Rolling US Economy Into The Shitbin Thread

Though it does make me happy that China is against dollar inflation, the whole IMF/NWO global currency idea has always seemed kind of scary.

CHOCOLATE PRODUCTION IS UP

that's one of those 'ppl working on their sex lives in a downturn' things isn't it

LAYOFFS NECCESSARY TO COUNTER WORLD INFLATION THREAT, SAYS WORLD RESERVE CHAIRMAN

“If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.”

kill em all, for real

check their hands for traces of caviar

'“If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.”'

isn't he just saying that he still has a job? I mean this sounds bad at first, on the other hand, a bailout that continues to give people their salary doesn't come with strings attached w/r/t how they spend their salary. Note I didn't bother to read the actual article because I'm lazy.

interview with ex-Treasury Sec. Paul O'Neill on last night's PBS Frontline Ten Trillion and Counting was depressing as hell. transcript here: http://www.pbs.org/wgbh/pages/frontline/tentrillion/interviews/oneill.html

I favor wasteful and capricious spending by the wealthy -- it's the best way to get that money into the hands of the middle class.

Overpriced stuff like bottle service is like a de facto prestige tax. I like it.

I was at the Treasury as the secretary from Jan. 20, 2001 until I got fired at the end of November 2002. I got fired for several reasons, including (that) I kept saying, "I'm looking at all these intelligence reports, and I don't find anything in here that rises to the level of evidence of weapons of mass destruction." ...

In addition to that, as President Bush was getting ready to recommend another tax cut beginning in early 2002, I said we shouldn't have another tax cut. ... I said we could have another 9/11, and if (we) did, it could cost us $100 billion easily.

The 10,000-page tax code, (is) proof we're not an intelligent people, and it desperately needs to be reformed. And it will take some money to smooth the transition from 10,000 pages to 10 pages that (the American people) can understand and believe in.

We need to fix Social Security and Medicare, and that's going to take a fair amount of money to do those things, ... so we shouldn't have a tax cut. And I kept saying it to the point that finally ... I got fired. So it's not really true that Barney Frank can say nobody raised it. I raised it at the highest levels of government. When I went to Congress to testify, I raised these issues with them. There were no takers.

I am interested in what that must have been like for you personally. Is it the kind of thing where Paul O'Neill walks into a room and everybody stops talking? How did that go?

... At the beginning when I started saying these things, there were other people sitting around the circle who nodded their heads and said: "I agree with Paul. I think he's really right. I know something about the economy, and it sounds right to me." But it was noticeable, the more we moved into the summer, the early fall, nobody else was nodding their head anymore.

The president really didn't want to hear what I thought, which was his right. I was happy to be fired at the end of November 2002. I didn't want to be part of something I thought was fundamentally wrong. I would not have wanted to go and testify to the Congress that this was all a wonderful idea when I thought it was a terrible idea. And unfortunately I turned out to be right ....

Did you walk into the Oval Office at any point, you and the president, and say, "Mr. President, I've got to put it on the line: For the country and for the administration, this is a terrible idea"?

I just kept talking about the facts, you know. I didn't ever go in and say, "Hey, this is awful; I'm not going to be part of this." But I said over and over again what I just said to you about the reasons why we shouldn't do this.

To him?

Absolutely to him, multiple times.

What was the president's response?

You know, he didn't really respond.

Nothing?

No.

He had to say a word or two.

No, absolutely not. That was my experience the whole time I was there. I said lots of provocative things to him, and I never really got a response. ...

This issue of stimulus is a different issue. This is about borrowing money and spending it for things; it's not about recapitalizing the financial system. So let's use some numbers. Right now we have, arguably, 10 million unemployed people. So if we said we were going to give every one of those 10 million people $40,000 a year for the next couple of years while we're in this ditch, how much would that cost us? Well, let's see: 10 million times 40,000 -- that's $400 billion. So if we're going to do $700 billion, what are we going to do with the other $300 billion?

Hadn't thought of it like that. I like this plan sign me up.

Safire in 1998 http://www.nytimes.com/1998/04/16/opinion/essay-don-t-bank-on-it.html:

1. No private enterprise should be allowed to think of itself as ''too big to fail.'' Federal deposit insurance, protecting a bank's depositors, should not become a subsidy protecting the risks taken by non-banking affiliates. If a huge ''group'' runs into trouble, it should take the bank down with it; no taxpayer bailouts should allow executives or stockholders to relax.

Gill Sans is a pretty terrible font for body text.

I keep having a vision of a New Yorker style cartoon where a fat dude sits on his living room couch, surrounded by Cheetos and beer and remote controls and his wife stands in the doorway, looking at him, and he's saying "I'm too big to fail"

Scheer: another ex-Goldman Rubinite on the way...

Obama's Toxic Advisers

Bernie Sanders, the senator from Vermont who is independent in spirit as well as party label, has placed a hold on President Obama's nomination of Gary Gensler to head the Commodity Futures Trading Commission.... I am eager for Barack Obama to succeed, but I see this appointment as further evidence that the president has entrusted his economic policy to the wrong people.

Gensler helped create this financial crisis when he was in the Treasury Department back in the Clinton era, when bipartisan cooperation with Wall Street lobbyists was all the rage....

In congressional testimony supporting the radical deregulation of the financial derivatives market, Gensler had insisted with great enthusiasm that "OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world." As to the many trillions of dollars in credit swaps that now afflict the world economy, Gensler specifically called for freeing swaps of this kind from existing government regulation in the Commodity Exchange Act, which regulated other futures such as wheat sales. He said, "...[S]wap transactions should not be regulated under the CEA. ..."

Not much time to get into it now, I'm afraid, but I spotted two very interesting related pieces about the financial industry's rise in the U.S.: the first, a short post from Josh Marshall, and the second, a long article from Simon Johnson in the May issue of The Atlantic (which was released early online, obv.).

For me, these articles raised questions about the nature of work in the United States, e.g., why did we allow ourselves to get to the point where the financial sector was the nation's "dominant industry" (paraphrasing the CEO at the press-conference after Pres. Obama's meeting with business leaders); what kind of work should we, as a nation, emphasize, especially after the rush to globalize the economy (presumably so we could enjoy the higher-end service jobs, a notion that's always seemed to be a bit silly to me)). Anyway, interesting pieces.

I'm looking forward to reading those articles. But "we" can't enjoy those higher-end service jobs, because there can't be enough of them. Maybe this is the same as all the other riggings of economies to favor the rich throughout history. But this one seems different, because even the kinds of jobs you'd think you couldn't take away, like farming b/c people have to eat, are in fact hardly possible now in the US.

Also of interest is Simon Johnson's TPM interview of about a month ago:

Listen to how casually radical his proposed solution is: Be ready to take down a series of elites and, as Johnson puts it, "oligarchs" in the U.S. fiancial sector to, essentially, "drain the swamp" and get the economy and banking sectors moving again.

Haha. Okay, that didn't work. Try this.

iirc he dropped the 'o' bomb more than once on moyers a few weeks ago

Doug Henwood: "So Obama fired Rick Wagoner at CEO of GM. No doubt he deserved it, but why do all the idiot bankers that Pres. Yeswecan met with on Friday get to keep their jobs? Oh yeah, I know. Only automakers get put through the wringer for a little federal spare change. Bankers get blank checks, no questions asked. And only autoworkers get their contracts ripped up. Ripping up bankers’ contracts would be governing by anger, and we don’t want to do that!"

http://doughenwood.wordpress.com/2009/03/29/one-down-dozens-to-go/

Well, AIG was forced to take a new CEO.

And doesn't Citigroup have a different CEO now?

The banking industry has had nowhere near the amount of conditions that the automotive sector has had to take on.

But the government didn't promise to bail-out all failing industries. Instead, it's acting on a case-by-case (or industry-by-industry) basis to prevent a very bad recession from metastasizing into a depression. Whether the auto industry requires similar concessions as those made to the banks (or whether we should have made concessions to the banks) is, admittedly, an open question.

the banking industry does not need an entire transformation and operational restructuring to survive.

OH NO?

They've been doing a heckuva job.

since black swan was mentioned on this thread, i'm posting this here:

http://wrongtomorrow.com/

(http://wrongtomorrow.com/blogposts)

http://content.yieldmanager.edgesuite.net/atoms/8b/99/78/2d/8b99782d8367ffabf635a178e7b64a72.gif

yuan renminbi
http://www.latimes.com/business/la-fi-yuan3-2009apr03,0,865582.story

interesting interview by bill moyers of william black, with black calling bullshit on the bailout
http://www.pbs.org/moyers/journal/04032009/watch.html

tough break, GM

It'd be good if everyone calling bullshit on the bailout would actually do any good.

Is there a youtube mashup of various congressman/women saying "It's this or the economy dies" [quick cut] "This bailout needs to stop"? Cos I want to see one.

srsly, maximum NY unemployment is $430/week. How'm I sposed ta eat after the rent, COBRA, MetroCard & utils?

http://www.nytimes.com/2009/04/19/nyregion/19benefits.html?ref=nyregion

no shit; I lost my second job in four months this week, I have some "contract" work pending but getting paid on that jeopardizes even the shitty amount of unemployment I'm eligible for from California ($450 a week) because they'll classify me as 'self-employed' and therefore fucked...not even sure what to do about that.

I was wondering when something like this would happen.
http://www.forbes.com/2009/04/22/fannie-freddie-kellermann-business-wall-street-freddie.html

Talking more about the suicide than the rest of the article.

wow, Cali get $20 a week UI more than NY.

your pal and Bam's:

http://www.nytimes.com/2009/04/27/business/27geithner.html?hp

An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions....

In a May 15, 2007, speech to the Federal Reserve Bank of Atlanta, Mr. Geithner praised the strength of the nation’s top financial institutions, saying that innovations like derivatives had “improved the capacity to measure and manage risk” and declaring that “the larger global financial institutions are generally stronger in terms of capital relative to risk.”

Two days later, interviews and records show, he lobbied behind the scenes for a plan that a government study said could lead banks to reduce the amount of capital they kept on hand.

While waiting for a breakfast meeting with Mr. Weill at the Four Seasons Hotel in Manhattan, Mr. Geithner phoned Mr. Dugan, the comptroller of the currency, according to both men’s calendars. Both Citigroup and JPMorgan Chase were pushing for the new standards, which they said would make them more competitive. Records show that earlier that week, Mr. Geithner had discussed the issue with JPMorgan’s chief, Mr. Dimon....

Geithner would have been much better as an undersecretary, with someone far more old school as Treasury Sec. He is too vested in the wrong financial model to fix it.

old school!? pre-Greenspan?? those guys are all dead.

Not so, but they probably were passed over for promotions and so are more obscure.

old school!? pre-Greenspan?? those guys are all dead.

Paul Volcker is alive and well ... and being ignored.

Paul Volcker is alive and well ... and being ignored.

Less "ignored" than "on deck" should Geithner fail. Some recent story said that one of the centerpieces of his plan -- the public-private partnerships ("PPP") -- isn't drawing much interest from the private sector, because they fear gov't over-regulation of the PPP's operations (such as compensation limits). Matthew Yglesias thinks this is another reason to opt for bolder measures, such as nationalization and/or receivership.

Unless they've taken the option off-the-table with their rhetoric, I think the Admin. still might be laying the groundwork for bank nationalization, if the more conservative efforts fail.

I pretty much meant dead to the feds.

Overregulation... boy, do we need it now.

good god. Depressing.

http://www.theatlantic.com/doc/200905/imf-advice

Yeah. But sometimes Simon Johnson gives more mixed (and more optimistic) signals about the state of the economy. I haven't kept up with it over the past week or so, but Johnson's blog -- The Baseline Scenario -- is really worthwhile reading on the economy, and especially the banking crisis.

yes, his blog (and really, it's written by several people) is awesome but he's never been optimistic about the marriage between bankers and the government.

And the article in the Atlantic outlines the astonishing way that Obama has been rolled.

dow has recouped all '09 losses, up over 8400 for the first time since jan. 13. hmmmmmm
http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET?SITE=AP
rolled or roller?