with electronic recorders, you have to pay someone to maintain them out of the reach of the prosecutor, the judge and the defendant, and enough so that they won't take bribes.

"Haloscan's feature of simply opening a new window to view the link."

You can get that effect by right-clicking on the link. Then you'll have the option of opening the link in a new window or tab. Works with Firefox, anyway. But it is something that the commenting system could do automatically.

Broward

Let them live in their delusion. Who are you to stomp on their investment strategies? Besides celebrity worship can be a wonderful distraction.

GEITHNER: Absolutely, because we want the American taxpayers -- this is going to generate greater lending, not providing excess compensation.

My comment: He better stick to that position now.
sportsfan

Stick to what position? He has a habit of breaking off mid sentence to start listing talking points. He never actually says anything.

Obama gonna save me!
Obama gonna save me!

Because he's a good democrat, not an evil republican!

hahahahahaha.

Yoji

thanks for making my point. Accurate, and indisputable

"You can get that effect by right-clicking on the link."

But not exactly. My default browser opens maximized so the comments are on top of the post. Then I gotta minimize. Comments should pop up in a smaller window without the menus, which can be programmed. I think it's on Ken's agenda, but this is his day of rest.

Can someone translate the word "decades" for the Republican Neanderthals on this board?

Geithner is a tax cheat. Anything that follows from that declaration of fact is icing. Look for the IRS hiring MANY auditors in the next few years as people get creative on their taxes. They will have to bring the fear factor back into the equation to ensure the govt is getting their cut.

When did the social stigma about receiving government aid, i.e.food stamps, disappear? I am not knocking a social safety net and am happy if I need some assistance at some point it will be there, but when did people stop caring about the perception of needing assistance?

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 12:20pm.

Mock Turtle

BS argument. Wages of both Management and Workers increased exponentially in the auto companies. Management faster than workers but the truth is none of these people were struggling to day-to-day. They bankrupted themselves. Autos under invested in their factories to fund pensions and as a result they have the oldest least efficient operations in the world. We may have the best autoworkers but yet no one wants their contracts. Something is wrong here.

---

i agree auto workers wages and benefits were fat and juicy

but you just chose one of the most extreme examples to make your case

and as you may notice the japanese companies paid wages to their auto workers on a par with GM and Ford

heres a report from bloomburg news

"Sluggish wage growth may undermine the economy, especially as the stimulus from this year's federal tax refunds fades, interest rates rise and higher energy costs begin to bite, said Jared Bernstein, an economist at the Economic Policy Institute, a Washington group that researches labor issues.

`Wage Recession'

``If we don't start seeing a greater increase in labor income, the recovery could easily stumble,'' Bernstein said.

Wage gains have been curbed by a loss of 1.5 million jobs since January 2001 and productivity gains of more than 4 percent in each of the past two years, the first time that's happened since records were kept in 1947."

http://www.bloomberg.com/apps/news?pid=10000103&sid=aCttIAcLPoXs&refer=us

you can call BS all you want...the facts show corporate profits, concentration of great wealth and a shrinking middle class

Uh, Tim, there were 27 minutes erased.

So you're with me now these might be voidable?

Having "one [unnamed] source" allege that "there may be" documents that "could prove" that AIG never intended to pay doesn't strike me as being anywhere close to voiding the contracts. As I just said:

I have assumed fraud in the highest financial circles for many years, perhaps decades.

Not many financial fraud cases involving the highest levels ever get prosecuted.

Even with electronic recorders, you have to pay someone to maintain them out of the reach of the prosecutor, the judge and the defendant, and enough so that they won't take bribes.

"Haloscan's feature of simply opening a new window to view the link."

You can get that effect by right-clicking on the link. Then you'll have the option of opening the link in a new window or tab. Works with Firefox, anyway. But it is something that the commenting system could do automatically.

Broward

Let them live in their delusion. Who are you to stomp on their investment strategies? Besides celebrity worship can be a wonderful distraction.

GEITHNER: Absolutely, because we want the American taxpayers -- this is going to generate greater lending, not providing excess compensation.

My comment: He better stick to that position now.
sportsfan

Stick to what position? He has a habit of breaking off mid sentence to start listing talking points. He never actually says anything.

Then why don't you assume fraud on behalf of the counterparties?

Why not demand an investigation?

also, the prosecution and defense want transcripts not dvds

somebody or some computer (so far, less reliable) has to keyboard it out so far

"You can get that effect by right-clicking on the link."

But not exactly. My default browser opens maximized so the comments are on top of the post. Then I gotta minimize. Comments should pop up in a smaller window without the menus, which can be programmed. I think it's on Ken's agenda, but this is his day of rest.

Can someone translate the word "decades" for the Republican Neanderthals on this board?

Geithner is a tax cheat. Anything that follows from that declaration of fact is icing. Look for the IRS hiring MANY auditors in the next few years as people get creative on their taxes. They will have to bring the fear factor back into the equation to ensure the govt is getting their cut.

When did the social stigma about receiving government aid, i.e.food stamps, disappear? I am not knocking a social safety net and am happy if I need some assistance at some point it will be there, but when did people stop caring about the perception of needing assistance?

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 12:20pm.

Mock Turtle

BS argument. Wages of both Management and Workers increased exponentially in the auto companies. Management faster than workers but the truth is none of these people were struggling to day-to-day. They bankrupted themselves. Autos under invested in their factories to fund pensions and as a result they have the oldest least efficient operations in the world. We may have the best autoworkers but yet no one wants their contracts. Something is wrong here.

---

i agree auto workers wages and benefits were fat and juicy

but you just chose one of the most extreme examples to make your case

and as you may notice the japanese companies paid wages to their auto workers on a par with GM and Ford

heres a report from bloomburg news

"Sluggish wage growth may undermine the economy, especially as the stimulus from this year's federal tax refunds fades, interest rates rise and higher energy costs begin to bite, said Jared Bernstein, an economist at the Economic Policy Institute, a Washington group that researches labor issues.

`Wage Recession'

``If we don't start seeing a greater increase in labor income, the recovery could easily stumble,'' Bernstein said.

Wage gains have been curbed by a loss of 1.5 million jobs since January 2001 and productivity gains of more than 4 percent in each of the past two years, the first time that's happened since records were kept in 1947."

http://www.bloomberg.com/apps/news?pid=10000103&sid=aCttIAcLPoXs&refer=us

you can call BS all you want...the facts show corporate profits, concentration of great wealth and a shrinking middle class

Uh, Tim, there were 27 minutes erased.

So you're with me now these might be voidable?

Having "one [unnamed] source" allege that "there may be" documents that "could prove" that AIG never intended to pay doesn't strike me as being anywhere close to voiding the contracts. As I just said:

I have assumed fraud in the highest financial circles for many years, perhaps decades.

Not many financial fraud cases involving the highest levels ever get prosecuted.

Even with electronic recorders, you have to pay someone to maintain them out of the reach of the prosecutor, the judge and the defendant, and enough so that they won't take bribes.

"Haloscan's feature of simply opening a new window to view the link."

You can get that effect by right-clicking on the link. Then you'll have the option of opening the link in a new window or tab. Works with Firefox, anyway. But it is something that the commenting system could do automatically.

Uh, Tim, there were 27 minutes erased.

Tim waiting for 2012 wrote on Sun, 04/05/2009 - 12:20pm.

Mock Turtle

BS argument. Wages of both Management and Workers increased exponentially in the auto companies. Management faster than workers but the truth is none of these people were struggling to day-to-day. They bankrupted themselves. Autos under invested in their factories to fund pensions and as a result they have the oldest least efficient operations in the world. We may have the best autoworkers but yet no one wants their contracts. Something is wrong here.

---

i agree auto workers wages and benefits were fat and juicy

but you just chose one of the most extreme examples to make your case

and as you may notice the japanese companies paid wages to their auto workers on a par with GM and Ford

heres a report from bloomburg news

"Sluggish wage growth may undermine the economy, especially as the stimulus from this year's federal tax refunds fades, interest rates rise and higher energy costs begin to bite, said Jared Bernstein, an economist at the Economic Policy Institute, a Washington group that researches labor issues.

`Wage Recession'

``If we don't start seeing a greater increase in labor income, the recovery could easily stumble,'' Bernstein said.

Wage gains have been curbed by a loss of 1.5 million jobs since January 2001 and productivity gains of more than 4 percent in each of the past two years, the first time that's happened since records were kept in 1947."

http://www.bloomberg.com/apps/news?pid=10000103&sid=aCttIAcLPoXs&refer=us

you can call BS all you want...the facts show corporate profits, concentration of great wealth and a shrinking middle class

Geithner is a tax cheat. Anything that follows from that declaration of fact is icing. Look for the IRS hiring MANY auditors in the next few years as people get creative on their taxes. They will have to bring the fear factor back into the equation to ensure the govt is getting their cut.

When did the social stigma about receiving government aid, i.e.food stamps, disappear? I am not knocking a social safety net and am happy if I need some assistance at some point it will be there, but when did people stop caring about the perception of needing assistance?

Can someone translate the word "decades" for the Republican Neanderthals on this board?

"You can get that effect by right-clicking on the link."

But not exactly. My default browser opens maximized so the comments are on top of the post. Then I gotta minimize. Comments should pop up in a smaller window without the menus, which can be programmed. I think it's on Ken's agenda, but this is his day of rest.

also, the prosecution and defense want transcripts not dvds

somebody or some computer (so far, less reliable) has to keyboard it out so far

Then why don't you assume fraud on behalf of the counterparties?

Why not demand an investigation?

Uhh, did anybody catch the huge Freudian slip?

Geithner... protect the government from not overpaying for these assets.

Normally what we would have expected is that we'd bring in private investors TO protect the government FROM overpaying.

But in this case, Geithner wants to protect ... someone ... from NOT OVERPAYING!

And to the bankers, is his singing "You've got a friend in me, you've got a friend in me".... Hmm???

Thanks,, wtf, for the right click (or, for me, Apple click) idea. I didn't know about that. It works on Safari.

Mock turtle

Extreme example? Hardly many US corporations facing the same problems on a smaller scale

Japanese companies have younger workers and last I check they weren't doing stellar. And nice quote from Bernstein who is on the White House payroll.

We need reform at all levels but unionization of every garage mechanic, babysitter and dollar store clerk is not how we will get there.

yogi

You have never seen the omissions and error in a court report have you? Compare the reports notes to the OJ tV broadcasts. you will be surprised.

RATM, I was talking about clicking links from the comments, rather than clicking the comments from the CR post. In JS-Kit whenever I did that I could not get back to the comments. I had to close the window and click the comments again and then scroll to wherever it was that I had left off. It was really lousy. For what it's worth, I don't really mind the comments opening up in maximized form; if I want to see the post again I can minimize. And I know some other folks don't like the blue but I actually do.

All those union workers sure buy their share of slave wage products. They fail in global competition. Post WWII they had no competition from the rest of the world. The world grew up and they didn't.

CR,

If memory serves Geithner made the same mistake (of mistaking a solvency issue for liquidity drying up) during the Asian financial crisis in 1997, to the detriment of the affected countries.

Making it again would indicate he either has no better peers to interact with or he's particularly narrow-minded.

Either way, it would be disturbing that he's in charge of policy. My fervent hope is that they are putting the pieces in place to eventually nationalize the money center banks, cleaning out the rot once and for all - and that what we see is just the public side-show they have to play out until then.

FASB was owned through this change, gave in to pressure from Congress. It's not a stretch to say the government made this change occur.

Blame Americans for winning WWII ? Classic nutism!

More Extreme and isolated examples.

"Pensions Losses will Devour Cooperate Earnings"

http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db2009017_85...

"Boeing's Costly Pension Breakthrough"

http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080826_6...

$1T hit to pensions could cost taxpayers, workers

http://www.businessweek.com/ap/financialnews/D97CE2V00.htm

Geithner is part of the problem, not the solution.

He & Summers are worse than worthless because they helped formulate the architecture for our current predicament.

That they are in power is some sort of testament to the cluelessness of DC Officialdom as to the problem and the options.

The first step in recovery is running these two idiots out of town on a rail.

If memory serves Geithner made the same mistake (of mistaking a solvency issue for liquidity drying up) during the Asian financial crisis in 1997, to the detriment of the affected countries.
-----------------------
Thought Summers was in charge of the IMF then.

When I clerked I was jealous of the reporters who made much more than I with my Bar admission. But I realized there was a greater chance they could get my degree than I could learn their skill, and I didn't want their job. They will be phased out as a more reliable (not accurate) system comes along.

We will no longer need unions when producers of value have a fair share of equity.

Auto wage comparisons are half truths unless we look at production hours per unit. I bet the non UAW manufactures produce post less hours per unit.

Unions are a valuable part of a working society. The fact is there needs to be a counter balance to capital holders. Labor isn't just another commodity and deserves to be held with respect and not contempt.

Can anyone not examine the situation we find ourselves in and not see the truth that seems to me to be so self evident. We talk about mass protest so often on this site and rightly label the financial sector as criminals and the ruination of our country. France and Germany have strong Unions and they provide the organization necessary to pose a serious threat if the policies of their country swing to far away from remembering that labor is people with families. I was very heartened to see the protests over the past few days.

Then why don't you assume fraud on behalf of the counterparties?

Why not demand an investigation?

I can assume fraud on all sorts of levels without demanding an investigation.

If I were inclined to demand investigations, I would start with those potentially involving treason.

I can't equate mere dollar fraud to the other frauds perpetrated on the American people.

Yogi

They will be phased out as a more reliable (not accurate) system comes along.

Thanks to NASA technology in conjunction with DARPA and 20 years of PHD research the videocassette was invented. Hallelujah!

Dare I say Closed Circuit TV????? If cameras are trusted for security of Fort Know why not Joe Schmoes fraud trial.

it's only a matter before the pension (private and public) system completely blows up. They're basically ponzi schemes, with Wall Street taking its usual pound of flesh on every transaction. It's simply unconscionable for a state agency to pay 2/20 for a stake in some private equity firm...

"When did the social stigma about receiving government aid, i.e.food stamps, disappear? I am not knocking a social safety net and am happy if I need some assistance at some point it will be there, but when did people stop caring about the perception of needing assistance?"

A very long time ago, at least back to the early-mid 80s in the relatively small town I was raised in. The safety net morphed into a way of life and it hasn't looked back.

It's even a worse situation in large cities, which are IMHO going to freaking implode pretty soon (no exact predictions on when/where/timeline). Assume "pretty soon" to mean when there are enough former upper-middle-class people laid off and the regular skimming of their taxes for local gov is not there, and the muni bonds sold didn't, and the cities are bankrupt.

Yeah, it may not get to Mad Max levels, but I'm not so sure of that based on anecdotal evidence. I know way too many people who are "upper middle class" who are overleveraged to the hilt (house, cars, and credit cards) who are stringing things together on those same credit cards as they eat away their income and these folks are soon going to be not getting raises but pay cuts and furloughs if not outright layoffs, which increases the problem they and the DMA's which rely on their taxes have.

I'm not fully prepared as many here, but I'm acutely aware of the possibilities and have done what I can. There's a major river within walking distance, anyhow, if there's anything to catch and the water remains potable somehow.

Tim:

Remember "Wag the Dog"? And about those 27 minutes...

The banks are NOT willing to lend in South Florida. Only loans are fha. Many with 'way more than 3% down.

I can't remember the last time I did a conventional mtg. Musta've been a
year.

Banks are also not lending to anyone in South Fla. For anything, near as I can tell.

REO loans needed!!

How do I get to be a member?

Actual film would cost most than stenography. Digital is alterable.

mp, conjure told us we'd all be living on stored water and canned goods by now correct? 5 handle on Dow and S&P? Curious as to your current outlook, of investment markets (economy is apparent).

Thanks

The fact is there needs to be a counter balance to capital holders.

GM is finding out what happens when the capital holders outweigh BOTH the management and the unions.

Actual film would cost most than stenography. Digital is alterable.

Nothing costs more than court reporters. Nothing.

Ah, AEP is back with more doom:

Swiss slide into deflation signals the next chapter of this global crisis

"We don't fully realise in the West what a catastrophic collapse Japan has suffered," says Albert Edwards, global strategist at Société Générale. "The West has dumped a large part of its economic downturn onto Japan by devaluing against the yen."

This is about to go into reverse as Tokyo hits the ping-pong ball back across the net. "As the unfolding collapse in the yen gathers pace, the West will see its green shoots incinerated to dust," he said.

Max
+1 The law of Reflextivity. This will be bad.

all i can say is if nobody wants to buy it, its junk. not unless you give it away for free, and give free insurance on it.

US watchdog calls for bank executives to be sacked

Elizabeth Warren, chief watchdog of America's $700bn (£472bn) bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration's approach to saving the financial system from collapse.

Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be "wiped out". "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade." She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees.

Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said.

Geithner has a 1.6M home for sale,not too shabby for a government guy. Geithner is just a small lesion of the spreading malignancy.

If there was not widespread fraud that created the financial crisis,then new laws or regulations need to adopted. So I want to see extensive convictions or extensive overhaul of financial system. The powers that be need to begin to believe that the system must be changed. The system being the political/legal/financial.

As far is PPIP

1. Investors will buy toxic assets if they think they could make money on them.
2. If banks think they could make money on toxic assets why sell?
3. What stops the banks from buying the toxic assets from each other so as to get the protection of the nonrecourse loan and also the leverage opportunity provided by putting down 7% and then getting the gains on 50% of the asset and not being penalized if the loan cannot be repaid?
4.By making the subsidy complicated and painting it as a free market approach it gives the appearance that this is less expensive than just buying the assets outright with government money.
5. The banks won't sell the toxic asset because it leaves the rest of their toxic assets worth less if the price is low.
6. If the price is high when they sell the toxic asset then the taxpayer will be left paying for it when it is sold later and the loan is not paid back and the price of sale causes a loss.

This program will move these assets if the taxpayer pays the difference between their fair market value and their government subsidized value.

Bank Stress Test Meeting Planned

Top federal bank regulators plan to meet early this week to discuss how to analyze the results of stress tests being conducted on the country's 19 largest banks, people familiar with the matter said....

Regulators are also expected to discuss at this week's meetings how new changes to accounting rules might affect each bank's performance in the stress tests. The Federal Accounting Standards Board voted last week to make it easier for banks in some cases to limit losses on assets that they don't intend to sell. Some government officials believe this could significantly improve some banks' condition on paper.

You change a major accounting standard in the middle of the stress tests? These people really are doofuses.

As corrupt as the Romans were, they had some values. When Caesar's wife was suspected of an impropriety, he divorced her saying, "Caesar's wife should be above suspicion."

So why not get a "divorce" from Summers? His "speaking" income from the banksters cannot make anyone comfortable regarding a potential conflict of interest. His actions, while treasury secretary during the Clinton administration, created policy that led to the situation we are now in. I realize that a new administration will often seek "talent' from an earlier administration, but it is time to wake-up and smell the coffee.

Summers must go!

reptillian: right now, it's really a confidence game, especially given the "green shoots." Remove Summers, and the public might believe that the emperor has no clothes. In a screwed up way, it's the same logic that kept Rumsfeld in office way past his expiration date.

Well you still picked a poor example. Court reporters are a small group of peaceful people. They don't pal around with Jimmy Hoffa types. The larger court unions (clerks, officers) know that that there is a budget which must be divided, so the reporters' share affects them. Their bargaining power is closely correlated to their specialized talent or skill.

You can pay less, but you will pay. Who's next? You want cut-rate fire and police? Those filthy rich teachers...

Add Elizabeth Warren to the list of open critics. She's been "cautiously optimistic" on Obama's plans for a while. This represents another major break in the ranks.

Max,

I'm guessing Elizabeth Warren's blasting will come in the next Congressional Oversight Panel report. One is due next week.

Her last report was pretty good: http://cop.senate.gov/documents/cop-030609-report.pdf

"Elizabeth Warren, chief watchdog of America's $700bn (£472bn) bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration's approach to saving the financial system from collapse."

Let us hope that she lives to deliver the report.

"I know way too many people who are "upper middle class" who are overleveraged to the hilt (house, cars, and credit cards) who are stringing things together on those same credit cards as they eat away their income..."

I'm always a bit startled when I see someone paying for a muffin and coffee at Whole Foods with a credit card. I was born in the 30s, but still...

Don't worry Basel, after the banks pass the stress tests, they can use "significant rejudgment" for the purposes of paying back TARP.

The ousting of the bank CEOs will probably happen as the outrage grows. The CEOs are just employees and if they need to be let go to take some heat or get some concessions from congress then they will be.

The US by mid summer will have some serious social instability in the poorer neighborhoods of our cities. The question is will this lead to a welcoming of martial law by the rest of us or will it be the tinder for a broad movement of protest across America? I think a crackdown and hiding out in our homes is the most likely outcome. The blogs will sing with unrest and the streets will be oddly quiet. Now if the college and universities were having large demonstrations then the opposite happening would occur. Why aren't the college aged citizens starting to speak out?

To the radicals in the commentariat I ask you to try an experiment. Don't eat for 3 days. Don't drink for a day. Turn off the circuit breakers in your domicile for a full day. After this ask yourself if the local authorities promised you food, water, and power wouldn't you pretty much do whatever they asked? Real change only comes with real sacrifice and risk.

Her last report was pretty good

thanks ;)

Bruce Krasting has a very funny, but thought-provoking, blog post out today titled "Geithner Speaks to Lord Keynes" at http://brucekrasting.blogspot.com/2009/04/blog-post_5662.html

I recommend this post in particular, and the blog in general, although the author doesn't post as frequently as his fans might like.

Beautiful day in Oregon. There are literally green shoots and seedlings here, if not figuratively in the CNBC/Kudlow sense.

Pavel at my supermarket debit card transactions are faster than cash.

And muggings are way down.

Hey, Basel, did you write it?

Google news search for Elizabeth Warren. 3 article links for what should be front page news here in the US.

http://news.google.com/news?pz=1&ned=us&cf=all&ncl=1327049481

"Gimme my bonus" riots! Effete, lound mouthed Libertarians with molotov cocktails! Oh my. I'm scared! Obamists willing to give up their tenure! Dios Mio!

Pavel, they are "earning points" on those muffin transactions, don't you know. Helps them get better seats on airlines or something. Or that's the highbrow talk.

The lowbrow talk is, I know people who would be dead in the water for everything they own if the credit spigot is shut off.

We're only delaying the inevitable, and I say that as someone who has one of those people currently occupying (and disrespecting, which will soon enough stop) the very house I live in and the person ostensibly pays to be here.

I had a dire situation and needed a bit of assistance, but then the assistance decided it could do what it wanted even while I provide everything that the assistance could not on assistance's own.

I'm being obtuse for a reason, but let's just say you can't pay me 200 dollars a month to live in a house where expenses are 1500/month and then act like you rule the place while driving around in your $650/month Tahoe and buying new shoes and clothes left and right but then failing to pay your home provider the piddling 200 bucks he's asking.

My point? Yeah, I'm a sucker but someone's going to find out right quick that I can get half of the cost of living out of an extra bedroom and full bath, from someone who respects the contract and whatnot.

There are a lot more deadbeats out there than you realize, and they're going to be out on the streets in growing numbers as the economy contracts more. Count on it.

did i write it? hell no.

but i might have worked on it.

Credit cards-do you mean those plastic things, that when used as directed, divert someone's money into bankster pockets? A high price to pay for convenience imho, but I don't have much $ anyways.

As corrupt as the Romans were, they had some values. When Caesar's wife was suspected of an impropriety, he divorced her saying, "Caesar's wife should be above suspicion."

Well, Calligula made his horse, Incitatus , a consul. According to Wikipedia, "The horse would "invite" dignitaries to dine with him in a house outfitted with servants there to entertain such events."

What does it tell us about which phase of the Roman Empire is a better proxy for the modern state US?

"The US by mid summer will have some serious social instability in the poorer neighborhoods of our cities."

I have thought that the unrest will appear in the suburbs: House underwater, unemployed, no one hiring.
That is where a burning/looting orgy may occur. It may not be organized, but the suburbanites will manage
to do an "insuraburn," if they become hopelessly trapped. People in the inner city are used to making do.

"Insuraburn" is a word from Naipul's "A House For Mr. Biswas." It's about a guy that spent his life in search of a house of his own.

Excellent work, sir or madam.

Max @4:10 - This news about Elizabeth Warren is one of the most encouraging news of late. If she does get heard (even if not listened to), that to me will be the first green shoot of recovery

did i write it? hell no.

but i might have worked on it.

Somehow I thought so. It is, after all, a collaborative effort.

Taking a slant from what Max said, I'd say Warren has been "cautiously critical" of administration efforts.

It's getting to be time to pull out the bigger guns.

Credit cards-do you mean those plastic things, that when used as directed, divert someone's money into bankster pockets?

Actually if you pay them off every month, you're borrowing money from the Banksters for free. I like that thought.

We are talking about an offspring here Lothar?

Geithner must realize what is really happening with the current program. By selling their junk to each other under his programs, the banks
A: Get to establish higher values for their books &
B: Offload 85% of the losses onto the taxpayers

Worst plan since Princess made crime legal in the City of Townsville.

Went and spent a bunch of money at Home depot and the lines were long again in the plant department. Not too many buying seeds and fertilizer, or little veggie plants.

lawyerliz, to become a member, go to the Hoocoodanode home page . . . or the top left of this page . . . and create a new account.

The problem with the suburbs is lack of population density and spontaneous gathering spots. Here in Portland the few protests we've had have always been centered around the downtown Pioneer Courthouse Square area. There also needs to be a unifying event or leader/organization to start a protest. The inherent rage among the minorities in the poor neighborhoods and the ease a bad arrest/shooting could blow up has been demonstrated time and again. Here's a story that relays a situation that could get out of control rapidly. California is the prime candidate for some very bad incidents this summer.

http://www.modbee.com/local/story/648161.html

Actually if you pay them off every month, you're borrowing money from the Banksters for free.

some people can't be helped....

nothing,nothing,nothing is free....ya dope

Actually if you pay them off every month, you're borrowing money from the Banksters for free.

some people can't be helped....

nothing,nothing,nothing is free....ya dope

And now, due the insistent demands of pretty much nobody, yet another Haloscan-izer.

It's view only, but it should work on anything (it efven works on my cheesy flip-phone). No left "gutter", no replay buttons, just text and lines. Also no sigs or viewing profiles.

See http://users.thelink.net/bobn/CR

Thanks to Ken for a useable RSS feed - JS-kit's was garbage.

Another beauty, courtesy zero hedge:

http://www.nakedcapitalism.com/

I'm always a bit startled when I see someone paying for a muffin and coffee at Whole Foods with a credit card

Wow, you carry that much cash around?!?

"As corrupt as the Romans were, they had some values. When Caesar's wife was suspected of an impropriety, he divorced her saying, "Caesar's wife should be above suspicion."

Well, Calligula made his horse, Incitatus , a consul. According to Wikipedia, "The horse would "invite" dignitaries to dine with him in a house outfitted with servants there to entertain such events."

What does it tell us about which phase of the Roman Empire is a better proxy for the modern state US?

My guess is that we're further along than the time of Julius Caesar (the one divorcing his wife), unless Summers/Geithner go, but not quite to Caligula's period, unless one thinks that decisions made by Bush were actually made by his dog (Barney?). But we may be to the point where the empire was auctioned off to the highest bidder. That is a sad state of affairs.

Dope Alert says:

some people can't be helped....

nothing,nothing,nothing is free....ya dope

Sorry dude, no annual charges, some of them give me points that I can actually apply to the balance. 0 finance charge every month. If you're the kind of dope that carries a balance then you are paying for people like to (temporarily) borrow money for free.

I have never carried a balance.

Actually if you pay them off every month, you're borrowing money from the Banksters for free.

nothing,nothing,nothing is free....

Your one-month free financing is paid by people who revolve their balances and by everybody who shops at stores that accept credit cards.
So if you pay off your balance every month, then it is indeed free - plus it may give you some rewards

The current problems are caused by people trying to avoid the consequence of one big change that has occurred over the last 100 years (but has accelerated during the last 40 years).

We can produce better things, more cheaply and with fewer people. But we also require more people to consume and support these industries.

We have tried to plug this hole with unionization, protectionism, debt.. but the truth is that we cannot effectively plug this hole with anything short of a rethink of our economy. We have to create a minimum living standard that still allows a decent amount of consumerism.

While this idea might strike at many deeply held, religious type beliefs about economics.. the reality is that there is no other way to keep the world going. If you have one.. please

Religious type thinking is problematic.. It often gives people certainty without making their lives any better. People once burnt witches openly, thought praying could cure infections and discouraged people from developing treatments for diseases because they might contradict divine punishment for sins. We have moved past that..

Maybe we should examine our economic beliefs and remove religious type thinking from it..

I have no illusions about people doing it willingly.. I have seen too much hubris and too much "peak-this and that" type mentalities from so-called educated people. It might just be the case this new system will be built on the skeletons of the hubris ridden twits.

C'mon guys, ever hear of "credit card processing fees"? Interest on revolving debt is icing on the cake.

We use our AMEX for everything, pay it off monthly, and reap the rewards.

Dope Alert wrote on Sun, 04/05/2009 - 1:49pm.
Actually if you pay them off every month, you're borrowing money from the Banksters for free.
some people can't be helped....
nothing,nothing,nothing is free....ya dope

Bzzzt. Unless the store is offering a cash discount there's lots of return for we careful users of credit. 2.5% back on gas purchases? Why in the world would you drop $40 when the swipe saves you $1.00? There's also the nice double warranty periods and proof of deductibility and a bunch of other valuable aspects to using credit.

"What does it tell us about which phase of the Roman Empire is a better proxy for the modern state US?"

I don't think it is reasonable to compare the US to the Roman Empire.
First, Roman EMpire was taken over. I don't see anyone around our borders who is capable of taking us over. Second, Roman EMpire held & GOVERNED a lot of territory inhibited by people that were hostile to its rule. The US while waging a war here and there does NOT GOVERN any of those countries DIRECTLY and for prolonged periods of time. Third, in order to conclude that the result will be the same, you ve got to figure out what might happen after US loses its power. Well unlike the Roman empire collapse, there won't be such a long period of dark edges because due to globalization and other factors the power vacuum will be filled pretty soon. However, no matter who will come to be a superpower next they will never have as much or more power than the US because it is much easier to form a powerful contra party then ever before in the human history.

The world will ether become filled with regional multipowers or remain the way it is today. The reason is simple, being dominating superpower is not anymore as profitable as it used to be.

Your one-month free financing is paid by people who revolve their balances and by everybody who shops at stores that accept credit cards.

Yeah I forgot the merchant fees.

I suppose if I could negotiate discounts for cash everywhere I went, then, yes I'm spending extra. Practically speaking, this doesn't seem to happen, (there is actually a silly law about it if I recall), except when buying gold and silver. That's what wire transfer is for.

...by mid summer will have some serious social instability...

That is always possible, but I am tempted to believe it will be misery by a million little cuts-more thefts, burglaries, domestic disputes, people going postal on their own for the most part. I talked with a liquor store clerk recently who told me that a customer jumped him and started choking him when his credit card was denied. He had to whop him up aside the head with a whiskey bottle and then call the cops.

He could start by hanging himself!
__________________________
U.S. May Oust CEOs at Banks Needing ‘Exceptional’ Aid (Update1)

By Jesse Westbrook

April 5 (Bloomberg) -- Treasury Secretary Timothy Geithner said he’s prepared to oust the senior management and boards of directors at banks that require “exceptional” assistance from the U.S. government.

“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said today in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”

As somebody is fond of saying, none of the prescriptions that Wall Street and the White House are trying to foist upon us assume an unemployment rate of 12 percent within a year. And based on my own observations within the public sector, we are _so_ going there.

Mid-year layoffs have already begun in some state and local gov't agencies, with many coming over the summer when the fiscal year changes. The only bright spot is that large cadres of pissed-off unemployed schoolteachers make excellent revolutionary troops.

I have held that Obama will get on track with the real problems after about a year in office, because all the advice he's getting from Wall Street and the economic oligarchy will go seriously pear-shaped in the face of massive public suffering. And he is smart enough, and cunning enough, at that point, to knife the power brokers and go full-bore populist. That last bit is an article of faith, but otherwise my schedule is right on track.

Never heard of such law. If a merchant records the transaction and pays appropriate tax he can charge whatever he wants.

So if you pay off your balance every month, then it is indeed free

Except that merchants build the expected charges into the price of the product. At two stores nearby, the cash price somehow also means no receipt; not sure how that works

LawyerLiz, had to run out but no, not blood. Just another one of the folks who sees no issues with being a parasite.

When the hosts wake up (or are forced to, as is the case), that's when the shyt is really going to hit the fan.

I'm sure you've heard the term "Ghetto rich," no?

It takes someone else paying the freight for people to get those loans (NINJA, car, or credit) and then be able to keep them without defaulting.

Those doing the keeping are in immediate danger of defaulting, or having the Gov tax/inflate away our chances at not defaulting.

Would you go to downtown Miami after, say, midnight, if you knew the cops weren't being paid (legally - let's not go the other route)?

New Orleans is a powderkeg even now. I'd wager it goes up before any other major city.

“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said today in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”

It all depends on the meaning of "exceptional assistance."

Lucifer wrote on Sun, 04/05/2009 - 1:58pm.
The current problems are caused by people trying to avoid the consequence of one big change that has occurred over the last 100 years (but has accelerated during the last 40 years).
We can produce better things, more cheaply and with fewer people.

Lucifer you devil you. You caused all this by making peoples' dreams come true. I tip my hat to your deviousness.

This has been a subject or subtext of many a sci-fi story. There's nothing wrong with producing and consuming less except for one thing. It is that one thing that is bollixing any hope of getting out of this mess. Less production and less consumption leaves the moneychangers without their usual vig. While some 6.99 billion of us see no problem with that...

I'm listening to all of this "Internet Reality", yet I'm running numbers on home sales in the burbs here in Dallas where houses are selling at ABOVE LIST. Something isn't adding up.

reptilian,

There is some money to be made in designing the 21st century equivalent of a guillotine.

I don't think it is reasonable to compare the US to the Roman Empire.

It is a longer discussion, based not on facts, but on historic anecdotes, but I would argue that the decline of the Roman Empire was primarily driven by the change in the public morale, especially changes in citizens' attitudes to their civic responsibilities as well as the continued attempts by the ruling elite to buy their popularity with the plebes with borrowed money. Much longer discussion

rd, you and I have already gone round the wagon wheel on this... cheap credit affects the 'price' of everything!

I'm running numbers on home sales in the burbs here in Dallas where houses are selling at ABOVE LIST. Something isn't adding up.

How many of them are above the MSA limit? I'd bet you almost all of them are FHA.

Except that merchants build the expected charges into the price of the product. At two stores nearby, the cash price somehow also means no receipt; not sure how that works

Merchants accepting credit cards are not allowed by their contracts with credit card networks to charge different prices for payments by cash and by credit cards (not that these contracts are always enforced, especially for smaller merchants).
That is why I said that financing is provided by everyone who shops at stores accepting credit cards - even if you pay with cash, your price still includes the merchant credit card fee.

MrM,

I think that the fall of the western roman empire had much to with hubris.. when any civilization achieves a certain edge over its contemptaries, it starts believing that 'its way is the only right way' and any deviation from said 'way' is wrong. It then becomes less innovative, more rigid and brittle till one of the "inferior barbarians" take it down.

What worked until yesterday may not work tomorrow.

Yes, dawg, my one world currency cuts out the moneychangers.

test

I'll wager Elizabeth Warren will be unemployed before too long. Either Obama or Geithner will not want her around bad-mouthing presidential decisions. The woman obviously is intelligent, well-read, quite knowledgeable, and thereby totally opposed to current policy - a bad combo in this administration. She'll tender her resignation before summer or never be heard from again. She's not the "Yes Masa" puppet-type.

RockyR, I added a comment this past week about the same thing starting to happen here in Bubbleville, California. Some of the better quality REOs have received multiple bids, including some above the listing price.

Also, the package deals are dead for now. Banks are willing to go the one-at-a-time route rather than wholesale properties.

Could be a blip; could be a trend. I don't think it will last. The buyers are mostly first-time FHA loans and the rest are cash. Those two pools of buyers are likely to empty soon.

There is some money to be made in designing the 21st century equivalent of a guillotine.

why use 25lbs of sharpened steel when you can use 5grams and a little gunpowder. but i do agree the guillotine would be more fun

Lucifer,

"Hubris, my favorite sin"

This is a call to everyone to please step outside the right vs. left paradigm. While there are important issues worth debating within this paradigm, all of them will be moot if we do not focus on a much greater issue outside this paradigm. Thomas Jefferson warned of wealth concentrating to such an extent that it threatened the state. Nowadays the media has taught us all very well to ridicule anyone who talks of central banks usurping the power of government. Well now I suppose the media will have to laugh at themselves, as many outlets from Newsweek to the Financial Times of London are openly discussing the creation of a "bank of the world" that will control economic policies of every nation. I invite you to watch this video, which details how this is currently taking place. While it focuses on our current officials' cooperation with these plans, it steps out of the typical political paradigm by highlighting the cooperation of both parties. Please do not look to politicians to protect us. Only we can protect us. And our first step must be to reach out to police and military. Without their cooperation, the global elite won't have the muscle to exercise their will of oppression. Please share this oath-keepers blog with them.

IF card processors do not collude, tacitly or otherwise, they can't take too much vig. Electronic processing costs have come way down. The consumer is free to bargain for that juice, just usually doesn't want the inconvenience and some frown on the process.

New Post: Stress Test Update: Regulator Meeting Planned

best to all, CR

This is a call to everyone to please step outside the right vs. left paradigm.

. . . and join the Revolution Party?

Warren works for Congress.

Either Obama or Geithner will not want her around bad-mouthing presidential decisions.

She works for congress, not the administration.

1 currency now -yogi

Never heard of such law. If a merchant records the transaction and pays appropriate tax he can charge whatever he wants.

If you are referring to CC transaction fees, there is no law, but the merchants are required by card processors (VISA, MC, under contract penalty of withdrawal of participation) NOT to allow a cash discount. to customers. The card processors do not want customers to be aware of the merchant's cost of taking their CCs.

some people can't be helped....

like i said

Merchants accepting credit cards are not allowed by their contracts with credit card networks to charge different prices for payments by cash and by credit cards
MrM (member) wrote on Sun, 04/05/2009 - 5:18pm
Thanks, I've wondered for decades why there were no cash discounts.

Merchants accepting credit cards are not allowed by their contracts with credit card networks to charge different prices for payments by cash and by credit cards

Not true. They can offer a discount for cash, but not a premium for credit cards. Think gas stations.

"There is some money to be made in designing the 21st century equivalent of a guillotine."

Put a designer name, high price and fake waiting list and they will camp out for a week just to sign up!

"Warren works for Congress." Not by Fall - she'll get tired of being told to "be quiet".

You are correct on this one..

"Put a designer name, high price and fake waiting list and they will camp out for a week just to sign up!"

Credit card fees are in the price of the product or service. Just like corporate taxes. I am sure those who scream for more corporate taxes don't get that one either.

Merchants don't want cash as it drives up their security costs and encourages employee theft.

MORE CORPORATE TAXES

In a competitive economy, they can't pass all the tax on to the consumer.

Fuck trickle down.

"In a competitive economy, they can't pass all the tax on to the consumer."

Thanks for making my point. The tax money just comes out of thin air, right?

Merchants don't want cash as it drives up their security costs and encourages employee theft.

One of my favorite restaurants won't take credit cards because they're afraid of government theft...

Merchants accepting credit cards are not allowed by their contracts with credit card networks to charge different prices for payments by cash and by credit cards

Not true. They can offer a discount for cash, but not a premium for credit cards. Think gas stations.

What I said is true - no difference in prices are allowed. However, not all these contracts are enforced at all times.

Credit cards are all about convenience, for everyone involved. However, the merchants are the ones who have to raise prices to cover their costs.

In a way, you and the Credit card issuers are colluding to get a little money from the merchants. In normal times, the convenience is worth it. Nowadays, just think about it. I don't like playing bankster games, even if I come out ahead a little.

One of my favorite restaurants won't take credit cards because they're afraid of government theft...

By theft you mean taxes, right?

By theft you mean taxes, right?

"The tax money just comes out of thin air, right? "

Thanks for making my point. If the rich pay less of the tax burden, someone else pays.

If corporations pass 100% of their taxes on to consumers, they must be an oligopoly.

CUT THE BONUS

Sad thing is if a merchant does not take credit cards they will miss far more after tax profits then cash only. The leveraged public has no cash and usually spend more then if they had cash.

No "if" they do.

Dope Alert wrote on Sun, 04/05/2009 - 2:17pm.
rd, you and I have already gone round the wagon wheel on this... cheap credit affects the 'price' of everything!

No, we are just talking different ends of the elephant. Sure, there is a price to retail credit. In that you are correct and no doubt that cost is reflected in prices. now, with that in mind are there cost savings? Come on, you can think of some. Right? yep, two edged sword. now, in that context, can you not see where on the micro retail level how some of us can arbitrage that gap?

Oligopolies are illegal.

Completely OT, but I couldn't resist...

yogi person: "Well you still picked a poor example. Court reporters are a small group of peaceful people. They don't pal around with Jimmy Hoffa types. The larger court unions (clerks, officers) know that that there is a budget which must be divided, so the reporters' share affects them. Their bargaining power is closely correlated to their specialized talent or skill.
You can pay less, but you will pay. Who's next? You want cut-rate fire and police? Those filthy rich teachers..."

This is why, although I actually overpay my taxes, and believe in some muddling of free markets to achieve social cohesion, I have to grit my teeth when I see more aggregate resources going through government. In the private sector of the economy, for all the fraud and lies etc, there is always pressure to do more with less. Achieving this is critical to our future. That force is what has gotten us from living in caves, desperate for the next woolly mammoth to wander by the cave entrance without a sabre-toothed cat in tow, to commenting in comfort on what other people across millions of square miles think about the underlying forces driving our world. That pressure is always resisted by those who benefit from the status quo, but if the government is ladling out the funds, the resistance is much more effective.

Rant over.. Carry on...

What got us out of caves was the rule of law. There are plenty of places where police salaries are privately determined. I dare you to visit one.

The example involves courtroom workers, who are part of the Judicial branch of government. Who shall pay their salaries, banks? Who shall determine judges salaries, the highest bidder?

The private financial sector has "done more"? Of what, exactly?

You are (perhaps unintentionally) very funny, 1 currency now - yogi. I am sure that the first folks to figure out how to make an ax of metal did so because they were anxious to get a legal patent application filed.

I enjoy the amusement you provide as you make comments on economic issues, but I'd be prepared to sacrifice this little enjoyment of mine if you studied economics enough to pick up the basics. If you were as skilled in economics as you are at partisan political sparring, your world would be very different. Of course, you won't actually do this, so as I said.. carry on.

That home is in the town I grew up in, 5 doors down from my best friend in grade schoool's house, there is no way it is worth $1.6M even at top of the market prices. Still its in a very high priced town, but he will be lucky to get $1.0 for it

How can it be a liquidity problem when we hear that banks are buying up "toxic assets" in order to sell it back to the government?

mp,

What do you expect will be the consequence?

AFAICT, the Japanese survived without cannibalism or gang warfare breaking out. It would seem that replicating the Japanese outcome is the best case and is what Bernanke and company are actually aiming for, regardless of their public pronouncements.

The one fly in the ointment is that Americans may not turn into savers over the long term, as the Japanese were. If Americans tire of saving after a short stint (which is what I fully expect), and revert to consuming any credit offered to them till they are bankrupt that may cause the gradual decline in the quality of living (a la the Japanese model) to turn into the Great Depression (as you seem to expect).

But we aren't living in the 1930's when the common man had limited ability to understand the big picture, to network and to push back against the powers that be. I think the current Internet, Web, and Blogs are a complete game changer in these respects. When pain levels start rising, I fully expect the masses to be able to direct them towards those that have the most to lose - and perhaps even survive because of it.

To be explicit about what I expect in that case, if the masses take by force the resources they need to survive, there is a fair chance that the basic needs of society will be met at the cost of the social order, of course.

Since the level of stimulus currently being applied hasn't been tried before, and the details of why Bernanke and company think what they do are not public, how certain can we really be that their course of action won't actually be able to moderate the downturn and inflate a new bubble to put off the day of reckoning by another decade?

@Tim waiting for 2012 (hmmm bit morbid...) I agree. If they had been content to play a minor, but important role and not leave the house to the kids, then there'd be no need for such huge correction preventing intervention...

"if you had to sell your home tomorrow, in a world where nobody could get a mortgage to buy your home, you’d have to sell at an enormously low price. " Since Geithner has to sell a home in NY, I guess he is hoping that if mortgage rates are low enough, he can get a 2006 vintage price for it. People who bought in 2005-2007 have to sell at what they feel is enormously low prices - because the old prices were bubblicious. They will never return to that at a time for the homeowner to wait for. To pump enough liquidity to make that home currently listed for $250k in FL, shoot back up to the $500k once paid for it would be to print an amount of money equal to all US assets - 100% inflation. That will wipe bondholders out anyway because even if they got 100% of their principal back, it'd be worth half as much.

Has Geithner acknowledged the existence of the housing bubble, and the degree to which it swept some of the largest markets?

Done