sdtfs, yeah, pirates all right. I was somewhat relieved in early 2005 when the guidance for home equity was issued and other lending problems were being discussed ... and then nothing. It was very frustrating.
That photo, the biographical sketches for each participant and current employers should be widely distributed. A thorough public shaming might not accomplish much, but perhaps we can begin to hold people accountable for their professional failings. If we can force them to retire from public life then at least they will not screw us again.
"We have so many regulators...who makes sure the regulators are doing their job?"
Some members of Congress actively worked to intimidate regulators. Does anyone remember the hearings where ol' Barney was beating up on the guys who were supposed to be regulating Fan and Fred?
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
We have so many regulators...who makes sure the regulators are doing their job?
In real life: The Regulators did consist of Dick Brewer, Billy the Kid, Doc Scurlock, Charlie Bowdre, Jose Chavez y Chavez and Dirty Steve, but there were,...
I attended and worked at the closing of Superior Bank mentioned in the article. Once the bank failed the OTS handed over the investigation to the FDIC. In addition, the FDIC's Office of Inspector General conducted its on investigation and published a report. I assisted the OIG during this process. When an investigation is handed over to another agency to handle the primary regulatory moves on so to speak. It would be helpful if the primary regualtor had a role in the investigation of the failed bank rather than leave it up to the FDIC to sort things out afterwards. The OTS basically washed it hands of Superior once it failed. FDIC is left to clean it up and OTS never learned its lessons because it did not participate in the investigations after failure. A joint investigation by the primary regulator and FDIC would require that the primary regulator learn better lessons from its failures.
FFDIC(Very Good) writes:
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
FFDIC | 11.23.08 - 2:29 am | #
This photo from 2003 shows two regulators: John Reich (then Vice Chairman of the FDIC and later at the OTS) and James Gilleran of the Office of Thrift Supervision (with the chainsaw) and representatives of three banker trade associations: James McLaughlin of the American Bankers Association, Harry Doherty of America's Community Bankers, and Ken Guenther of the Independent Community Bankers of America.
Morbid curiosity compels me to wonder where their investments were. After all, Karma sometimes comes as a boomerang. Where are they today - anyone know?
Combine this WaPo story with NY Times story on "Citi's Rush to Risk".
Many of the architects of the "de-regulated" bubble and now the bailouts are coming back in the next Obama administration. Bob Rubin as major advisor is one of the key architects of the Citi failure and Clinton's Treasury Secretary who championed all the deregulation and derivatives non-regulation is Obama's advisor. Larry Summers who carried the water after Rubin is to be head of White House economic policy. Tim Geithner Mr. Handout of Taxpayer funds is a protege of Rubin and Summers is tipped to be Treasury secretary.
It looks like major cover-up of all the crookedness will be in place and even more FUBAR!
The decider decided, and now this sucker is going down.
Bush finally achieved what he has been attempting to find his entire life - a situation where no one could rescue him from the consequences of his own decisions and actions.
Sink or swim does have a certain draw back - someone always rescues the sinking non-swimmer.
Not this time.
Bush's place in the history of America is now secure, in a way that his father's never will be.
It is sad and unfortunate that there is and will be no accountability for such intentionally reckless behavior on the part of regulators. These regulators openly looked the other way; however the only thing that will happen to them is ... nothing. What is worse, they may even get jobs, clients, and paid speaking gigs for having been in the appointed postions they were.
Just keep on pumping the monetary base at annualized 1,000% and things will be alright. Fill up the coffers of Wall Street Banks and let them speculate in natural gas when it gets really cold in January. This is it folks. This is it.
It was a big party and the entire country was invited.
Borrow, borrow, blow the bubble. We can borrow our way to prosperity, and if you don't buy now you'll be priced out forever.
When the economy was getting juiced each year with hundreds of billions of sterilzed, recycled investments from China, Japan, and our OPEC friends, taking the punchbowl away before it got too late would have been a very difficult political act.
It's one thing to let the party go on, but another class entirely to intervene. Given that bad consequences would follow from either action, it's always better politically to whistle past the graveyard and hope things turn out, or in the worst case work on the alibi, or misdirection of blame (eg. it's Barney Frank's and his gay lover's fault).
I think this is the first time I have seen you state clearly where you stood and how you felt about the madness that engulfed the home lending industry for the last few years, and that you attempted to intervene with the regulators.
Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
I'd be very curious to hear any diagnosis you have. (I am skeptical about theories ascribing it mostly to individual regulators' failures. Haven't regulators always been pushed toward looser lending by the same forces - Congress and the White House and bankers? What changed? I am beginning to wonder if the baby boomer life cycle playing out might not be the biggest underlying force, but my grasp of economics and finance and politics is not up to nailing that down one way or another.)
The study of economics without a good grasp of Zionism is analogous to the study of astronomy without an understanding of the gravitational pull of black holes.
So we are left with either an improbable brilliant conspiracy or unbelievable stupidity. One thing that gets my tin foil hat on was that addendum to the Heroes Act bill that will not let people leave the country with their money without paying capital gains on all their assets. Who was clamoring for that? Why was it on on congresses radar? Do they know what is coming and expected people to flee in front of the big dollar revaluation? and who is they?
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
FFDIC | 11.23.08 - 2:29 am
Can you shed any light on whether W's brother Neil had anything, anything at all to do with thrifts? Whether as owner or board member or consultant, whatever?
I'm glad people are starting to realize this problem lies at the feat of Bush and Cheney. The right wing talk has been about how the problem at its roots, was caused by policies enacted during the Carter administration.
Let's see, we've had a republican president for 20 of the past 28 years since then and the pubs did nothing to resolve this.
It's pretty obvious that after 911, the pubs did everything they could to get the economy going via easy money. I can't blame them for a certain amount of this since we were in a recession, but their anti-regulatory ideology got out of control.
I have two brothers who are hard core right wingers and have had to listen to years of them echoing right wing sentiments of how their economic philosophy is far superior to the liberals and I have finally shown them how it's the pubs fault we're in this mess. They are schocked and have come to conclusion that it's Bush's fault but not the republicans. If Bush had been a true republican, everything would be OK. Even the pubs are making Bush a patsie. No wonder his approval ratings are in the teens.
Now I understand why we did so well in the USSR. We had a gazillion pages of rules and regulations. Thank you CR!
P.S. Just look at Fannie after ~80 years of gov. regulations.
P.P.S. Somehow this country became nr 1 in the world when practically there were no gov. rules and regulations. Strange, isn't it?
The problem in general is Bureaucrats normally act in collective stupidity. An inverse of the "invisible hand". When they micromanage, they don't reduce risk as much as they simply drag things or require extra paperwork.
Most of what we see today was in a post-SarbOx world. Lots and lots more paper. But at least the failure is well documented! And wasn't that too passed around the same time? And were any risks aligned so that failures would be on the risk-taker's heads? That is probably the best measure of socialism - not profits for risk-takers, but if the risk-takers suffer the losses themselves. e.g. when Meriweather and Scholes are working at Taco Bell instead of founding yet another hedge fund that blows up.
We forget in Russia the Commisars had the special stores and privileges and they were maintained through every failure. Our corporate socialism has the same features. The cutting of red-tape in the photo was not a freeing of the market as much as a grant of privilege. What they were cutting were the penalties for failure and stupidity.
I don't know of any parallel agency that micromanages Credit Unions, but at the same time there aren't a whole lot with problems. But most lend to their community and stuck to the 20% down rule and such.
But again what freedom? If I wanted to open a financial institution, could I without going through all the rules and regulations about who to hire, lend to, report to the government, etc., or did they leave all those in place but "deregulate" only in the sense they allowed huge risks in individual loans like the S&L crisis in the late '80s with commercial loans? So they won't let me actually take a risk running a bank/thrift/etc. anyway I please, nor will they let those who took the utterly stupid risks and blew things up actually feel any pain from their failure.
"Long-term corporate bonds, for example, declined in value by more than 18 percent, on average, through October, according to Ibbotson Associates, a Morningstar subsidiary. Thats worse than any full-year decline on its records going back to 1926.
The rout in corporate bonds, particularly high-yield or junk bonds, has been worse, by some measures, than even the distressed market of the Great Depression, said William H. Gross, co-chief investment officer of the Pacific Investment Management Company. Junk-bond yields which move in the opposite direction of prices recently soared above 20 percent.
These are unheard-of, unseen yields that have never taken place in anyones lifetime, said Mr. Gross, who manages Pimco Total Return, the countrys largest bond fund. Even during the Depression, corporate bonds did not trade at these particular yield spreads, or premiums over yields of comparable Treasuries, Mr. Gross added.
Who owns a lot of corporate bonds?
Pensions, endowments and life insurance companies.
Pensions will blow up later.
It's the life insurance companies you want to worry about next. And soon.
"Now I understand why we did so well in the USSR. We had a gazillion pages of rules and regulations. Thank you CR!"....
there were rules, usually involving bullet through head, or concrete boots, would you prefer those?
"This is a delusion about credit. And whereas from the nature of credit it is to be expected that a certain line will divide the view between creditor and debtor, the irrational fact in this case is that for more than ten years debtors and creditors together have pursued the same deceptions. In many ways, as will appear, the folly of the lender has exceeded the extravagance of the borrower."
Jeffrey Tucker,
He goes on to explain how the debt overhang of the first world war (Housing today?) is the root cause; how society came to accept the idea that if people can't immediately afford stuff, government should provide it; how government came to operate on a bankrupt system; how we came to believe that prosperity came from credit rather than savings; and how the Federal Reserve working with government is the root source of the problem.
Excellent CR! Perhaps you could join he Obama administration to help clean up this mess. (Of course Obama would have to agree to keep your real identity a secret!)
syvanen wrote, That photo, the biographical sketches for each participant and current employers should be widely distributed. A thorough public shaming might not accomplish much, but perhaps we can begin to hold people accountable for their professional failings.
It was an anti-regulatory environment. It is not limited to lending regulations. Same thing was happening in other areas, some of which I have witnessed. The regulators were being herded to spend their time devising plans and regulations that resulted in less regulation. There are even virtually unused models being used, much like the financial engineering models used to show the safety of MBSs etc., that will be shown not to work in the future. These untested unused models are being used to replace regulation and common sense. The federal regulators were not listening to anyone outside of those they were told to listen to.
I think it's time to focus on the fix rather than the blame, but I have questions about the blame.
How many OTS reform laws were proposed over the last 10 years. Who proposed them, who opposed and blocked them and what happened to them?
If you're going to play the blame game, play fair. Name names of bankers, lobbyists, legislators, presidential advisers, regulators, journalists, editorial writers, lawyers, judges and even borrowers.
malabar wrote, Combine this WaPo story with NY Times story on "Citi's Rush to Risk". Many of the architects of the "de-regulated" bubble and now the bailouts are coming back in the next Obama administration.
Agreed.
I'm a very liberal Democrat who despises Bush and the Republican Party, but it's foolhardy to say this is only the Republican's and Bush's fault.
IMHO the ultimate cause of the crisis was the culture of deregulation, which started under Reagan and is a right-wing enterprise, but the notion that only Republicans perpetuated these delusions is flat-out wrong.
And yes, I'm sure that quite liberal Dems like Barney Frank played a role. (Not surprising, given lucrative payoffs from the FIRE sector.)
I suppose you can identify ideological roots to problems wherever it suits your bias to locate them. What is meant by Democrat or Republican has undergone changes over time, so the reference is always inexact.
What I like in reading from the conventional literature is the absence of reference to party affiliation and the concentration on the nature of economics. Makes the finger-pointing far more 'pointed'.
We've alternated periods of diet and bingeing throughout our history, as have other parts of the world, though there have been times of relative moderation here and abroad.
Looks like we may at last have landed ourselves in the ICU.
Further proof that this crisis was engineered from the very top. Let's not just blame it on Bush, though. It was a bipartisan consensus, as it's been since Ronnie, and earlier, perhaps.
You're not the only intelligent person out there who saw this coming, CR. It was actually quite obvious, especially to the crooks on Wall Street and Capital Hill. They let it happen. In fact, they engineered and enabled it.
The big question is, to what end? I do believe this is the implementation of the Shock Doctrine, as Naomi Klein describes it. Look at how people are ready to do whatever Obama tells them needs to be done.
Broker wrote, P.P.S. Somehow this country became nr 1 in the world when practically there were no gov. rules and regulations. Strange, isn't it?
Yeah, it's particularly strange when you have no knowledge of history. Such as:
* A land mass initially without population (well, there was a native population which was rapidly eliminated), with all the attendant economic advantages
* One of the few major powers that came out of WWII essentially unharmed in terms of population or wealth
And Mal raises a great point. We have reached a point of such ridiculous complexity, that regulation doesn't make sense from a cost benefit standpoint. The complexity has reached its zenith, and there's nowhere for it to go then the opposite direction, whether it's done voluntarily, or not.
Anonymous wrote, Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
I'm hardly an expert on the money and credit systems, but my impression is that it was an unfortunate confluence of a few main factors:
* Lots of easy money
* Anti-regulation culture
* Increased leverage
* Use of exotic, opaque derivatives products
* Use of nonmarketed derivative products and the concomittant lack of transparency
* Rise of the shadow banking system
Further proof that this crisis was engineered from the very top. Let's not just blame it on Bush, though. It was a bipartisan consensus, as it's been since Ronnie, and earlier, perhaps.
Hmmm. Politicians - they always sway to the wind of public opinion.
When the entire country gets drunk on the kool-aid of deregulation and small-government; thinks no rules and govt are needed for the pyscopathic plutocrats, then politicians dance to the tune.
Think more like ... the people screwed up. The people got the govt thye deserved.
Needs to be pointed out that 60% of the option arms were in California. Not every state had a housing bubble.
I'm not saying the Feds should not have intervened to cool off the market
in California, Florida, Nevada etc. but doing so would have created a lot of anger as well. For example the GSEs
could have decertified California but can you imagine the reaction if they did? All the realtors, bankers, appraisers, house flippers, etc. would
have been demanding their Congressman
do something. A state with over 50 of them has a lot of clout.
rent to own
and he hates us for it too.imo its our fault because we let him have 2 terms therefore no hope of rescue from family and friends. this is his depression.
this is not political this is ecnomics.
we really need to do something about that january 20 date,way to long to wait to change regimes. again in my opinion.
Part of the problem was the crooks hid behind computer programs--the regulators assumed all risk was minimized by the smartest people in the room. That also means that the regulators knew they weren't the smartest in the room. The big money goes to the abuser, not the regulator.
"They are schocked and have come to conclusion that it's Bush's fault but not the republicans. If Bush had been a true republican, everything would be OK. Even the pubs are making Bush a patsie. No wonder his approval ratings are in the teens."
Exactly what I have been hearing too from these maggots. "Oh no, our ideology is flawless! it was just that those people implementing it were not REAL republicans".
Yeah, and Nazi ideology was also "flawless" but German people were just too weak to implement it! Screw them anyway, all the strong ones have already died in the eastern front...
Beach Blvd writes:
Regulatory agency captured by its industry.
Self-dealing, incompetent, and ideological public administration was the Republican's worst disservice to us.
Beach Blvd | 11.23.08 - 4:27 am | #
It's statements like this which will prevent us from ever correcting the problem. Do you really believe this was entirely a Replublican failure? It was a bi-partisan effort. Damn, the public is stupid, and until the majority of people get a brain, we are going nowhere..
It surely was. The people just believed everything the saintly bleeding-heart plutocrats were telling them, and acted on it.
They acted on it with every intent to execute the policies the saints wanted. The people wanted small govt and deregulation and no regulation.
That the policies did not achieve the results the people expected - whocodanoode?
Chickens should never trust the foxes. Even when the foxes say that leaving the coop door open is the way for chickens to fulfill their destiny of wealth and glory in life.
liberal writes:
I'm a very liberal Democrat who despises Bush and the Republican Party, but it's foolhardy to say this is only the Republican's and Bush's fault.
IMHO the ultimate cause of the crisis was the culture of deregulation, which started under Reagan and is a right-wing enterprise, but the notion that only Republicans perpetuated these delusions is flat-out wrong.
And yes, I'm sure that quite liberal Dems like Barney Frank played a role. (Not surprising, given lucrative payoffs from the FIRE sector.)
liberal | 11.23.08 - 9:11 am | #
Doing it through guidance rather than by leaning on individual thrifts was not only too late, it was counterproductive. Once the guidance came out it spooked the markets and triggered the freeze in the secondary markets. OTS, if it had had more guts plus political backing, could have nipped this in the bud. They didn't have to prohibit the exotic loans, just tell the big thrifts that they could get their feet wet (say, up to 5% of portfolio) but any more and we'll make you add so much capital that it won't be profitable.
"When the entire country gets drunk on the kool-aid of deregulation and small-government; thinks no rules and govt are needed for the pyscopathic plutocrats, then politicians dance to the tune."
Well, communists kept America sane and society in balance for most part. During 50-60's income tax was much more progressive (90+ percent the biggest tax level!!!) than even in Sweden!
Americans could not afford to be this collectively stupid when there was this big commie boogieman out to get them and free world.
$500,000 clapboard bungalows were not made in Washington people. They were created by the people of California and that is what is dragging this country into the abyss.
The losses in Florida, Nevada and Arizona, while huge, do not approach the magnitude of the disaster that is the Golden State and if we want to assign blame the mirror is a good place to start.
Everyone was happy as a clam at the idea their home was apppreciating at 10+% per year in those areas where that was happening. But it wasn't happening everywhere so why blame Washington for a speculative fever in Florida and California?
The people wanted small govt and deregulation and no regulation.
First, there is no "The People." We're not a monolithic group that speaks and does as One.
Secondly, most people have no clue what they really want. They are indoctrinated to wait and be told what they want. It starts with parenting and then is reinforced by schooling and ultimately corporations.
Sure, the illusion of choice is there, but it's just that...an illusion.
Americans could not afford to be this collectively stupid when there was this big commie boogieman out to get them and free world.
You need to rent and watch Atomic Cafe. People in the 50's were visiting Vegas and having Atomic Bomb Testing parties. They would go outside with their cocktails and watch the bomb go off as the radioactive fall-out settled over them. If that's not stooopid, I don't what is.
Today, they just put the bomb to their heads all day long as they talk about who they banged last night.
morocco bama
you're right except maybe parents wait for the schools and the schools are geared for the corportations.and the schools are getting them so very much younger nowdays the little girl next door started school last year at age 3.
I sure would go out and watch an Atomic bomb test. BTW the fallout is instantaneous and the prevailing winds
dumped most of it to the east not south and west of the Nevada test range. Utah got most of it.
One of the real problems with the Test
Ban Treaty is that fewer and fewer people are left that actually saw an atomic blast. Maybe the UN should allow 1 1 megaton detonation every year or so to remind people what those
things are really about.
Anonymous wrote: Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
Very simple.
Underlying forces:
Feelings of entitlement
Greed
Anyone who puts the blame on anyone other than the citizens who overextended themselves is a huge part of the problem.
I will concede there were predatory lending practices, but I am sure that the country could have easily absorbed those losses.
Aside from the fall-out issue, it's utterly insane that these people were celebrating the Bomb......the very means of their potential extinction. And, it still is.
Yeah, and Nazi ideology was also "flawless" but German people were just too weak to implement it! Screw them anyway, all the strong ones have already died in the eastern front...
Hilipatihippa | 11.23.08 - 9:45 am | #
Well. What I take away from CR's post and the attendant articles is that there was early recognition of regulatory failure and ideological resistance to correctives. Evidently, we need to get the idealogues under control to stand a better chance of decent governance.
The new buzzword inside the loop seems to be 'pragmatism'. Good choice, but only if it's more than a mere rhetorical device.
I read the article in the WaPo this morning - glad to see that CR is on it. The most shocking assertion to me was the description of OTS competing for regulatory "business" in order to have their funding increased. Talk about a perverse incentive, and another black eye for the Bush administration.
yes and the president was harry truman who knew absolutly nothing about the bomb or mahattan project. roosevelt(sp) kept him totally in the dark.
gabyjan
well that explains a lot, i mean the thing that truman and bush are related. also with cheney and also with obama through his white mother
When the madness is upon us, we can't be stopped. I used to look at the people taking on these immense loans and wonder how they could afford a peanut butter sandwich for dinner. But, I thought they planned to rent out a couple of rooms to make up the difference. Lots of them probably did. It's why not everyone is in foreclosure.
And remember my broker was honest, didn't do but 1 neg am, and no option arms at all.
So I think there is Blame for the Bushies, but there is blame for everyone to go around.
read them and get out of town,but they didnt believe.i dont know if that warning such as it was,was from truman as a condition of using the bombs or not.
but it took two to bring surrender and i dont think that there was a third.
the military told truman that if he didnt use them the war would cost another million life(allied side). they had no idea of what the bombs would do.
The Japanese ignored the US after Hiroshima because they thought we only had enough fissionable uranium for one bomb. The Japanese were right. They did not know that the US had a parallel plutonium bomb program, which produced the one that went off over Nagasaki.
just anecdotal, but I am surrounded by well-educated friends who are doctors, writers, et. al, who shock me with their rudimentary understanding of personal finance. they are well-paid professionals, but are loaded apparently with mortgage debt, Helocs, car loans, etc. They are living with huge debt and the idea that it can be unmanageable has now left them confused.
Getting slammed with 401k losses is their wake-up but they still expect " the government" will fix things.
Just speaking generally with the folks you know is frightening...
I think those conservatives who are complaining about W. not being a "real conservative" mostly resemble the old line communists who would claim that the problem was not Marx, but that Stalin and Mao were not "real Marxists". The conservative free market at all costs experiment has failed just as the Marxist experiment failed. The free market is all about offense, with no defense. Great on the upside, but it is brittle, and as soon as things turn down, things start to fall apart. Regulation and automatic stabilizers (which involve a big role for govt as a saftey net) are needed to give the system some resilience. Left to its own devices, the free market will concentrate all wealth in a few hands, which will ultimately undermine the system, since there is a limit to how much the few will consume, and the masses will not have the money to do so. They try to keep up for a while, but do so via debt, but without the income to support the debt. This needs to be rectified through a progressive tax system. However there are limits to how far one can press tax progresivity. The Laffer curve is both true and to an extent trivial. Yes the Govt will collet $0 at 2 tax rates, 0% and 100%m but it does not answer the key question of what the point of revenue maximization is. Clearly it is better to pick the lower of the 2 tax rates that lead to the same revenues. The experiment of the Clinton administration shows that in the high 30's for the top marginal tax rate we are still on the right hand (rising) side of the Laffer curve. I suspect that the revenue max point is somewhere neat 50%.
Nonsense. The blast at Alamagordo was monitored by thousands of sensors and hundreds of scientists. The blast was heard in three states, and it broke windows 150 miles from ground zero. The hot, radioactive glass at ground zero was measured by scientists in a lead-lined tank within hours. Based on the data, Oppenheimer calculated 1870 feet as the ideal altitude for the shock wave to demolish wooden structures over the maximum possible area. Hiroshima was selected, in part, because its size best matched the expected footprint of destruction.
Rich's warnings on insurance companies has saved a few folks...I emailed his earlier warnings to friends with retired parents with annuities etc., and when those stocks started cratering, they followed thru.
So thank you Rich, you helped people you don't know, and you got my youngest brother to move his 403b away from Metlife and into Vanguard.
My father was a participant in the AEC/Manhattan project. They knew in detail the effects of thermal/shock/radiation loads on structures and on living things.
Yes the immediate death toll from Dresden was higher than that of Hiroshima or nagasaki (also true of the firebombing of Tokyo a few months earlier). However the long term effects of H and N were much worse. One must also consider though the number of casualties what would have been in an invasion of the islands, both US military, but also civilian. All things considered I think that Truman did the right thing, although I think a very good case could be made for dropping the first bomb about 10 miles offshore in tokyo bay as a warning, and see if that lead to capitulation. However, time was of the essence since Truman did not want Stalin to declare war on Japan and then claim it was the USSR that tipped the balance and thus was due to a bigger slice of the post war pie in Asia.
Those that blame the free market for the mess we are in are idiots. this was the pump and dump of America, facilitated by both of the criminal political parties.
this was the pump and dump of America, facilitated by both of the criminal political parties.
I agree.
"In 2000 these were made legal, and at the same time were prevented from being regulated, by the Commodity Futures Modernization Act, which specifies that products offered by banking institutions could not be regulated as futures contracts.
This bill, by the way, was 11,000 pages long, was never debated by Congress and was signed into law by President Clinton a week after it was passed. It lies at the root of Americas failure to regulate the debt derivatives that are now threatening the global economy."
alambka(Unrated) writes: Those that blame the free market for the mess we are in are idiots.
Yes and no. No ideal is any more than a flag waved by man to recruit followers and justify causes. Thus, the 'free market' can neither accept blame nor receive praise. Only the people who mediate between the ideal and reality are responsible parties.
There is good Marxism and bad Marxism, good free market capitalism and bad free market capitalism.
The only mechanism of state that can be said to be genuinely poor is autocracy, because it's so fraught with problems -- dotage rule, ambitious princes, succession wars, captivity of the sovereign, being yoked to a single source of good ideas -- that it's hard to defend on anything other than a romantic / irrationalist basis.
Everything else is as good as its implementation is suited to its conditions and flexible enough to meet the changing needs of history.
Why is it whenever a Republican leader
screws up we are instantly told to not "play the blame game"? Katrina? "Don't play the blame game".
Iraq? "Don't play the blame game". The meltdown of the World Financial System? "Don't play the blame game"...When will it be okay to play the blame game again? January 21st?
Also, yes, I believe more than a few Dems were compicit BUT, it was Republican ideaology that has proven to be the failure. Free market run amock with no regulation is a GOP wet dream...let's be honest here.
"alambka writes:
Those that blame the free market for the mess we are in are idiots. this was the pump and dump of America, facilitated by both of the criminal political parties.
alambka | 11.23.08 - 10:45 am | "
That is completely and utterly true.
That said, leaving the Repubs in place would have been madness. With the Dems, there's the glimmer of a chance of an ounce of hope that they won't make decisions that are entirely wrong.
Eventually -- likely maybe next year -- circumstances may overwhelm the standard playbooks of either party.
One thing that seems obvious now is why are officers of regulated corporations allowed to make campaign
contributions?
True, everyone is entitled to free speach and donations are a form of free speech, but when you are raising
money on behalf of elected officials who oversee your regulators is not that an inherent conflict of interest?
It seems every decade or so the S&L industry in particular craps all over itself and it then emerges that the most soiled institutions also were raising large sums of money for various politicians.
Then there is the money raised for lobbying. Its not unreasonable for an industry to want a voice at the table
but surely some limits need to be placed on the amount of money expended to influence regulation. The GSE's were notorious in their lobbying
efforts and would hire key lobbyists just to prevent them from being hired
by others seeking to tighten regulation on their lending practices!
Ed - Mtn View(Unrated) writes:
Those who blame both political parties equally, for anything that happens, no matter what, are idiots.
Who said anything about equal? I agree the Republocrats suck more than the Demopublicans at this point in time. Now it's the Demo's turn to Shine and show us what they can do.
Counterpointer(Excellent) writes: I'm booking the regulators as Level 3 toxic asshats.
Ahh, mark-to-model douchebags.
"Dear OTS, we need the little eggheaded chicken who harasses Foghorn Leghorn and three Excel extensions to tell you what a loser you are! The area surrounding the intersection of these three n-dimensional curves represents the depths of your incompetence."
I have to say I'm going to be watching with fascination these attempts to reform the American bureaucracy. I will be curious to see how the American state perceives and implements the need for a rectification of the Dynasty.
I'm of the opinion this is when the Imperial Family has to massacre all the eunuchs and start over again, cost to the state be damned, but we'll see if there's an evil eunuch who is a better evil eunuch than the current evil eunuchs. Clearly, however, we are going to try some other stuff first.
I hope it is really as simple as toppling the Republican's "Thousand Year Reich".
Dry,
You still on line? was wondering if you have had any recent dealings with BUCY or JOYG. Both look super cheap in here, but wonder if mining equipment demand is going to go to 0 as is sort of implied by the stock prices.
Lax regulation/easy money are two sides of the same coin. If regulations were not relaxed, then the money would have had to been made even cheaper.
Firm regulations and easy money are policies that are at odds with one another. No one in government wants to burst a bubble. If you don't believe me, look at what is happening at the present moment- lending standards have risen sharply, but the government is harassing banks to lend, lend, lend to anyone that will take money- and the fricking press is doing the same damned thing.
I have never seen so much cognitive dissonance in my entire life.
One could argue that it is the very fact of government regulation that distorts what the market would otherwise self enforce.
Public policy deemed it necessary for banks to extend credit to all sectors of society despite, as Barney Frank shockingly admitted , 'not all people
are financially or culturally ready for home ownership'! But that doesn't
mean Frank won't strip a bank or S&L of its charter if they fail to make
loans to those financially and culturally unready for homeownership.
Thus banks are forced to use a one size fits all model to determine loan
eligibility. Subjective factors can too easily be designated as discriminatory and result in huge fines and court judgements.
....After what's going to happen happens, I'm sure there will be enough nation-states spread across this continent to satisfy any and all opinions & lifestyles.....
Yancy,
I work in DC and overheard a politician who is heavily involved in this mess talking about stabilizing home prices, etc. They're still under the impression that they can control the prices. Unbelievable.
The "good" Marxism is what gets taught in second-rate college Sociology classes, and it's safe because the theory doesn't leave the building. The "bad" Marxism is the one that's put into practice, and the one which killed an estimated 100 million people in the 20th century.
The IMF, with its focus on surveillance, should strengthen collaboration with other IFIs, enhancing efforts to integrate
regulatory and supervisory responses into the macro-prudential policy framework and conduct early warning exercises.
Oh Counterpointer, this shit is great. WTF is a "macro-prudential policy framework" and how many people were in the working group that had to stay up all night to work out how it could fit into a sentence. This is almost as good as the 1-paragraph release Uncle Billy found for the G-8 meeting.
"Change we can believe in" has been replaced with "History rhymes."
Interesting that an election that was won on a platform of change managed to solidify the existing party in their dominant positions in both houses. The blame game has the potential of being the biggest backfire since Carter. The Republican administration in a divided government may get the credit for a financial crisis only to leave the unequivocally Democrat controlled Federal government to take the blame for a world wide depression.
More on the economic geniuses involved in APEC, here's the Sept 07 statement, including para 3 "we are confident that robust economic growth will continue..."
No wonder they took their eye off the ball with all the other trivial pieities being mouthed.
Doubt cramdown puts a floor under housing prices, but in the context of personal bankruptcy is needed to give people some route out. Bankruptcy is pretty onerous, so it already has moral hazard safeguards.
What Free Market? Show me one...just one, and perhaps I'll take that seriously. Otherwise, it's just a cannard.
False. As I've discussed before, Free Markets are a utopian ideal that will never come to pass, much like "Pure Communism". they are ethereal and fantasy land.
Why are free marekts a fantasy? because there is no way to achieve them. Every attempt at getting towards free markets (i.e. deregulation) is met with IMMEDATE greed and stupidity by a few a-holes that ruins it for everybody.
weaken glass-steagal? get Citi.
deregulate energy? Enron manipulated the market causing brownouts.
allow CDS to be UNREGULATED? (they are totally unregulated by the way) AIG goes tits up.
in the end, although we can't blame "free markets" we can blame any attempt to get towards free markets. Or at least acknowledge that Free Markets are a great idea but nothing more... just like a "chicken in every pot and a car in every garage"
I claimed months ago that the next pres. was going to be the sucker pres., wittingly, or not.
From a class perspective, betting on Obama and the Progressives is like doubling down on the crisis. If we win, great and kudos.
But if we lose, the sub rosa class wars that have been percolating for the past 50 years (e.g. boomers, race, ivy league elitism) have the potential to explode.
So "Don't you dare question the free market or you're an idiot" is a strong debating technique?
My point was that what we've had is not a free market.
in a free market bad behavior is punished not rewarded.
That is not what we have had (mostly thru Government intervention).
would we have the derivatives problem if LTCM was allowed to fail?
would we have the bank problem if they were allowed to fail and officers prosecuted for malfeasance?
Not a free market.
and if you insist on calling it one and worse, if you really believe it's one , yes I think you're are an idiot.
One could argue that it is the very fact of government regulation that distorts what the market would otherwise self enforce.
one could argue this. but one would be incorrect to do this.
there was little to no regulation of the "investment trusts" of the 1920's. there was little to no regulation of the CDS field. In the 1800's there was almost no regulation in banking. and there were hordes of bank failures.
the principals show that they cannot self-enforce. nor have they ever been able to self enforce. nor will they be able to do so.
I wonder if incentives have anything to do with this? Where in our founding documents does it say anything about "the government must enact such laws as to constantly grow the size of it's purse?"
I think that generally sums up the problem re: oversight, lobbyists, wars for resources, etc.
It's always a revenue problem b/c if they don't have the money to dole out, they have no power.
On further reflection, I think this is where Republicans and "small government" have diverged. Small government within the constraints of, "but we still need more money", that is.
In my ideal world, some party would emerge whose slogan would be: "We're not for small government, we're for small revenues for government".
The size of the monster will decline as a matter of course.
YTL, Communism sounds great on paper as well, doesn't work so well in practice though. Perhaps at some point in our future our leaders will discover that maybe more than one theory can be implemented at a time?
I agree, Dawg. I claimed months ago that the next pres. was going to be the sucker pres., wittingly, or not.
I remember Jas.
I'm keeping a running total of the policy and appointments which I expect to be failures but I am willing to let him try. What surprises me is all the leftits nd moderates who express their surprise that a machine politician and party beholden is appointing machine enforcers and party loyalists above all. We'll see how that works when Rahm tries to strong arm a 4 term chairman. Arnold learned fast, Barry will too.
"They were created by the people of California and that is what is dragging this country into the abyss."
Totally myopic to blame CA for this. No one complained when the state carried the water for the whole US prosperity during the tech boom.And by the way,it has one of the lowest returns on tax dollars sent to Washington. It was Wall St. & Washington that created this problem, and CA is a leading indicator, of just about everything. 9% + unemployment and depression already here and coming to a neighborhood near you.
would we have the derivatives problem if LTCM was allowed to fail?
would we have the bank problem if they were allowed to fail and officers prosecuted for malfeasance?
yes.
Banks and investment trusts (now called mutual funds) were allowed to fail in the 1920's.
very shortly after that experience they were stronger than ever (although investment trusts were then called mutual funds)
in fact, one could argue a reason we did NOT have a second depression earlier was Glass Steagal and margin rules. (regulation).
The bombings of Hiroshima and Nagasaki were presumably militarily useful. They were also attacks on non-combatants, and therefore acts of terrorism. If Uncle Sam wants to establish his bona fides in his war on terrorism, he should start by apologizing for those bombings.
Last year, my wife and I visited Japan for 2 weeks and spent 2 days in Hiroshima. It was a heartbreaking experience, one that I certainly will never forget. When you see the pictures of and the memorials to the Hibakusha, or the survivors of the explosion, you understand the lasting effects of this type of device. I too thought that Dresden could have been put on the same level at Hiroshima and Nagasaki before I visited the site - no more having seen the mutilated and twisted bodies of the children born of this terrible event.
Now I am no fan of the Japanese, being of mixed race (Korean and American.) 20,000 Koreans died in Hiroshima as well, having been captured and forced to work in factories. In addition, the record of cruelty by the Japanese against Koreans and other Asians is well documented. My American grandparents fought in WWII against the Japanese and my grandfather's life was likely saved by the bombings ending the war quickly.
However, even with this background, I found it impossible not to look at the way in which the US government handled this situation and be saddened by our ability to justify killing innocents. These cities were purposefully left untouched by standard bombing methods in order to maximize the scientific data collection as a result of the nuclear strikes. Think about that - our leaders had the forethought to not bomb Hiroshima with conventional weapons so we could better measure the effects of the nuclear weapon.
Anyone that thinks that this is decision that has not had lasting effects needs to go to Japan and visit the site. See the mound that contains the ashes of the victims. Read about how these bombs destroyed the Japanese psyche - Godzilla and Akira are not accidents, but attempts by a people to process something so unbelievably frightening and devastating that it manifests itself in mutation nightmares put to film and paper.
Finally, think about the sad irony of a country responsible for the only use of nuclear weapons against a civilian population in history trying to encourage and enforce containment and disarmament policy with the rest of the world. To try to personalize it a bit more, wouldn't you be nervous about the only guy in the neighborhood that had ever used a gun to kill people asking you not to get a gun yourself? I'm not saying that we should allow Iran to get nukes, but I certainly think it's more complex than we'd like to admit as Americans.
YTL, Communism sounds great on paper as well, doesn't work so well in practice though. Perhaps at some point in our future our leaders will discover that maybe more than one theory can be implemented at a time?
bingo.
the sooner people give up this fantasy about "free markets" or "pure communism" the better.
quit expecting govt to be able to "fix" everything. and quit expecting by some miracle that suddenly business will ethically and morally self regulate. neither is ever going to happen.
Before you all jump down my throats, I have a few things I'd like to say
-I am all for SMALLER govt
-I am aghast (but not surprised) that Obama thus far seems to be change promised but not achieved although I'll be willing to give him the benefit of the doubt
-I have no illusions that regulation will fix everything
-I am also pessimistic that our govt will do "the right thing"
-I am also unsure of what "the right thing" should be.
but that does not mean that responsible regulation shouldn't be ATTEMPTED.
At the end of WW II the local Germans were made to see the concentration camps that some claimed to know nothing about. There was a lot of blame to go around, but the tone was set by the leader.
OK, I follow you. Pump and dump was perfectly legitimate, now we have to take our medicine and everything will work out just fine. Or maybe, pump and dump would never have happened IF Chrysler, Mexico, LTCM, etc. had been allowed to fail without government intervention.
Byzantine_Ruins writes:
Boy CR companion is a great tool.
With the wonderful CR Companion, when you make irresponsible statements like Republicans wanted to create a "thousand year Reich," or mention an imaginary thing called "good" Marxism, then you can run away and hide. It's better than earplugs. It's even better than an echo chamber!
Meredith Whitney is a great analyst, but not a M.I.L.F. - no kids yet.
I'd avoid JOY and BUCY at all costs. Between metals prices cratering as China rolls over and the credit crunch debacle, JOY and BUCY are at the far tail-end of "crack the whip". If you want to get crazy with the theme, I'd maybe go with FCX - there is a long term copper shortage, but even that's going to be a wild crazy ride. JOY and BUCY have no hope for 2 years, minimum.
Cramdoown means that the low value is acknowledged, and mtg reduced to that amount.
So, yep, I don't think cramdowns are a bad thing. Might prevent the housing mkt from overshooting on the downside.
And NOTHING is being financed, except hard equity loans and FHAs in the Miami-Dade Broward area. FHAs at least reflect lower values, so I think are less dangerous than one might think.
Regions Bank told a client of mine, that they were requiring 800 credit scores; ie, the equivalent of not loaning anything to anybody.
So if politicians are hasseling banks, the hasseling is not producing much of anything in the way of lending, at least where I am.
Might prevent the housing mkt from overshooting on the downside.
Absolutely not. Everybody that gives out a mortgage will now have to price the possibility of the cramdown into the interest rate. And what do you think that will do to the affordability?
Rich or anyone - is there any way to assess annuities the way one can assess banks and credit unions? I had a talk with my dad about his retirement situation (fun, fun!) and found out he has an annuity. He doesn't want to think about it. I can't just email him and say, "be scared!" But if there was a way to give him specific info, I'd like to do that.
My mom is mostly in stocks, so she is already hosed. Sigh.
Yes, at the moment, the harassment is not working, but politicians are not so easily denied for very long. If banks won't lend, they will either be forced to do so, or the government will lend for them. The bubble must be reinflated- that is all that politicians know.
"My point was that what we've had is not a free market. in a free market bad behavior is punished not rewarded. "
You are one naive t/fool. Punished by whom? Filthy rich business pals at the country club? "Timmy!! You have been a bad boy, your golfing privileges have been cancelled for two weeks!" For real punishment you would need a STRONG government.
And what about the Bhopal disaster? It is a kind of hard to complain WHEN YOU ARE DEAD!
"The Bhopal disaster was an industrial disaster that occurred in the city of Bhopal, Madhya Pradesh, India, resulting in the immediate deaths of more than 3,000 people, according to the Indian Supreme Court. A more probable figure is that 8,000 died within two weeks, and it is estimated that an additional 8,000 have since died from gas related diseases[1][2].
The incident took place in the early hours of the morning of December 3, 1984, in the heart of the city of Bhopal in the Indian state of Madhya Pradesh. A Union Carbide subsidiary pesticide plant released 42 tonnes of methyl isocyanate (MIC) gas, exposing at least 520,000 people to toxic gases. The Bhopal disaster is frequently cited as the world's worst industrial disaster."
Totally free markets would also include the very one freedom that would destroy that market: the freedom to create/gain monopoly by any means (=FREEDOM!) necessary.
Winner of one market would also in many cases expand into other markets too, creating eventually both horizontal and vertical monopolies.
"One thing that seems obvious now is why are officers of regulated corporations allowed to make campaign
contributions?
True, everyone is entitled to free speach and donations are a form of free speech, but when you are raising
money on behalf of elected officials who oversee your regulators is not that an inherent conflict of interest?"
This is an easy one, let everyone make whatever contributions they want to whoever, BUT make all contributions anonymous. Can't buy influence if they don't know who you are.
Attributed to a senior Bush advisor (believed to be Karl Rove) in 2004. "Were an empire now, and when we act, we create our own reality. And while you're studying that reality-judicously, as you will-we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to just study what we do."
Can anyone point to a web site that is measuring M3?
And, if money supply is increasing rapidly (?), does anyone have any idea how we make it disappear in a couple of years, before we get hyper-inflation?
CR, Your outrage seems little bit disengenuous if you do not share the direction of your outrage to other groups. What about the bankers who gave the loans? What about the people who took the loans knowing that they cannot pay the mortgage? What about the securitization of those loans and tranching which bundled good and bad loans so that their ratings were meaningless. What about the CDOs on these securitizations and the leverage allowed.
No your outrage has to be much more inclusive it is truly to be believed.
Don't let Lockhardt out of this story, he is as corrupt as all of them!
The newly formed Federal Housing Finance Agency (FHFA) whose predecessor agencies failed to stop the meltdown at mortgage giants Freddie Mac and Fannie Mae aims to grow its budget by as much as 10 percent and hire more examiners.
There are lots of lessons [from this crisis]. Capital is extremely important, said FHFA Director James Lockhart. [And] there was a theory, say 15 years ago, that mortgage risk was not very large. Weve all learned that it can be a large risk.
The Office of Thrift Supervision (OTS), a Treasury Department agency, failed to recognize the vast portfolio of risky loans at the savings banks it regulated.
Several OTS-regulated banks have failed, including Countrywide; Independent National Mortgage Corp. (IndyMac), which failed in July; and Washington Mutual, which was taken over by the government and sold to JPMorgan Chase last month.
They all held billions of dollars in questionable mortgage loans. More than half of IndyMacs loans, for example $11 billion worth were Alt-A mortgages that didnt require proof of income.
Our examiners are starting to look at institutions being too concentrated in any one area, said William Ruberry, a spokesman for OTS. Because if something happens to [that area], the institution is vulnerable.
This is an easy one, let everyone make whatever contributions they want to whoever, BUT make all contributions anonymous. Can't buy influence if they don't know who you are.
The Supreme Court would shut that down in a second. Under free speech jurisprudence, the messenger and the message are often one in the same.
Sadly, attacks on civilians were/are standard military practice. The idea of noncombatants is a modern invention. Apologies will have to flow from every nation..I wouldn't hold my breath.
Watson writes:
The bombings of Hiroshima and Nagasaki were presumably militarily useful. They were also attacks on non-combatants, and therefore acts of terrorism. If Uncle Sam wants to establish his bona fides in his war on terrorism, he should start by apologizing for those bombings.
FFDIC writes:
"I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from."
Hmm... really? What did the FDIC have to do with:
CDS'
Fannie Mae and Freddie Mac
Investment banks
etc., etc., etc.........
Nothing other than being around to clean up the mess as far as I can tell. Perhaps it's best that you've no longer around the FDIC.
The Bankers killed the Golden Goose.
Congress buried the body.
The Office of Thrift Supervision marked the grave of the Goose like a dog marks a fire hydrant.
2.9 million foreclosures 2008 so far through October.
2 million more foreclosures projected in 2009.
5 million facing foreclosures.
40% of homeowners projected to be underwater in near future.
These foreclosure victims have no voice,
These people became victims because they trusted their banker who took financial advantage of them and the Congress watched them through their regulator, the OTS.
Office of Thrift supervision 12-26-06 states in writing The OTS Consumer Complaint program is voluntary, a non public process by which OTS attempts to assist the consumer in resolving complaints with savings associations regulated by OTS.
The Office of Thrift Supervision 12-126-06 states in writing there are No Consumer Federal Banking Regulation so violations consumers file are not enforceable.
The Congress has watched the lynching of these home owners and at the same time have
legislatively created trillions of dollars to protect the powerful and the wealthy.
These Congressional members have been bought and paid for by the wealthy and the powerful.
The bankers who lend mortgage money control every detail of the lending process. They determine the terms and conditions. They determine the documentation, the requirements, the rates, and who gets what. The borrowers have not control or input over the process. The Congress has passed no legislation to control the aberrant behavior of the federal savings bank lender.
Conversely the Congress has passed no legislation to permit the mortgage borrower
to object or contest their foreclosure within the same regulatory system that the bank lends its mortgage money.
The Office of Thrift Supervision is a Bank Buddy. OTS do not have the knowledge, the expertise, the will, the manpower, the authority or the common sense to regulate, supervise or to enforce any legislation regarding federally chartered savings banks.
These Banks operate autonomously, with absolute impunity and answer to no one.
When people state that people got mortgages they could not afford it was the bank that
made the rules, the conditions, the values and the decision who got what. Only a fool would think the borrower had control over getting a mortgage loan.
The Office of Thrift Supervision is a lackey of the wealthy and powerful Congress who serve those that give the Congress the greatest benefits, the Banks.
Until my fellow Americans watch their house being sold by Congress at foreclosure because the federal bank violated what little rules there were and then lied about it, they can never really taste the political vomit of our elected federal officials.
There are millions of foreclosure victims that have no voice. Their silence is deafening.
I cant speak for all of them, for I am one of them.
"Hmm... really? What did the FDIC have to do with:
CDS'
Fannie Mae and Freddie Mac
Investment banks
etc., etc., etc.........
Nothing other than being around to clean up the mess as far as I can tell. Perhaps it's best that you've no longer around the FDIC."
Ah, there must be a brownout in Iowa, the bulbs are burning a bit dimly tonight...The point is that what was happening at the FDIC was surely also going on with the OTS, only more so. Got it?
I feel sick to my stomach looking at the gleeful ignorance of those depicted in the photograph. It is not regulations and red tape they are cutting up, they are destroying human lives. How can they sleep at night now that it has become clear where their blind ideology has taken us?
aaarrh, keel haul the OTS! oops, wrong thread.
Yeah, kind of blends right into the pirate thread.
sdtfs, yeah, pirates all right. I was somewhat relieved in early 2005 when the guidance for home equity was issued and other lending problems were being discussed ... and then nothing. It was very frustrating.
Aaarrggghhhh ...
Best Wishes.
We have so many regulators...who makes sure the regulators are doing their job? Reminds me of a Stephen King novel.
That photo, the biographical sketches for each participant and current employers should be widely distributed. A thorough public shaming might not accomplish much, but perhaps we can begin to hold people accountable for their professional failings. If we can force them to retire from public life then at least they will not screw us again.
"We have so many regulators...who makes sure the regulators are doing their job?"
Some members of Congress actively worked to intimidate regulators. Does anyone remember the hearings where ol' Barney was beating up on the guys who were supposed to be regulating Fan and Fred?
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
We have so many regulators...who makes sure the regulators are doing their job?
In real life: The Regulators did consist of Dick Brewer, Billy the Kid, Doc Scurlock, Charlie Bowdre, Jose Chavez y Chavez and Dirty Steve, but there were,...
From: Summary of the Life of Billy the Kid
I attended and worked at the closing of Superior Bank mentioned in the article. Once the bank failed the OTS handed over the investigation to the FDIC. In addition, the FDIC's Office of Inspector General conducted its on investigation and published a report. I assisted the OIG during this process. When an investigation is handed over to another agency to handle the primary regulatory moves on so to speak. It would be helpful if the primary regualtor had a role in the investigation of the failed bank rather than leave it up to the FDIC to sort things out afterwards. The OTS basically washed it hands of Superior once it failed. FDIC is left to clean it up and OTS never learned its lessons because it did not participate in the investigations after failure. A joint investigation by the primary regulator and FDIC would require that the primary regulator learn better lessons from its failures.
FFDIC(Very Good) writes:
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
FFDIC | 11.23.08 - 2:29 am | #
~~~~~~~~~~
hopefully the grandkids will.
and on that note, nite!
"We have so many regulators...who makes sure the regulators are doing their job?"
The regulators are not going to do their jobs if that is not what the White House wants.
Let's not forget "our national treasure" Fed Chairman opining that securitization of aforementioned risky loans had somehow made the risk disappear
So we've got three sets of primary federal regulators, the FDIC, and 50 various state regulators...
Maybe we need to consolidate.
This photo from 2003 shows two regulators: John Reich (then Vice Chairman of the FDIC and later at the OTS) and James Gilleran of the Office of Thrift Supervision (with the chainsaw) and representatives of three banker trade associations: James McLaughlin of the American Bankers Association, Harry Doherty of America's Community Bankers, and Ken Guenther of the Independent Community Bankers of America.
Morbid curiosity compels me to wonder where their investments were. After all, Karma sometimes comes as a boomerang. Where are they today - anyone know?
Combine this WaPo story with NY Times story on "Citi's Rush to Risk".
Many of the architects of the "de-regulated" bubble and now the bailouts are coming back in the next Obama administration. Bob Rubin as major advisor is one of the key architects of the Citi failure and Clinton's Treasury Secretary who championed all the deregulation and derivatives non-regulation is Obama's advisor. Larry Summers who carried the water after Rubin is to be head of White House economic policy. Tim Geithner Mr. Handout of Taxpayer funds is a protege of Rubin and Summers is tipped to be Treasury secretary.
It looks like major cover-up of all the crookedness will be in place and even more FUBAR!
Good job, Brownie
The decider decided, and now this sucker is going down.
Bush finally achieved what he has been attempting to find his entire life - a situation where no one could rescue him from the consequences of his own decisions and actions.
Sink or swim does have a certain draw back - someone always rescues the sinking non-swimmer.
Not this time.
Bush's place in the history of America is now secure, in a way that his father's never will be.
It is sad and unfortunate that there is and will be no accountability for such intentionally reckless behavior on the part of regulators. These regulators openly looked the other way; however the only thing that will happen to them is ... nothing. What is worse, they may even get jobs, clients, and paid speaking gigs for having been in the appointed postions they were.
Just keep on pumping the monetary base at annualized 1,000% and things will be alright. Fill up the coffers of Wall Street Banks and let them speculate in natural gas when it gets really cold in January. This is it folks. This is it.
It was a big party and the entire country was invited.
Borrow, borrow, blow the bubble. We can borrow our way to prosperity, and if you don't buy now you'll be priced out forever.
When the economy was getting juiced each year with hundreds of billions of sterilzed, recycled investments from China, Japan, and our OPEC friends, taking the punchbowl away before it got too late would have been a very difficult political act.
It's one thing to let the party go on, but another class entirely to intervene. Given that bad consequences would follow from either action, it's always better politically to whistle past the graveyard and hope things turn out, or in the worst case work on the alibi, or misdirection of blame (eg. it's Barney Frank's and his gay lover's fault).
The only thing missing from this story is Reich and Gilleran being offered spots in the Obama administration.
Captain Renault: I'm shocked, shocked to find that gambling is going on in here!
CR,
I think this is the first time I have seen you state clearly where you stood and how you felt about the madness that engulfed the home lending industry for the last few years, and that you attempted to intervene with the regulators.
Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
I'd be very curious to hear any diagnosis you have. (I am skeptical about theories ascribing it mostly to individual regulators' failures. Haven't regulators always been pushed toward looser lending by the same forces - Congress and the White House and bankers? What changed? I am beginning to wonder if the baby boomer life cycle playing out might not be the biggest underlying force, but my grasp of economics and finance and politics is not up to nailing that down one way or another.)
Regulatory agency captured by its industry.
Self-dealing, incompetent, and ideological public administration was the Republican's worst disservice to us.
"Self-dealing, incompetent, and ideological public administration was the Republican's worst disservice to us."
No, I think that would be two land wars in Asia.
"It is sad and unfortunate that there is and will be no accountability for such intentionally reckless behavior on the part of regulators."
Only if we fail to figure out what the actual problem is.
This isn't some Nigerian bureaucrat keeping his bribes in a freezer.
These are people all following their orders.
The actual problem is obviously radical Republican ideology.
As Talleyrand once said about the Bourbons upon their idiotic return to the French monarchy: "They have learned nothing, and have forgotten nothing".
Time to oil up the (political) guillotines.
The study of economics without a good grasp of Zionism is analogous to the study of astronomy without an understanding of the gravitational pull of black holes.
Anon. Pump fake money and bad credit into economy. Bubble. But where? We don't know. What to regulate?
So we are left with either an improbable brilliant conspiracy or unbelievable stupidity. One thing that gets my tin foil hat on was that addendum to the Heroes Act bill that will not let people leave the country with their money without paying capital gains on all their assets. Who was clamoring for that? Why was it on on congresses radar? Do they know what is coming and expected people to flee in front of the big dollar revaluation? and who is they?
tin foil link
try to leave the us and lose everything - Video Search Results - AOL Video
I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from.
FFDIC | 11.23.08 - 2:29 am
Can you shed any light on whether W's brother Neil had anything, anything at all to do with thrifts? Whether as owner or board member or consultant, whatever?
So we've got three sets of primary federal regulators, the FDIC, and 50 various state regulators...
Maybe we need to consolidate.
Basel Too | 11.23.08 - 2:45 am
Absolutely not!
Zionism? WTF? Israel, or the fundamentalist Christian Zionists have nothing to do with this.
Or is this the new code word for Dem Damn Jooz?
PS: they voted 3:1 for Kerry.
Pere Ubu say OTS, no one's home.
YouTube - Pere Ubu - Come Home
But they can sure chug it at the sports bar in G St.
C
Sadly, this will mean little to the "Heads I Win, Tails You Lose" electorate.
Fox will spin it as evidence of big gov't ineptness, therefore, we need smaller gov't.
The party continues.
I'm glad people are starting to realize this problem lies at the feat of Bush and Cheney. The right wing talk has been about how the problem at its roots, was caused by policies enacted during the Carter administration.
Let's see, we've had a republican president for 20 of the past 28 years since then and the pubs did nothing to resolve this.
It's pretty obvious that after 911, the pubs did everything they could to get the economy going via easy money. I can't blame them for a certain amount of this since we were in a recession, but their anti-regulatory ideology got out of control.
I have two brothers who are hard core right wingers and have had to listen to years of them echoing right wing sentiments of how their economic philosophy is far superior to the liberals and I have finally shown them how it's the pubs fault we're in this mess. They are schocked and have come to conclusion that it's Bush's fault but not the republicans. If Bush had been a true republican, everything would be OK. Even the pubs are making Bush a patsie. No wonder his approval ratings are in the teens.
Now I understand why we did so well in the USSR. We had a gazillion pages of rules and regulations. Thank you CR!
P.S. Just look at Fannie after ~80 years of gov. regulations.
P.P.S. Somehow this country became nr 1 in the world when practically there were no gov. rules and regulations. Strange, isn't it?
The problem in general is Bureaucrats normally act in collective stupidity. An inverse of the "invisible hand". When they micromanage, they don't reduce risk as much as they simply drag things or require extra paperwork.
Most of what we see today was in a post-SarbOx world. Lots and lots more paper. But at least the failure is well documented! And wasn't that too passed around the same time? And were any risks aligned so that failures would be on the risk-taker's heads? That is probably the best measure of socialism - not profits for risk-takers, but if the risk-takers suffer the losses themselves. e.g. when Meriweather and Scholes are working at Taco Bell instead of founding yet another hedge fund that blows up.
We forget in Russia the Commisars had the special stores and privileges and they were maintained through every failure. Our corporate socialism has the same features. The cutting of red-tape in the photo was not a freeing of the market as much as a grant of privilege. What they were cutting were the penalties for failure and stupidity.
I don't know of any parallel agency that micromanages Credit Unions, but at the same time there aren't a whole lot with problems. But most lend to their community and stuck to the 20% down rule and such.
But again what freedom? If I wanted to open a financial institution, could I without going through all the rules and regulations about who to hire, lend to, report to the government, etc., or did they leave all those in place but "deregulate" only in the sense they allowed huge risks in individual loans like the S&L crisis in the late '80s with commercial loans? So they won't let me actually take a risk running a bank/thrift/etc. anyway I please, nor will they let those who took the utterly stupid risks and blew things up actually feel any pain from their failure.
OT but this is a really amazing article from today's NY Times.
Seeking Solace? You'll Find Little in the Bond Market - NY Times
"Long-term corporate bonds, for example, declined in value by more than 18 percent, on average, through October, according to Ibbotson Associates, a Morningstar subsidiary. Thats worse than any full-year decline on its records going back to 1926.
The rout in corporate bonds, particularly high-yield or junk bonds, has been worse, by some measures, than even the distressed market of the Great Depression, said William H. Gross, co-chief investment officer of the Pacific Investment Management Company. Junk-bond yields which move in the opposite direction of prices recently soared above 20 percent.
These are unheard-of, unseen yields that have never taken place in anyones lifetime, said Mr. Gross, who manages Pimco Total Return, the countrys largest bond fund. Even during the Depression, corporate bonds did not trade at these particular yield spreads, or premiums over yields of comparable Treasuries, Mr. Gross added.
Who owns a lot of corporate bonds?
Pensions, endowments and life insurance companies.
Pensions will blow up later.
It's the life insurance companies you want to worry about next. And soon.
TZ just proves my point right there.
Great post CR.
tz, you hit two home runs in one comment.
Photo shows a grant of privilege/cutting penalties.
Regulatory barriers to entry are high to keep out the little capitalists who might try to innovate.
"Now I understand why we did so well in the USSR. We had a gazillion pages of rules and regulations. Thank you CR!"....
there were rules, usually involving bullet through head, or concrete boots, would you prefer those?
Sorry TZ, after reading your post more carefully I agree with your points.
The "stupid bureaucrats" meme, however, gets old when you've been hearing it for eight years.
If you notice in CR's post the people down the food chain can identify what the problems are.
Its just noone above them ever asks.
Garet Garrett,
"This is a delusion about credit. And whereas from the nature of credit it is to be expected that a certain line will divide the view between creditor and debtor, the irrational fact in this case is that for more than ten years debtors and creditors together have pursued the same deceptions. In many ways, as will appear, the folly of the lender has exceeded the extravagance of the borrower."
Jeffrey Tucker,
He goes on to explain how the debt overhang of the first world war (Housing today?) is the root cause; how society came to accept the idea that if people can't immediately afford stuff, government should provide it; how government came to operate on a bankrupt system; how we came to believe that prosperity came from credit rather than savings; and how the Federal Reserve working with government is the root source of the problem.
It's different this time?
Business Cycles, Not Our Fault - Jeffrey A. Tucker - Mises Institute
As upton sinclair coulda said:
It is hard to get a man to regulate something when his salary depends upon his not regulating it
Excellent CR! Perhaps you could join he Obama administration to help clean up this mess. (Of course Obama would have to agree to keep your real identity a secret!)
syvanen wrote,
That photo, the biographical sketches for each participant and current employers should be widely distributed. A thorough public shaming might not accomplish much, but perhaps we can begin to hold people accountable for their professional failings.
Damn straight. Should make a website.
Well,
It was an anti-regulatory environment. It is not limited to lending regulations. Same thing was happening in other areas, some of which I have witnessed. The regulators were being herded to spend their time devising plans and regulations that resulted in less regulation. There are even virtually unused models being used, much like the financial engineering models used to show the safety of MBSs etc., that will be shown not to work in the future. These untested unused models are being used to replace regulation and common sense. The federal regulators were not listening to anyone outside of those they were told to listen to.
I think it's time to focus on the fix rather than the blame, but I have questions about the blame.
How many OTS reform laws were proposed over the last 10 years. Who proposed them, who opposed and blocked them and what happened to them?
If you're going to play the blame game, play fair. Name names of bankers, lobbyists, legislators, presidential advisers, regulators, journalists, editorial writers, lawyers, judges and even borrowers.
malabar wrote,
Combine this WaPo story with NY Times story on "Citi's Rush to Risk". Many of the architects of the "de-regulated" bubble and now the bailouts are coming back in the next Obama administration.
Agreed.
I'm a very liberal Democrat who despises Bush and the Republican Party, but it's foolhardy to say this is only the Republican's and Bush's fault.
IMHO the ultimate cause of the crisis was the culture of deregulation, which started under Reagan and is a right-wing enterprise, but the notion that only Republicans perpetuated these delusions is flat-out wrong.
And yes, I'm sure that quite liberal Dems like Barney Frank played a role. (Not surprising, given lucrative payoffs from the FIRE sector.)
I suppose you can identify ideological roots to problems wherever it suits your bias to locate them. What is meant by Democrat or Republican has undergone changes over time, so the reference is always inexact.
What I like in reading from the conventional literature is the absence of reference to party affiliation and the concentration on the nature of economics. Makes the finger-pointing far more 'pointed'.
We've alternated periods of diet and bingeing throughout our history, as have other parts of the world, though there have been times of relative moderation here and abroad.
Looks like we may at last have landed ourselves in the ICU.
Further proof that this crisis was engineered from the very top. Let's not just blame it on Bush, though. It was a bipartisan consensus, as it's been since Ronnie, and earlier, perhaps.
You're not the only intelligent person out there who saw this coming, CR. It was actually quite obvious, especially to the crooks on Wall Street and Capital Hill. They let it happen. In fact, they engineered and enabled it.
The big question is, to what end? I do believe this is the implementation of the Shock Doctrine, as Naomi Klein describes it. Look at how people are ready to do whatever Obama tells them needs to be done.
Broker wrote, P.P.S. Somehow this country became nr 1 in the world when practically there were no gov. rules and regulations. Strange, isn't it?
Yeah, it's particularly strange when you have no knowledge of history. Such as:
* A land mass initially without population (well, there was a native population which was rapidly eliminated), with all the attendant economic advantages
* One of the few major powers that came out of WWII essentially unharmed in terms of population or wealth
And Mal raises a great point. We have reached a point of such ridiculous complexity, that regulation doesn't make sense from a cost benefit standpoint. The complexity has reached its zenith, and there's nowhere for it to go then the opposite direction, whether it's done voluntarily, or not.
Anonymous wrote, Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
I'm hardly an expert on the money and credit systems, but my impression is that it was an unfortunate confluence of a few main factors:
* Lots of easy money
* Anti-regulation culture
* Increased leverage
* Use of exotic, opaque derivatives products
* Use of nonmarketed derivative products and the concomittant lack of transparency
* Rise of the shadow banking system
Hmmm. Politicians - they always sway to the wind of public opinion.
When the entire country gets drunk on the kool-aid of deregulation and small-government; thinks no rules and govt are needed for the pyscopathic plutocrats, then politicians dance to the tune.
Think more like ... the people screwed up. The people got the govt thye deserved.
It was never "The People's" Government. It was always a system to protect the Oligarchy whilst feigning a voice to The People.
Needs to be pointed out that 60% of the option arms were in California. Not every state had a housing bubble.
I'm not saying the Feds should not have intervened to cool off the market
in California, Florida, Nevada etc. but doing so would have created a lot of anger as well. For example the GSEs
could have decertified California but can you imagine the reaction if they did? All the realtors, bankers, appraisers, house flippers, etc. would
have been demanding their Congressman
do something. A state with over 50 of them has a lot of clout.
"* One of the few major powers that came out of WWII essentially unharmed in terms of population or wealth"
With said population protected by Glass-Steagall.
rent to own
and he hates us for it too.imo its our fault because we let him have 2 terms therefore no hope of rescue from family and friends. this is his depression.
this is not political this is ecnomics.
we really need to do something about that january 20 date,way to long to wait to change regimes. again in my opinion.
Part of the problem was the crooks hid behind computer programs--the regulators assumed all risk was minimized by the smartest people in the room. That also means that the regulators knew they weren't the smartest in the room. The big money goes to the abuser, not the regulator.
for some reason this thread makes me think of a handle I haven't seen here in months..."Engineered Depression."
And now it's time to pull up the ladders.
"They are schocked and have come to conclusion that it's Bush's fault but not the republicans. If Bush had been a true republican, everything would be OK. Even the pubs are making Bush a patsie. No wonder his approval ratings are in the teens."
Exactly what I have been hearing too from these maggots. "Oh no, our ideology is flawless! it was just that those people implementing it were not REAL republicans".
Yeah, and Nazi ideology was also "flawless" but German people were just too weak to implement it! Screw them anyway, all the strong ones have already died in the eastern front...
Beach Blvd writes:
Regulatory agency captured by its industry.
Self-dealing, incompetent, and ideological public administration was the Republican's worst disservice to us.
Beach Blvd | 11.23.08 - 4:27 am | #
It's statements like this which will prevent us from ever correcting the problem. Do you really believe this was entirely a Replublican failure? It was a bi-partisan effort. Damn, the public is stupid, and until the majority of people get a brain, we are going nowhere..
It surely was. The people just believed everything the saintly bleeding-heart plutocrats were telling them, and acted on it.
They acted on it with every intent to execute the policies the saints wanted. The people wanted small govt and deregulation and no regulation.
That the policies did not achieve the results the people expected - whocodanoode?
Chickens should never trust the foxes. Even when the foxes say that leaving the coop door open is the way for chickens to fulfill their destiny of wealth and glory in life.
liberal writes:
I'm a very liberal Democrat who despises Bush and the Republican Party, but it's foolhardy to say this is only the Republican's and Bush's fault.
IMHO the ultimate cause of the crisis was the culture of deregulation, which started under Reagan and is a right-wing enterprise, but the notion that only Republicans perpetuated these delusions is flat-out wrong.
And yes, I'm sure that quite liberal Dems like Barney Frank played a role. (Not surprising, given lucrative payoffs from the FIRE sector.)
liberal | 11.23.08 - 9:11 am | #
Thank you.
Doing it through guidance rather than by leaning on individual thrifts was not only too late, it was counterproductive. Once the guidance came out it spooked the markets and triggered the freeze in the secondary markets. OTS, if it had had more guts plus political backing, could have nipped this in the bud. They didn't have to prohibit the exotic loans, just tell the big thrifts that they could get their feet wet (say, up to 5% of portfolio) but any more and we'll make you add so much capital that it won't be profitable.
The US government failed across the board. They are the problem and they can only make the problem worse.
"When the entire country gets drunk on the kool-aid of deregulation and small-government; thinks no rules and govt are needed for the pyscopathic plutocrats, then politicians dance to the tune."
Well, communists kept America sane and society in balance for most part. During 50-60's income tax was much more progressive (90+ percent the biggest tax level!!!) than even in Sweden!
Americans could not afford to be this collectively stupid when there was this big commie boogieman out to get them and free world.
$500,000 clapboard bungalows were not made in Washington people. They were created by the people of California and that is what is dragging this country into the abyss.
The losses in Florida, Nevada and Arizona, while huge, do not approach the magnitude of the disaster that is the Golden State and if we want to assign blame the mirror is a good place to start.
Everyone was happy as a clam at the idea their home was apppreciating at 10+% per year in those areas where that was happening. But it wasn't happening everywhere so why blame Washington for a speculative fever in Florida and California?
The people wanted small govt and deregulation and no regulation.
First, there is no "The People." We're not a monolithic group that speaks and does as One.
Secondly, most people have no clue what they really want. They are indoctrinated to wait and be told what they want. It starts with parenting and then is reinforced by schooling and ultimately corporations.
Sure, the illusion of choice is there, but it's just that...an illusion.
Americans could not afford to be this collectively stupid when there was this big commie boogieman out to get them and free world.
You need to rent and watch Atomic Cafe. People in the 50's were visiting Vegas and having Atomic Bomb Testing parties. They would go outside with their cocktails and watch the bomb go off as the radioactive fall-out settled over them. If that's not stooopid, I don't what is.
Today, they just put the bomb to their heads all day long as they talk about who they banged last night.
morocco bama
you're right except maybe parents wait for the schools and the schools are geared for the corportations.and the schools are getting them so very much younger nowdays the little girl next door started school last year at age 3.
I sure would go out and watch an Atomic bomb test. BTW the fallout is instantaneous and the prevailing winds
dumped most of it to the east not south and west of the Nevada test range. Utah got most of it.
One of the real problems with the Test
Ban Treaty is that fewer and fewer people are left that actually saw an atomic blast. Maybe the UN should allow 1 1 megaton detonation every year or so to remind people what those
things are really about.
er fallout is NOT instantaneous.
I could see this coming shortly after the last crisis when OTS personnel received orders from the D.C. office to become a "kinder, gentler" agency.
That doesn't work in the bank regulatory business. You either kick ass and take names or you find another profession.
BTW the fallout is instantaneous
Bzzzzt.... thanks for playing.
Radiation is (mostly) instantaneous.
Fallout, definitely not.
That doesn't surprise me in the least, Unit....you going out to watch an Atomic Bomb test. Certifiable, you are.
Increasingly, American Beauty comes to mind when I read your posts.
Anonymous wrote: Why do you think this credit bubble went further than most prior bubbles in our history? Is it just an unlucky coincident strengthening of many contributing factors? Or are there one or two underlying forces at work?
Very simple.
Underlying forces:
Anyone who puts the blame on anyone other than the citizens who overextended themselves is a huge part of the problem.
I will concede there were predatory lending practices, but I am sure that the country could have easily absorbed those losses.
Look in the mirror people! Change your ways!
Aside from the fall-out issue, it's utterly insane that these people were celebrating the Bomb......the very means of their potential extinction. And, it still is.
morocco bama
troops regularly got an up front and close seat to said tests. think my dad went,long time ago.
Yeah, and Nazi ideology was also "flawless" but German people were just too weak to implement it! Screw them anyway, all the strong ones have already died in the eastern front...
Hilipatihippa | 11.23.08 - 9:45 am | #
Speaking of Nazis:
Obama calls on his Internet campaign army to march again | McClatchy
troops regularly got an up front and close seat to said tests.
Yeah, I know. Also, same goes for several hundred thousand Japanese Civilians, and they didn't even know they had tickets to a test.
sorry but leafets were dropped before both "tests" in japan.
And a very specific ultimatum from the President. " A rain of ruin from the sky that the world have never seen the likes of"
Well. What I take away from CR's post and the attendant articles is that there was early recognition of regulatory failure and ideological resistance to correctives. Evidently, we need to get the idealogues under control to stand a better chance of decent governance.
The new buzzword inside the loop seems to be 'pragmatism'. Good choice, but only if it's more than a mere rhetorical device.
Above comments re: greed and entitlement very nicely illustrated by Time Magazine Person of the Year pick in 2006:
TIME Magazine Cover: Person of the Year: You - Dec. 25, 2006 - Science & Technology - Person of the Year - YouTube - Computers
IMO, the next cover needs to say:
Who Caused This Mess?
Just think of the money they could save by re-using the 2006 graphics.
yes and the president was harry truman who knew absolutly nothing about the bomb or mahattan project. roosevelt(sp) kept him totally in the dark.
sorry but leafets were dropped before both "tests" in japan.
Of course, and just what were the Japanese Civilians to do with said leaflets? Cover their faces with them?
I read the article in the WaPo this morning - glad to see that CR is on it. The most shocking assertion to me was the description of OTS competing for regulatory "business" in order to have their funding increased. Talk about a perverse incentive, and another black eye for the Bush administration.
-Jaso
yes and the president was harry truman who knew absolutly nothing about the bomb or mahattan project. roosevelt(sp) kept him totally in the dark.
gabyjan
well that explains a lot, i mean the thing that truman and bush are related. also with cheney and also with obama through his white mother
That deal could have been structured by cows.
C
Morocco Bama(Excellent) writes:
Increasingly, American Beauty comes to mind when I read your posts.
He's quite the piece of work. What's especially sad is that he's obviously intelligent.
When he's lucid and not fantasizing about going Klebold and blasting Nipsy Russel at 300m with a night sight, he's got interesting things to say.
Good morning Counterpointer, &etc.
When the madness is upon us, we can't be stopped. I used to look at the people taking on these immense loans and wonder how they could afford a peanut butter sandwich for dinner. But, I thought they planned to rent out a couple of rooms to make up the difference. Lots of them probably did. It's why not everyone is in foreclosure.
And remember my broker was honest, didn't do but 1 neg am, and no option arms at all.
So I think there is Blame for the Bushies, but there is blame for everyone to go around.
read them and get out of town,but they didnt believe.i dont know if that warning such as it was,was from truman as a condition of using the bombs or not.
but it took two to bring surrender and i dont think that there was a third.
the military told truman that if he didnt use them the war would cost another million life(allied side). they had no idea of what the bombs would do.
The Japanese ignored the US after Hiroshima because they thought we only had enough fissionable uranium for one bomb. The Japanese were right. They did not know that the US had a parallel plutonium bomb program, which produced the one that went off over Nagasaki.
gabyjan(Unrated) writes:
read them and get out of town,but they didnt believe.
LOL! Like they had freedom of movement? In wartime Japan? W.ever, I'm sure they dropped leaflets at Dresden too.
just anecdotal, but I am surrounded by well-educated friends who are doctors, writers, et. al, who shock me with their rudimentary understanding of personal finance. they are well-paid professionals, but are loaded apparently with mortgage debt, Helocs, car loans, etc. They are living with huge debt and the idea that it can be unmanageable has now left them confused.
Getting slammed with 401k losses is their wake-up but they still expect " the government" will fix things.
Just speaking generally with the folks you know is frightening...
"sorry but leafets were dropped before both "tests" in japan."
There were, as you say, generic warnings by leaflet.
At Hiroshima they were all policed up by the authorities soon after they fell.
And perhaps you forgot that, due to a SNAFU, they rained down on Nagasaki the day AFTER the nuclear blast.
Gaby, I'm having trouble with your information.
The trinity nuclear test was in July, 1945. The Hiroshima and Nagasaki detonations were a few weeks later, in August.
Truman knew what an atomic device would do.
byzantine_ruins i dont know if they dropped at dresden i do know that dresden was worse then either of the two japanese cities.
Used to be a management consultant for docs. Not much common sense or business sense and huge egos. Bad combination for finance and flying airplanes.
I think those conservatives who are complaining about W. not being a "real conservative" mostly resemble the old line communists who would claim that the problem was not Marx, but that Stalin and Mao were not "real Marxists". The conservative free market at all costs experiment has failed just as the Marxist experiment failed. The free market is all about offense, with no defense. Great on the upside, but it is brittle, and as soon as things turn down, things start to fall apart. Regulation and automatic stabilizers (which involve a big role for govt as a saftey net) are needed to give the system some resilience. Left to its own devices, the free market will concentrate all wealth in a few hands, which will ultimately undermine the system, since there is a limit to how much the few will consume, and the masses will not have the money to do so. They try to keep up for a while, but do so via debt, but without the income to support the debt. This needs to be rectified through a progressive tax system. However there are limits to how far one can press tax progresivity. The Laffer curve is both true and to an extent trivial. Yes the Govt will collet $0 at 2 tax rates, 0% and 100%m but it does not answer the key question of what the point of revenue maximization is. Clearly it is better to pick the lower of the 2 tax rates that lead to the same revenues. The experiment of the Clinton administration shows that in the high 30's for the top marginal tax rate we are still on the right hand (rising) side of the Laffer curve. I suspect that the revenue max point is somewhere neat 50%.
burnside what they knew after trinity was that it worked it blew up they had no idea about what it would do to humans.
"they had no idea of what the bombs would do."
Nonsense. The blast at Alamagordo was monitored by thousands of sensors and hundreds of scientists. The blast was heard in three states, and it broke windows 150 miles from ground zero. The hot, radioactive glass at ground zero was measured by scientists in a lead-lined tank within hours. Based on the data, Oppenheimer calculated 1870 feet as the ideal altitude for the shock wave to demolish wooden structures over the maximum possible area. Hiroshima was selected, in part, because its size best matched the expected footprint of destruction.
Rich's warnings on insurance companies has saved a few folks...I emailed his earlier warnings to friends with retired parents with annuities etc., and when those stocks started cratering, they followed thru.
So thank you Rich, you helped people you don't know, and you got my youngest brother to move his 403b away from Metlife and into Vanguard.
Gaby, just stop it.
My father was a participant in the AEC/Manhattan project. They knew in detail the effects of thermal/shock/radiation loads on structures and on living things.
Sorry to be so blunt, but there it is.
The US knew what the nuclear bombs would do, just as the Japanese empire knew what its attack on Pearl Harbor would do.
Yes the immediate death toll from Dresden was higher than that of Hiroshima or nagasaki (also true of the firebombing of Tokyo a few months earlier). However the long term effects of H and N were much worse. One must also consider though the number of casualties what would have been in an invasion of the islands, both US military, but also civilian. All things considered I think that Truman did the right thing, although I think a very good case could be made for dropping the first bomb about 10 miles offshore in tokyo bay as a warning, and see if that lead to capitulation. However, time was of the essence since Truman did not want Stalin to declare war on Japan and then claim it was the USSR that tipped the balance and thus was due to a bigger slice of the post war pie in Asia.
Those that blame the free market for the mess we are in are idiots. this was the pump and dump of America, facilitated by both of the criminal political parties.
this was the pump and dump of America, facilitated by both of the criminal political parties.
I agree.
"In 2000 these were made legal, and at the same time were prevented from being regulated, by the Commodity Futures Modernization Act, which specifies that products offered by banking institutions could not be regulated as futures contracts.
This bill, by the way, was 11,000 pages long, was never debated by Congress and was signed into law by President Clinton a week after it was passed. It lies at the root of Americas failure to regulate the debt derivatives that are now threatening the global economy."
A tsunami of hope or terror? - Alan Kohler - News - Business Spectator
Those who blame both political parties equally, for anything that happens, no matter what, are idiots.
alambka(Unrated) writes:
Those that blame the free market for the mess we are in are idiots.
Yes and no. No ideal is any more than a flag waved by man to recruit followers and justify causes. Thus, the 'free market' can neither accept blame nor receive praise. Only the people who mediate between the ideal and reality are responsible parties.
There is good Marxism and bad Marxism, good free market capitalism and bad free market capitalism.
The only mechanism of state that can be said to be genuinely poor is autocracy, because it's so fraught with problems -- dotage rule, ambitious princes, succession wars, captivity of the sovereign, being yoked to a single source of good ideas -- that it's hard to defend on anything other than a romantic / irrationalist basis.
Everything else is as good as its implementation is suited to its conditions and flexible enough to meet the changing needs of history.
Morning Byz.
I'm booking the regulators as Level 3 toxic asshats.
C
Why is it whenever a Republican leader
screws up we are instantly told to not "play the blame game"? Katrina? "Don't play the blame game".
Iraq? "Don't play the blame game". The meltdown of the World Financial System? "Don't play the blame game"...When will it be okay to play the blame game again? January 21st?
Also, yes, I believe more than a few Dems were compicit BUT, it was Republican ideaology that has proven to be the failure. Free market run amock with no regulation is a GOP wet dream...let's be honest here.
Hate to say this , but the nuclear bombs on Japan were just the period dot .
to a war that killed 50 million.
People had become pretty desensitized to death by that point.
Look how many people died on the Eastern front.
"alambka writes:
Those that blame the free market for the mess we are in are idiots. this was the pump and dump of America, facilitated by both of the criminal political parties.
alambka | 11.23.08 - 10:45 am | "
That is completely and utterly true.
That said, leaving the Repubs in place would have been madness. With the Dems, there's the glimmer of a chance of an ounce of hope that they won't make decisions that are entirely wrong.
Eventually -- likely maybe next year -- circumstances may overwhelm the standard playbooks of either party.
One thing that seems obvious now is why are officers of regulated corporations allowed to make campaign
contributions?
True, everyone is entitled to free speach and donations are a form of free speech, but when you are raising
money on behalf of elected officials who oversee your regulators is not that an inherent conflict of interest?
It seems every decade or so the S&L industry in particular craps all over itself and it then emerges that the most soiled institutions also were raising large sums of money for various politicians.
Then there is the money raised for lobbying. Its not unreasonable for an industry to want a voice at the table
but surely some limits need to be placed on the amount of money expended to influence regulation. The GSE's were notorious in their lobbying
efforts and would hire key lobbyists just to prevent them from being hired
by others seeking to tighten regulation on their lending practices!
Ed - Mtn View(Unrated) writes:
Those who blame both political parties equally, for anything that happens, no matter what, are idiots.
Who said anything about equal? I agree the Republocrats suck more than the Demopublicans at this point in time. Now it's the Demo's turn to Shine and show us what they can do.
Weak strawman argument by the way.
Purple, aside from Stalingrad, I'm not sure many in America know the Eastern front history.
Although I know something of the siege of St. Petersburg, I'll have to include myself among the ranks of the ignorant.
Take a look at the take the money and run satire on Housing Wire.
So "Don't you dare question the free market or you're an idiot" is a strong debating technique?
Another ripper of a statement, this time from APEC Leaders:
http://www.apec.org/etc/medialib/apec_media_library/downloads/news_uploads/2008/aelm/aelm.Par.0001.File.tmp/08_aelm_StandAloneStmt_GlobalEconomy.pdf
That'll work.
Not even a subclause on credit markets.
C
I find it ominous that the thread, over the past few weeks, has gone from gallows humor to survivalist tips to discussions of nuclear holocaust.
I'm making bacon and eggs for breakfast, and will go from there.
What Free Market? Show me one...just one, and perhaps I'll take that seriously. Otherwise, it's just a cannard.
Counterpointer(Excellent) writes:
I'm booking the regulators as Level 3 toxic asshats.
Ahh, mark-to-model douchebags.
"Dear OTS, we need the little eggheaded chicken who harasses Foghorn Leghorn and three Excel extensions to tell you what a loser you are! The area surrounding the intersection of these three n-dimensional curves represents the depths of your incompetence."
I have to say I'm going to be watching with fascination these attempts to reform the American bureaucracy. I will be curious to see how the American state perceives and implements the need for a rectification of the Dynasty.
I'm of the opinion this is when the Imperial Family has to massacre all the eunuchs and start over again, cost to the state be damned, but we'll see if there's an evil eunuch who is a better evil eunuch than the current evil eunuchs. Clearly, however, we are going to try some other stuff first.
I hope it is really as simple as toppling the Republican's "Thousand Year Reich".
"I'm making bacon and eggs for breakfast,"
You realize what those nitrites are doing to your body ...
Dry,
You still on line? was wondering if you have had any recent dealings with BUCY or JOYG. Both look super cheap in here, but wonder if mining equipment demand is going to go to 0 as is sort of implied by the stock prices.
Lax regulation/easy money are two sides of the same coin. If regulations were not relaxed, then the money would have had to been made even cheaper.
Firm regulations and easy money are policies that are at odds with one another. No one in government wants to burst a bubble. If you don't believe me, look at what is happening at the present moment- lending standards have risen sharply, but the government is harassing banks to lend, lend, lend to anyone that will take money- and the fricking press is doing the same damned thing.
I have never seen so much cognitive dissonance in my entire life.
One could argue that it is the very fact of government regulation that distorts what the market would otherwise self enforce.
Public policy deemed it necessary for banks to extend credit to all sectors of society despite, as Barney Frank shockingly admitted , 'not all people
are financially or culturally ready for home ownership'! But that doesn't
mean Frank won't strip a bank or S&L of its charter if they fail to make
loans to those financially and culturally unready for homeownership.
Thus banks are forced to use a one size fits all model to determine loan
eligibility. Subjective factors can too easily be designated as discriminatory and result in huge fines and court judgements.
....After what's going to happen happens, I'm sure there will be enough nation-states spread across this continent to satisfy any and all opinions & lifestyles.....
One could argue that it is the very fact of government regulation that distorts what the market would otherwise self enforce.
And that One would be Friedman and the Chicago Boys. We can't have our Free Market here without an appropriate Junta. We need our Pinochet.
....no sense in getting worked up for the "pre-game"....
More like Regions within a Global Feudal Empire.
Yancy,
I work in DC and overheard a politician who is heavily involved in this mess talking about stabilizing home prices, etc. They're still under the impression that they can control the prices. Unbelievable.
There is good Marxism and bad Marxism
The "good" Marxism is what gets taught in second-rate college Sociology classes, and it's safe because the theory doesn't leave the building. The "bad" Marxism is the one that's put into practice, and the one which killed an estimated 100 million people in the 20th century.
From C's link:
The IMF, with its focus on surveillance, should strengthen collaboration with other IFIs, enhancing efforts to integrate
regulatory and supervisory responses into the macro-prudential policy framework and conduct early warning exercises.
Oh Counterpointer, this shit is great. WTF is a "macro-prudential policy framework" and how many people were in the working group that had to stay up all night to work out how it could fit into a sentence. This is almost as good as the 1-paragraph release Uncle Billy found for the G-8 meeting.
The "bad" Marxism is the one that's put into practice, and the one which killed an estimated 100 million people in the 20th century.
You mean the one that was sponsored by us and our henchmen like Pinochet in Chile?
"Change we can believe in" has been replaced with "History rhymes."
Interesting that an election that was won on a platform of change managed to solidify the existing party in their dominant positions in both houses. The blame game has the potential of being the biggest backfire since Carter. The Republican administration in a divided government may get the credit for a financial crisis only to leave the unequivocally Democrat controlled Federal government to take the blame for a world wide depression.
No, I mean Mao Zedong, Joseph Stalin, and Pol Pot, for starters.
I work in DC and overheard a politician who is heavily involved in this mess talking about stabilizing home prices, etc.
Yep, witnessed Senator Schumer say that cramdown was the key to solving the financial crisis because it would put a floor under housing...
More on the economic geniuses involved in APEC, here's the Sept 07 statement, including para 3 "we are confident that robust economic growth will continue..."
No wonder they took their eye off the ball with all the other trivial pieities being mouthed.
http://www.apec.org/etc/medialib/apec_media_library/downloads/sec/pubs/2008.Par.0012.File.tmp/Outcomes_Outlook2007_08.pdf
Far out. Some satire just writes itself.
C
I agree, Dawg. I claimed months ago that the next pres. was going to be the sucker pres., wittingly, or not.
Doubt cramdown puts a floor under housing prices, but in the context of personal bankruptcy is needed to give people some route out. Bankruptcy is pretty onerous, so it already has moral hazard safeguards.
Boy CR companion is a great tool.
I love the way Chimpy is scolding CONgress for not giving free ponies to the little 3...his Carl Rove spin tactics will continue all the way to Jan 19
Plantagenet writes:
"I'm making bacon and eggs for breakfast,"
You realize what those nitrites are doing to your body ...
Plantagenet | 11.23.08 - 11:11 am | #
Science marches on Nitrites, Nitrates May Cut Heart Damage
What Free Market? Show me one...just one, and perhaps I'll take that seriously. Otherwise, it's just a cannard.
False. As I've discussed before, Free Markets are a utopian ideal that will never come to pass, much like "Pure Communism". they are ethereal and fantasy land.
Why are free marekts a fantasy? because there is no way to achieve them. Every attempt at getting towards free markets (i.e. deregulation) is met with IMMEDATE greed and stupidity by a few a-holes that ruins it for everybody.
weaken glass-steagal? get Citi.
deregulate energy? Enron manipulated the market causing brownouts.
allow CDS to be UNREGULATED? (they are totally unregulated by the way) AIG goes tits up.
in the end, although we can't blame "free markets" we can blame any attempt to get towards free markets. Or at least acknowledge that Free Markets are a great idea but nothing more... just like a "chicken in every pot and a car in every garage"
great fantasy. nothing more.
Is shitybank® still alive?
Nice team photo, looks like it was a prerequisite to work in the Bush administration that you look like a corpse
I claimed months ago that the next pres. was going to be the sucker pres., wittingly, or not.
From a class perspective, betting on Obama and the Progressives is like doubling down on the crisis. If we win, great and kudos.
But if we lose, the sub rosa class wars that have been percolating for the past 50 years (e.g. boomers, race, ivy league elitism) have the potential to explode.
So "Don't you dare question the free market or you're an idiot" is a strong debating technique?
My point was that what we've had is not a free market.
in a free market bad behavior is punished not rewarded.
That is not what we have had (mostly thru Government intervention).
would we have the derivatives problem if LTCM was allowed to fail?
would we have the bank problem if they were allowed to fail and officers prosecuted for malfeasance?
Not a free market.
and if you insist on calling it one and worse, if you really believe it's one , yes I think you're are an idiot.
One could argue that it is the very fact of government regulation that distorts what the market would otherwise self enforce.
one could argue this. but one would be incorrect to do this.
there was little to no regulation of the "investment trusts" of the 1920's. there was little to no regulation of the CDS field. In the 1800's there was almost no regulation in banking. and there were hordes of bank failures.
the principals show that they cannot self-enforce. nor have they ever been able to self enforce. nor will they be able to do so.
I wonder if incentives have anything to do with this? Where in our founding documents does it say anything about "the government must enact such laws as to constantly grow the size of it's purse?"
I think that generally sums up the problem re: oversight, lobbyists, wars for resources, etc.
It's always a revenue problem b/c if they don't have the money to dole out, they have no power.
On further reflection, I think this is where Republicans and "small government" have diverged. Small government within the constraints of, "but we still need more money", that is.
In my ideal world, some party would emerge whose slogan would be: "We're not for small government, we're for small revenues for government".
The size of the monster will decline as a matter of course.
YTL, Communism sounds great on paper as well, doesn't work so well in practice though. Perhaps at some point in our future our leaders will discover that maybe more than one theory can be implemented at a time?
I agree, Dawg. I claimed months ago that the next pres. was going to be the sucker pres., wittingly, or not.
I remember Jas.
I'm keeping a running total of the policy and appointments which I expect to be failures but I am willing to let him try. What surprises me is all the leftits nd moderates who express their surprise that a machine politician and party beholden is appointing machine enforcers and party loyalists above all. We'll see how that works when Rahm tries to strong arm a 4 term chairman. Arnold learned fast, Barry will too.
"They were created by the people of California and that is what is dragging this country into the abyss."
Totally myopic to blame CA for this. No one complained when the state carried the water for the whole US prosperity during the tech boom.And by the way,it has one of the lowest returns on tax dollars sent to Washington. It was Wall St. & Washington that created this problem, and CA is a leading indicator, of just about everything. 9% + unemployment and depression already here and coming to a neighborhood near you.
would we have the derivatives problem if LTCM was allowed to fail?
would we have the bank problem if they were allowed to fail and officers prosecuted for malfeasance?
yes.
Banks and investment trusts (now called mutual funds) were allowed to fail in the 1920's.
very shortly after that experience they were stronger than ever (although investment trusts were then called mutual funds)
in fact, one could argue a reason we did NOT have a second depression earlier was Glass Steagal and margin rules. (regulation).
Econ-Milf takes C apart:
PANDIT NEEDS TO MOVE HIS ASSETS - NYPOST.com
The bombings of Hiroshima and Nagasaki were presumably militarily useful. They were also attacks on non-combatants, and therefore acts of terrorism. If Uncle Sam wants to establish his bona fides in his war on terrorism, he should start by apologizing for those bombings.
PSgirl: Yes, doctors are notoriously bad investors and bad pilots. There's a particular type of plane called the "doctor killer".
Last year, my wife and I visited Japan for 2 weeks and spent 2 days in Hiroshima. It was a heartbreaking experience, one that I certainly will never forget. When you see the pictures of and the memorials to the Hibakusha, or the survivors of the explosion, you understand the lasting effects of this type of device. I too thought that Dresden could have been put on the same level at Hiroshima and Nagasaki before I visited the site - no more having seen the mutilated and twisted bodies of the children born of this terrible event.
Now I am no fan of the Japanese, being of mixed race (Korean and American.) 20,000 Koreans died in Hiroshima as well, having been captured and forced to work in factories. In addition, the record of cruelty by the Japanese against Koreans and other Asians is well documented. My American grandparents fought in WWII against the Japanese and my grandfather's life was likely saved by the bombings ending the war quickly.
However, even with this background, I found it impossible not to look at the way in which the US government handled this situation and be saddened by our ability to justify killing innocents. These cities were purposefully left untouched by standard bombing methods in order to maximize the scientific data collection as a result of the nuclear strikes. Think about that - our leaders had the forethought to not bomb Hiroshima with conventional weapons so we could better measure the effects of the nuclear weapon.
Anyone that thinks that this is decision that has not had lasting effects needs to go to Japan and visit the site. See the mound that contains the ashes of the victims. Read about how these bombs destroyed the Japanese psyche - Godzilla and Akira are not accidents, but attempts by a people to process something so unbelievably frightening and devastating that it manifests itself in mutation nightmares put to film and paper.
Finally, think about the sad irony of a country responsible for the only use of nuclear weapons against a civilian population in history trying to encourage and enforce containment and disarmament policy with the rest of the world. To try to personalize it a bit more, wouldn't you be nervous about the only guy in the neighborhood that had ever used a gun to kill people asking you not to get a gun yourself? I'm not saying that we should allow Iran to get nukes, but I certainly think it's more complex than we'd like to admit as Americans.
The bombings of Hiroshima and Nagasaki were presumably militarily useful.
Please don't encourage Jas, or whatever he is calling himself this week.
HaloScan.com - Comments
YTL, Communism sounds great on paper as well, doesn't work so well in practice though. Perhaps at some point in our future our leaders will discover that maybe more than one theory can be implemented at a time?
bingo.
the sooner people give up this fantasy about "free markets" or "pure communism" the better.
quit expecting govt to be able to "fix" everything. and quit expecting by some miracle that suddenly business will ethically and morally self regulate. neither is ever going to happen.
Before you all jump down my throats, I have a few things I'd like to say
-I am all for SMALLER govt
-I am aghast (but not surprised) that Obama thus far seems to be change promised but not achieved although I'll be willing to give him the benefit of the doubt
-I have no illusions that regulation will fix everything
-I am also pessimistic that our govt will do "the right thing"
-I am also unsure of what "the right thing" should be.
but that does not mean that responsible regulation shouldn't be ATTEMPTED.
Thanks for the Meredith Whitnety link
she makes a lot of sense here
C is toast
At the end of WW II the local Germans were made to see the concentration camps that some claimed to know nothing about. There was a lot of blame to go around, but the tone was set by the leader.
OK, I follow you. Pump and dump was perfectly legitimate, now we have to take our medicine and everything will work out just fine. Or maybe, pump and dump would never have happened IF Chrysler, Mexico, LTCM, etc. had been allowed to fail without government intervention.
Crispy&cole,
Thanks for the link.
"Citi is wrong if they say they are adequately capitalized. No bank is adequately capitalized today and Citi is no exception," [Whitney] said.
dr. munch,
Thanks for the early laugh. Bonanza A35 v-tails are the plane you are thinking of. "I can't be out of gas... I'm a doctor!"
Or maybe, pump and dump would never have happened IF Chrysler, Mexico, LTCM, etc. had been allowed to fail without government intervention.
doubtful. "pump and dump" was present AND ENCOURAGED by everybody in 1927-1929. People wanted it.
It was called "organizational support" at the time.
It was also done most famously in the early 1900s by JP Morgan himself.
Very well said, Cake of Death. My sentiments, exactly.
Anonymous(Unrated) writes:
Please don't encourage Jas, or whatever he is calling himself this week.
I had wondered who the Morocco Mole was. =)
Byzantine_Ruins writes:
Boy CR companion is a great tool.
With the wonderful CR Companion, when you make irresponsible statements like Republicans wanted to create a "thousand year Reich," or mention an imaginary thing called "good" Marxism, then you can run away and hide. It's better than earplugs. It's even better than an echo chamber!
I promise you, I'm not Jas. There is only one Jas....although, in a Jungian kind of way, we are all Jas.
Meredith Whitney is a great analyst, but not a M.I.L.F. - no kids yet.
I'd avoid JOY and BUCY at all costs. Between metals prices cratering as China rolls over and the credit crunch debacle, JOY and BUCY are at the far tail-end of "crack the whip". If you want to get crazy with the theme, I'd maybe go with FCX - there is a long term copper shortage, but even that's going to be a wild crazy ride. JOY and BUCY have no hope for 2 years, minimum.
I'm companion free, and loving every minute of it.
Plus, I would never trust anything proferred by someone named Ken Cooper.
Cramdoown means that the low value is acknowledged, and mtg reduced to that amount.
So, yep, I don't think cramdowns are a bad thing. Might prevent the housing mkt from overshooting on the downside.
And NOTHING is being financed, except hard equity loans and FHAs in the Miami-Dade Broward area. FHAs at least reflect lower values, so I think are less dangerous than one might think.
Regions Bank told a client of mine, that they were requiring 800 credit scores; ie, the equivalent of not loaning anything to anybody.
So if politicians are hasseling banks, the hasseling is not producing much of anything in the way of lending, at least where I am.
I promise you, I'm not Jas. There is only one Jas....although, in a Jungian kind of way, we are all Jas.
You have Jas style and even the friggen punctuation in that link.
You're busted.
Might prevent the housing mkt from overshooting on the downside.
Absolutely not. Everybody that gives out a mortgage will now have to price the possibility of the cramdown into the interest rate. And what do you think that will do to the affordability?
Rich or anyone - is there any way to assess annuities the way one can assess banks and credit unions? I had a talk with my dad about his retirement situation (fun, fun!) and found out he has an annuity. He doesn't want to think about it. I can't just email him and say, "be scared!" But if there was a way to give him specific info, I'd like to do that.
My mom is mostly in stocks, so she is already hosed. Sigh.
Lawyerliz,
Yes, at the moment, the harassment is not working, but politicians are not so easily denied for very long. If banks won't lend, they will either be forced to do so, or the government will lend for them. The bubble must be reinflated- that is all that politicians know.
"My point was that what we've had is not a free market. in a free market bad behavior is punished not rewarded. "
You are one naive t/fool. Punished by whom? Filthy rich business pals at the country club? "Timmy!! You have been a bad boy, your golfing privileges have been cancelled for two weeks!" For real punishment you would need a STRONG government.
And what about the Bhopal disaster? It is a kind of hard to complain WHEN YOU ARE DEAD!
"The Bhopal disaster was an industrial disaster that occurred in the city of Bhopal, Madhya Pradesh, India, resulting in the immediate deaths of more than 3,000 people, according to the Indian Supreme Court. A more probable figure is that 8,000 died within two weeks, and it is estimated that an additional 8,000 have since died from gas related diseases[1][2].
The incident took place in the early hours of the morning of December 3, 1984, in the heart of the city of Bhopal in the Indian state of Madhya Pradesh. A Union Carbide subsidiary pesticide plant released 42 tonnes of methyl isocyanate (MIC) gas, exposing at least 520,000 people to toxic gases. The Bhopal disaster is frequently cited as the world's worst industrial disaster."
Totally free markets would also include the very one freedom that would destroy that market: the freedom to create/gain monopoly by any means (=FREEDOM!) necessary.
Winner of one market would also in many cases expand into other markets too, creating eventually both horizontal and vertical monopolies.
"One thing that seems obvious now is why are officers of regulated corporations allowed to make campaign
contributions?
True, everyone is entitled to free speach and donations are a form of free speech, but when you are raising
money on behalf of elected officials who oversee your regulators is not that an inherent conflict of interest?"
This is an easy one, let everyone make whatever contributions they want to whoever, BUT make all contributions anonymous. Can't buy influence if they don't know who you are.
Attributed to a senior Bush advisor (believed to be Karl Rove) in 2004. "Were an empire now, and when we act, we create our own reality. And while you're studying that reality-judicously, as you will-we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to just study what we do."
Can anyone point to a web site that is measuring M3?
And, if money supply is increasing rapidly (?), does anyone have any idea how we make it disappear in a couple of years, before we get hyper-inflation?
CR, Your outrage seems little bit disengenuous if you do not share the direction of your outrage to other groups. What about the bankers who gave the loans? What about the people who took the loans knowing that they cannot pay the mortgage? What about the securitization of those loans and tranching which bundled good and bad loans so that their ratings were meaningless. What about the CDOs on these securitizations and the leverage allowed.
No your outrage has to be much more inclusive it is truly to be believed.
Beezer:
Google Shadowstats for a synthetic M3.
John Williams at shadowstatistics.com tracks M3 and a whole bunch of other gov't misleadings. Gotta pay of course.
Sorry,
it's shadowstats.com
Don't let Lockhardt out of this story, he is as corrupt as all of them!
The newly formed Federal Housing Finance Agency (FHFA) whose predecessor agencies failed to stop the meltdown at mortgage giants Freddie Mac and Fannie Mae aims to grow its budget by as much as 10 percent and hire more examiners.
There are lots of lessons [from this crisis]. Capital is extremely important, said FHFA Director James Lockhart. [And] there was a theory, say 15 years ago, that mortgage risk was not very large. Weve all learned that it can be a large risk.
The Office of Thrift Supervision (OTS), a Treasury Department agency, failed to recognize the vast portfolio of risky loans at the savings banks it regulated.
Several OTS-regulated banks have failed, including Countrywide; Independent National Mortgage Corp. (IndyMac), which failed in July; and Washington Mutual, which was taken over by the government and sold to JPMorgan Chase last month.
They all held billions of dollars in questionable mortgage loans. More than half of IndyMacs loans, for example $11 billion worth were Alt-A mortgages that didnt require proof of income.
Our examiners are starting to look at institutions being too concentrated in any one area, said William Ruberry, a spokesman for OTS. Because if something happens to [that area], the institution is vulnerable.
This is an easy one, let everyone make whatever contributions they want to whoever, BUT make all contributions anonymous. Can't buy influence if they don't know who you are.
The Supreme Court would shut that down in a second. Under free speech jurisprudence, the messenger and the message are often one in the same.
Science marches on Nitrites, Nitrates May Cut Heart Damage
Why@ ZIRP | 11.23.08 - 11:24 am | #
The original article:
"Supplemental nitrate (1 g/liter) in the drinking water for 7 days" is not the same as eating bacon.
But, as Homer says,
mmmmmmmmmmmmm..... bacon.
Office of Truth Supervision?
Is that the one Cheney heads up?
Sadly, attacks on civilians were/are standard military practice. The idea of noncombatants is a modern invention. Apologies will have to flow from every nation..I wouldn't hold my breath.
Watson writes:
The bombings of Hiroshima and Nagasaki were presumably militarily useful. They were also attacks on non-combatants, and therefore acts of terrorism. If Uncle Sam wants to establish his bona fides in his war on terrorism, he should start by apologizing for those bombings.
CSTAR that's the OTR --
Office of Truth Revisio
Watson writes:
..."start apologizing for those [atomic] bombings"....?
Watson must be very young.....
FFDIC writes:
"I can honestly tell you as a former FDIC employee that ALL regulators were following orders from President Bush. Former FDIC Chairman Don Powell carried out those orders which created the greatest financial crisis in the nation's history none of us will live long enough to fully recover from."
Hmm... really? What did the FDIC have to do with:
CDS'
Fannie Mae and Freddie Mac
Investment banks
etc., etc., etc.........
Nothing other than being around to clean up the mess as far as I can tell. Perhaps it's best that you've no longer around the FDIC.
The Bankers killed the Golden Goose.
Congress buried the body.
The Office of Thrift Supervision marked the grave of the Goose like a dog marks a fire hydrant.
2.9 million foreclosures 2008 so far through October.
2 million more foreclosures projected in 2009.
5 million facing foreclosures.
40% of homeowners projected to be underwater in near future.
These foreclosure victims have no voice,
These people became victims because they trusted their banker who took financial advantage of them and the Congress watched them through their regulator, the OTS.
Office of Thrift supervision 12-26-06 states in writing The OTS Consumer Complaint program is voluntary, a non public process by which OTS attempts to assist the consumer in resolving complaints with savings associations regulated by OTS.
The Office of Thrift Supervision 12-126-06 states in writing there are No Consumer Federal Banking Regulation so violations consumers file are not enforceable.
The Congress has watched the lynching of these home owners and at the same time have
legislatively created trillions of dollars to protect the powerful and the wealthy.
These Congressional members have been bought and paid for by the wealthy and the powerful.
The bankers who lend mortgage money control every detail of the lending process. They determine the terms and conditions. They determine the documentation, the requirements, the rates, and who gets what. The borrowers have not control or input over the process. The Congress has passed no legislation to control the aberrant behavior of the federal savings bank lender.
Conversely the Congress has passed no legislation to permit the mortgage borrower
to object or contest their foreclosure within the same regulatory system that the bank lends its mortgage money.
The Office of Thrift Supervision is a Bank Buddy. OTS do not have the knowledge, the expertise, the will, the manpower, the authority or the common sense to regulate, supervise or to enforce any legislation regarding federally chartered savings banks.
These Banks operate autonomously, with absolute impunity and answer to no one.
When people state that people got mortgages they could not afford it was the bank that
made the rules, the conditions, the values and the decision who got what. Only a fool would think the borrower had control over getting a mortgage loan.
The Office of Thrift Supervision is a lackey of the wealthy and powerful Congress who serve those that give the Congress the greatest benefits, the Banks.
Until my fellow Americans watch their house being sold by Congress at foreclosure because the federal bank violated what little rules there were and then lied about it, they can never really taste the political vomit of our elected federal officials.
There are millions of foreclosure victims that have no voice. Their silence is deafening.
I cant speak for all of them, for I am one of them.
Michael LittleBig
11-23-08
"Hmm... really? What did the FDIC have to do with:
CDS'
Fannie Mae and Freddie Mac
Investment banks
etc., etc., etc.........
Nothing other than being around to clean up the mess as far as I can tell. Perhaps it's best that you've no longer around the FDIC."
Ah, there must be a brownout in Iowa, the bulbs are burning a bit dimly tonight...The point is that what was happening at the FDIC was surely also going on with the OTS, only more so. Got it?
I feel sick to my stomach looking at the gleeful ignorance of those depicted in the photograph. It is not regulations and red tape they are cutting up, they are destroying human lives. How can they sleep at night now that it has become clear where their blind ideology has taken us?