How can so many Americans believe that we’re in a depression, when the stock market and commodity prices have been booming?
Read the Rest…
Apr 102011
I don’t subscribe to it, but there is a theory that Franklin Roosevelt saved capitalism. According to the theory, by co-opting the left, FDR prevented the real radicals and socialists from gaining power at the national level.
It is, to say the least, an ironic theory — which makes me think of the irony currently surrounding House Budget Chairman Paul Ryan’s proposed budget.
Whether for pragmatic political reasons or sincere belief that America must preserve a social safety net (if for no other reason than that Americans have ostensibly paid into the system and have grown to expect it), Ryan’s budget proposals could ultimately do more to preserve a social safety net than anything liberal Democrats could pass.
“We ought to have a social safety net to help people who are down on their luck and people who cannot help themselves,” Ryan said at a Tuesday morning press conference. “The problem is, our social safety net is fraying at the seams.
Paul Ryan and the Irony of Saving the ‘Social Safety Net’
By Matt Lewis, The Daily Caller
Apr 092011
In an article titled “Of the 1%, by the 1%, for the 1%”
It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.
Easy Money & the Decapitalization of America – Dowd & Hutchinson, Cato
Sometimes Moral Courage Is the Catalyst
A Growing List Of One Term Presidents, A Moral Question - Not A Political One, A Picture Is Worth A Thousand Words, Patience is a virtue...Delusion is a vice, Political Chaos, Politicians, Prostitutes and Pimps All Rhyme, The Democrats Blew It Again, The Growing American Fascist State, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The Obama OMG magic factory, The Oil Question, The Suffering Poor, Time For A New Third Party, Truth In Charity, Unindicted Co-Conspiritors, Unintended Consequences
No Responses »
Mar 122011
Here is what his administration and its allies have told the world, and the Libyan dictator, and the Libyan rebels, in recent days. The director of national intelligence declared before the Senate Armed Services Committee, in a chilling example of self-fulfilling prophecy, that “over the longer term Qaddafi will prevail.” The secretary of defense continued to insist that the imposition of a no-fly zone over Libya is too much for America to do, and to frighten the public with the warning that it would constitute a military operation, as if all military operations are like all other military operations, and therefore the prelude to the sort of wars that would require us, as he put it in an earlier outburst about Iraq and Afghanistan, to have our heads examined. ” Continue reading “Obama’s Libya Policy Isn’t a Muddle. It’s a Disgrace.”
Jan 022011
Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.
2010 Was the Year of Voodoo Hypocrisy – Paul Krugman, New York Times
Oct 302010
Bettmann/CORBIS
C-SPAN Supreme Court Series: Prayer in Public School
By Andrew Cohen
Arguments in Abington School District v. Schempp offer a candid snapshot into the way Americans perceived the intersection of government and religion nearly 50 years ago.
Watch the full video of this session
“The average American doesn’t realize how much of the laws are written by lobbyists” to protect incumbent interests, Google CEO Eric Schmidt told Atlantic editor James Bennet at the Washington Ideas Forum. “It’s shocking how the system actually works.”
In a wide-ranging interview that spanned human nature, the future of machines, and how Google could have helped the stimulus, Schmidt said technology could “completely change the way government works.”
“Washington is an incumbent protection machine,” Schmidt said. “Technology is fundamentally disruptive.” Mobile phones and personal technology, for example, could be used to record the bills that members of Congress actually read and then determine what stimulus funds were successfully spent.
Let Them Eat Credit
A Growing List Of One Term Presidents, A Moral Question - Not A Political One, A State of Distress, AIG and all that....., Audit the auditors?, “the Greenspan doctrine”, Bilderbergers 1 USA 0, Catholic Social Teaching, China and the Treasuries - A Dependency Relationship, Collateral Damage, Coming Social Unrest, Constitutional Questions, Consumption Ran the Old Economy, Coup d'etat in America, Death of the Dollar, Deficit Death Spiral, Deflation-Inflation-Stagflation, Derivatives Reform, Did they ever hear of GAAP?, Dismal Science-Ignorant Scientists?, Economic Analysis Isn't Science, Federal Reserve-Discussion, Greenspan is kind of stupid, It Is Nice To Be Part of the Elite!, It Is Supposed to be a Republic!, Let's Call What It Is - DEPRESSION, Monetary Policy - Discussion, Moral Hazard, No Bank Is Indispensable, Obama Bingo, Obama's Hypocrisy, Our phony middle class, Patience is a virtue...Delusion is a vice, Political Chaos, Political Implications, Regulatory Failures, Subsidiarity, TARP fruit loops, The American Financial Oligarchy, The Consequences of Greed, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Unemployment Catastrophe, Unintended Consequences, We Have Become Beggars To The World
No Responses »
Aug 292010
By most counts, the U.S. economy started growing in the middle of last year. For many Americans, though, it does not feel as if the Great Recession has ended—unemployment and underemployment are still alarmingly high, and job growth is weak. Many causes have been suggested for both the economic collapse and mediocre recovery, but one that is hardly ever mentioned is income inequality. This is a mistake. Growing income inequality in the United States and the policy responses it has spawned have done tremendous damage to our economy. And because we continue to ignore this underlying problem, the risks of our policies leading to another calamity will not go away, no matter what we do to reform the financial sector.
Since 1968, income inequality has been steadily increasing in the United States. I am not referring to the Croesus-like income of a John Paulsen, the hedge fund manager who in 2008 netted over $3 billion, about 75,000 times the average household income. I refer to a more worrying everyday phenomenon that confronts most Americans, the disparity in income growth rates between a manager at the local supermarket and the typical factory worker or office assistant. Since the 1970s, the wages of the former, typically workers at the 90th percentile of the wage distribution in the United States, have grown much faster than the wages of the latter, the typical median worker. Or consider the table below, which shows that the wages of occupation groups that are paid more than the national average in 2002 have grown much faster since then than the wages of occupation groups below the average:
The Inequality Gap Is Ruining the American Economy—and Bernanke Is Just Making it Worse Raghuram G. Rajan
Just as freedom of speech does not include the right to yell “fire” if there isn’t one, Joshua Muravchik argues that neither does freedom of worship afford for the building of whatever, wherever one chooses. Before endorsing the building of a mosque blocks from Ground Zero, he’d like to know more about the beliefs behind the center, especially those of the “moderate” Imam whose current project is ranking the world’s countries according to their “Islamicity” and who sees Osama bin Laden as “made in the USA.” Read More
Cronus (Saturn) castrates his father Uranus, the Greek sky god (before Zeus)
Made by Giorgio Vasari and Cristofano Gherardi in the 16th century Palazzo Vecchio, Florence.
Prior to Jesus, the Messiah, the Second Person of the Blessed Trinity, this was the general perception by man of the supernatural world. It would now appear as Hell.
13TH SUNDAY OF HE LITURGICAL YEAR
LUKE 9:51-62
When the days drew near for him to be taken up, he set his face to go to Jerusalem. And he sent messengers ahead of him. On their way they entered a village of the Samaritans to make ready for him; but they did not receive him, because his face was set toward Jerusalem. When his disciples James and John saw it, they said, “Lord, do you want us to command fire to come down from heaven and consume them?” But he turned and rebuked them. Then they went on to another village. As they were going along the road, someone said to him, “I will follow you wherever you go.” And Jesus said to him, “Foxes have holes, and birds of the air have nests; but the Son of Man has nowhere to lay his head.” To another he said, “Follow me.” But he said, “Lord, first let me go and bury my father.” But Jesus said to him, “Let the dead bury their own dead; but as for you, go and proclaim the kingdom of God.” Another said, “I will follow you, Lord; but let me first say farewell to those at my home.” Jesus said to him, “No one who puts hand to the plough and looks back is fit for the kingdom of God.”
Alexandre Ledru-Rollin was Minister of the Interior during the 1848 Paris Revolution. Looking down one day from his window at a mob passing by on the street, he said, “I am their leader; I must follow them.” It sounds back-to-front, but is it? In a democracy do we not elect leaders to follow us? Governments have Ministers of this and that: the word ‘minister’ means ‘servant’.
On the one hand, if the people who presume to lead me are not serving any real interest of mine, then they are using me to serve their own interests. But how can they serve my interest when there are so many conflicting interests in society? They try to persuade me that their interests and mine coincide with ‘the common good’. But if they live in a society where few people care about the common good, they have to give each group the impression that they are going to serve that group’s particular interests. Since it isn’t always possible to juggle all these interests successfully we enter a world of persuasion, lies, flattery and spin, with occasional flashes of truth and integrity. Yet, somehow, it seems to work to some degree. Democracy, said Churchill, is a very poor form of government, but we have not found a better.
Jesus said that he came to serve and not to be served (Mt 20:28, Mk 10:45). Many politicians say something similar, but even as they speak, our eyes are drawn to their fat salaries, pensions and perks, and to how little like servants most of them appear. Nobody begrudges them a decent salary: they have families to raise, just like everyone else. But when we see excess we pounce. In some hidden recess of our minds, it may be, they are suffering comparison with a man who really came to serve and not to be served, and who had nowhere to lay his head. We can believe Jesus because he took nothing for himself. It’s a credibility thing.
Jesus is not begging for your vote, and so he can speak the truth to you from a pure mind. He is not asking to represent you, and so he doesn’t need to flatter you. He is taking nothing for himself, and so he can ask you to give everything you have.
He does not come to you talking about economic deals. He never spoke about financial matters, except to say, “Render to Caesar what belongs to Caesar” (Mt 22:21; Mk 12:17; Lk 20:25), and to withdraw from financial arbitration (Lk 12:13-14). He doesn’t speak in abstractions at all. He speaks to what is most personal in you. And so his appeal is universal. This is the paradox: what is most personal is most universal. Henri Nouwen saw this clearly, and repeated it many times in his talks and his writing. “We like to make a distinction between our private and public lives and say, ‘Whatever I do in my private life is nobody else’s business.’ But anyone trying to live a spiritual life will soon discover that the most personal is the most universal, the most hidden is the most public, and the most solitary is the most communal. What we live in the most intimate places of our beings is not just for us but for all people. That is why our inner lives are lives for others. That is why our solitude is a gift to our community, and that is why our most secret thoughts affect our common life.”
Because Jesus touches the deepest part of your being he touches the whole of your life. And so he has the right to ask you to follow him. He is not leading you a dance, pretending to lead while only following, pretending to follow while furtively leading. When he says he has come to serve you, you can believe him. He poured out his life and so he has the right to ask you to do the same.
May 162010
Purveyors of C.D.O.’s maintain that buyers who lost billions in these mortgage-related instruments were, of course, sophisticated.
But as a recent report from the inspector general of the National Credit Union Administration shows, it is neither credible nor factual that only savvy investors bought C.D.O.’s.
The report analyzes the April 2009 collapse of the Eastern Financial Florida Credit Union. Based in Miramar, Fla., this state-chartered institution was created in 1937 to serve the Miami employees of what later became Eastern Airlines. The institution added other Florida employee groups and was serving 208,000 members when it failed last year.
Eastern Financial had $1.6 billion in assets at the end of 2008. The company was placed in conservatorship on April 24, 2009. It was taken over by the Space Coast Credit Union of Melbourne, Fla. The failure will cost the National Credit Union Share Insurance Fund, the federal agency that guarantees credit union deposits, an estimated $40 million.
Because it was based in Florida, the doomed credit union had its share of bad real estate loans on its books. But the inspector general’s autopsy report said that the major cause of the Eastern Financial collapse was its decision to dive head-first into toxic C.D.O.’s just as the mortgage mania was faltering.
Between March 2007 and June 22, 2007, the credit union committed nearly $100 million to buy 16 of these instruments; most contained dicey home equity loans.
The timing of these purchases is intriguing. The spring of 2007 was when Wall Street’s mortgage machinery was sputtering; New Century Financial, a big subprime lender, filed for bankruptcy that April. Brokerage firms that had provided funding to lenders like New Century and Countrywide began pulling in their credit lines. At the same time, it became a matter of some urgency for these firms to jettison mortgage-related securities in their pipelines.
Who sold Eastern Financial its toxic securities? Alas, the inspector general identifies neither the C.D.O.’s the credit union bought nor the firms that peddled them.
But the report did note that the instruments Eastern Financial bought were private placements, “which provided less readily available market data to perform analysis and provide better understanding of underlying assets and grading system, tranches, etc.” In other words, the most obscure C.D.O.’s imaginable.
“This situation illustrates yet again why over-the-counter securities and derivatives are not suitable for federally insured banks and other ‘soft’ institutional clients,” said Christopher Whalen, editor of The Institutional Risk Analyst. “Wall Street securities dealers who knowingly cause losses to federally insured depositories should go to jail.”
Credit unions are nonprofit entities and typically do not engage in the risky investing that bank executives did during the credit bubble. Federal credit unions are also limited in the types of securities they can buy. While they can purchase mortgage-backed securities, they are barred from buying C.D.O.’s.
State-chartered credit unions have more leeway to invest in exotic instruments if their home states allow it. Florida, California and Michigan are three such states. But according to the National Credit Union Administration, less than 1 percent of all credit union investments fall into the exotic category.
THOSE state-chartered institutions that can buy C.D.O.’s and other riskier investments must set aside reserves of 100 percent of mark-to-market losses in such securities when they decline in value. This is intended to deter credit union executives from venturing down the risk spectrum.
The Florida credit union met that requirement, but clearly the deterrence didn’t work. Eastern Financial’s failure may be an outlier, but it makes for a terrific case study.
Indeed, the inspector general’s analysis is depressingly familiar. Eastern Financial’s management and board “relied too heavily on rating agencies’ grading of C.D.O. investments,” it concluded, and failed to evaluate and understand their complexity.
Almost immediately after the credit union bought the C.D.O.’s, they fell in value. By September 2007, the credit union had recorded $63.4 million in losses on the products, almost two-thirds of the original investment. By the time of its failure, the credit union had charged off all 18 C.D.O. investments, resulting in total losses of nearly $150 million.
Richard Field, managing director of TYI, which develops transparency, trading and risk management information systems, says the Eastern Financial collapse is yet another example of why investors in complex mortgage securities need to be able to consult complete loan-level data on what is in these pools.
“A sizable percentage of the problems in the credit markets and bank solvency are directly related to this lack of information,” Mr. Field said.
But the Eastern Financial insolvency also illustrates why regulators should make Wall Street adhere to concepts of suitability for institutions as well as individuals, Mr. Whalen said.
“The dealers who sold the C.D.O.’s to this credit union should be sanctioned,” he said. “It might even be possible to pursue the dealer who sold the C.D.O.’s under current law. At a minimum, the Securities and Exchange Commission should impose retail investor suitability standards onto banks and public sector agencies to end the predation by large Wall Street derivatives dealers.”
Will the National Credit Union Administration pursue any of the credit union’s executives or the firms that sold it the toxic securities? “We always consider potential claims of third-party liability in cases of this magnitude,” said John J. McKechnie III, director of public and congressional affairs at the administration.
A Credit Union That Played With Fire Gretchen Morgenson, New York Times
Apr 102010
Bankers’ Worst Nightmare: Richard Vigilante – Jim McTague, Barron’s
CONGRESS, HOLD YOUR HORSES! SURE, EVERYONE except the perps favors better regulation on Wall Street. But we need more efficient and intelligent policing than what the current House and Senate financial-reform bills offer.
The aptly named Richard Vigilante, who recently co-wrote a book called Panic with Minneapolis-based hedge-fund legend Andrew Redleaf, suggests this approach: Force all firms managing other people’s money to publish their investment positions in detail before the market opens; this would include hedge funds. Then, the short sellers could punish ineptness before it spreads by betting heavily against a particular institution’s stupid decisions.
“Bankers would hate it. It’s their worst nightmare,” says Vigilante, whom I met with at Firehook bakery on Washington’s Farragut Square. If the system had been in place in 2006, short sellers would have stamped out the smoldering subprime mania before it had a chance to spread, he asserts.
His suggestion is both brilliant and a model of simplicity — it could protect consumers against all kinds of risky financial products — but it will never become reality.
Bankers would scream about the need to protect their proprietary-trading information. And, as was the case with health-insurance “reform,” Congress is bent on ramming a bill, no matter how flawed, through the legislative sausage works in order to mollify an uncommonly angry electorate before Nov. 2. To entertain new ideas at this juncture, even good ones, would upset the ambitious timetable.
Does It Make Sense to Resurrect the Glass-Steagall Act?
A Growing List Of One Term Presidents, A Moral Question - Not A Political One, A Shareholder-Not Just a "Stakeholder", A State of Distress, A Time To Repent, AIG and all that....., Audit the auditors?, “the Greenspan doctrine”, Back to the basics, Bank Failures, Banks - Crisis Discussion, Collateral Damage, Consumption Ran the Old Economy, Coup d'etat in America, Figures don't lie but Liars can figure, Negative Cash Flow, No Bank Is Indispensable, Our phony middle class, PANDEMIC, Regulation - the Discussion, Regulatory Failures, The Consequences of Greed, The Democrats Blew It Again, The excellent adventures of Ben Bernanke, The Financial Elite, The Geithner Resignation Watch, The Importance of Strategic Planning, The Joy of Being A Bank
No Responses »
Feb 202010
In the present system, the more unrestricted the banks are, the more money they can generate “out of thin air,” and the more damage they can inflict upon the wealth-generation process. FULL ARTICLE by Frank Shostak
The Committee to Defraud the World
To say now that ‘No one knew’ or ‘I was mistaken’ or ‘I was just doing as I was told’ is another in a series of lies and deceptions that have supported one of the greatest frauds in the history of the world.
But this is not history. This episode of fraud is still playing itself out now. And to fail to understand the depth and breadth of this madness is to place oneself in peril, and in the power of those who are twisting the Western economic and political system even now to satisfy their lust for wealth and power. You are only successful if you can keep what you kill.
Glass-Steagall fell after a decade long campaign involving hundreds of millions in lobbyist money spread lavishly around the Congress, led by Sanford Weil of Citibank, supported by key banking and political figures in the Congress and at the Fed. It involved Senator Phil Gramm, who helped to put a stake in the heart of the financial regulatory process under the Reagan free markets banner, and who recently said the problem is that the middle class were a bunch of whiners. As did his wife Wendy, who as the chairperson of the CFTC had exempted Enron from regulatory oversight, and then left to take a position there on its board of directors.
Like the Mortgage Backed Securities scandal it involved surprisingly few principal players, like Alan Greenspan and Robert Rubin, who used their power and influence to silence and ostracize critics, and promote a climate of reckless disregard for the public trust under the meme of ‘efficient markets’ and deregulation. This might have been an innocent policy error if it did not involve premeditated theft on a massive scale, followed by cover ups, denials, and a control fraud that exists even today.
But it also involved literally thousands of collaborators and enablers, from mainstream media people, economists, analysts, and other thought leaders to politicians and regulators who saw that it was to their advantage to at least passively support this scheme which they knew very well was a fairy tale, a fraud, class warfare by a new name, but were able to hide their own guilty consciences behind self-serving rationalization and the shield of plausible deniability.
History, and hopefully the justice system, will sort this all out. It is difficult, even now, to get one’s mind around the enormity of it. This is its most powerful weapon. Who could be such monsters, so amoral, so destructively sociopathic? Future generations will regard it as an episode of madness, driven by a few people in a tight circle of self-reinforcing thought, people with remarkably similar cultural and educational backgrounds, driven by a consuming lust for power, that were able to dupe and delude an entire nation made vulnerable by propaganda, a co-opted press, and apathy.
In the meanwhile all the great mass of people can do is to watch, and wait, and seek to protect themselves from these ravening wolves grown increasingly desperate, as their arrogance comes to a tragic fall. They can vote out incumbents, but the parties choose the candidates, and too often they resemble competing crime families of special interests more than pillars of a representative government, saying one thing to get elected and doing another thing once in office.
This is the approach of trouble when hubris is at its height, and the few feel they have everything to gain and nothing to lose, if only they can gain more power, and necessarily become more ruthless. They are trapped in a cycle of fear and greed. The fear provokes the lies and the cover ups, but the greed promotes the extension of the fraud and the theft, requiring even more lies and cover ups. The operative word is ‘over reach,’ in a classic late stage Ponzi scheme. This will undoubtedly add to the confusion as the truth is assaulted by the big lie.
The last vestiges of polite society are often shed as the downfall reaches it final conclusion, at the end, when all is revealed, at last. And so there will be great danger.
Jesse’ s Cafe http://jessescrossroadscafe.blogspot.com/2010/07/committee-to-defraud-world.html