Very funny take of Treasury Secretary Geithner as Charlie Brown:
>
via The New Republic
>
Source:
Good Ol’ Timothy Geithner
Drawger, March 27, 2009
http://www.drawger.com/drewfriedman/?section=articles&article_id=7369
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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April 13th, 2009 at 3:46 pm
makes our boy tax-cheat Timmy look a tad on the poor innocent side!! Conniving prick
April 13th, 2009 at 3:57 pm
You’re going to be laughing at him out the other side of your mouth as it becomes increasingly evident that the Geithner Plan worked.
April 13th, 2009 at 3:58 pm
http://www.hussman.net/
This Week:
Green Shoots over Thin Ice
Thus far, we’ve got a strong rally off the recent trough, with uninspiring sponsorship but good breadth, reasonable but not strikingly attractive valuations, and an overhang of increasingly distressed mortgage and non-residential debt that looks like Armageddon Part II in the offing, because we are doing nothing to restructure it.
…Dr. Hussman seems increasingly frustrated with Mr. Geithner…when people use “Armageddon” in the prologue, I guess he just doesn’t get it…
Maybe a 6 pack of Pacificos and some beach time…
April 13th, 2009 at 4:01 pm
Well I sold some ESM9 today at 856. We’ll see how that goes…
April 13th, 2009 at 4:02 pm
FAZ never ceases to amaze.
April 13th, 2009 at 4:02 pm
Isn’t using Geithner and Plan in the same sentence a malapropism? That wouldn’t be like ending a sentence with a preposition, sort of?
April 13th, 2009 at 4:04 pm
franklin411 @ 3:57
If Obama wins re-election, then we know it “worked”.
April 13th, 2009 at 4:04 pm
Well, it’s really the Paulson plan with a twist to con the public into thinking it’s different.
April 13th, 2009 at 4:05 pm
FAZE never ceases to amaze.
I decided to stay out of the financial last week and focus on the S&P until there’s some sign of a decisive breakdown.
Put XLF on a log scale to see how impressive this rally has really been.
The “convex” behavior of FAZ (is that the right term?) makes me think puts might be the better way to play for a turn around (if like me you can’t watch your positions all day every day).
Anybody have any opinions on the matter?
April 13th, 2009 at 4:06 pm
Good point, DL. So what if O wins re-election and Rome still burns like it did under Bush. Do all of the O’s celebrate because “our guy” won? Yay!! Our guy won!! Meanwhile, we’re all worse off, but hey, our guy won so it’s all good. It’s like sports, right?
April 13th, 2009 at 4:06 pm
What if they had a rally and no-one showed up…? Volume is declining.
http://zerohedge.blogspot.com/
April 13th, 2009 at 4:11 pm
Anybody watching the S&P futures? Weird stuff…
April 13th, 2009 at 4:13 pm
Ah, never mind… earnings. What am I thinking.
April 13th, 2009 at 4:15 pm
Goldman doubled earnings per share estimates. Earnings came in at over $9 Billion vs. $7 Billion estimates. I wonder just what Joe Six-Pack thinks of that on Main Street? Why exactly are the taxpayers bailing them out again if things are so good over there?
April 13th, 2009 at 4:17 pm
leftback @ 4:06
The lower the volume, the easier it is to manipulate. Maybe “they” are establishing short positions from 9:30-3:30, then buying it all back in the last half hour. Or maybe they’re loading up on puts, or short futures.
April 13th, 2009 at 4:18 pm
Mannwich @ 4:15
Ditto for WFC.
April 13th, 2009 at 4:18 pm
@Mannwich,
Wasn’t Goldman asked to participate in TARP to give it legitimacy? IE, so financials wouldn’t worry about being labeled a “bad” institution by virtue of participating in TARP.
April 13th, 2009 at 4:19 pm
@DL: This is simply outrageous. Things are all of a sudden great again in our banking system. It’s an Easter miracle!!! A wonderful life!! Then pay back the TARP money now please……….
April 13th, 2009 at 4:20 pm
http://jessescrossroadscafe.blogspot.com/
The market is rigged – the S&P futures are the only thing that is trading, and it’s all on black boxes.
The small cap materials stocks that I hold have barely budged at all in two weeks.
At some point trading will make sense, but right now we can see the magician’s assistant behind the curtain.
April 13th, 2009 at 4:21 pm
@franklin411: Goldman and Morgan would both be BK, done for, like Lehman and Bear, if the gov’t didn’t step in and help them via AIG and their access to the fed window. Remember, they were allowed to change their status to being “commercial banks” to get this special access? Not entirely sure about the TARP and whether or not they needed it at the time, but I’m guessing they needed it too.
April 13th, 2009 at 4:24 pm
The market is rigged – the S&P futures are the only thing that is trading, and it’s all on black boxes.
The small cap materials stocks that I hold have barely budged at all in two weeks.
At some point trading will make sense, but right now we can see the magician’s assistant behind the curtain.
I’ve always argued that once a solid bear rally came the “hedgies” would use every ounce of margin at their disposal until they’d squeezed ever single undercapitalized short out of the market.
April 13th, 2009 at 4:30 pm
The guy who made a killing by buying CDS’s on MBS is now short treasuries:
http://www.cnbc.com/id/30192550
April 13th, 2009 at 4:32 pm
Super-Anon @ 4:24
Not to mention luring some money out of T-bills and $ market funds.
April 13th, 2009 at 4:35 pm
@DL
And like most gambling addicts, I predict he’ll end up penniless. That’s how the house always wins: the Big Score just makes people want to double down.
April 13th, 2009 at 4:41 pm
franklin411 @ 4:35
You think that T-bond yields won’t be a lot higher 18 months from now?
April 13th, 2009 at 4:48 pm
franklin-
dude- what is it with you and Geithner? The guy is a douche who didn’t couldn’t even take it upon himself to pay his taxes (that he knew he owed). Talk about “being above the law”. And his plan- please- take as much taxpayer money as possible to keep the banks upright- wow!- what a great plan- pretty creative- sure he had to think real hard on that. one.
April 13th, 2009 at 4:49 pm
Mannwich @ 4:15
I’m not sure I fully understand the politics of this. I can see why Obama doesn’t want anyone paying back the TARP money. But what I don’t get is why aren’t any of the House Republicans calling for repayment? If I were a “young pup” in Congress (on the Republican side), that’s what I’d be doing.
April 13th, 2009 at 4:49 pm
Geithner Sachs’ earnings release feels like they are going all-in on a pre-flop raise. Talk about overplaying your hand, sheesh!
April 13th, 2009 at 4:57 pm
Geithner Sachs’ earnings release feels like they are going all-in on a pre-flop raise. Talk about overplaying your hand, sheesh!
Hard to overplay your hand when the dealer is on the payroll.
April 13th, 2009 at 4:58 pm
@ DL
I’m simply addressing the psychology of the compulsive gambler. It’s a rare breed who can score really big and do the sensible thing, which is to lay down your cards and claim victory. Most people get a psychological rush from playing, and it’s no fun unless the stakes are truly high.
@Ahab:
We need to get away from the idea that good looking people, tall people, or people we’d like to have a beer with are the right people to be running the show. I don’t care what the man has done in his personal life. I care about just one thing: turning this economy around. If I have to enrich immoral people to do so, so be it. If a guy who made mistakes on his taxes becomes known as one of the greatest Treasury Secretaries of all time because of it, so be it.
I’m sorry, but I am not foolish enough to cut off my nose to spite my face.
April 13th, 2009 at 5:01 pm
something tells me that ol’TTT needs a new outfit..
maybe he could find one here:
http://www.art-and-flour.de/deutsch/sammlung/afrika.html
http://www.art-and-flour.de/deutsch/museum.html
April 13th, 2009 at 5:04 pm
franklin Says:
“We need to get away from the idea that good looking people, tall people, or people we’d like to have a beer with are the right people to be running the show. ”
what are you freaking talking about??????
“If a guy who made mistakes on his taxes becomes known as one of the greatest Treasury Secretaries of all time because of it, so be it.”
mistakes? hahahahahahahahahahahahahahahahaha- the guy is a douche
April 13th, 2009 at 5:14 pm
@Ahab
My theory is that if Geithner was a football player-type he wouldn’t get half the flak he currently does. Studies have shown that the taller and more attractive a person is, the more “competent” people rate them. It turns out that it’s human nature to judge books by their covers.
I don’t care if he is a douche or not. I care that he institutes policies that bring about a recovery, and by that measure he’s doing splendidly. The fact that you consistently appeal to emotion in attacking the Secretary proves my point.
April 13th, 2009 at 5:18 pm
” I care that he institutes policies that bring about a recovery, and by that measure he’s doing splendidly.”
franklin,
could you explain that further? which policies, what ‘recovery’?
April 13th, 2009 at 5:24 pm
Dudes.. relax.. way too much emotion involved here..
I do not trust GS at all so their actions need to be questioned from all angles.
Timmy is playing poker at a table with a bunch of card sharks.
The deck is certainly stacked but he must play the hand.
The cards are also marked.
Hank P. dealt the hand and the table belongs to GS.
Who can unequivocally say they paid all their owed taxes every year for all years?
At some point rates will rise.. when is the million dollar question or the so called trade of the century.
Best advise is to pay attention and act accordingly.
The fact is that no one knows what the F is gonna happen.
April 13th, 2009 at 5:26 pm
franklin411 @ 4:58
Point taken. Perhaps Sam Zell would be an example of what you’re referring to.
April 13th, 2009 at 5:42 pm
The problem with drinking beer with Geithner….he’d never pick up the tab…it would ALWAYS be my treat…….
April 13th, 2009 at 5:44 pm
@franklin411: “increasingly evident that the Geithner Plan worked.”
Well of course it will. Collusion between our government and big business will always work. Take the stress tests. The government is going to give, grade and suppress their findings until they have a chance to go in and clean some of that stuff up with our money and/or accounting shenanigans. So, that it all looks better. Think of it as a head scratched off a zit. Have you removed all the pus? No! Think it’ll get re-infected? Of course it will. How many more times can they do this and how much more money is it going to cost us before it all comes crashing down around our heads anyway? The plan will work until the game is over.
April 13th, 2009 at 5:51 pm
The S&L crisis was a zit
This is a Mt. Vesuvius sized boil.
April 13th, 2009 at 5:55 pm
@ Foghorn Longhorn
I agree. Because the world’s most prosperous countries are all involved.
April 13th, 2009 at 6:45 pm
This minipulation by Geithner et. al. is the biggest ponzi of all…tell me it isn’t a pump o’ dump! Check this bullshit out:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNsEBgrV8HA0&refer=home
April 13th, 2009 at 6:51 pm
@DL: I don’t think the GOP has any young “rising stars”. For the most part, they seem to be utterly clueless. It’s quite sad.
April 13th, 2009 at 6:56 pm
@ 8,000 on the Dow, 860 on the S&P, is anyone surprised that the Shorts aren’t taking more bets? http://www.google.com/finance?q=SDS
April 13th, 2009 at 6:59 pm
Bruce in Tn Says:
“The problem with drinking beer with Geithner….he’d never pick up the tab…it would ALWAYS be my treat…….”
exactly- you have summed up Geithner- every time I see him I want to punch him in his stupid “I am entitled face.”
April 13th, 2009 at 7:32 pm
anyone still think hes on the imminent chopping blocK?
i think depending on how the auto bk’s go will hold the key to his survival (or lack thereof)
April 13th, 2009 at 7:53 pm
Do you think he ever regrets taking this gig??? He’s probably here to stay… maybe Larry Summers could take over but I believe he is waiting for Bernanke’s term to end…
http://moneyneversleepsblog.blogspot.com
April 13th, 2009 at 8:26 pm
@franklin@Mannwich,
Wasn’t Goldman asked to participate in TARP to give it legitimacy? IE, so financials wouldn’t worry about being labeled a “bad” institution by virtue of participating in TARP.
Excuse me. You sound like a GS pimp to me. And exactly how much money did GS get through the AIG back door. And they were totally solvent, profitable and not in need of a taxpayer handout? So how does that little sum compare to their announced profits? And are they going to also payback the AIG scam?
April 13th, 2009 at 8:36 pm
@franklin
i believe paulson (hank, not the other one who is a “compulsive gambler”) played football and i, for one, rate him both then and now as incompetent and as a douche. go figure. he, and geithner, are walking, talking embodiments of regulatory capture. we’re spending trillions more than we need to on the rescue plan because we’re maintaining the status quo. there were paths not taken that now cannot be taken. this is the bailout equivalent of vietnam and at some point in the indeterminate future we’ll be rioting to get on the last helicopter out. not very splendid, in my view.
April 13th, 2009 at 8:50 pm
I think most of us were just as hard on Paulson as we have been on Geithner, maybe even more so. Franklin411′s assertions about people somehow being harder on Geithner because he wasn’t a football player and doesn’t come across as a hard-ass are ludicrous.
Keep up the good work of filling otto’s void here at TBP. He had some big shoes to fill on the Obama/Wall Street apologist front.
April 13th, 2009 at 8:50 pm
“And are they going to also payback the AIG scam?”
GS “reports” $3 billion was it? Good. That means they’re only $10 billion in the hole when we claw back the AIG-laundered money we gave them. Of course, they still owe us the $10 billion in TARP money. Not to worry, a few more quarters like this and Goldman can get the US taxpayer monkey off its back.
Goldman Sachs is actually quite stupid to announce ANY earnings about now, especially while claiming they want to raise money to pay back the TARP so they don’t have to cringe under the scrutiny of the taxpayers that they manipulated into saving them from insolvency, but without letting on that we were doing it.
When all is said and done, Goldman Sachs is running the American financial system, if from the shadows like a mafia don, which is how they prefer it, else they wouldn’t be so eager to pay back the TARP. I think, though, they are too clever by half, and this is all going to blow up in their faces soon enough. Goldman Sachs defines the very same hubris that got us here, yet incredibly, they still believe they are masters of the universe. Pride always goeth before a fall.
April 13th, 2009 at 8:52 pm
What also kills me about these firms wanting to pay back the TARP money – it’s not for the good of the firm that they want to pay it back. My guess is they probably still need the capital cushion when things deteriorate even further this year and next year, so this is clearly to allow them to go back to paying themselves huge sums of money again without Uncle Sam looking over their shoulder and causing a fuss. I ask again, who in their right minds would invest in these companies again? I can see a quick trade but a long term investment? No way, unless you can get Warren’s terms…….
April 13th, 2009 at 9:27 pm
Geithners plan will work all right sending us right into a tailspin, Inflation followed by Depression that slip of the tongue about a world currency was freudian. The resident and his gang of thieves are world citizens and have worldly plans.
Let’s start with the numbers. Why is a first term Senator pulling down almost $300,000 a year from Goldman Sachs, Lehman Brothers, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Countrywide Financial, and Washington Mutual? He has not even completed his fourth year in the Senate and received a total of $1,093,329.00 from these eight companies and their employees. (all data from OpenSecrets.org). John McCain’s numbers, according to OpenSecrets.org for the period 1990-2008 (i.e., 18 years worth of data) only collected $549,584.00. In other words, Barack is receiving $273,582.25 (and 2008 is not over) per year while McCain raised a paltry $30,532.44.
Want another shocker? Barack Obama has received more from one source–Goldman Sachs $542,252.00–than McCain has from all of the companies combined. Who the hell is more beholden to lobbyists? And why does a junior Senator from Illinois rate this kind of dough?
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
April 13th, 2009 at 9:41 pm
I’m thinking about moving more dollars into silver and gold. I’m nervous about the next shoe to drop. I thought they could keep this up for 5-9 more months (you know, the false sense of security, improvement of conditions). But now I think it will fall apart quickly. I hope I’m wrong.
I just get the feeling no one wants to make the first move (china doesn’t want to sell our bonds in a panic, central banks don’t want to buy gold in a panic, governments don’t want to let failed banks be liquidated, companies don’t want to cut staff to a skeleton crew which won’t be able to compete, consumers don’t want to know how bad it is or might get, contries don’t want to make the wrong move (trade barriers, currency devaluations, defaults on their debt), BUT the feeling is, something will get the ball rolling. Then it will be a rush for the exits.
What could get the panic running though the higher levels (decision makers) to tip the scales? I’m not sure. Some event which I don’t think we can predict right now. It seems like stability is low, and risk is high. Events can be handled in normal times, but may not be able to be handled during a world resession/depression, with simultaneous mishandling of a developed world wide financial crisis. I hope I’m wrong. I just have a feeling.
April 13th, 2009 at 9:41 pm
It seems as if we live in a Stephen King novel, that is still under construction.
Using his past works as a guide, this is a combination of
“IT”
+
“The Langoliers”
There is some giant, crazy-ass clown running around beneath the surface wreaking havoc and in the meantime others can hear the distant whine of gnashing teeth, that are devouring everything in their path.
Where to make one’s stand?
Against the clown one can’t see
or the gnashing teeth biting at your backside?
Should be interesting.
April 13th, 2009 at 10:48 pm
hopeImwrong @ 9:41
I’m planning on buying SLV sometime in the next 6 months; I’m expecting one more deflationary scare before SLV really takes off. As for gold, I think it could get to $2500 by 2011, but right now it’s hard to find a bear on gold. So I’m thinking that gold languishes here for a while. If the S&P drops below 675, I think that GDX would be a good way to go, since it gets pulled by both gold and the SPX.
(I hope I’m right).
April 13th, 2009 at 11:01 pm
Interesting interview in Barrons with William Black
http://online.barrons.com/article/SB123940701204709985.html?page=sp
Following are a few quotes:
“Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama’s presidency”.
“We have failed bankers giving advice to failed regulators on how to deal with failed assets”
Comment on the PPIP:
“It is worse than a lie. Geithner has appropriated the language of his critics and of the forthright to support dishonesty. That is what’s so appalling — numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians”
April 13th, 2009 at 11:32 pm
Tyler Durden at http://zerohedge.blogspot.com/ brought up a good point. Is Goldman Sachs quarterly earnings based on three months or four months? YoY is from Feb 08 to Mar 09.
April 14th, 2009 at 12:10 am
dl @ 4:41 —–
Oh! Oh! Oh! Can I get this one?
– I know so little about so much of all this but I do believe that as yields rise, the bond price goes down thereby benefiting the “short” position.
Is this not correct? Anyone?
April 14th, 2009 at 12:17 am
Rather than a distinct “Phase II” of the Great Bear, (or depression) ~ “Phase I” of which we could really sense approaching for months, if not years ~ I think the U.S. will rally some more, then only a little more, and fade into global relative irrelevance over the next 5-10 or more years. Maybe,….MAYBE to be renewed mid-century or so. (See major double top in the “all data” charts.)
April 14th, 2009 at 12:18 am
davboz @ 12:10
Correct.
April 14th, 2009 at 12:19 am
Geithner at his best:
http://lolfed.com/2009/04/09/if-you-just-cant-get-enough-bank-shares/
April 14th, 2009 at 12:42 am
What I worry about is him kicking the football in the fall. If I remember correctly, the ball-holder pulls the ball away at the last moment and Charlie Brown flips and falls on his back. But fall is where we begin to anticipate a Santa Claus rally. Can a rally occur with our place kicker flat on his back?
April 14th, 2009 at 12:55 am
Like the market – he is looking very toppy.
April 14th, 2009 at 1:08 am
@Franklin
“My theory is that if Geithner was a football player-type he wouldn’t get half the flak he currently does. Studies have shown that the taller and more attractive a person is, the more “competent” people rate them. It turns out that it’s human nature to judge books by their covers.
I don’t care if he is a douche or not. I care that he institutes policies that bring about a recovery, and by that measure he’s doing splendidly. The fact that you consistently appeal to emotion in attacking the Secretary proves my point.”
We do judge books (people) by their covers. First time I saw Geithner I said he was a punk, reminded me of the kid that was hard to like in school, smug, cocksure of himself.
The truth is that I had no idea he was shorter than average. Now that I know he is short (thanks Franklin), I know why he comes across as a punk. He has been overcompensating for the poor way that people treat him. He feels entitled (to cheat on his taxes) because he has been dealt a short hand.
Whatever my emotions… the fact stands that he is a tax cheat. He DECIDED to not pay his taxes. It is a well known fact that all IMF employees were repeatedly educated on paying taxes on their IMF income. He had to sign document(s) that he understood this. So it was NOT a mistake. To claim it is a “mistake” tells me all I need to know about whoever is making the claim. Their claim is dishonest.
There is no way he is qualified to be our chief of our tax collection agency. Geithner a Fraud. He helped perpetrate the financial fraud that is bringing down the world economy in a cascading failure. He is beholden to the GSEs (Financial firms taking taxpayer money). He is NOT looking out for the taxpayer. He is looking out for the bond holders and the GSEs. He is part of the problem.
April 14th, 2009 at 2:04 am
radically off-topic:
“Boston (MA) – Harvard astrophysicist Dr. Willie Soon tells us that Earth has seen a reduced level of sunspot activity for the past 18 months, and is currently at the lowest levels seen in almost a century. Dr. Soon says “The sun is just slightly dimmer and has been for about the last 18 months. And that is because there are very few sunspots.” He says when the sun has less sunspots, it gives off less energy, and the Earth tends to cool. He notes 2008 was a cold year for this very reason, and that 2009 may be cold for the same.
As of today, there have been 15 days in a row without any sunspots. In 2008 there were 266 days scattered throughout the year without sunspots, and in 2007 there were 163 days without sunspots. These are the #2 and #9 fewest sunspots years seen since 1911.
Dr. Soon’s field of specialty is the sun. He explains that sunspots are planet-sized pockets of magnetism with much greater energy output and matter expulsion, some of which strikes the Earth’s atmosphere as extra energy from the sun. He says when sunspots are present, the temperature goes up, when they are not present the temperature goes down. He also told a reporter at WBZ, CBS TV 38 (http://wbztv.com/video/?id=75101 @ wbz.dayport.com — remove spaces), that beginning in 1645 and continuing through 1715, there were no observed sunspots. This is the period known as the Little Ice Age.
He also explains that sunspots go in cycles, which are around 11 years. There are periods of maximum activity (called the Solar Max) and periods of minimal or no activity (called the Solar Min)…”
http://www.tgdaily.com/content/view/42006/181/
though, it goes to show that some people, from Hartford, can, actually, responsibly be entrusted with = signs..
hope yon’ prof. has some 24kt Tenure..
April 14th, 2009 at 2:29 am
Forget the tax thing, forget mumbling about China and Japan — What did T. Geithner accomplish in his career that made him the man to choose as Sec. Of Treasury? Under Sec for Rubin, for Summers, the other job then head of NY Fed. Why was he noteworthy?
April 14th, 2009 at 2:30 am
Gotta be a Stalking Horse.
April 14th, 2009 at 7:18 am
http://macro-man.blogspot.com/
“Meanwhile, back in the US, Goldman recorded super earnings in the first part of the current fiscal year, announcing Q1 earnings of $3.39 per share, well above the consensus expectation of $1.64. Except that they didn’t. Buried in the small print, it appears that as the Easter Bunny was delivering candy and eggs to children all over the world, he also desposited a small turd in the GS income statement. In December, which magically falls outside the aegis of any reporting period (falling through the cracks, as it were, in the transition from investment bank to bank holding company) , the firm lost $2.15 per share. Add that to the Q1 earnings figure, and you get a result that is comfortably lower than consensus.”
April 14th, 2009 at 7:42 am
Goldman reserved $4.7 billion for future compensation (someone estimated that at $168k per employee – not sure if that’s accurate though). Think they’re hiring? :)
April 14th, 2009 at 8:03 am
“Black is a former Director of the Institute for Fraud Prevention who now teaches Economics and Law at the University of Missouri, Kansas City. Moyers recalled that it was Black who accused then-House Speaker Jim Wright and five U.S. Senators, including John Glenn and John McCain, of doing favors for the S&Ls in exchange for contributions and other perks. “The senators got off with a slap on the wrist,” said Moyers, “but so enraged was one of those bankers, Charles Keating—after whom the senate’s so-called ‘Keating Five’ were named—he sent a memo that read, in part, ‘get Black—kill him dead.’ Metaphorically, of course.”
Here are some of the most important observations Black made to Moyers about the current crisis:
* The CEOs of major banks and mortgage companies knowingly made billions of dollars of bad loans, to make huge short term profits for their institutions and themselves
* These were known among financial execs as “NINJA” loans—no income verification, no job verification, no asset verification.
* One company, IndyMac, produced as many losses as the entire S&L debacle. In 2006, IndyMac sold $80 billion of these essentially worthless loans to other companies.
* “The exotic stuff was created out of things like liars’ loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings…A triple-A rating is supposed to mean there is zero credit risk. So you take something that…has crushing risk. That’s why it’s toxic. And you create this fiction that it has zero risk.”
* As a result, much of the American financial system “became a Ponzi scheme: Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, ‘Triple-A.’”
* Treasury Secretary William Geithner is continuing the cover-up started by his predecessor, Henry Paulson: “Geithner is publicly saying that it’s going to take $2 trillion to deal with this problem. But they’re allowing all the banks to report that they’re not only solvent, but fully capitalized. Both statements can’t be true. It can’t be that they need $2 trillion, because they have masses losses—and that they’re fine.”
* After 9/11, the Justice Department transferred 500 white-collar specialists in the FBI to International Terrorism—and the Bush administration never replaced those agents. “This crisis is [at least] 100 times worse than the S&L crisis [and] there are one-fifth as many FBI agents as worked the Savings and Loan crisis.”
* The Prompt Corrective Action Law, passed in the wake of the S& L crisis, requires the current administration to close insolvent institutions, “and they are refusing to obey it. They ignore it, and nobody calls them on it.”
http://www.cjr.org/full_court_press/above_the_fold_our_financial_f.php
(bag)Holder for AG! TTT for TreasSec!, heckuva job 44
April 14th, 2009 at 8:10 am
hoffer-
great post- makes me want to run out and get a bigger SUV- my 4runner has 120K miles on it and is 8 years old- Escalade maybe?
April 14th, 2009 at 8:11 am
How long will the facade last? Who will be present at the hangings?
April 14th, 2009 at 10:24 am
@MEH–
Are you telling me that the SUN might have something to do with the Earth’s climate? You are so unbelievably naive. Everyone know that the Earth’s climate is determined by human beings.
Next you’ll say that the rescue of AIG had something to do with the ex-boss of Goldman Sachs being the Treasury Secretary:)
April 14th, 2009 at 4:11 pm
ahab,
that 4runner will probably last another 120k miles, might be a better idea to re-upholster the puppy, and drop in some new speakers..
Curmudgeon,
How ’bout it, guess I’m just old-fashioned, though no beard..
“one should not increase, beyond what is necessary, the number of entities required to explain anything”
http://www.encyclopedia.com/topic/William_of_Occam.aspx