dagblog - Comments for "Too Big To Save"

Ack! 'PartialTy'? (F me.)

we are stardust — Wed, 09 Mar 2011 01:10:31 +0000

In reply to Hi Stardust,I'd love to hear

Ack! 'PartialTy'? (F me.) I will do some searching; it's a hotly debated subject. I ususally count on Angry Bear and George and Yves for cool graphs and charts; digging may require more time that I have tonight. RL is sucking just now, and I ain't got much online time lately to hunt. ;o) Try to be back, and glad to hear the SO news. (Shhhhhh.) Remember dancing. (See Gaga video)

Hi Stardust,I'd love to hear

Obey — Wed, 09 Mar 2011 00:59:24 +0000

In reply to There were many who didn't

Hi Stardust,

I'd love to hear from Obey if ... QEII ... is partiallyt what's driving up gas and food price spikes

Personally I'd love to hear from anyone who knows something about it. ;0)

I haven't really been keeping up. I was a fan of QEII before it happened and still am. But I don't know what the evidence is showing now...

And It's baaaaccckkk..

cmaukonen — Wed, 09 Mar 2011 00:56:20 +0000

In reply to There were many who didn't

And It's baaaaccckkk.. Subprime lending. Now with new car sales.

There were many who didn't

we are stardust — Tue, 08 Mar 2011 23:22:11 +0000

In reply to I've drunk the cool aid.I

There were many who didn't think that not bailing out the banks would have been catastrophic, including (the Sainted) Elizabeth Warren, and most impressively, Wm. Black and Randall Wray, who wrote a two-part piece and posted it at Huffpo detailing the steps of temporary receivership, all the way through to simpler, smaller, healthy banks with books that actually reflected their financial conditions. Black was a regulator during the S & L 'crisis', and reminds us that over a thousand criminal bankers, etc. were put into jail. Right now, the Dept. of Justice is very kindly letting banks know if they are being investigated (and we assume if they are a tad prosecutable, and they can then approach the DoJ and cut a deal to pay some crap fines to forestall further investigations, like Mozilo at Countrywide. Feh!

The second biggest financial crime wave after the fraudulent rent-seeking that has become the de facto basis for our phony-baloney GDP is that with all the stars aligned when he came into office, Obama just continued it all with his Dark Lord economics team, blood brothers to Robert Rubin whom we now learn exported neoliberalism at the end of a financial gun via the IMF and World Bank all over the planet, and destroyed economies, and created vast gaps between working people and the Dictatorial Elite class; goddam we have a lot to answer for in the world! But I digress. Oh yeah: and the White House blocked meaningful fin-regs every step of the way until they passed (Ta-da!) Dodd-Frank, advertised as a law that would 'prevent TBTF; how's that working out? None of them are! Why? None are flunking their own Stress Tests! Fancy that!

You might be interested in GeorgeWashington's (umpteenth) blog naming the best of the economists who absolutely get that Wall Street Health is an utter oxymoron, and that until the banks are downsized and cleaned of their toxic assets, there will be no trust in them or the entire system, much less any recovery that isn't built on another house of cards.

I'd love to hear from Obey if the folks who predicted that QEII would lead not to banks lending or investing in uh...America...but would just generate another round of gambling on commodities is partiallyt what's driving up gas and food price spikes (and I do get that crops have failed, etc.), but still...it looks like this round may be the other.

One Black/Wray piece I found; not the one I was looking for, and an excerpt:

First, it is time to stop the foreclosures until the banks and servicers adopt corrective steps, certified as adequate by FDIC, that will prevent all future foreclosure fraud. They must also adopt plans to remedy the injuries their foreclosure frauds have already caused, and assist the FBI, Department of Justice, and legal ethics officials investigations of their officers’ and attorneys’ frauds and ethical violations.

Second, it is time to place the financial institutions that committed widespread fraud in receivership. We should remove the senior leadership of the banks and replace them with experienced bankers with a reputation for integrity and competence, i.e., the honest officers that quit or were fired because they refused to engage in fraud. We should prioritize the receiverships to deal with the worst known “control frauds” among the “systemically dangerous institutions” (SDIs). The SDIs’ frauds and fraudulent leaders endanger the global economy.

http://economics.arawakcity.org/node/788

George Washington:

http://www.washingtonsblog.com/2011/03/top-economists-trust-is-necessary-is.html

Uh-oh; TLTR, I fear; even I don't want to read it for typos; we'll have to live with them. ;o)

OK. I only have a position

Flavius — Tue, 08 Mar 2011 20:19:37 +0000

In reply to I'm not denying the domino

OK. I only have a position about about the domino theory on which we agree.

I don't have one on receivership vs the Paulson/Geithner solution because I simply don't know enough. So I'll withdraw and read on with interest.

Well there are a couple of

Obey — Tue, 08 Mar 2011 19:44:58 +0000

In reply to Beginning in Fall 2008 I have

Well there are a couple of little glimmers of hope here in Europe, imho. the tax on size in the UK and the regulatory zeal around the BofE, and Sarkozy's talk of a tobin tax. It's just a foot in the door, but it will be useful when one or another of the big European banks go under, as seems likely.

As for self-regulation...? Fat chance. I get the impression they all feel quite vindicated in their risk management. After all, they're still standing. And here in Switzerland, the worst of them all - UBS - thinks of the cushy bailout they got as ultimately a testament to their smarts and talent in negotiating a sweet deal. I.e. just another great business decision...

Like I've said a few times:

sociopaths.

I'm not denying the domino

Obey — Tue, 08 Mar 2011 19:31:59 +0000

In reply to I've drunk the cool aid.I

I'm not denying the domino theory of mega bank failures. If any of the big players were allowed to fall, they all would fall. I just don't think putting them into receivership would have had any significant adverse effect on the broader economy. Quite the contrary - the government could have ensured that they expand rather than contract their loan book as they were nationalized, and/or break them up into bad-bank good-banks so that the healthy part of the bank continues to function. The current lumbering pack of zombie banks is the worst of all outcomes.

I'm close to the end of The

Beetlejuice — Tue, 08 Mar 2011 18:45:03 +0000

In reply to Too Big To Save

I'm close to the end of The 13 Bankers and all I can say is our current Congress is the best legislative body money can buy.

What's repeated thru out the book is subtle references to what was brought out in the initial pages. Both Jefferson and Jackson opposed a central bank based on their belief it could undermine the government. In fact, Jackson locked horns with the 2nd central bank. The bank was giving campaign contributions to members of Congress to ensure they passed legislation favorable to the bank over the objections of the Executive office, being Jackson. And it's still the game today. One would think the Treasury would have enough on the ball to keep tabs on both Congress and the banks, but Congress controls the purse strings and chokes off any government initiative that may cause harm to the bank's bottom line.

I've drunk the cool aid.I

Flavius — Tue, 08 Mar 2011 18:04:00 +0000

In reply to Beginning in Fall 2008 I have

I've drunk the cool aid.

I accept the consensus that each failed bank would bring down counter parties until the entire international banking system would fail. Followed by corporations first those with commercial paper,coming through then those with maturing debt issues, then by those simply unable to collect trade payables . So the real economy would follow the financial community into a shut down.

I can't be sure of that. I am sure it wasn't worth taking the risk.

Oh, yeah. Definitely

EmmaZahn — Tue, 08 Mar 2011 17:35:36 +0000

In reply to I suspect things would be

Oh, yeah. Definitely different.

We would all have been better off long-term with a direct assault on them. I wish someone would have called their bluff. But no one did and so here we are back in the same situation again.

Just because I do not agree with Summers or Johnson does not mean I agree with TARP.