Now come the first books to record the Wall Street financial crisis -- Week of March 8, 2010 notes
Date: 2010-03-15T00:00:00
Author: Edith Fletcher
Number of Views: 248
3/14 -- Now come the first books to record the Wall Street financial crisis – Week of March 8, 2010notes
As so often happens, a character in a book provides the “real” substance of a historical main event such as the financial meltdown we are still living through. In his book “The Big Short” Michael Lewis describes two who were swept up in the crisis and their final disillusionment.
They "had always sort of assumed that there was some grown-up in charge of the financial system whom they had never met; now they saw there was not."
The book “drips with sarcasm” says Steven Pearlstein in the Washington Post, but Wall Street earned it. He says it “manages to give us the truest picture yet of what went wrong on Wall Street -- and why. At times, it reads like a morality play, at other times like a modern-day farce. But… its value lies in the way it reveals character and motive and explores the cultural context in which the plot unfolds.”
In another book “Too Big to Fail,” author Andrew Ross Sorkin recreates all the drama and trauma of the days leading up to the meltdown. Reading how those bankers operated is like spending days in a Tyson chicken gutting plant. Unending scrawny chickens conveyed on hooks past your eyes and guts all over the place.
They had various methods of twisting each other’s arms and necks. And we have to suppose they still do.
On Sorkin’s book cover, Tim Geithner is quoted saying to Henry Paulson about disclosing the $700 billion bailout before Congressional leaders knew about it – “”I’m certain you’ll spark a freakin’ panic…” And I’ve been in an amazed panic to finish the book ever since.
3/13 -- First “corporate person” to run for office – Week of March 8, 2010 notes
Murray Hill is “his” name and “he” is a public relations corporation “who” has filed for the Republican primary for the 6th district seat of Maryland now held by Democrat Rep. Chris Van Hollen. “He,” Hill, will not donate campaign funds to anyone, but will spend them “himself.”
“The candidate wasn’t available for interviews,” said John Wagner of the Washington Post, “available” implying something or someone to touch. However, “his hired gun” and campaign manager William Klein said the firm is the 1st "corporate person" to run for any office and will run a spirited campaign that "puts people second, or even third.”
And “his” prolific ads promise results -- “Vote for Murray Hill Incorporated for Congress -- for the best democracy money can buy," says “his” Web site.
But, does ”he“ bleed when cut by critics or just seep a little corporate PR? And when asked for an opinion does “he” cough up a TV jingle or a billboard slogan? Or does he have a stockholder’s vote on it? And “he” may be able to step on a lot of regular people’s toes, but no matter what the Supreme Court says, “he” can’t tap dance like a regular politician.
The bright side might be that if an accounting corporation won an election for comptroller “he” would already have a battery of bean counters. Or if a firm of lawyers were elected attorney general “he” would have the same in brief writers.
The problem is that the state and the Constitution have some requirements hard to fill, but “his” campaign managers are working on them. Hill’s president Eric Hensal was chosen by stockholders to be the “designated human” to attend debates and sign needed paperwork. And that’s more human than some candidates are.
3/12 -- Check out the magic and think for yourself – Week of March 8, 2010 notes
Two brothers, Jay and Eric Merkle, found they had been victims of a Ponzi scheme in 2004. Then instead of reporting it to the authorities they joined up with the perps and became co-predators. When that scheme failed they started another, became rich and failed again when the FBI caught them.
Though duping investors out of $50 million is small potatoes to Bernie Madoff”s $65-billion, they were just one of the huge crowd of Ponzi schemers that have became part of America’s persona today.
The victims “caught the true, democratic spirit of a decade of an unrestrained magical thinking that infected rich and poor, successful and ne’er-do-well, the financially savvy and neophytes who couldn’t tell a stock from a bond,” said Andy Kroll in CBS NEWS.
All of these people, very much like you and me, are part of what you could call the Ponzi-Prone-Patsies Being a P-P-P is not a character failing – charities and pension funders are found in this group. Ordinary people have been fooled. And dozens of schemes have been found by the SEC and FBI. At 150, four times as many Ponzi schemes broke down in 2009 as in 2008.
But it could be seen that people are letting others make too many important decisions for them without due diligence in checking out their stories -- and some are preposterous.
Yes, but checking schemes out may take a lot of time. Oh? A lot of time compared to what – TV viewing, partying, shopping, blogging?
Check it out - it could even be fun if you helped catch one of those Merkles or Madoffs.
3/11 -- Fannie and Freddie still the old Fannie and Freddie – Week of March 8, 2010 notes
After a year and a half has passed since Fannie Mae and Freddie Mac got their big bailouts, they are still the same old money pits.
During this time, the Fed has worked to roll back the bailout treatment it had used with several companies and banks to hold up financial markets – everywhere but in the cases of Fan and Fred. For them a redo plan was promised by Feb.1. Now it will be another year before the government. proposes how to restructure them, says Treasury Secretary Tim Geithner.
Meanwhile they are still slurping at the tap running up a tab totaling more than $125 billion – the costliest bailout baby of the bunch.
And the beat goes on. After the B administration offered $200 billion available to them, the O administration took it to $400 billion and then decided to offer unlimited funds to show they would be solvent to investors.
Democrats say they don’t want to upset Fan’s and Fred’s equilibrium because they’re helping the program making new homes more affordable, easing borrower’s burdens and sending funds to hardest hit sections of the country. They also don’t want attention aimed at the impasse before the elections.
GOPers say Fan and Fred are intrusions into the free market and a Democrat “patronage haven,” says Zachary Goldfarb in the Washington Post. Other critics say unlimited funding is like giving them a “blank check.”
Meanwhile it’s back to the policy-papers drawing board behind closed-doors of the haggling rooms – in slo-mo.
3/10 -- Nobody is going to watch the banks watching out for you – Week of March 8, 2010 notes
When it becomes necessary to take care of threats to consumers, it’s best not to hire the suspected threateners to take care of those threats. But that’s what “embedding” a proposed consumer protection agency is going to do if Congress keeps on its present path.
Sen. Chris Dodd, at first, asked for an independent agency to watch banks and their lending practices for consumers of loans and credit cards. But after extreme lobbying (what else?) from bankers themselves, Dodd gave up on independence.
He accepted their demand to “embed” the spy glasses and whip crackers inside the Federal Reserve. It’s independent all right but in the wrong way – independent from scrutiny by anyone.
It’s a fact that the Federal Reserve is a group of bankers who produce certain products, not consumers of those products, and can't be trusted to look out for consumers. It’s also a fact that the Fed failed to crack down on lenders during the subprime mortgage boom. And look what the consumer got – economic crisis.
It should be a given that the protector of the consumer has to be independent. But so far, not so good.
3/9 -- Watch Papandreou and see if he can put a straitjacket on hedge funds – Week of March 8, 2010 notes
Greek Prime Minister Papandreou is here in the U.S. to try. So, three cheers for him. And if he can try so can we.
He reports that he is not here to meet with O to get money. He is here to try to get help in putting a straitjacket on hedge fund speculators whom he blames for making Greece’s economic crisis worse. We say join the club, Mr. Papandreou. They made ours worse over a year ago and nothing has been done.
According to Wikipedia, a straitjacket is what is “used to restrain a person who may otherwise cause harm to him/herself or other persons.” And certainly the hedge fund speculators have caused harm all over the world. It ought not take so long to produce one of those garments or something like it.
Besides seeking advice from the International Monetary Fund on taxes and budget reform, Papandreou is calling for stricter control of currency markets.
On Monday he compared currency speculators to arsonists saying, “It is common sense, enforced by insurance regulators, that a person is not allowed to buy fire insurance on his neighbor's house, and then burn it down to collect on that insurance.”
If acting like an arsonist isn’t criminal it does look maniacal. The U. S. should forego waiting another year in dealing with those speculations. It doesn’t make sane sense not to.
3/8 -- Some say the health care bill runs into a constitutional wall – Week of March 8, 2010 notes
Were constitutional lawyers involved in the development of the health care plan or were they overlooked? Doesn’t seem possible that they were, but government doings can be strange – even unconstitutional. Wait, O taught constitutional law in law school. That’s even stranger.
What’s not strange is Virginia’s legislature getting ready to become the first state to pass a law that says citizens can’t be required to have medical insurance. The upset election of new Republican Governor Bob McDonnell predicted this outcome. And dozens of other states are considering the same legislative path.
If states can opt out of the mandate it may become a national revolt and battle. The Virginia efforts are aimed at constitutional questions and the rights of states to rule over their own affairs.
Rep. Bob Marshall, a Virginia delegate who sponsored its bill, says the government wants its leaders to be able to tell its citizens what to do, and “that is not what the American Revolution was about.”
Opponents say the Virginia bill is reminiscent of Virginia’s “massive resistance” to racial integration ordered by the Feds in the 1950s. Supporters say there’s nothing in the constitution that gives the government the right to penalize the public for failing to buy something.
Constitutional lawyers will probably have the last word.
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