Mish's Global Economic Trend Analysis Fri 2010-09-24 15:05 EDT

Elizabeth Warren Tossed a Bone and Appointed Geithner's Lapdog

Michael Shedlock

Under guise of being handed an important role, Elizabeth Warren was shoved aside and tossed a bone by President Obama. One might not know it from the New York Times headline Warren to Unofficially Lead Consumer Agency...Unfortunately, no matter how much Obama tries to spin it, this has nothing to do with a "potentially contentious confirmation" but rather everything to do with Geithner winning the battle to marginalize her...

Appointed Geithner's Lapdog; bones; Elizabeth Warren Tossed; Mish's Global Economic Trend Analysis.

Sat 2010-08-07 20:18 EDT

Wall Street's Big Win | Rolling Stone Politics

Matt Taibbi

...Obama and the Democrats boasted that the bill is the "toughest financial reform since the ones we created in the aftermath of the Great Depression" -- a claim that would maybe be more impressive if Congress had passed any financial reforms since the Great Depression, or at least any that didn't specifically involve radically undoing the Depression-era laws...What it was, ultimately, was a cop-out, a Band-Aid on a severed artery. If it marks the end of anything at all, it represents the end of the best opportunity we had to do something real about the criminal hijacking of America's financial-services industry. During the yearlong legislative battle that forged this bill, Congress took a long, hard look at the shape of the modern American economy -- and then decided that it didn't have the stones to wipe out our country's one --dependably thriving profit center: theft...Dodd-Frank was never going to be a meaningful reform unless these two fateful Clinton-era laws -- commercial banks gambling with taxpayer money, and unregulated derivatives being traded in the dark -- were reversed...Republican and Democratic leaders were working together with industry insiders and deep-pocketed lobbyists to prevent rogue members like Merkley and Levin from effecting real change...Geithner acted almost like a liaison to the financial industry, pushing for Wall Street-friendly changes on everything...Without the Volcker rule and the --Lincoln rule, the final version of finance reform is like treating the opportunistic symptoms of AIDS without taking on the virus itself. In a sense, the failure of Congress to treat the disease is a tacit admission that it has no strategy for our economy going forward that doesn't involve continually inflating and reinflating speculative bubbles...

Rolling Stone political; Wall Street's Big Win.

naked capitalism Mon 2010-07-19 17:07 EDT

Is the SEC Settlement Really a Win for Goldman?

Tom Adams and Yves Smith

...Conventional wisdom in the financial media is that the settlement announced by the SEC over its lawsuit on a Goldman 2007 Abacus CDO is a home run for Goldman. But a closer reading suggests that Goldman's victory is qualified, and the enthusiastic press response is in large measure due to the firm's skillful manipulation of perceptions...it is hard to see how anything in the settlement, if affirmed, would be negative for private parties considering lawsuits against sellers of CDOs...we imagine potential CDO investors will be mightily encouraged that Goldman ended up returning the full amount of investment to the one true third party investor in the deal -- IKB...An investor considering bringing an action against a bank that sold them a CDO that failed (meaning virtually all 2006 and 2007 ``mezzanine'' CDOs) would probably be encouraged that a bank was required to pay such a large amount for making inaccurate statements about the true nature of the CDO...Plaintiffs who sue CDO sellers have good reason to be optimistic...The settlement thus tarnishes the popular myth that the subprime shorts were insightful outsiders who executed ``the greatest trade ever''...the SEC has demonstrated that investors in such a CDO can win a recovery as a result of such inaccurate statements.

Goldman; naked capitalism; SEC Settlement Really; Wins.

naked capitalism Mon 2010-07-19 17:02 EDT

Elizabeth Warren in Treasury Crosshairs Again, Geithner Opposes Her as Head of Consumer Financial Services Protection Agency

To say there is no love lost between Treasury and Elizabeth Warren is probably putting it mildly. Treasury was gunning for her ouster in early 2009...During the period when the COP was openly and effectively critical of the TARP, there was also a full court press in the media against Warren. Warren is the obvious choice to head the otherwise-guaranteed-to-be-a-joke consumer financial services agency due to set up its shingle at the Fed. She has been a tireless consumer advocate, is trusted and well liked by the public at large, an effective communicator and a respected legal scholar, and is willing to stare down political opponents. All those qualities make her hugely threatening. Banksters and their lobbyist allies have been saying loudly and clearly that they are firmly opposed to having Warren head the new consumer agency. So, predictably, Geithner acts as their water-carrier...this Administration...may actually see loss of the Democrat majority in the House as a win (as in is finding creative ways to rationalize its fallen standing as a possible longer-term advantage). First, it allows Team Obama to blame whatever happens (or fails to happen) on the Republicans. Second, it gives the Administration plenty of air cover to become more openly corporatist (recall Clinton's famed move to the right after the 1994 mid term debacle).

Consumer Financial Services Protection Agency; Elizabeth Warren; Geithner opposes; Head; naked capitalism; Treasury Crosshairs.

PressThink Thu 2010-06-24 10:18 EDT

Clowns to the Left of Me, Jokers to the Right: On the Actual Ideology of the American Press

Jay Rosen

That it's easy to describe the ideology of the press is a point on which the left, the right and the profession of journalism converge. I disagree. I think it's tricky. So tricky, I've had to invent my own language for discussing it...political journalists...are skeptical about changing society in any fundamental way...professional journalist...generate authority and respect...flee opprobrium...[by demonstrating] that they are not on anyone's ``team,'' or cheerleading for a known position. This puts a premium on stories that embarrass, disrupt, annoy or counter the preferred narrative...``True believer,'' a term of contempt...narcissistic reactions of both sides prove how mature and professional and detached he is...people with political sense in press treatment will usually be the moderates, mavericks and ``pragmatists,'' a word that in political journalism has almost no content beyond, ``opposite of true believer... ideologically flexible... not a purist.''...journalists try to win the argument not by having better arguments but by standing closer to a reality they get to define as more real than your reality...The Church of the Savvy...The Quest for Innocence...Regression to a Phony Mean...The View from Nowhere...He said, she said journalism...The sphere of deviance...

actual ideological; American press; clowns; jokers; left; PressThink; Right.

Sun 2010-02-28 13:39 EST

America's Future: My Baseline Scenario | Ian Welsh

1) employment is not going to recover to pre-great recession levels for at least a generation, maybe more, in terms of % of people employed. The late Clinton economy is the best you or I will see in our working lives. 2) Politics will continue to be dominated by monied interests and that dominance will increase, rather than decrease. They will use their power to fight over the shrinking pie, rather than to increase it, and will make any real systemic restructuring of the economy essentially impossible. 3) a right wing ``populist'' will get in after Obama. Since the only sort of stimulus they can do is war stimulus, they will pick a war with someone. Who, I'm not sure. In economic terms they will have all the wrong solutions to various real problems... Americans will put off cutting the military, I think, till they've gutted virtually everything else. I expect the military will probably win the fight against financial interests when the moment comes, though we'll see...

America s future; Baseline Scenario; Ian Welsh.

Fri 2010-02-12 21:31 EST

The Cash Committee: How Wall Street Wins On The Hill

Ryan Grim and Arthur Delaney

...In the fall of 2008, Democrats took the White House and expanded their congressional majorities as America struggled through a financial collapse wrought by years of deregulation. The public was furious. It seemed as if the banks and institutions that dragged the economy to the brink of disaster -- and were subsequently rescued by taxpayer funds -- would finally be forced to change their ways. But it's not happening. Financial regulation's long slog through Congress has left it riddled with loopholes, carved out at the request of the same industries that caused the mess in the first place. An outraged American public is proving no match for the mix of corporate money and influence that has been marshaled on behalf of the financial sector...

Cash Committee; Hill; Wall Street wins.

Jesse's Café Américain Tue 2009-12-01 22:19 EST

Mark Pittman, Investigative Journalist

Jesse

Mark Pittman, the award-winning investigative reporter whose fight to open the Federal Reserve to more scrutiny led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52. ...``He was one of the great financial journalists of our time,'' said Joseph Stiglitz, a professor at Columbia University in New York and the winner of the 2001 Nobel Prize for economics. ``His death is shocking.''

investigation journalist; Jesse's Café Américain; Mark Pittman.

naked capitalism Fri 2009-11-20 09:42 EST

Einhorn: First, Let's Kill All the Credit Default Swaps

David Einhorn, who enjoys his considerable reputation for hard-fought battles against firms with shaky finances and dubious accounting (Alliance Capital and Lehman), has taken aim at a new and equally deserving target: credit default swaps...CDS are a means of extortion...CDS speculators win if companies die...a credit default swaps clearinghouse is not a viable solution...CDS serve the interests of the financial sector at the expense of the real economy...

Credit Default Swap; Einhorn; Let's Kill; naked capitalism.

Jesse's Café Américain Tue 2009-11-03 19:36 EST

Obama's Economic Policy Has Doomed the US to Stagnation - Or Worse

Jesse

This was the very moment of Obama's failure, when he allowed Summers, Geithner and Bernanke to establish the principle of "Too Big To Fail" and set up a financial oligarchy at the expense of taxpayers. We would have expected this out of the Treasury under Hank Paulson, but to see this kind of policy error favoring Wall Street over the US taxpayers from a government elected on the promise of reform is inexcusable, a disgrace. ...(Bloomberg) Nobel Prize-winning economist Joseph Stiglitz said the world's biggest economy is suffering because of the U.S. government's failure to nationalize banks during the financial crisis.

doomed; Jesse's Café Américain; Obama s economic policy; stagnated; worse.

naked capitalism Tue 2009-10-27 12:18 EDT

Guest Post: Capitalism, Socialism or Fascism?

George Washington of Washington's Blog

What is the current American economy: capitalism, socialism or fascism? ...Nouriel Roubini writes ``We're essentially continuing a system where profits are privatized and...losses socialized.'' Nassim Nicholas Taleb says ``the government is socializing all these losses by transforming them into liabilities for your children and grandchildren and great-grandchildren.'' Nobel prize winning economist Joseph Stiglitz calls it ``socialism for the rich'' ...leading journalist Robert Scheer writes: ``What is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as ``financial fascism'''' ...Italian historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because ``the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social'' ...one of the best definitions of fascism -- the one used by Mussolini -- is the ``merger of state and corporate power`` ...Nobel prize-winning economist George Akerlof co-wrote a paper in 1993 describing the causes of the S&L crisis and other financial meltdowns...[Looting is the] common thread [when] countries took on excessive foreign debt, governments had to bail out insolvent financial institutions, real estate prices increased dramatically and then fell, or new financial markets experienced a boom and bust...Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations ...Whether we use the terminology regarding socialism-for-the-giants (''socialized losses''), of fascism (''public and social losses''), or of looting (''left the government holding the bag for their eventual and predictable losses''), it amounts to the exact same thing. [kleptocracy] Great comments, including Joseph: Three core ideas characterize the myth of our society: 1. Free market; 2. Capitalism; 3. Democracy. The conceptual error that people make is to think that they are compatible, or indeed represent aspect of the same thing. In fact they are all deeply antagonistic towards each other. It is the miracle of post-war society that we managed to hold them in balance for so long. That balance has now been destroyed. A simple example of the contradiction, and the one that the over-socialised right finds most confusing, is the contradiction between capitalism and the market. Capitalism is a system of ownership; the market is a system of distribution. The perfect world for the capitalist is one in which they are price setters in terms of the commodities they produce and labour they employ -- ie a state of monopoly. Each individual capitalist seeks the destruction of the market. What has occurred over the past year is not corruption; it is the triumph of capitalism. The market and democracy have been defeated. Not socialism, not fascism,...

capitalism; Fascism; Guest Post; naked capitalism; social.

Willem Buiter's Maverecon Thu 2009-10-15 16:51 EDT

Kornai on Soft Budget Constraints, Bail-Outs and the Financial Crisis

Nobel Prize winning economist J��nos Kornai

...Spreading of the SBC syndrome is at once a cause and an effect of the crisis. I will not say it is the only cause: the situation that led to the crisis was brought about by a complex of factors. But I will say firmly that softening of the budget constraint is one of the main causes of the crisis. The general softening tendency has been reinforced in the United States and several other countries by successive bailouts over the last ten or twenty years. Some economists, such as Professor Chenggang Xu, have been pointing for years at a close link between the crisis in East Asia and earlier bailouts. [moral hazard generalized]

bail-outs; Financial Crisis; Kornai; Soft Budget Constraints; Willem Buiter's Maverecon.

Willem Buiter's Maverecon Sat 2009-10-10 14:00 EDT

Expect little and you may yet be disappointed

Willem Buiter

...the most disappointing development this year was the performance of president Barack Obama and his administration - and my expectations were modest to begin with...On the fiscal side, Barack Obama is presiding over the biggest peace-time government deficits and public debt build-up ever. According to my back-of-the-envelope calculations there is about a 10 percent of GDP gap between the medium and longer-term spending plans of the Obama administration and the taxes the Congress is willing and able to impose. The reality that you cannot run a West-European welfare state (with decent quality health care, decent pre-school, primary and secondary school education for all), rebuild America's crumbling infrastructure, invest in the environment and fulfill your post-imperial global strategic ambitions while raising 33 percent of GDP in taxes, has not yet dawned on the Obama administration or on the American people at large...Clearly, the qualities one needs to get elected to high office in western democracies are not qualities that are likely to be helpful once you have achieved high office and are expected to govern and lead. To survive the selection process to become president you have to be able to stitch together a coalition of special interests that can provide sufficient financial and sweat equity resources to win this grueling race to the top. Once you get there, you should shed the unfortunate baggage you accumulated on your way up and govern in the interest of all the people. Few can do that. Apparently Obama is not one of them.

disappointment; expectations; Willem Buiter's Maverecon.

zero hedge Thu 2009-09-17 09:42 EDT

Excess Liquidity Game Is Coming To An End

David Rosenberg notes M1, M2 and MZM have commenced contracting at an alarming rate: M1 fell 1.0% in the August 24th week and over the past four weeks is down at a 6.5% annual rate. M2 has contracted in each of the past four weeks too and over that time has slipped at a 12.2% annualized pace, which is a near-record decline. We see the same trend in the broad MZM money measure -- off at a 15.8% annual rate over the past month. Bank credit also remains in a fundamental downtrend -- contracting at an epic 9% annualized pace over the past four weeks. So for the first time in the post-WWII era, we have deflation in credit, wages and rents, and from our lens this is a toxic brew that in the end will ensure that the focus on capital preservation and income orientation will be the winning strategy over a strict reliance on capital appreciation.

comes; ending; Excess liquidity game; Zero Hedge.

Jesse's Café Américain Fri 2009-09-04 18:58 EDT

Stiglitz on the Financial Crisis

Jesse

Joe Stiglitz describes the current financial crisis and prospective recovery quite well, and the conclusions he draws are remarkably similar to our own which is gratifying. It's good to hear these things from a distinguished Nobel laureate, and not just from your humble Propriétaire, while puttering over his daily bread. Bloomberg Stiglitz Says U.S. Economic Recovery May Not Be `Sustainable' By Michael McKee Sept. 4 (Bloomberg) -- The U.S. economy faces a ``significant chance'' of contracting again after emerging from its worst recession since the 1930s, Nobel Prize-winning economist Joseph Stiglitz said. ``It's not clear that the U.S. is recovering in a sustainable way,'' Stiglitz, a Columbia University professor, told reporters yesterday in New York.

Financial Crisis; Jesse's Café Américain; Stiglitz.

Wed 2008-03-26 00:00 EDT

Barack Obama's Smart Speech "A More Perfect Union": Did It Reveal Him To Be Too Intellectual To Be President? | The Smirking Chimp

Barack Obama's Smart Speech "A More Perfect Union": Did It Reveal Him To Be Too Intellectual To Be President? by John Dean | The Smirking Chimp; "Republicans have spent the past half century dumbing-down the American presidency, for it has helped them win the White House"; "Anti-intellectual Republican presidents have led this nation into a new age of unreason"

Barack Obama's Smart Speech; intellectual; Perfect Union; President; revealed; Smirking Chimp.

Thu 2007-11-01 00:00 EDT

blackagendareport.com

- The Handwriting is On the Wall: It's a Clinton-Obama Ticket in 08, by Bruce Dixon; "For Democratic and Republican wings of America's permanent ruling party, the all-important selection which precedes the election isn't about poll numbers, votes or the citizens that cast them. It's about winning the favor of military contractors, the banking and financial sectors and Big Oil. It's about reassuring insurance and pharmaceutical companies, cozying up to agribusiness, the cable and telecom monopolies, allaying the fears of chambers of commerce, and wooing Hollywood."

blackagendareport; com.

Tue 2002-12-03 00:00 EST

The Register

-- File swap nets will win, DRM and lawyers lose, say MS researchers

Register.