Within days of some terrorists flying some airplanes into buildings our government leapt into action passing legislation to restrict American freedoms so fast it is obvious that all of this legislation was sitting on the shelf waiting for the opportunity to be implemented. The Patriot Act was obviously a pre-conceived piece of legislation that had broad backing of industry and right wing elements of the US government for some time. It passes with flying colors, even overwhelmingly by the more liberal members of the government who bent over and allowed themselves to be bullied into passing the legislation less they be deemed “un-patriotic or un-American” during this knee-jerk time of American history.
Yet TWO YEARS after the first major financial firm’s collapse (Bear Sterns) and 18 months after the rest of the market’s collapse as a result of what could be called “financial terrorism”, the domination of the market by unregulated risky and toxic financial derivatives traded, financed and created by unregulated and regulated financial institutions alike, with abandon and with no sense of respect or responsibility to the financial system or lives of people who would be affected by their reckless actions, we have yet to have ONE IOTA of regulation passed to address this run-amok unregulated toxic industry.
In fact, this very industry is betting Billions of Dollars with financial derivatives designed to “pay out” if the finances of the nation of Greece collapses. Yet no-one is asking, “Who is going to pay out on these derivatives if Greece truly collapses and will the actions of these gamblers in Greece’s debt create winners and losers and another market tsunami that will inevitably result in Greece becoming the first domino in a cascade of nations which will ultimately have their finances also collapse under the pressure of these financial speculators?”
It seems clear to me who “owns” Washington and it is not the citizens of the United States, but the “corporate super citizens” who have our government in their pockets and have just been give the green light to spend an unlimited amount of money buying and selling the individual legislators who make the rules in this nation.
I don’t give a damn about the finances of Greece. I do give a damn about the lack of governance in the US and the rising fascist, corporate domination of the structure with which Americans now live and will be increasingly living under in the future.
I also have a desire to completely do away with “unregulated markets” of all kinds and “unregulated financial derivatives” of all kinds. In a world with over 6 Billion people, highly interconnected and mutually destined to live the same fate, there no longer exist any positive human element to Trillions of Dollars swathing around betting for or against any asset class or created asset class with the sole objective of raking as much money out of the global financial system as possible irrespective of the consequences of their actions on the lives, destinies or wellbeing of the human beings their actions touch.
These unregulated institutions function outside of the regulatory structures of any nation, global governing body, or regulated institutions, answer to no person or persons in any jurisdiction with which they operate and seek to make money irrespective of their impact on the human beings they may have positively or negatively. They need to be eliminated or regulated. They need all funding by regulated financial institutions to be terminated. Their products need to be liquidated. We need them no more.
Showing posts with label financial bailout. Show all posts
Showing posts with label financial bailout. Show all posts
Sunday, February 28, 2010
Sunday, October 25, 2009
The Financial "Crises" is Not Over
I have been reading my weekend section of the FT this afternoon and came across two unrelated articles that struck a chord with me with respect to the financial markets. Some items that are notable, 1) Treasuries, since the credit crises, have been the only acceptable collateral in the "repo market" 2) There are still non financial companies out there that are writing off huge losses in derivative "investments" that are way out of proportion to the revenues they had as functioning companies, making me think more non-financial companies than I originally thought got hood-winked by Wall Street into derivative positions way out of line with the regular functioning of their business.
So what does this mean?
First, the huge demand for US Government debt over the last year, despite a normal economic view that any nation running the kinds of reckless borrowing and printing of money the US has been would make rational investors run the other way, is a direct response to the fact that only treasures are being accepted as collateral in the global credit markets and the US Dollar is "reserve currency" by default. Hence, there is a very large demand component to treasuries that is unrealistic, unsustainable, unhealthy and explainable only within the context of the crash of the credit markets. Low US interest rates cannot be sustained much longer without GREAT cost to our financial system, as we know it. The Trillions of dollars in subsidies being offered by the Fed to the credit markets make the billions of dollars of reckless subsidies to say gasoline in Iran or bread in Egypt look like paltry handouts, yet those subsidies are often referred to as dangerous to those countries balance of payments and government debt ratios. Go figure.
Second, after seeing companies like chicken producer Pilgrims Pride go bankrupt largely due to derivative contracts in corn which went bad costing them millions, I realized that real companies that produced real products were pulled into the derivative markets (along with investment funds like Harvard University's Endowment) with promises from Wall Street Firms to "hedge" their operations at levels that were completely out of context with the needs to do so in their every day operations. So when I read that GM, the Bankrupt now Government owned US Automaker, just pumped $413 Million (Won 491 Billion) into it's Korean joint venture with Daewoo, called GM Daewoo, after GM Daewoo had it's "entire equity base (cash) wiped out by Won 2.3 Trillion of currency derivatives losses", I realized this problem has not gone away.
So how do these two seemingly unrelated articles jog my brain? Well, first, I have presumed for some time that the increasingly oligopolistic nature of American business does some things well. They become extremely inefficient and difficult to manage but hugely profitable due to their purchasing power with very large scale orders(evident by the ability of these companies to lay huge amounts of their work force and turn out higher profits with lower revenues); they are entirely responsible for driving manufacturing out of the US with their desire to constantly lower the cost of inputs to meet needs for quarterly profits; they become faceless, unwieldy and largely wrapped up in getting as large as possible by squeezing out any and all competitive elements while colluding with the other oligopoly members on pricing; the collective "tax" these companies call "profits" begin to look like a tax because no longer are these companies benefiting their many individual owners and pools of investors like when there are many players of all sizes in an industry, but these companies start to look like mini socialist governments, taxing their "customers" with fixed prices, lying to, cheating and outright stealing from their customers (at least 1 out of every 3 grocery store visits I make I have to return and get a refund on an item that was overcharged at the register); paying exorbitant salaries to the "apparatchik" (crony insiders) selected to run the organizations; paying their "workers" lower and lower wages and most importantly, generating HUGE amounts of cash which then must be "invested"; the cash generated is so large only Wall Street firms have the wherewithal to handle the money.
This is where Wall Street and Hedge Funds come in. Where does all the cash generated by these oligopoly companies go? It appears much of it found it's way into the same esoteric products that financial and insurance companies were buying and selling which means huge losses on the books of some companies. This is truly where Wall Street hits Main Street and it is only possible when Main Street has become an oligopolistic town with profits large enough to play with the big boys in New York and Off Shore. Now even these huge companies, which have shown a great penchant for halting internal "investment" and "growth plans", cutting dramatically their "inventory levels", laying off huge numbers of employees and hence creating very large cash balances, need to "play it safe" and buy treasuries as there is uncertainty in the economy and lack of any other "instrument" to invest in due to the collapse in the credit markets. The lack of liquidity from “productive industry” (those who make and sell tangible products) in the US is further exasborating the crises and forcing the Fed to offer more support then would otherwise have been needed.
I sense a great deal of resentment building towards the dollar and treasury markets by countries forced to continue to hold both when they know it is no longer economically wise to do so.
I sense companies are going to continue to accumulate cash and hence buy treasuries as a cushion to a potential continued decline in the economy.
I assume there are still huge amounts of esoteric derivative products on the books of many a financial institution (and otherwise) that are basically worthless but being recorded as having value to avoid a collapse in the institutions.
I assume everyone knows these worthless assets are worthless but have stopped pressing for more collateral because there is no more collateral so nobody sees any benefit in continuing to bleed a turnip dry since losses on one party's books simply reverberate into losses in everyone else’s as well.
I figure, there is no near term end to the financial crises because it will take years for all of the worthless paper to be "wound down" so to speak while companies try to "earn" their way out of the financial mess.
What does all this mean? Is somebody going to blink? The markets now only have to drop 100 points for every man in Washington to find a podium and announce a new "program" or "reinforce their support" of the credit markets or "ensure no change in liquidity or interest rates" or whatever to "calm" the markets so they can continue their rise straight out of the stratosphere. It used to take Paulson 300 points to do the same. One needs little more evidence that the smoke screen being sold the public by the media conglomerates and PR spinsters in Washington is a total lie.
The global financial system is still a complete mess. Wall Street is celebrating every time a company "beats" some arbitrary analyst "prediction" of how much earnings and profits would drop over last year. Yes "drop" over last year. So if my profits are only down 18% and revenues down 10% when the street was looking for profits down 20% and revenues down 12% then my stock is going to a 52 week high! Yes I can celebrate that my stock is worth as much as in early 2008 even though my company is doing 30% or so less business than January 2008.
This is all liquidity driven. I love seeing the CNBC pundits all acting like everything is normal again. They talk stocks and earnings like the credit crises never happened. There is no need to discuss the fact that the Fed IS the Residential Mortgage Market, Commercial Mortgage Market, Consumer Credit Market, Student Loan Market, Auto Finance Market not to mention the other myriad of "support systems" in place to keep other markets from crumbling. The interest rates we are all paying on our credit cards, mortgages, and auto loans are all massively subsidized right now by the Fed and FDIC. The rates are COMPLETELY divorced from "market reality" which to an economic minded person like me no longer resembles "reality" at all.
Companies still being brought to their knees by bad derivative bets; trillions of dollars in "assets" on the books of thousands of banks, companies and hedge funds that are in the best case scenario worth $.30 on the dollar; hundreds of billions of dollars in government debt being sold every couple weeks by the Fed to finance the massive stimulus and deficit spending by the government being soaked up by institutions with no where else to turn to put their dollars; commodity prices completely divorced from economic demand realities; stock market valuations 20-40% elevated from fundamental realities, what does this mean?
Simple, we are seeing global inflation of ALL dollar-based assets, which is reflecting as we speak the massive loss in purchasing power of the dollar. Yet the dollar itself is only marginally off against a basket of currencies from last year's dramatic fall then rise again and the Fed is telling us that consumer prices in the US are stable to falling. How much longer can the relative value of the US Dollar maintain stability while the amount of dollars needed to purchase all commodities priced in dollar continues to rise?
If the US economy faces a second dip and other countries economies follow, especially the few developing nations that have held up relatively well during this latest recession, the underlying demand for commodities priced in dollars would drop further putting downward pressure on the price, but will this result in an actual drop in the dollar price of these assets or will the dollar price for commodities simply continue to rise as institutions increasingly seek to get out of their dollars by buying other assets?
This is the big money question. How far will the equity markets rise before someone decides to take his or her cash out in a big way? With all these dollars floating around now and the obvious inflation in the price of every global asset priced in dollars, the absolute dire state of the credit markets has held the Fed's hand in removing liquidity and getting interest rates back to normal levels. Where is the break point?
Removing liquidity will force reckoning by all those firms with worthless assets on their books and could put credit markets back in crises mode. Not removing liquidity is causing the inflation of all dollar-based assets globally. We are paying a huge, unrecognizably destructive price for being both the global reserve currency and the source of the global financial crises. We screwed ourselves and everyone else and there is no turning back. By not allowing the markets to work out the derivative driven credit crises, not matter how immediately painful it would have been, we have simply delayed the inevitable market correction while simultaneously created a new asset bubble fed by to many dollars floating around. The next move will be a double whammy. I cannot wait.
So what does this mean?
First, the huge demand for US Government debt over the last year, despite a normal economic view that any nation running the kinds of reckless borrowing and printing of money the US has been would make rational investors run the other way, is a direct response to the fact that only treasures are being accepted as collateral in the global credit markets and the US Dollar is "reserve currency" by default. Hence, there is a very large demand component to treasuries that is unrealistic, unsustainable, unhealthy and explainable only within the context of the crash of the credit markets. Low US interest rates cannot be sustained much longer without GREAT cost to our financial system, as we know it. The Trillions of dollars in subsidies being offered by the Fed to the credit markets make the billions of dollars of reckless subsidies to say gasoline in Iran or bread in Egypt look like paltry handouts, yet those subsidies are often referred to as dangerous to those countries balance of payments and government debt ratios. Go figure.
Second, after seeing companies like chicken producer Pilgrims Pride go bankrupt largely due to derivative contracts in corn which went bad costing them millions, I realized that real companies that produced real products were pulled into the derivative markets (along with investment funds like Harvard University's Endowment) with promises from Wall Street Firms to "hedge" their operations at levels that were completely out of context with the needs to do so in their every day operations. So when I read that GM, the Bankrupt now Government owned US Automaker, just pumped $413 Million (Won 491 Billion) into it's Korean joint venture with Daewoo, called GM Daewoo, after GM Daewoo had it's "entire equity base (cash) wiped out by Won 2.3 Trillion of currency derivatives losses", I realized this problem has not gone away.
So how do these two seemingly unrelated articles jog my brain? Well, first, I have presumed for some time that the increasingly oligopolistic nature of American business does some things well. They become extremely inefficient and difficult to manage but hugely profitable due to their purchasing power with very large scale orders(evident by the ability of these companies to lay huge amounts of their work force and turn out higher profits with lower revenues); they are entirely responsible for driving manufacturing out of the US with their desire to constantly lower the cost of inputs to meet needs for quarterly profits; they become faceless, unwieldy and largely wrapped up in getting as large as possible by squeezing out any and all competitive elements while colluding with the other oligopoly members on pricing; the collective "tax" these companies call "profits" begin to look like a tax because no longer are these companies benefiting their many individual owners and pools of investors like when there are many players of all sizes in an industry, but these companies start to look like mini socialist governments, taxing their "customers" with fixed prices, lying to, cheating and outright stealing from their customers (at least 1 out of every 3 grocery store visits I make I have to return and get a refund on an item that was overcharged at the register); paying exorbitant salaries to the "apparatchik" (crony insiders) selected to run the organizations; paying their "workers" lower and lower wages and most importantly, generating HUGE amounts of cash which then must be "invested"; the cash generated is so large only Wall Street firms have the wherewithal to handle the money.
This is where Wall Street and Hedge Funds come in. Where does all the cash generated by these oligopoly companies go? It appears much of it found it's way into the same esoteric products that financial and insurance companies were buying and selling which means huge losses on the books of some companies. This is truly where Wall Street hits Main Street and it is only possible when Main Street has become an oligopolistic town with profits large enough to play with the big boys in New York and Off Shore. Now even these huge companies, which have shown a great penchant for halting internal "investment" and "growth plans", cutting dramatically their "inventory levels", laying off huge numbers of employees and hence creating very large cash balances, need to "play it safe" and buy treasuries as there is uncertainty in the economy and lack of any other "instrument" to invest in due to the collapse in the credit markets. The lack of liquidity from “productive industry” (those who make and sell tangible products) in the US is further exasborating the crises and forcing the Fed to offer more support then would otherwise have been needed.
I sense a great deal of resentment building towards the dollar and treasury markets by countries forced to continue to hold both when they know it is no longer economically wise to do so.
I sense companies are going to continue to accumulate cash and hence buy treasuries as a cushion to a potential continued decline in the economy.
I assume there are still huge amounts of esoteric derivative products on the books of many a financial institution (and otherwise) that are basically worthless but being recorded as having value to avoid a collapse in the institutions.
I assume everyone knows these worthless assets are worthless but have stopped pressing for more collateral because there is no more collateral so nobody sees any benefit in continuing to bleed a turnip dry since losses on one party's books simply reverberate into losses in everyone else’s as well.
I figure, there is no near term end to the financial crises because it will take years for all of the worthless paper to be "wound down" so to speak while companies try to "earn" their way out of the financial mess.
What does all this mean? Is somebody going to blink? The markets now only have to drop 100 points for every man in Washington to find a podium and announce a new "program" or "reinforce their support" of the credit markets or "ensure no change in liquidity or interest rates" or whatever to "calm" the markets so they can continue their rise straight out of the stratosphere. It used to take Paulson 300 points to do the same. One needs little more evidence that the smoke screen being sold the public by the media conglomerates and PR spinsters in Washington is a total lie.
The global financial system is still a complete mess. Wall Street is celebrating every time a company "beats" some arbitrary analyst "prediction" of how much earnings and profits would drop over last year. Yes "drop" over last year. So if my profits are only down 18% and revenues down 10% when the street was looking for profits down 20% and revenues down 12% then my stock is going to a 52 week high! Yes I can celebrate that my stock is worth as much as in early 2008 even though my company is doing 30% or so less business than January 2008.
This is all liquidity driven. I love seeing the CNBC pundits all acting like everything is normal again. They talk stocks and earnings like the credit crises never happened. There is no need to discuss the fact that the Fed IS the Residential Mortgage Market, Commercial Mortgage Market, Consumer Credit Market, Student Loan Market, Auto Finance Market not to mention the other myriad of "support systems" in place to keep other markets from crumbling. The interest rates we are all paying on our credit cards, mortgages, and auto loans are all massively subsidized right now by the Fed and FDIC. The rates are COMPLETELY divorced from "market reality" which to an economic minded person like me no longer resembles "reality" at all.
Companies still being brought to their knees by bad derivative bets; trillions of dollars in "assets" on the books of thousands of banks, companies and hedge funds that are in the best case scenario worth $.30 on the dollar; hundreds of billions of dollars in government debt being sold every couple weeks by the Fed to finance the massive stimulus and deficit spending by the government being soaked up by institutions with no where else to turn to put their dollars; commodity prices completely divorced from economic demand realities; stock market valuations 20-40% elevated from fundamental realities, what does this mean?
Simple, we are seeing global inflation of ALL dollar-based assets, which is reflecting as we speak the massive loss in purchasing power of the dollar. Yet the dollar itself is only marginally off against a basket of currencies from last year's dramatic fall then rise again and the Fed is telling us that consumer prices in the US are stable to falling. How much longer can the relative value of the US Dollar maintain stability while the amount of dollars needed to purchase all commodities priced in dollar continues to rise?
If the US economy faces a second dip and other countries economies follow, especially the few developing nations that have held up relatively well during this latest recession, the underlying demand for commodities priced in dollars would drop further putting downward pressure on the price, but will this result in an actual drop in the dollar price of these assets or will the dollar price for commodities simply continue to rise as institutions increasingly seek to get out of their dollars by buying other assets?
This is the big money question. How far will the equity markets rise before someone decides to take his or her cash out in a big way? With all these dollars floating around now and the obvious inflation in the price of every global asset priced in dollars, the absolute dire state of the credit markets has held the Fed's hand in removing liquidity and getting interest rates back to normal levels. Where is the break point?
Removing liquidity will force reckoning by all those firms with worthless assets on their books and could put credit markets back in crises mode. Not removing liquidity is causing the inflation of all dollar-based assets globally. We are paying a huge, unrecognizably destructive price for being both the global reserve currency and the source of the global financial crises. We screwed ourselves and everyone else and there is no turning back. By not allowing the markets to work out the derivative driven credit crises, not matter how immediately painful it would have been, we have simply delayed the inevitable market correction while simultaneously created a new asset bubble fed by to many dollars floating around. The next move will be a double whammy. I cannot wait.
Thursday, September 24, 2009
AIG and Attitude
I came across this comment from "White House Economist" off the Dow Jones Newswire today referring to an article in the Washington Post.
I find it objectionable that AIG has a new CEO with anywhere near the attitude he has. I don't care if the guy thinks Washington is clueless about business or esp. running his business. On this front he is more than likely correct. It is very unfortunate we (the American Taxpayer) own 80% of the blasted company. I would prefer we own 0% and have never owned any at all and don't give a darn if AIG would have imploded. Personally I think it did not implode because of the number of "well connected" wealthy bank running CEO's and "investors" that would have lost a fortune if it did called their "friends" running the Treasury and said, "Bail out AIG or we will loose a fortune". So the American Taxpayer paid to make sure that Goldman Sachs can pay it's employees $700,000 in bonuses each this year.
Besides the fact this is the biggest financial crime ever perpetrated against the American people, mind you done without any approval from our impotent legislators, the guys running the show at AIG should have better taste than say such things in public about the idiots in Washington. I mean how many people in the entire Government are qualified to run a sprawling 100 + country "insurance" operation, let alone all the other crazy divisions they own? There are not many people in the world that understand AIG enough to "run" it.
Obviously Hank Greenberg was running an operation with "Enron" financing. It has been reported he was moving money around to skirt the US regulators (Partly allowed because of the arcane and completely outdated insurance regulation in the US which is still state by state and completely out of touch with the fact that the industry is national and international in scope) and pad his accounts to hide the billions of dollars in risk and losses he began to accumulate when they kicked him out over one reinsurance deal which was caught.
Hank still gets "answers" when he make calls to Washington and as far as I can tell he is a one man lobbying effort right now to "save" his old company. He has said himself "all of his wealth" is tied up in AIG shares (though he sole enough to pay some bills) and he obviously thinks he can influence "Washington" to loosen up credit terms and allow AIG five years or so to "unwind" loosing positions and rescue the company's balance sheet.
It is not going to happen. AIG should be "gone" as we know it and unfortunately, not unlike the "bad banks" the Chinese created after bailing out their banking industry about a decade ago, the American Taxpayers will NEVER see the $160 billion sunk into the company. This is reality. But the bankers, hedge funds and other "investors" that benefited from the taxpayer bailout "got theirs" and they are living large off what is left of the crumbled institution's lousy contracts.
Shame. Mr. Robert Benmosche should be fired. AIG wound down, sooner rather than later.
I find it objectionable that AIG has a new CEO with anywhere near the attitude he has. I don't care if the guy thinks Washington is clueless about business or esp. running his business. On this front he is more than likely correct. It is very unfortunate we (the American Taxpayer) own 80% of the blasted company. I would prefer we own 0% and have never owned any at all and don't give a darn if AIG would have imploded. Personally I think it did not implode because of the number of "well connected" wealthy bank running CEO's and "investors" that would have lost a fortune if it did called their "friends" running the Treasury and said, "Bail out AIG or we will loose a fortune". So the American Taxpayer paid to make sure that Goldman Sachs can pay it's employees $700,000 in bonuses each this year.
Besides the fact this is the biggest financial crime ever perpetrated against the American people, mind you done without any approval from our impotent legislators, the guys running the show at AIG should have better taste than say such things in public about the idiots in Washington. I mean how many people in the entire Government are qualified to run a sprawling 100 + country "insurance" operation, let alone all the other crazy divisions they own? There are not many people in the world that understand AIG enough to "run" it.
Obviously Hank Greenberg was running an operation with "Enron" financing. It has been reported he was moving money around to skirt the US regulators (Partly allowed because of the arcane and completely outdated insurance regulation in the US which is still state by state and completely out of touch with the fact that the industry is national and international in scope) and pad his accounts to hide the billions of dollars in risk and losses he began to accumulate when they kicked him out over one reinsurance deal which was caught.
Hank still gets "answers" when he make calls to Washington and as far as I can tell he is a one man lobbying effort right now to "save" his old company. He has said himself "all of his wealth" is tied up in AIG shares (though he sole enough to pay some bills) and he obviously thinks he can influence "Washington" to loosen up credit terms and allow AIG five years or so to "unwind" loosing positions and rescue the company's balance sheet.
It is not going to happen. AIG should be "gone" as we know it and unfortunately, not unlike the "bad banks" the Chinese created after bailing out their banking industry about a decade ago, the American Taxpayers will NEVER see the $160 billion sunk into the company. This is reality. But the bankers, hedge funds and other "investors" that benefited from the taxpayer bailout "got theirs" and they are living large off what is left of the crumbled institution's lousy contracts.
Shame. Mr. Robert Benmosche should be fired. AIG wound down, sooner rather than later.
Thursday, August 27, 2009
Fed Urges Secrecy on Banks in Bailout Programs
The out right insult of the title here, the headline in a Reuters article today is indicative of how bad the folks running the Fed are. From their insistence as far back as 2006 that the Trillions of dollars in Insurance Protection floating on unregulated markets would not harm the greater economy to their indiscriminate bail out of multiple unregulated companies while allowing many of them to become banks under accelerated application processes to their obvious ignorance of market mechanisms whereby allowing savvy institutions to rake in Billions in profits from the various Fed programs to float debt and buy back debt (print money) to the absolutely unconscionable allowing of financial and non-financial firms to float Private Debt with direct Public Backing through the FDIC to the complete take over of the consumer and mortgage credit markets to the tune of a couple Trillion Dollars...
Now they want total secrecy. The Fed is paranoid and incompetent and they are "spending" taxpayer money with abandon (flooding the banks with cash through buybacks of debt) while supporting without oversight firms they deem "to big to fail" at the same time they and the FDIC continue to encourage the building of more institutions that are "to big to fail" all the while inviting "private equity" and other unregulated non "financial" firms to buy into their tottering financial system.
Where does this end??? I have had it with these guys and our legislators are complete incompetent, impotent wimps with no backbone to deal with the Fed. Where are they in all this discussion?
From the Article
Give me a break. At this point does it matter? We all know the firms that almost went under, the ones that are technically insolvent and only operating because of the accounting changes instituted early this year. There is no "news" to be revealed in disclosing this other then for the Citizens of this Nation to have the right to see how the Washington Financial Elite bailed out the Wall Street Financial Elite after their House of Cards came crumbling down.
Give me a BREAK!!
Now they want total secrecy. The Fed is paranoid and incompetent and they are "spending" taxpayer money with abandon (flooding the banks with cash through buybacks of debt) while supporting without oversight firms they deem "to big to fail" at the same time they and the FDIC continue to encourage the building of more institutions that are "to big to fail" all the while inviting "private equity" and other unregulated non "financial" firms to buy into their tottering financial system.
Where does this end??? I have had it with these guys and our legislators are complete incompetent, impotent wimps with no backbone to deal with the Fed. Where are they in all this discussion?
From the Article
* Fed urges judge not to enforce order pending appeal
* Banks say disclosure could cause loss of confidence
By Jonathan Stempel
NEW YORK, Aug 27 (Reuters) - The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy....
Preska (Chief Justice Loretta Preska) said the Fed failed to show that revealing the names would stigmatize the banks and result in "imminent competitive harm." The Fed asked the judge not to require disclosure while it readies an appeal.
"Immediate release of these documents will cause irreparable harm to these institutions and to the board's ability to effectively manage the current, and any future, financial crisis," the central bank argued.
It added that the public interest favors a delay, citing a potential for "significant harms that could befall not only private companies, but the economy as a whole" if the information were disclosed.
Give me a break. At this point does it matter? We all know the firms that almost went under, the ones that are technically insolvent and only operating because of the accounting changes instituted early this year. There is no "news" to be revealed in disclosing this other then for the Citizens of this Nation to have the right to see how the Washington Financial Elite bailed out the Wall Street Financial Elite after their House of Cards came crumbling down.
Give me a BREAK!!
Monday, June 22, 2009
Mr. William Poole's Comment on Goldman
Funny, the former president of the St. Louis Fed, William Poole, makes comment about Goldman's raking AIG over the coals before their collapse. His comment:
I have been arguing for years now that the reason the credit markets and the hugely profitable unregulated, opaque derivative markets have not been regulated is because those that have a hand in regulating were just making to much money off the same markets they supposedly regulated to do anything about it. Look at the impotent SEC, Fed, Treasury, Legislative bodies and White House over last 8 years and you get the picture.
Now, for someone who is no longer in their highly powerful and influential position to come out and say, "Hey, I know I was in government when all this was happening and I know we did not do shit about it, but that is tough cause it's nobody else's responsibility either." is kind of a joke.
It’s not the responsibility of any private firm to determine what the public interest is -- that’s why we have a government.Strange when someone who basically resigned because of his interest in Goldman was seen as a complete contradiction to his job "protecting" the financial system, hence the citizenry, would make such a comment.
I have been arguing for years now that the reason the credit markets and the hugely profitable unregulated, opaque derivative markets have not been regulated is because those that have a hand in regulating were just making to much money off the same markets they supposedly regulated to do anything about it. Look at the impotent SEC, Fed, Treasury, Legislative bodies and White House over last 8 years and you get the picture.
Now, for someone who is no longer in their highly powerful and influential position to come out and say, "Hey, I know I was in government when all this was happening and I know we did not do shit about it, but that is tough cause it's nobody else's responsibility either." is kind of a joke.
Wednesday, February 11, 2009
Sir Lloyd Blankfein calls for More Controls?
Are you kidding? Mr. Blankfein, head of Goldman Sachs, was quoted in the Financial Times saying almost exactly (one word exception, key word of course) what I have been saying for some time. Here is the quote:
This completely blew me away. I read it like three times, then read the entire article over again. My statement used many times, though more harsh, read something like this:
OK so it is a little different but if you just changed the word "some" in Blankfein's quote to "the same" and added the words "as other regulated financial institutions" to the end of the sentence you would have what I have been saying.
The idiots that run our financial world are almost there. Maybe some day they will "get it".
Read article here (subscription may be required)
"All pools of capital that depend on the smooth functioning of the financial system and are large enough to be a burden on it in a crisis should be subject to some degree of regulation."
This completely blew me away. I read it like three times, then read the entire article over again. My statement used many times, though more harsh, read something like this:
In a world of over 6 billion people, having a couple trillion dollars of unregulated money leveraged 10 to one or greater doing everything they can on a global scale to earn 30% on their money with no allegiance to any nation, no regulatory authority to answer to and no rules on what they can or cannot buy, sell, create or destroy (not to mention being serviced and lent to by regulated entities) no longer serves the human race any useful purpose, period.
OK so it is a little different but if you just changed the word "some" in Blankfein's quote to "the same" and added the words "as other regulated financial institutions" to the end of the sentence you would have what I have been saying.
The idiots that run our financial world are almost there. Maybe some day they will "get it".
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