Because WordPress sucks, I couldn’t embed this slideshow.
Here is the link.
I’m just sayin’, is all.
Because WordPress sucks, I couldn’t embed this slideshow.
Here is the link.
I’m just sayin’, is all.
There have been so many juicy topics to cover, it’s been difficult to keep away. Every time I’m moved to write, though, I really have something else to do or simply don’t want to devote the time to it. That said, here is, in summary, how to think about the following issues:
Google/China: Yes, if Google was #1 in China this wouldn’t have happened, but they’re not and it did. As a result, this is one of the great humanitarian corporate moves of all time. Perhaps the greatest (there’s not a lot of competition, I’m guessing). Google should follow through and close their business there. As arguably the most important corporation in the world, the move will properly shame China and the many companies that remain in that authoritarian country. Here’s a question that any one doing business there should ask: Would I want to live here?
Haiti: Nothing to do in the aftermath but help. In the long term, I’m with David Brooks and Bret Stephenson. Let’s stop giving money to countries “in need.” It does nothing, and may actively do harm. It’s difficult, because it is human nature to try to help fellow humans in need, but it’s also the right thing to do. Certainly, what the first world has been doing for decades has not worked.
Taxachusetts: I would have voted for Scott Brown too. Seriously. I would have voted for a cardboard cutout against Coakley. Although she was inept, I would have done it to send the message. I have said, many times, that if Obama and this Congress can’t get it done, then there is no hope for us. Year one has been an epic, unmitigated failure. Iraq, Afghanistan, secrecy, deficit spending, bank coddling, and worst of all, the healthcare nightmare. I blame Obama for not using his robust post-election strength to strong arm Pelosi (failure) and Reid (failure) immediately. Weak, poorly managed, pathetic. Obama, where are your balls? It’s time to lead.
And, btw, why do you need the 60 votes? Make an exceptional bill and let the GOP filibuster. Call their bluff. If they do it, and the bill dies, you hang it around their neck. Now, the bill dies, and it’s a Dem failure. Disgraceful.
(But then there would be no healthcare bill, someone wails. So fucking what? Paul Krugman can cry to his cats. This is not the most pressing issue in America. Budget restraint, financial reform, and confiscatory, punitive taxes on very wealth bankers, should be the priority. Followed by a 10% spending cut across the entire government, no exceptions.
We are going to have to suffer, period. Let us start suffering already so we have a shot at not fucking our children.)
The bottom line for me, in all this, is that I have really given up hope. I don’t believe our Congress (and the state legislatures) are capable of introducing the change (ethics, responsible spending) that is necessary.
Something very, very bad is going to happen in the next ten or twenty years. War with China, epic depression/inflation/default, or, in the best case scenario, a benevolent military coup (and a draft) that reforms the government in a way that makes it possible for America to function properly.
David Petraeus, are you out there? Rome needs you. Cross the Rubicon. Cast the die!
P.S. I can’t believe I just wrote that. Nevertheless, letting it stand.
Since everyone is summing up the decade, here are my two cents:
In America, it was the decade of fear. Beginning with Y2K, punctuated by 9/11, and ending with the continuing uncertainty of economic apocalypse.
We have gone, in a matter of a decade, from the security and comfort of Pax Americana, to, at best, a weak bipolar partner whose straits are inelegantly summed up by the popular construction Chimerica.
We are polarized, insecure, and, not surprisingly, at risk.
It hasn’t been a pretty picture.
You can figure out who to blame for yourself.
Or why Congress better tax 95% of Wall Street bonuses (with no bloody loopholes).
From a former Managing Director at Goldman Sachs, Nomi Prins, writing on Mother Jones:
Keep in mind that by virtue of becoming a bank holding company, Goldman received a total of $63.6 billion in federal subsidies (that we know about—probably more if the Fed were ever forced to disclose its $7.6 trillion of borrower details). There was the $10 billion it got from TARP (which it repaid), the $12.9 billion it grabbed from AIG’s spoils—even though Goldman had stated beforehand that it was protected from losses incurred by AIG’s free fall, and if that were the case, would not have needed that money, let alone deserved it. Then, there’s the $29.7 billion it’s used so far out of the $35 billion it has available, backed by the FDIC’s Temporary Liquidity Guarantee Program, and finally, there’s the $11 billion available under the Fed’s Commercial Paper Funding Facility.
Tactically, after bagging this bounty, Goldman asked the Fed, its new regulator, if it could use its old risk model to determine capital reserves. It wanted to use the model that its old investment bank regulator, the SEC, was fine with, called VaR, or value at risk. VaR pretty much allows banks to plug in their own parameters, and based on these, calculate how much risk they have, and thus how much capital they need to hold against it. VaR was the same lax SEC-approved risk model that investment banks such as Bear Stearns and Lehman Brothers used, with the aforementioned results.
On February 5, 2009, the Fed granted Goldman’s request. This meant that not only was Goldman getting big federal subsidies, but also that it could keep betting big without saving aside as much capital as the other banks.
Read this piece and then forward to your Congressperson and the White House with your feelings on the matter. The top talent is scamming you.
Because it’s a matter of trust. The economy won’t recover until there is a palpable sense that we are doing the right thing. But no one can say, with certainty, that we are. Meanwhile, Americans, who truly understand being in debt, are watching the government pile on trillions with only a possible (it’s a bet!) positive outcome.
It’s beyond frightening. And though as a basic matter of economics – the money goes into circulation and revives the patient – what they are doing should work, there is a “spiritual” component here that is ignored. The patient has got to believe he’s going to get better. On that score, the doctors have a lot more work to do.
Just watch the Q2 GDP numbers beat expectations. We’ll hear that the recession is (near) over. And yet…their are plenty of layoffs on the horizon and no job creation; plenty of debt, and nothing resembling a balanced budget.
The hardest times are still ahead.
P.S. On a related note, if Congress doesn’t tax Goldman Sachs bonuses at, like, 90% (and they won’t), it will be hard to say that Americans aren’t justified in taking the law into their own hands down at 85 Broad Street. They shouldn’t. It is wrong to do so. But it will still be hard to say. Goldman Sachs represents the apotheosis of the moral hazard. Too big to fail, they make their profits on your back.
I have completely soured on the American political system. Really, I have given up.
Democrats are in charge of Congress and the Executive and they still pass shit legislation like the weak credit card reform bill, Obama’s financial regulatory half-measures (still to be watered down even further), and now this cash for clunkers deal.
What the fuck? Just what the fuck?
Why should someone driving a piece of shit get my money to help them buy a new car? And, you know what? We’re borrowing it. So it’s my child’s money. $104 billion Treasury auction next week. And the bottom line here is that all of the important reforms are not happening. It’s all window dressing. And kicking the can down the road. Again. Just like the GOP. We have a completely dysfunctional, utterly broken political system and it won’t change until (seriously) a revolution happens.
WE ARE FUCKED.
Par for the course. Reflate those popped tires and keep driving towards that vast chasm in the distance.
Who trusts anyone right now?
February 28, 2007 – Dow Jones @ 12,268
March 13th, 2007 – Henry Paulson: “the fallout in subprime mortgages is “going to be painful to some lenders, but it is largely contained.”
March 28th, 2007 – Ben Bernanke: “At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained,”
March 30, 2007 – Dow Jones @ 12,354
April 20th, 2007 – Paulson: “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.” , “All the signs I look at” show “the housing market is at or near the bottom,”
April 30, 2007 – Dow Jones @ 13,063
May 17th, 2007 – Bernanke: “While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.”
May 31, 2007 – Dow Jones @ 13,627
June 20th, 2007 – Bernanke: (the subprime fallout) “will not affect the economy overall.”
July 12th, 2007 – Paulson: “This is far and away the strongest global economy I’ve seen in my business lifetime.”
August 1st, 2007 – Paulson: “I see the underlying economy as being very healthy,”
October 15th, 2007 – Bernanke: “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”
December 31, 2007 – Dow Jones @ 13,265
January 31, 2008 – Dow Jones @ 12,650
February 14th, 2008 – Paulson: (the economy) “is fundamentally strong, diverse and resilient.”
February 28th, 2008 – Paulson: “I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes. Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”
February 29th, 2008 – Bernanke: “I expect there will be some failures. I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”
March 16th, 2008 – Paulson: “We’ve got strong financial institutions . . . Our markets are the envy of the world. They’re resilient, they’re…innovative, they’re flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong.”
March 18th, 2008 – Bear Stearns Bailout Announced
May 7, 2008 – Paulson: ‘The worst is likely to be behind us,”
May 16th, 2008 – Paulson: “In my judgment, we are closer to the end of the market turmoil than the beginning,” he said.
May 30, 2008 – Dow Jones @ 12,638
June 9th, 2008 – Bernanke: Despite a recent spike in the nation’s unemployment rate, the danger that the economy has fallen into a “substantial downturn” appears to have waned,
July 16th, 2008 – Bernanke: (Freddie and Fannie) “…will make it through the storm”, “… in no danger of failing.”,”…adequately capitalized”
July 20th, 2008 – Paulson: “it’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”
July 31, 2008 – Dow Jones @ 11,378
August 10th, 2008 – Paulson: “We have no plans to insert money into either of those two institutions.” (Fannie Mae and Freddie Mac)
September 8th, 2008 – Fannie and Freddie nationalized. The taxpayer is on the hook for an estimated 1 – 1.5 trillion dollars. Over 5 trillion is added to the nation’s balance sheet.
September 16th, 2008 – $85 Billion AIG Bailout “Loan”
September 19th, 2008 – $700 Billion Bailout Plan Announced
September 19th, 2008 – Paulson: “We’re talking hundreds of billions of dollars – this needs to be big enough to make a real difference and get at the heart of the problem,” he said. “This is the way we stabilize the system.”
September 19th, 2008 – Bernanke: “most severe financial crisis” in the post-World War II era. Investment banks are seeing “tremendous runs on their cash,” Bernanke said. “Without action, they will fail soon.”
September 21st, 2008 – Paulson: “The credit markets are still very fragile right now and frozen”, “We need to deal with this and deal with it quickly.”, “The financial security of all Americans … depends on our ability to restore our financial institutions to a sound footing.”
September 23rd, 2008 – Paulson: “We must [enact a program quickly] in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses, both small and large, and the very health of our economy,”
September 23rd, 2008 – Bernanke: “My interest is solely for the strength and recovery of the U.S. economy,”
October 31, 2008 – Dow Jones @ 9,337
March 31, 2009 – Dow Jones @ 7,609From