I am guessing this guy is not real popular in the Administration.
So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis.
You mean this isn't a generational buy?
This is 25 minutes of a very pissed off man seeing history repeat itself on a monumental scale.
Splendid.
He's just a "legacy" naysayer, the administration shoudn't have to deal with every legacy naysayer trying to grab airtime.
It's really not fair for O tohave to deal with all this negative legacy stuff.
Banks have been the problem: now they are the solution?
The community bankers who wanted less regulation are now getting enforcement orders and cease-and-desist orders by the bucketload from the FDIC. Just to save their depositors.
Just noticed a "chutzpah" tag in the list of tags on the right. A little misty eyed...
This is the most important video of our time.
Without a doubt it should be sent to every one of your friends and family members.
Thank you for posting this CR !
I like comment counter (many)
That is my kind of math
Wait a minute, under the post it said "Comments (many)---this isn't many.
'...that it was in the boardrooms and the CEO offices where this fraud began?'
But, but - that is where the white guys hang out.
in fact, if "hope and change" could replace all "negacy" attitudes we'd be out of this jam lickitysplit
I think that Black is without a doubt correct. This crisis came into being with the full knowledge and full support of the banking and finance executives and the regulators either were completely incompetent or (more likely) completely complicit. But much as its nice to see someone say it, what we need is someone to prove it. Or at least provide some concrete evidence such as emails, meeting transcripts, etc to actually support the theory. In the era of blackberries and all the other forms constant electronic communication, there's no doubt this evidence exists. So come on whistelblowers, all you folks in the financial companies who've been fired or laid off, lets see it. Scour your hard drives, emails and usb key drives.
Goldbugs rest assured, inflation will return
http://www.ft.com/cms/s/0/b8d36560-21b1-11de-8380-00144feabdc0.html?ncli...
BILL MOYERS: Who's covering up?
WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.
Anonymous wrote on Mon, 04/06/2009 - 2:03pm.
'...that it was in the boardrooms and the CEO offices where this fraud began?'
But, but - that is where the white guys hang out
And your point is?
Anonymous wrote on Mon, 04/06/2009 - 2:03pm.
'...that it was in the boardrooms and the CEO offices where this fraud began?'
But, but - that is where the white guys hang out
And your point is?
You forgot to quote the part about Prompt Corrective Action
So a mindful change in attitude will put people back to work and money in their pockets...I Yawn!
The government should love this guy, actually. They can easily blame this on the prior administration while they go on doing the same thing.
@ Shill
Goldbugs rest assured, inflation will return
Doesn't have to paper currency won't return so....
@Max
Nice Find. Keep up the blog
My favourite line from the video: "Madoff was a Piker!"
that was fast
Government Rolls Out Plan to Fight Loan Scams
By Renae Merle
Washington Post Staff Writer
Monday, April 6, 2009; 12:18 PM
The Obama administration today announced a multi-agency effort to combat loan modification scams, which government officials said are preying on distressed homeowners searching for help.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/06/AR200904...
there's lack of transparency for you
'The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle.'
Clearly, the Democrats are to blame. Obama=FAIL because in 2004, he didn't do anything to stop what was happening.
But I dare say, a white Republican with a chainsaw is always an image that makes me yearn for the days when Republican wielding chainsaws were guarding our Republic from whatever it is Obama is now responsible for.
I say, let's forget the past, and start with a fresh slate of people to blame, and not the ones actually in charge when the catastrophe was occuring.. After all, it is the American way.
how come replies don't appear below the replied to message?
I have been surprised a how many people that knew what was going on, and designed some of these transactions, didn't consider it fraudulent.
I have a funny feeling we will revisit this type of thing in other contexts. Mortgages are a place where stupidity and fraud cost the banks money. There are plenty of instances where someone made money from fraud, and may still be making money on it.
Can the FDIC pay for a dedicated staff of FBI agents?
While I agree with Mr Black, I don't think anything will come of this. The current administration won't do anything unless they think it will cost them elections. In order for this to happen, the public will have to be outraged. Much of the public is complicit in this and the public can't be outraged over something they don't understand. If the banksters robbed a bank at gunpoint, that would be easy to understand, but inflating profits via securitized debt that was improperly rated AAA by the ratings agencies and hence increasing the value of stock options is hard to understand for the vast majority.
A little thread music:
http://www.youtube.com/watch?v=tXaZmY52gHM
Charlie +1 No political pressure=no action. I think they will start to sweat it later this year when the "recovery" fizzles.
Plus I bet half those old coots will be dead soon.
'And your point is?'
Simple - we were all told, repeatedly by the same white guys, that it was the illegal immigrants getting no-doc loans that destroyed America's purity of essence, to name one hot button interpretation of why America's financially engineered miracle economy went down the tubes.
And those same white guys were able to find a surprising number of people, who resembled themselves, to agree that truly, the problem of fraud was easily contained to certain people, the type you could tell just by looking, or in a few borderline cases, by hearing how they spoke.
And let's be honest - it is the same white guys who aren't worrying currently about being jailed for their crimes, the same white guys pocketing our tax money, and the same white guys telling us that really, they are the only ones competent to handle such complex financial matters.
Nothing much changes in America, including who the real crooks are.
And what happens to them.
After all, they have chainsaws, don't they?
Manyth
When the sleeping giant awakes in its fury. People will again be examined in a binary way as to their vocations, skills, and lifetime emphasis.
Bankers, speculators, transactional paper pushers, and those deriving income far above actual contributions to society won't find the kind eye of the state upon them. Germany, Russia, Cambodia, Vietnam had just such recent examinations in recent memory.
Call it the human being stress test for future viability.
So... fair to say Mr Black fails to see the Crocuses in the crabgrass.
reposting from last thread (Ken, I miss your Mortgage Pig popup new thread alert)...
hc,
(BTW - enjoying this dialogue)
We're in the Triangle Area of NC (Durham, Raleigh, Chapel Hell). We've seen some anecdotal evidence of the economy impacting people here in real ways. My wife speaking to another mom of a boy in my son's 6th grade class about a camp this summer. Seemed the $80 cost was too much for them this year. Conversation ended with tears and my wife feeling terrible about even suggesting the camp. Enrollments at said school down significantly for next year - it's a private, Christian school with moderate cost. Personally know 2 families who have lost primary breadwinner's employment in last 6 months and having difficult time finding work. Brother is a university professor, being asked to teach more units for his base salary (pretty low to begin with), he used to augment his base salary by teaching additional units at $3K each. So he basically just got a $6K drop in pay by being told he now has to teach 6 units instead of 8 to make his base. Certainly not a conclusive sample, but that's what we're seeing.
Housing market here has been very resilient - we didn't have a huge runup, but it seems very soft this season. Especially in the $500K+ range. Wife keeps asking if now is the time, but I'm cautioning patience. We've been renting a nice home for 14 months after we sold ours. Lease goes thru June, and I'll probably try to negotiate a more favorable 12 month renewal unless something great pops up in the next couple months. I believe a lot of people will decide to rent rather than sell into this market - so there should be more rental supply / lower rents. In fact, I'm seeing a lot more "For Rent" signs up around here.
I listened to the Mark Mayo conf. call this morning (thanks CR). The accounting guy on the call (Bob something or other) kept pointing out that the mark to fantasy guidelines only apply to securities, not straight loans. So, the industry will have to reanimate the securitization market in order for this (FASB nonsense) to generate vast amounts of new lending. I'm not sure they are going to be able to put Humpty together again before Timmy and the Bearded Wonder are crushed under the collapsing mountain of govt debt they are so eagerly piling up.
but I've been amazed at how far this has already gone, so what do I know?
Cuomo Sues Merkin For Fraud...finally.
J. Ezra Merkin, a prominent New York financier whose private clients lost more than $2 billion in the collapse of Bernard L. Madoff’s Ponzi scheme, has been accused of fraud and deception in a civil lawsuit filed Monday by the New York attorney general, Andrew M. Cuomo.
The lawsuit, filed under state charity and securities laws, claims that Mr. Merkin improperly collected more than $470 million in fees from his clients, who included more than a dozen nonprofit organizations, by “falsely claiming he actively managed their funds” when in fact he simply handed their money over to Mr. Madoff, without adequate investigation or oversight.
http://www.nytimes.com/2009/04/07/business/07madoff.html?_r=1&hp
Anonymous wrote on Mon, 04/06/2009 - 2:17pm.
'And your point is?'
Yep, I agree. Strip them naked, hit them with a chainsaw on their flanks. Carve off some of that meat. Feed it to them.
and then
It will happen again unless changes are made.
Since
It does not look like that is going to happen. It will be the same ol same ol
"These predatory scams callously rob Americans of their savings and potentially their homes," Geithner said.
.....what a two-faced horseshit hypocrite. They sure don't like competition in the "predatory scams" con, do they?
For those who might have missed this: http://www.goupstate.com/article/20090405/ARTICLES/904051111/1083/ARTICL...
This vid speaks for itself!
http://patdollard.com/2008/10/it-is-here-the-banned-snl-skit-cannot-hide...
Funny yes, but true.
nova (member) wrote on Mon, 04/06/2009 - 11:07am.
Anonymous wrote on Mon, 04/06/2009 - 2:03pm.
> '...that it was in the boardrooms and the CEO offices where this fraud began?'
> But, but - that is where the white guys hang out
And your point is?
When you're around whites
the numbers will never be right.
we literally need a tsunami of outrage or nothing will happen.
my favorite quote of the day from basline scenario
"Excessive inflation is a typical outcome in oligarchic situations when a weak (or pliant) government is unable to force the most powerful to take their losses - high inflation is, in many ways, an inefficient and regressive tax but it’s also often a transfer from poor to rich"
You want oligarchs? cause thats what were seeing. They will impact more than your financial world.
We need prosecutions. Funny how Spitzer was forced to exit stage left.
Remember....Silence is complicity.
http://www.economicnews.ca/cepnews/wire/article/278341
Gold prices down despite drop in equity markets.
If gold gets around to 820, I am thinking of going in modestly to an etf.
At least in my part of the bank, white guys were not the majority. There were plenty of women, a lot of people who were black, hispanic, asian. The head of one division I worked at was black, at another it was a woman.
He is also here saying the stress test is a sham.
I like this guy, we need more of him.
http://finance.yahoo.com/tech-ticker/article/225897/Geithner%27s-Stress-...
I have been surprised a how many people that knew what was going on, and designed some of these transactions, didn't consider it fraudulent.
Did you know:
Recently, many large law firms servicing large financial interests have stopped billing by the hour for complicated securities services, and instead bill a nominal sum for a transaction plus a percentage of the value of the transaction? I think the evil nature of these transactions was obscured through compartmentalization; the lawyers make sure that the documents and securities registration are up to snuff, the accountants make sure the numbers work, market risk makes sure that VAR stays nice and low... Everyone has perfectly maintained the portion of the vehicle's engine to which they've been assigned, but thanks to this painstaking work, no attention is paid to where the vehicle is going...
At least in my part of the bank, white guys were not the majority.
Retail banks attract women, minorities, and other people who like stability.
Ibanks attract QUANTS (Foreign nuclear engineering PHD's) and beautiful, chiseled, aggressive, dickish Rugby Champions.
I would not entirely agree that the government and the banking industry pursued a true "deregulation". You cannot state that the industry was truely "deregulated" unless the consequences of the participants' actions are fully shouldered by those participants. The inheirent checks and balances have been distorted. If the government sponsored insurances (FDIC etc.) were completely removed then the industry would have far less incentive to recklessly endanger thier capital. As it stands the "deregulation" was akin to giving a teenager a no limit credit card and informing them that Uncle Sam will pick up the tab if they get in trouble
I visited my home town this weekend, and the economy was booming. People out on the packed streets, spending money, engaging in discretionary purchases left and right. Then I realized that the entire economy of the town is driven by extremely secure executive-level state civil servants and the local UC university. The presence of the university assures that student loan money gets channeled into the local economy. Since it is assumed that students should be given access to this money in both good times and bad, this source of revenue is not really affected by the economic downturn. I guess my town is the ultimate beneficiary from all those slaves to undischargeable student debt.
Goat Herder Boy liked to rummage through the ruins of the towns they moved through. Sometimes he found useful items that could be used for the tribe. What sometimes really meant was not very often, as he was not the first goat herder to have thought of that. What he did like was finding the pretty magazines with the photos of the “olden days.” Once he even found one with naked goddesses in it! Every time after that when he looked, he secretly hoped he would find another magazine like that.
All he found this time was a magazine that had something in the old tongue written on it. He thumbed through it quickly and sighed. No naked goddesses again. Just big, fat, white guys in funny clothes. Some were skinny, but most were fat. Goat Herder Boy only had a vague understanding of how people got fat. He did not know any personally. He took the magazine to Grandpa Old Goat Herder Boy and showed it to him. He was surprised at what happened.
Grandpa Old Goat Herder began screaming obscenities from the old tongue and ripping at the magazine. He became especially crazed at each new picture of a fat old white men. Goat herder boy watched and learned. Grandpa Old Goat Herder through the magazine down and began dancing on it until he ran out of breath. Once he caught his breath he told Goat Herder Boy “You will understand when you get old enough for the “Ceremony of the Chainsaw.” Goat Herder boy shivered. That was the night the sacred banjos came out after the clan had caught themselves “A Banker.”
I find it hard to believe that the underlying premise of this is true. All the banks and underwriters knew that they were writing bad loans, knew that they would come back to bite them in the ass and went ahead and did it anyway because they needed an extra million?
This is just not believeable on its face.
Were they not aware of the systemic ramifications, that I can believe. But that they were just economic terrorists unconcerned of their actions seems to be a complaint of the have nots against the haves....
"If gold gets around to 820, I am thinking of going in modestly to an etf. "
Went to 700 briefly not all that long ago. I expect gyration in the gold market (and most other markets) for months to come. The zeitgeist will be uncertainty long past the time those of us who can read, read the handwriting on the wall.
re: GoinSouth, Black Star Ranch. Altman is saying there will be no healthcare reform
Maybe you read some entirely different text than I, but without diving into the politics of the matter that interpretation wouldn't make sense in that single-payer is demonstrably more cost efficient once implemented. I am not expecting or advocating healthcare reform here, but it just seemed to me that you were over-reaching to project your own perspectives and not Altman's.
Lets face it, the CDS, ABS, and every other Hybrid type " S " was a trial for the future Economy model, and it failed miserably. Pull the plug and reboot!...The World is screaming for it....otherwise, and I hate to be a doom and gloomer, we will continue down the path to our own financial demise.
If the smart ones in the world can not see this we are in deep trouble. The Trillions upon Trillions thrown down the existing Black hole and still nothing. Think of the possibilities if we gave everyone in the world over 18 a $100,000 bills would have been paid off, people would have shopped, people would have bought autos, Jobs would have been preserved.......and so on and so on.
Crazy.
If everything goes to shit and you did happen to find a crocus you're in luck. Crocuses are edible!
[Most edible flowers have subtle flavors, he says. "The most commonly known are pansies, lavender, nasturtiums, hibiscus, jasmine and saffron, which is hand-picked from the crocus." ]
chainsaw,
(BTW - also enjoying this dialogue)
The housing market in (Bucks County, PA) has shown surprising resilience so far, so is the market in Flushing, NY (where one of my friend lives and I get proxy news) and Princeton NJ. I don't know what's a benchmark for "not going up so much" anymore, because a lot of these houses were $300K in 2002, to $600K in 2007 and $500K or more today -- is that too much?
We've had kids birthday party thrown regularly at a gym near here. Almost every weekend you go, there's a new bday party. These are $300 to $800 a pop; and they're more frequently in the $800 range than in the $300 range. And we're talking no hole barred type, completely all out in all party goods, none of those "value-store" type of balloons or plain cups or plates -- all theme ones or even kid picture engraves custom ones.
The sesame place theme park near here, tickets nearly $60 a person, or $100 PP for season pass, had an early spring opening, and when I went, it was so crowded, I had to cancel our trip and come back another time. (it's no big deal as we live nearby)
Traffic to work in central NJ isn't getting any less, (if layoff was an issue, you should in theory see less traffic).
None of my friends who work in the area, some frankly not very good at what they're doing, are experiencing any difficulty. We're talking about jobs in JP Morgon, Chase, Defense, IT and Advertisements. The only effect I'm seeing is more negativity in people's discussions, but not their actions and certainly not their plans.
My wife openly discusses finances with her friends, and apparently, out of 7 of them, none have increased in savings and are still doing the paycheck to paycheck routine. We're talking about not even participating in company matching 401K plan when I say "not saving".
I've been renting for over 2 years now, going on 3. The landlord wanted to raise rent on me. Although only about 3% increase, I still thought it insane in this market, so I went out to the market to look for alternatives -- every other rental is at least $100 higher than mine and instantly snapped up within a week of vacancies. Thus, I'm forced to renew at a 3% increase despite my salaries not going up this year.
Would moving have helped? As I have the flexibility to move around my job. Not really, rents in the area, either were originally very insane and merely going back down to insane; or simply higher than us staying put.
I feel like I'm the only one in an economic recession here. Apparently, nobody around here has that pesky economic problem!
I find it hard to believe that the underlying premise of this is true. All the banks and underwriters knew that they were writing bad loans, knew that they would come back to bite them in the ass and went ahead and did it anyway because they needed an extra million?
This is just not believeable on its face.
You seem to be treating the institutions as if they were rational decision makers. They are not--they are made up of a great many individual decision makers, the great majority of whom behave quite rationally the great majority of the time.
I spoke to many mortgage lenders during the boom who, while they typically did not see the systemic ramifications, were quite clear on the quality and eventual value of the loans they were originating but were also quite certain (and in just about all the cases I can think of they were right) that they would be out of the game, profits in hand, before the collapse. Enormous fortunes were made on the way up; enormous fortunes were lost by others on the way down. That's always been the subprime lending game; this time it was just scaled up by a few orders of magnitude.
Can you point me to a single former executive of a mortgage lender that's worse off now than they were 15 years ago? There probably are a few that screwed up their personal fortunes, but there are a lot more that are spending their days on the golf course.
The problem with overfeeding and breeding the top layer of parasitical pond scum (aig, citi, gs, jpmorgan....) is that it eventually chokes off oxygen to the underwater infrastructure (taxpayers) and the entire system expires. Geithner believes he can obfuscate the Laws of Nature. Guess he missed basic science in grammar school, Mother Nature always wins.
I find it hard to believe that the underlying premise of this is true. All the banks and underwriters knew that they were writing bad loans, knew that they would come back to bite them in the ass and went ahead and did it anyway because they needed an extra million?
This is just not believeable on its face.
Why? it happened and it worked. Your grandkids are going to pay for it for the rest of their life. GJ.
Were they not aware of the systemic ramifications, that I can believe. But that they were just economic terrorists unconcerned of their actions seems to be a complaint of the have nots against the haves....
LOL. Denial is more than a river in Egypt.
http://www.anewwayforward.org/
I'll be at Union Square at 2pm on Saturday. I'm just really interested in the level of outrage - the idea behind this protest is driven by the Simon Johnson thesis - Pledge to Break Up the Banks. Nationalize, Reorganize, Decentralize.
Trying to decide on a banner - "Simon Johnson for Treasury Sec", "Banker against Bailouts" or maybe a shoutout to Tanta, but I don't want to be disrespecting her memory.
i really don't see why you find it unbelievable. The decisions they made were quite obviously bad. They huge numbers of mortgage loans were obviously bad. A friend of mine who was an insurance underwriter saw hundreds of bad loans that she recommended be denied, but was always overruled. To believe that all those above her somehow didn't see what was obvious to her is silly. Additionally, the pay structure in this industry is designed specifically to benefit this kind of reckless action. Do you think that's a coincidence? You seem to prefer to believe that all the major players were amazingly ignorant. It seems much easier to believe they did exactly what made perfect sense for them to do. They were perfectly willing to burn the house down to make that extra million. That's the mentality that made them all so fucking rich.
"I visited my home town this weekend, and the economy was booming. People out on the packed streets, spending money, engaging in discretionary purchases left and right. Then I realized that the entire economy of the town is driven by extremely secure executive-level state civil servants and the local UC university. The presence of the university assures that student loan money gets channeled into the local economy. Since it is assumed that students should be given access to this money in both good times and bad, this source of revenue is not really affected by the economic downturn. I guess my town is the ultimate beneficiary from all those slaves to undischargeable student debt."
I live in a UC town/tourist town, and life isn't so jazzy. The students are short of cash, the Silicon Valley workers who live here are cutting back, and restaurants and businesses are starting to fray at the edges. They still look good, but "special offers" are everywhere, and vacant storefronts aren't filling very fast. The university is in the process of laying off, the students are doubling up on housing (more under one roof than usual, reports a landlord acquaintance), and older people are starting to appear in retail jobs that previously were staffed by students.
There's no doubt that the university will keep the economy moving here in hard times; but it won't be fun.
Hoopajoops LTD
I'm not up-to-date, maybe up-to-quarter, but I wouldn't invest in any commodities until at least Aug/Sept. Deflation/deleveraging/whatever will rule the roost for some time yet, already oil traders are belatedly clueing into the obvious.
Commodities will do well in nominal terms once you can't make money shorting equities. Once the movement slows down, no one is making money. They will herd into commodities, because unlike other asset bubbles that are difficult to run profitably, governments that subsidize certain commodities will pay traders to keep an asset bubble going. They can't back out of the trap unless they break a peg on the USD, in which case commodities do well in nominal USD terms again. Winter is slow-season economically, so you'll see it early 2010. Granted everything has moved quicker than I first expected.
Central Banks Expand Currency Swaps
By JACK HEALY
Published: April 6, 2009
Central banks in the United States, Europe, Britain and Japan announced an agreement on Monday that could provide some $287 billion in liquidity to the Federal Reserve, in the form of currency swaps.
Under the arrangement, the Fed could draw on these lines to provide more liquidity to financial institutions, this time in the form of foreign currency.
http://www.nytimes.com/2009/04/07/business/global/07fed.html?ref=global
Hoopajoops LTD
meant to add, at least your hometown isn't Ozymandias (Dubai)
Careful: You're right on the edge of demonstrating how it was not wrong of Ward Churchill to suggest many 'civilian' victims of the 9/11 tragedy were acting as 'little eichmanns" facilitating real "crimes against humanity," albeit often economic and not military, in places they might not have even known they were precisely engaged...That is, SOME were not innocent victims, because they had not reflected upon what what they were doing did...and the rest were, in the conventional vernacular of international conflict, 'collateral damage.' Interesting how the term's meaning grows when it's "your" people it describes, innit?
I'm a Democrat. I voted for Barack Obama. I was cautiously optimistic he'd be more open to actual solutions (nationalization) than just doing more of the same. I was definitely wrong.
I don't know if it's because he's in the pocket of Wall St. like everyone else or he just made really bad decisions with his appointments who are 100% in the pockets of Wall St. and are just using scare tactics on him.
To this point, nothing Obama has done with the financial crisis has been the least bit different than Bush/Paulson. That's nauseating.
"That was the night the sacred banjos came out after the clan had caught themselves “A Banker.” "
I sure would like to catch me one o' them. Although, I think I would be partial to the Pulp Fiction, "blowtorch and pliers, over something so quick and messy as a chainsaw.
Did anyone see this from Spitzer?
http://www.newsweek.com/id/190345
"Central Banks Expand Currency Swaps "
AKA - Back-handed IMF bailout to the USA without all the restrictions imposed.
Goat Herder Boy liked to rummage through the ruins of the towns they moved through. Sometimes he found useful items that could be used for the tribe. What sometimes really meant was not very often, as he was not the first goat herder to have thought of that. What he did like was finding the pretty magazines with the photos of the “olden days.” Once he even found one with naked goddesses in it! Every time after that when he looked, he secretly hoped he would find another magazine like that.
All he found this time was a magazine that had something in the old tongue written on it. He thumbed through it quickly and sighed. No naked goddesses again. Just big, fat, white guys in funny clothes. Some were skinny, but most were fat. Goat Herder Boy only had a vague understanding of how people got fat. He did not know any personally. He took the magazine to Grandpa Old Goat Herder Boy and showed it to him. He was surprised at what happened.
Grandpa Old Goat Herder began screaming obscenities from the old tongue and ripping at the magazine. He became especially crazed at each new picture of a fat old white men. Goat herder boy watched and learned. Grandpa Old Goat Herder through the magazine down and began dancing on it until he ran out of breath. Once he caught his breath he told Goat Herder Boy “You will understand when you get old enough for the “Ceremony of the Chainsaw.” Goat Herder boy shivered. That was the night the sacred banjos came out after the clan had caught themselves “A Banker.”
I find it hard to believe that the underlying premise of this is true. All the banks and underwriters knew that they were writing bad loans, knew that they would come back to bite them in the ass and went ahead and did it anyway because they needed an extra million?
This is just not believeable on its face.
He who dies with the most .... wins!
These are a bunch of alpha lacrosse assholes playing no limit poker with your life.
No chip!
Just got a silver 1964 quarter in change for lunch today. Decent shape too. Somebody had to dig deep into the piggybank for this one!
I don't know if he is right or if he is wrong, but the fat cats are ours to police, punish, parade around, and have hung drawn and quartered. If those in the middle-east had a problem with it (demonstrably yes), then they should have taken it up with their own government and business communities. You don't have to do business with criminals.
Oh... I forgot to add, I've personally had four families whom I have direct relationship with (whether work or friends), that have bought houses over the last 18 months.
Compare this to only two families that I know of who have bough homes from 2001 to 2007.
It's non scientific, but it still tells me more and more people are buying homes in the last 18 months.
Here I am, still renting and having to tolerate rent increases.
Comrade Jeremy
What if cleaning up the balance sheets required a check bigger than the United States of America could sign?
EHP
Dubai is a mess. My dad has quite a bit tied up there. A developer offered to cut his share on one building from half the floor to a quarter, if willing to take a 25% haircut to cost. Keep in mind that when initially bought, investors were expecting 25% a year increases in value, unleveraged, so they made 100%+ IRR in several projects by just putting 5% down and flipping in the secondary market. Now that whole Ponzi scheme has come crashing down and developers have no funds to continue building projects. I think my dad's cousin raised almost $20 million from investors to buy a building pre-construction, and now the developer can't finance construction, leaving him personally responsible to somehow return all that money.
When the WSJ started pointing out Dubai's debt load in the summer of 2008, I told him to get out. He said I didn't understand the local market and stayed in.
"These predatory scams callously rob Americans of their savings and potentially their homes," Geithner said.
Black Star,
True about Timmie's participation. Sort of like: "Sure, I carried the money to them, but I had no choice."
Meredith coming up on CNBC
CR
If you get down this far, I'd sure be interested to know what YOU (pl?) think about Black's assertions...
We live in an area that likewise sees itself as insulated, a university, four colleges and a couple hospitals. Three of the colleges lost 25-30% on their endowments last year and the endowments fund ca. 25% of their operating budgets. Needless to say, there are cutbacks at the state U, and even the hospitals have had layoffs.
I'm sure most of you have already read this, but this discussion has brought it back to mind:
http://www.businessweek.com/magazine/content/08_47/b4109070638235.htm?chan=top+news_top+news+index+-+temp_top+story"
The sum of many individual rational decisions doesn't always lead to the best result for the collective.
OT-
Excellent article:
http://www.forbes.com/2009/04/03/dont-blame-greenspan-opinions-columnist...
comrade Jeremy : Ditto that. Just had the same conversation with my 99 yr old grandmother. She is mystified. Keeps saying she doesnt understand what is wrong with him. We both concluded that if you put the wrong people around you, you get the wrong answers. I mean, look, whose side do you think Summers can be on? What do you think he said to those folks AFTER the million dollar speeches. If you can't guess, just randomly string together words after the beggining, "Hey, you guys got nothing to worry about..."
Toronto ponzi scheme falls down: http://www.reuters.com/article/ousiv/idUSTRE5355E220090406
4th Q 08 price / rent = 107.97. "The main take-away from this chart is that home prices
are most likely to decline in the months ahead, given the elevated level of inventories; but the
pace of decline will be assuredly small."
http://web-xp2a-pws.ntrs.com:80/content//media/attachment/data/econ_rese...
Whitney on CNBC now -- going "positive" on banks in the short term (sort of)
"In the era of blackberries and all the other forms constant electronic communication, there's no doubt this evidence exists."
You might be surprised how hard is these days to get an executive to put anything in writing. I've written many provocative memos and e-mails that have gotten attention at the highest levels of my organizations. Yet, all responses have been passed down or directly addressed orally. Plausible deniability (covering one's ass until retirement) is everyone's true first mission statement.
-
Sallie Mae onshores two thousand jobs: http://uk.reuters.com/article/bankingfinancial-SP/idUKN0637711820090406
"Just got a silver 1964 quarter in change for lunch today. Decent shape too. Somebody had to dig deep into the piggybank for this one!"
Very likely some kid raided Dad's coin collection / bulk silver stash and spent the proceeds at face. That happens more often than you might think.
"This is just not believable on its face. "
They were acting in their own personal self interest in an unregulated market, in which the suckers were not yet aware that the game was a ponzi. Maddoff was small time.
New York State is clearly misguided in prosecuting ponzi schemes. The Federal policy is in direct conflict: ponzis should be guaranteed, not prosecuted.
alybaba,
It got so big that a lot of people lost sight of what it actually was. Just imagine the impact on foreign remittances though, Dubai's economy supported a lot more than just Dubai and drew upon investment from much more than just Dubai. It was a node in the ponzi bubble, and now Brits, Bangladeshis, and all the other ex-pat/migrant workers are returning home to where the economy is also slumping.
"But, but - that is where the white guys hang out."
"Simple - we were all told, repeatedly by the same white guys, ... And those same white guys ... And let's be honest - it is the same white guys... Nothing much changes in America, including who the real crooks are."
"When you're around whites
the numbers will never be right."
Barack? Michelle? Is that you? Oh, sorry Rev Wright, I didn't realize it was you giving one of your sermons.
You're really showing your colors, idiot.
Gates budget kills F-22, choppers, funds BlackOps: http://www.cnn.com/2009/POLITICS/04/06/gates.budget.cuts/
@hc:
Same story here in DFW. Stores and restaurants are packed, house prices are stubbornly stable, rents are rising, new construction projects are breaking ground. The only evidence of recession is that I'm watching my company's forecast tanking - there appears to be real pressure on rates. That and there are people are out of work, which is nothing new for the last several years.
There are signs of the slowdown in the real world, but it does not match the "reality" put forth online. Certainly nothing approaching what I would expect out of a depression.
The only frustrating part about it for me is that I keep expecting to go out house shopping and come away with a great deal. However, we can find nothing. Houses are still moving at above list in the better suburban neighborhoods.
Go figure.
Not discussed much, but crucial:
If one large financial firm offers to give investors/depositors supra-normal returns on their investment (let's say over 10%) and they achieve this by leverage, fraud, securitization or other financial gimmicks, they set the competitive climate for all other financial organizations. The others must compete or lose ground, so they adopt the same gimmicky practices.
The key here is that we failed to reign in those who promised too much and had to deliver the nearly impossible. It only took one or a few bad actors. Most of the employees of the bad actors are mostly innocent of the overall knowledge of outright fraud and failure of fiduciary responsibility. But the executives are guilty and they should be swinging or wearing orange jumpsuits. Regulators couldn't or didn't reign in the early big-promisers (for example being told by Congress to not regulate CDS). They should be revealed and tossed out too.
The entire fascade of post 1980 finance was in front of an empty building or no building at all. Unless this fraud is revealed, responsible parties punished, and limits of prudence are imposed, there is no way forward that will be trustworthy of investor/depostor funds.
But you HAVE to get the bad actors that lead the pack. I'm looking at Citi, JPM, BOA, AIG, and probably most of the top 20 banks, hedge funds, and other scam organizations, and I'm sharpening my pitchfok twines.
Whitney appears to be completely flummoxed by Mayo - she recommends State Street, Bank of NY -
Very likely some kid raided Dad's coin collection / bulk silver stash and spent the proceeds at face. That happens more often than you might think.
Yeah, sad for them. 1964 circulated silver quarters are selling on FleaBay for $3. That was an expensive lunch.
Numerous psychological studies have shown that the vast majority of people prefer to stand with the majority and be wrong rather than be right and stand alone. It has also been shown that most people can rationalize almost any behavior if that behavior serves to enrich them.
Add these two truisms of human nature together and you have the answer to the vexing question of why every big bank went along with mortgage scam. Large complex systems tend to grind up and spit out those who buck the big plan. Look at the picture of the regulators and the lobbyists. These guys are all buddies, all part of the same financial in-crowd. They work for the same goals. Any honest banker who stood up against the pressure to conform would be booted out of the club forever.
In all the endless chatter about the causes of this financial crisis I've never once seen anybody mention the true root cause. Our government and our society are essentially run by corporate lobbyists. They have the money and they finance the politicians. Without corporate money nobody can get elected. Clever guys like Obama are happy to play the "outsider" card and reap the political rewards. But, in the end, I think we'll see that Obama is just as eager to be a card-carrying member of the Davos 500 as Clinton was.
@RockyR:
"Same story here in DFW. Stores and restaurants are packed, house prices are stubbornly stable..."
Not according to Bob Schiller. Down 10.6% in DFW. That's not stable, Cochise. You're gaming the board.
RockyR,
Same thing here only it depends on who you know.
Depends on class and color. Also how tuned in you really are.
My neighborhood. The richest family on the block bails in a UHaul. I suspect foreclosure. No one else knows anything.
A couple weeks later a family has a truck there loading appliances into it. That was 3 weeks ago.
Maybe they are moving in? I didn't think so.
Today I get an email from the neighborhood grapevine. Last night someone broke in and stole all the appliances - at that house.
Insurance scam?
wow...go away for a few months and the place is swarming with Pollyannas. Too funny!
Max,
Or the quarter was the result of a burglary. Coin collections are nice finds for joe the junkie
We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.
BILL MOYERS: In other words, they could have closed these banks without nationalizing them?
WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.
BILL MOYERS: And that's a law?
WILLIAM K. BLACK: That's the law.
BILL MOYERS: So, Paulson could have done this? Geithner could do this?
WILLIAM K. BLACK: Not could. Was mandated--
BILL MOYERS: By the law.
WILLIAM K. BLACK: By the law.
"@RockyR:
"Same story here in DFW. Stores and restaurants are packed, house prices are stubbornly stable..."
Not according to Bob Schiller. Down 10.6% in DFW. That's not stable, Cochise. You're gaming the board."
Not necessarily. If you read the waiter/waitress blogs -- and there are a lot -- there's a lot of talk about the regulars spending less. Two glasses of the house wine instead of a $50 bottle; pasta with chicken instead of the prime rib; that sort of thing. And tipping lower percentages. A restaurant can look full but still be in decline. Profit margins aren't wide.
rps
William Black forgot to mention this, but "Prompt Corrective Action Law" does not apply to bank holding companies.
"Not according to Bob Schiller. Down 10.6% in DFW. That's not stable, Cochise. You're gaming the board. "
Gaming the board? How so? I'm just relaying some surprising findings from spending time on the street instead of on the blog.
"However, we can find nothing. Houses are still moving at above list in the better suburban neighborhoods."
I don't think it works that way. When prices fall, entire neighborhoods go from good to bad or from bad to worse. Looking only in locations where there are underlying economic supports, would be misleading.
there's a lot of talk about the regulars spending less.
For most people, it takes a lot of truly discretionary spending to equal the cost of a plasma TV or private grade school.
'Depends on class and color. Also how tuned in you really are."
That very well could be. Still, nowhere near GD levels of pain being felt out here. Not yet, at least. Still feels like 2001-2003 around here... i.e., a relatively "normal recession".
Again, just relaying anecdotes. Something I do from time-to-time.
"William Black forgot to mention this, but "Prompt Corrective Action Law" does not apply to bank holding companies."
Well then, neither should bailouts.
"Not according to Bob Schiller. Down 10.6% in DFW. That's not stable, Cochise. You're gaming the board. "
Wasn't Texas the last state to slip into recession, and aren't they still "pink" on the map? Or was that Wyoming. In any event, I suspect that what he said felt true; maybe he's a bit out of touch with the local economy.
There are signs of the slowdown in the real world, but it does not match the "reality" put forth online. Certainly nothing approaching what I would expect out of a depression.
It's only about 120 days old? What do you want, everyone out of jobs Monday at 9 am? Isn't the JHapanese timeline like, up around 200 months now?
I mean, really, even as someone who thinks this is going to end in a collapse comparable to the destruction of the Han Dynasty -- companies have lines of credit and cash reserves, and the state is hosepiping money into the banks to keep those revolvers funded.
The fast part's done. It won't speed up again til the national balance sheet cracks the dollar / treasuries market complex.
hc -
My wife and I often joke we'll live quite comfortably in the coming depression cause we've been living like that for years now, saving for the house and the rainy day. Still, everywhere else, the party seems to go on. Boston currently has more condo construction sites than I've seen in all my years here. Crazed.
Pitch
Comrade Jeremy: I, too, am a Dem who went all in on Obama. Mystified at Geithner/Summers choices. Why not a Krugman type? Do you not want someone to tell you the truth, even if it hurts?
There's always more going on than we're being told. Duh, right? Seriously, though. They're scared sh**less of a worst-case scenario that is virtually assured to occur. (We're on the path, folks. It ain't rocket science. Group Dymanics 101.) "Maybe if we keep saying things like 'it's all going to be okay' and 'this is going to work' and 'we know what we're doing' that people will believe it and it will become a self-fulfilling prophecy.
But it'll be more of the same. (Wait 'til the commercial real estate dominoes start tumbling. Talk about needing more $ to throw down a black hole.) And it isn't going to get better for a long while. Impromptu marches will lead to planned protests which will foment into mass public anger that the world's economy could be brought to it's knees by an uber fraternity of super wealthy greed-mongerers. It won't happen everywhere, but there will be some violence. Once people know the truth, they will get angry. And they should. The truth can set you free, but it can also make you angry.
Thus far we have passed on the best opportunity for a fix to this mess. Someone above mentioned it already. Give money directly to the people. They will bail out the economy and some of the $ will eventually get to banks by way of loan repayments. Our children and grandchildren are going to be the ones who have to pay it all back. Let the people decide the most effective way to spend it. Think about it. What would you do if you had $100k?
And like casino gamblers who take huge risks and lose the farm, the banks that took the most risks and got over-leveraged need to fall. I guarantee you most of those big bankers/boards wouldn't feel sorry for a business or homeowner who took risks, over-borrowed and couldn't pay.
Go long pitchforks and torches. Off with their heads.
"Just got a silver 1964 quarter in change for lunch today"
.....if it's "just junk" silver, they are worth 10-13X face (dimes, quarters, halves, etc.).
....the best places here to pick them up are the "smoke shops" that have slots/food/booze/beer. All the bartenders & wastresses keep a sharp eye.
Re silver quarters. Once had three rolls of them come in from the bank, a customer had rolled them themselves. Never forget the beautiful sound they made when they hit the till...Unfortunately the boss heard it too...I did get a roll of them though...
"In all the endless chatter about the causes of this financial crisis I've never once seen anybody mention the true root cause. Our government and our society are essentially run by corporate lobbyists. They have the money and they finance the politicians. Without corporate money nobody can get elected. Clever guys like Obama are happy to play the "outsider" card and reap the political rewards. But, in the end, I think we'll see that Obama is just as eager to be a card-carrying member of the Davos 500 as Clinton was. "
Bingo. I continue to be amazed that not only is there no outrage over this issue, noone even brings it up, ever. This is *the* root of the problem, folks! There is not going to be significant change from the politicians, "change"-mongers or otherwise - they are simply too tied to the corporate lobbyists. If we the little people don't agitate for fundamental change in campaign financing, the country will never change in any meaningful manner.
Hi Bob, wazzuuppp??
RockyR, here are some observations from the other side:
1. Just closed on a house in one of the best neighborhoods in chicago. 30% below 2007 price.
2. haven't had to make restaurant reservations in last 6 months. Just walk in...
3. Went to a Bulls game a couple of weeks ago, empty seats all over (don't follow the game too much...maybe its always like that, so may not be a good data point)
4. Getting some home improvement projects done and have bargained down every contractor atleast 15%, and one upto 30%
Rev Cleodus writes: "Think about it. What would you do if you had $100k?"
Such a move would be so outrageously inflationary that I would have no other sane choice than to spend every last cent received on silver and gold.
Hey CR - here's the text to accompany your picture of the bankers cutting the red tape of regulation:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Determined to cut red tape and reduce regulatory burden are (l to r),
OTS Director James Gilleran, Jim McLaughlin of the American Bankers
Association, Harry Doherty of America’s Community Bankers,
FDIC Vice Chairman John Reich and Ken Guenther of the Independent
Community Bankers of America.
bankers chainsaw massacre
IMHO, the real solution to the Kleptocracy isn't to limit power of the lobbists or corporations. It's to make the boards/CEOs more accountible to the shareholders.
The shareholders are the big loosers here. Most are down 60%+. BAC for example is down over 80%. This is an amazing loss of wealth. Do you think Ken Lay or any BAC board member will lose their job because of this performance?
Black talks about pressuring congress/treasury to replace the leaders. I think that the shareholder rights should be changed so that the real owners of the companies can replace their leaders before we get into these problems.
My solution:
1) Open board nonimations
2) Direct shareholder votes on all board/CEO compensation.
3) Clawbacks requirements in contracts triggered by shareholder votes.
4) More that 50% of the board needs to be indies.
...
Comrade Jeremy
What if cleaning up the balance sheets required a check bigger than the United States of America could sign?
I should have been more clear... I certainly do not (nor have I ever) endorsed bailouts of these firms of any size.
However, the fact is we've already dumped obscene amounts of money into them. Might as well try to get some good out of it.
FU racist! lol
You're part of the problem you partisan POS. Big Business and Big Government have been canoodling thru several administrations.
The sooner we're rid of payasos like you the better.
Not suggesting pay it all out at once. Over time. Through paychecks. Via tax credits. Etc. Was ranting/rambling. It would indeed be counter productive to hand out 100K like candy. But the point is put it (or at least some of it) into the hands of people. Responsible people will invest wisely, save, or pay down debt. Others? Well, they'd stimulate the economy
He's still sharp, but he's getting kind of fat over the last 10 years. He should really cut some of that noise hair, too. And, people would take him more seriously if he got those eyelids fixed.