Where’s Volcker?
If you want to know why the administration’s approach to the credit crisis has been lacking, and why the Obama bailouts looks surprisingly like the Bush bailouts, consider this: No Volcker.
“The one-time central banker has been put in charge of a presidential advisory board that hasn’t yet had a formal meeting. It has been nearly a month since he has seen Mr. Obama. Mr. Volcker hasn’t been a main player in key decisions handling the global financial crisis.
Treasury Secretary Timothy Geithner unveiled the administration’s plans for handling troubled financial institutions and the housing crisis without seeking input from Mr. Volcker, associates say. “Paul was surprised” at the failure to consult him, particularly on issues of financial rescue after his dominant role in resolving financial crises in the 1980s, says one person who has spoken to Mr. Volcker recently.”
To review: You have access to the greatest Fed chief in history, and you are choosing not to use him during the greatest crisis since the Great Depression.
I wonder what White House aide is too insecure to let the big dog loose . . .
>
Source:
Volcker Assumes Smaller-Than-Expected Role With Obama
MONICA LANGLEY
WSJ, APRIL 11, 2009
http://online.wsj.com/article/SB123940537361509771.html
See also:
The Path of Kohn: Crisis Changes a Fed Vet
JON HILSENRATH
WSJ, APRIL 11, 2009
http://online.wsj.com/article/SB123940551680709817.html
April 11th, 2009 at 7:21 am
Probable reasons:
1. We’re in a youth centric culture.
2. It’s different this time (they think)
3. The ones making the decisions probably bought into the consumer society way of life of the last 3 decades, they probably have too much to lose by going the Volcker way.
April 11th, 2009 at 7:38 am
Buying Gold
April 11th, 2009 at 7:55 am
I tried to leave a comment on the previous post regarding Goldman selling shares to repay the government loan, but it keeps telling me that I need to sign in.
The move, which could be announced as early as next week, comes as the firm prepares to report solid first-quarter earnings Tuesday.
They should be reporting “earnings” after all the money we have given them. Just like WFC reported $3 Billion in “profits” after we gave them $25 Billion.
My question is: why would anyone rush out to buy Goldman shares if their shares will get diluted immediately afterward? Wouldn’t this action lead to a selloff?
April 11th, 2009 at 8:06 am
As another fine blogger said: He has been marginalized, put in charge of finding ways to tax people and companies to make up for Turbo Timmy’s spending.
April 11th, 2009 at 8:34 am
I don’t know what this syndrome is called…but all events are naturally conspiring to make this the worst financial disaster in history…given that concept, it is fully expected that Volcker would be ignored. Does this have a name? Kind of like The Perfect Storm.
April 11th, 2009 at 8:42 am
WMD (c. 2003) = Banking system (present)
Larry Summers = Dick Cheney
Tim Geithner = Don Rumsfeld
Sheila Bair = Richard Perle
I’m beginning to feel deja vu all over again
April 11th, 2009 at 8:49 am
After some research, it may be one of a few laws at play:
Finagle’s Law of Dynamic Negatives (also known as Finagle’s corollary to Murphy’s Law) is usually rendered:
“Whatever can go wrong will go wrong, and at the worst possible time, in the worst possible way.”
or
O’Toole’s Commentary on Murphy’s Law: “Murphy was an optimist.”
This one pretty much sums it all up…don’t know if it has a name:
“Every solution breeds new problems.”
April 11th, 2009 at 8:51 am
@davo:
http://www.nytimes.com/2009/04/11/business/11fees.html?_r=2&ref=business
Cities Turn to Fees to Fill Budget Gaps
” A rose by any other name would smell as sweeet…”
There are taxes coming and some may not be recognizable at first..
I put my new computer in a Sumatra death hold last night, and maybe it will try to behave this morning….
April 11th, 2009 at 8:55 am
Here’s another law that is in play:
Rudin’s Law: “In crises that force people to choose among alternative courses of action, most people will choose the worst one possible”….thus of course they exclude Volcker.
April 11th, 2009 at 8:57 am
I wonder what White House aide is too insecure to let the big dog loose . . .
Larry Summers, Rahm Emanuel or both.
April 11th, 2009 at 9:05 am
They are all scared. Government power is peaking right now. Once the government runs out of money (think high interest rates and rampant currency inflation while assets continue to deflate), they will be powerless.
Imagine Congress turning into the Detroit City Council.
The West Wing headed by Kwame Kilpatrick and his Blackberry!
April 11th, 2009 at 9:18 am
I think most of us thought this is what would happen to Volcker…he was window dressing…and this doesn’t surprise me…
I like Volcker, he is like Bruce in Tennesse except much taller and older and not as good looking….
Now that we’ve had time to adjust to the policies of the new administration, I foresee the future here as maybe not bleak, but very different from my experience. We will have elements of socialism permanently..as evidenced by this administration and the recent poll which showed that younger workers and half of democratic voters think this is better than capitalism…I don’t, but that is just me…
I see a more rigid government that while having more regulation in place against future disasters, will also probably stifle initiative. Higher taxes should also cause risk taking to be less than in my lifetime…
We may not become France, or Sweden, or Japan (they are just literary devices to get an idea across) but we won’t be the acknowledged leader either…instead of a Volcker, we’ll be a country of Geithners…
April 11th, 2009 at 9:19 am
Tar and feathers for Wordpress..
April 11th, 2009 at 9:19 am
B-
“Larry Summers = Dick Cheney”. Very astute.
Summers cannot allow Volcker to operate in the WH. LS represents a generational cohort and a worldview that is principally parasitic. The two men hold diametrically opposed positions. Obama’s drive toward synthesis will not work because we won’t/can’t confront the ’strong’, the ones with power.
The only thing that sustains me is the hope that Summers can no longer stand to even see himself in the mirror. He should start wearing shades cuz his eyes reveal too much.
April 11th, 2009 at 9:20 am
To those who have not seen this on ZH, worth a read.
http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html
April 11th, 2009 at 9:28 am
they and we realise it is too late for volker, too late
April 11th, 2009 at 9:41 am
Volcker is a big, blunt, brilliant straight talker who probably advocated the tough love this crisis demands.In short, he is everything Tiny Tim isn’t.
TT is attempting to finesse his way thru the crisis by putting Paulson’s old wine in a new bottle.
April 11th, 2009 at 9:44 am
Everyone was happy to see Obama picked Gramps to be a part of his team, guess it was just for show. As mentioned he may be a little too blunt. It would be interesting to get his thoughts given his experience. Maybe they are saving him for the wicked inflation on the other side of this thing.
http://moneyneversleepsblog.blogspot.com
April 11th, 2009 at 9:50 am
I was elated when Volcker was first picked for the Obama team, much like I was totally dismayed when Geithner was chosen. Since then, I’ve become totally disallusioned with Obama, for the reasons nicely set forth in Jonathan Weil’s Bloomberg article, “Obama Stakes His Fortunes on Failed Banksters.”
http://www.bloomberg.com/apps/news?pid=20601039&sid=aNMQDysdnKRc&refer=home
Obama is taking a huge risk here, because if this does turn out to be a bear market rally, and we go back down, his entire administration (and the next election) will be at risk. If his inept picking of Summers and Geithner results in the Republicans returning to power, I will be very bitter about Obama, to put it mildly.
April 11th, 2009 at 9:52 am
With our debt piling up, can an economy live with debt at 200% of GDP?
I think Volcker would be horrified by this kind of management…are we far behind?
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/10/AR2009041000732.html
Massive Stimulus Packages Add to Japan’s Pile of Debt
Spending Plans Balloon to $270 Billion, Mostly Borrowed
April 11th, 2009 at 9:55 am
I sure hope he is involved with the new regulatory regime. Maybe that is the strategy.
Who will argue when he forces the medicine down the throats of the petulant banksters and others.
This will be the real cram down.
April 11th, 2009 at 9:56 am
@MRegan:
Thanks so much for that link…it ties a lot of my theories up in a neat ball…first that hedge funds will be blowing up in the near future…second, that volume on this rally is really telling a story (ZH concludes volume is light and some marginal player is toying with the market)…and that the PPT has kicked into full gear, after a brief hiatus during the Obama transistion. ZH concludes a ‘non-linear” event is imminent.
April 11th, 2009 at 10:02 am
One other thing before we hike today, if Wordpress will take it…
Our budget deficit is 400% higher for this March than one year ago…
http://www.bloomberg.com/apps/news?pid=20601103&sid=aNKhvlFt3chc&refer=us
U.S. March Budget Deficit Swelled to $192.3 Billion (Update1)
“…and revenue fell 28 percent to $129 billion. ”
Yep, tax revenues are falling like a rock…no one could have expected anything different..
April 11th, 2009 at 10:04 am
@MRegan
I read that article at serohedge. He makes a great point. The real trading of the market goes on behind prying eyes. If they lose liquidity then look out below.
April 11th, 2009 at 10:10 am
BR: “I wonder what White House aide is too insecure to let the big dog loose”
I wonder what has gotten into you this year. You’ve been deflecting blame from Obama for a while now. The honeymoon is over and it’s time to start laying some blame at the feet of the CEO of the Administration. The buck stops there. Do you honestly think some aide is calling the shots in the White House?
April 11th, 2009 at 10:13 am
@MRegan.
The activity described in the article reminds one of the CDS ‘market’. Low volume trades by few participants, shrouded in secrecy aimed at manipulating equity prices.
April 11th, 2009 at 10:14 am
Volker is known for *causing* recessions, not *fixing* them.
Seriously, Barry…this is just about the most non-sensical post I’ve ever read on TBP.
April 11th, 2009 at 10:21 am
Franklin:
Your last two posts that I read were to defend Lenny Dykstra as a trader and to attack Paul Volcker…forget to take your meds?
April 11th, 2009 at 10:29 am
Steve:
I never defended Lenny Dykstra. I said it’s illogical to assume that because he apparently failed to manage his own money well it means that his trading advice is automatically bad.
This is something I learned in logic and reason many years ago. It might do you some good:
1. I tell you “It’s dangerous to your health if you put a .45 into your mouth and pull the trigger.
2. I put a .45 into my mouth and pull the trigger.
3. By your logic, it is not dangerous to put a .45 in your mouth and pull the trigger. I failed to live by my own advice. Therefore, my advice is wrong.
Now do you see the illogical nature of the assertion that Dykstra’s home life and the quality of his advice are one and the same?
As for Volker, I issue a simple challenge. Defend him.
I will note that the article Barry cites seems to contradict Barry’s own attitude. Barry wants nationalization and a major clean up of Wall Street. Volker does not…Volker seems to think Obama is doing too much!
“Mr. Volcker’s advice hasn’t always been heeded. The former Fed chairman urged the administration to “slow down” its push for regulatory changes. “Paul thought it was important to take enough time to fill holes in the regulatory framework and not get caught up in the current atmosphere,” says former Securities and Exchange Commission Chairman William Donaldson, who’s on the Volcker panel.”
April 11th, 2009 at 10:38 am
Franklin:
I understand logic and the point you are making…but common sense also rules. Would you take health advice from a Doctor who smokes? Would you take financial advice from a homeless man because he claims to have 99% winners?
April 11th, 2009 at 10:43 am
Steve Barry, health advice from a Doctor who smokes? Yes, why not? Financial advice from a homeless man? If he could prove 99% winners, Yes. i don’t really see a lack of common sense there.
April 11th, 2009 at 10:43 am
“I wonder what White House aide is too insecure to let the big dog loose . . .”
Hmm, try the boss. Volker was around him during the campaign, the economy is the priority. If anyone but President Obama has made the decision to put Volker on the shelf then this White House has taken dis function to level we’ve never seen before. Tall Paul is not going to play the Paulson bailout game. The Obama admin has decided they will. That decision was made at the top. Hence the big guy is frozen out until PPIP flops and the Ratt blows up Detroit. End of the summer the President will turn over his last card, should be interesting.
April 11th, 2009 at 10:45 am
In sum the ZH article points to the impossibility of current market valuations and other information (such as WFC). The insistent recourse to obfuscation tells me that they are going to run out of lies.
Re AmenRa’s (and others) point about prying eyes, few are allowed into the Sanctus Sanctorum.
That fact is essential for an outsider and why one must be entirely ‘agnostic’ as to the market. Pharisees like Kudlow should only be mocked.
I think that belief is a fundamentally dangerous mental bias when approaching the market. ‘It should be’ is an inherently riskier thing to think than than ‘it could be’.
April 11th, 2009 at 11:06 am
@Franklin411:
“Volker seems to think Obama is doing too much!”
Well, duh, yes….put me in the Volcker camp…
192 billion (March deficit) times 12 months…em….2.2 trillion deficit…and this is a minimum…
talk about your non-linear event…the bubble created in deficit spending by declining revenues and massive increases in spending…yes, put me very much in the Volcker camp…
When they pulled a rabbit out of a hat, the secret was that the rabbit was always there…the money is not.
April 11th, 2009 at 11:19 am
Of course Volcker is playing no role whatsoever. He’s the opposite of Geithner/Summers and Obama had to make a choice as to which plan to follow. Obama took the “easier” path of bailing everyone out and hoping the iceberg melts. Obama will only turn to Volcker if he abandons the Geithner/Summers’s approach. All we have to do is watch the stock market…forget the economic numbers. Not until the market turns downwards decisively and despair takes over will Obama start to even realize that “Plan A” has failed. The unspoken, hiding in plain sight, “Plan B” is Volcker. The turn in the markets won’t happen for 2 – 5 months so we’ll have to wait awhile.
April 11th, 2009 at 11:22 am
@Steve,
Yes, it’s human nature to mistrust people who seem hypocritical, but I agree with Greg. If a doctor who smokes tells me to stop smoking (not that I do smoke!), it’s still good advice. I might be less likely to follow his advice because of human nature; I’ll concede that.
@Bruce,
What is the Volcker plan? The article doesn’t say anything about him being for or against deficit spending. All the article says is that Volcker doesn’t want new rules put in place. It suggests that Volcker wants the regulatory environment to stay as it was on 1/19/2009: Wide open for Wall Street.
That’s completely at odds with most of the sentiment on this blog, from what I can tell.
April 11th, 2009 at 11:29 am
OK…let’s think about where we are going in the future…
This massive creation of debt will end badly…no matter how you who are less fiscally conservative than I feel, you are creating a bad end…the things I’ve posted today about Japan show that once this road is taken, you can’t get off of it…
It is like being Mia Farrow in the movie Rosemary’s Baby…when you first realize you were ^&%$#@, you had a vague sense that this was going to turn out badly, but in 9 months you were sure of it…you are merely changing the debt from the business world and homeowner to the taxpayer…I also published the new ways government is going to get you…
Will we pay off this massive new debt? I don’t know, but very very large increases in taxes are in our future…and will be forever…that is what I mean by Sweden, France, Japan…
We are going to give away our competitive advantage, and it won’t be coming back…period.
April 11th, 2009 at 11:33 am
@franklin: I guess my standards are too high. I trust my own opinions, and only rely on others if they have proven that they are more capable than myself. BTW, other links show Lenny’s 99% winners resulted in a loss, because the one loser was massive. He bets on deep in the money calls. That is like betting a thousand dollars on Secretariat 10 times in a row…he wins 9 straight and you make a $50 each time…but he loses the tenth time and you lose $1000. Hey, you still won 90% of the time.
@ MRegan: Did you see the post in BP Cafe about recovery? See my comment about operating earnings being negative. What is the market’s valuation if even operating earnings stay negative?
April 11th, 2009 at 11:34 am
The ZH material is fascinating. Many have been commenting here for some time about “mysterious forces” influencing market direction and prices in repeated patterns during trading days.
I guess we are being told there are indeed levers behind the curtain, and we are not going to see them or who’s pulling them.
Until the upcoming singularity.
Is it just that the liquidity and hedging has not yet fully unwound?
April 11th, 2009 at 11:35 am
@Bruce:
Our competitive advantage is a well educated and highly productive workforce. That’s all we have, and we’re losing that as China and India send more and more of their population to school. We can’t compete on resources. We’ve outlawed wage slavery.
We are not Japan. Permit me to repeat that. We are not Japan. We are nothing like the Japanese. We are nothing like the Japanese.
My only problem with the President’s deficit spending is that I don’t think it goes far enough. I think we need a 4 year, $5 trillion Rebuilding America program to repair our crumbling infrastructure, fix our broken health care system, “get off the grid” of fossil fuels, and most importantly, educate the “lost” generations born between 1980 and the present, who have been cheated out of a decent education by free market fundamentalists bent on “killing the beast” of government.
April 11th, 2009 at 11:39 am
No doubt Volcker is quite willing to put up with short term pain in exchange for long term gain. For Obama, it’s all about pushing problems into the future.
April 11th, 2009 at 11:39 am
Obama has admitted that the last thing he expected on taking the Presidency was a financial meltdown (if you think back, the economy was a late issue during the campaign cycle, but in places like TBP, it was already old news). He was prepared for the Iraq war, government spying on citizens, torture, cronyism, and the other hallmarks of Bushco, but not an economic meltdown.
That said, he’s relying on his own ilk (Ivy League frat boys) to get us out of this mess – not understanding that the Ivy League no longer produces our best and brightest (again, I give you GW Bush), and completely missing the point that these are the numbskulls who put us in this position in the first place. All of his life, the man has aspired to be among the intellectual “elite”. Now that he’s achieved that goal, it hasn’t dawned on him that these people are fuckwits.
The big question is if he will realize this fact before it’s too late, if it’s not already.
April 11th, 2009 at 11:42 am
If I was Volker, I would quit and go back into retirement. If they aren’t going to listen to anything you say, don’t be associated with the eventual outcome in any way, shape, or form. And be honest about it, let everyone know (nicely) why you are leaving (they don’t want your opinion, so you are going.)
April 11th, 2009 at 11:44 am
Franklin:
We just disagree…I don’t think anyone has been cheated out of education, if they wanted it.
I certainly don’t think government is the answer…but that is what makes debates…
My 3 children all went to college…my middle son, the brightest of the 3, at least by test scores, majored in communications…and the old saw has come true….
No matter, your side is winning, and massive government spending and taxes will be the norm for the next 4 years….I am politically neutral but fiscally conservative…and I don’t like this one little bit.
But since I didn’t run for office, I imagine I’ll just have to put up with it, and make the best investment decisions based on past experience…
April 11th, 2009 at 11:50 am
SB-
Get ready for an amazingly trenchant response: Yikes. (that’s like a Zoinks for you Scooby-Doo loving Fabian Socialists)
That is the whole point: -.09 How can the current valuations be justified. It’s like Julia Roberts being married to Lyle Lovett (and on top of it- he cheats on her), you just know that someone is going to stomped by a crazy bull.
I understand your QID etc positions but I wonder if you’re missing out on some good lovin’ if you only swing one way….ooooohh!
April 11th, 2009 at 11:54 am
@Bruce,
Fair enough.
@DL,
Define “short term pain.” Things are already as bad (or worse, if you consider the fact that the headline unemployment rate is not reflective of the fact that many employers are cutting hours before they cut heads) as they were during Volcker’s tenure.
The only thesis I can come up with for why so many people here have a thing for Volcker right now is they have an almost-sadomasochistic belief in the idea that pain will bring pleasure.
April 11th, 2009 at 11:57 am
Bruce in Tn Says:
“We are going to give away our competitive advantage, and it won’t be coming back…period.”
____
What competitive advantage?
From the first unbalanced/deficit budget this nation ran, we have been flamingly liberal regarding finance. That we continue is no surprise – we’ve done it for so long, we consider “manageable” indebtedness to be conservative.
Why the stimulus spending? Because there’s only one other option, and that’s default. To think that we can ever work our debt off is to ignore the reality of our situation.
I agree with franklin411 – the spending is not great enough, and I’ll add that it’s applied to the wrong end of the economic system. We need massive grants of taxable dollars to the lower and middle classes (yes, the dollar will be trashed – but that will happen, regardless), along with a fairly lengthy wage/price freeze. I harbor no delusions that this will happen, but that makes the idea nonetheless true. If we do this, the debt goes away, the banks are made whole, and we buy some breathing room.
Tell me the error in my thinking.
April 11th, 2009 at 11:58 am
SB-
I wrote you a response about the Cafe post and it was so funny that the Word Press gremlins kept it and devoured it for their ownselves…dirty gremlins.
Yes, operating earnings at -.09 are beyond frightening. How the market is capable of this kind of delusion is way beyond my ken.
(To the WP gremlins- what is with the no fun posts?)
April 11th, 2009 at 12:03 pm
Marcus,
Not to get bogged down in politics, but The President is taking spying on citizens to a level Bush never dreamt of.
“The Cybersecurity Act of 2009 goes far beyond anything ever contemplated by the Bush administration. The most controversial provisions are Sec. 18 (2), which gives the President authority to shut down all or any portions of the internet that he may designate as “critical infrastructure information systems and networks,” and Sec. 14 (b)(1), which gives the Secretary of Commerce access to “all relevant data concerning such networks without regard to any provision of law, regulation, rule, or policy restricting such access.” Critics have interpreted this clause as giving the Secretary the ability to access, without any sort of search warrant, any internet communication. That looks like a reasonable interpretation, as long as the President has designated the network “critical infrastructure,” which he has unfettered (and unguided) discretion to do.”
But that’s okay, because we can trust this President, no? Debacle. Also, the President attended Columbia and Harvard, he has spent his adult years among the “elite” and seems to like it.
Franklin,
Volker will not put out a plan, he is part of the team and semi retired. If he did publish his thoughts they’d be far and wide of Paulson/Geithner. His approach to regulatory reform is not do nothing, more slow and thoughtful. Bankruptcy Reform of 2005 played a key role in the credit fiasco. Many on this blog would take issue with the Patriot Act legislation passed in flurry. Likewise, TARP and the Stimulus were rammed through, because “we have to do something (RIGHT NOW).” If only cooler heads had prevailed. That is how I read Volker’s perspective re writing Financial Regs.
April 11th, 2009 at 12:06 pm
US Banking Oligarchs to Obama
Larry Summers = OK we own him
Tim Geithner = OK we own him
Ben Benanke – OK we own him
Sheila Bair = OK we own her
Volcker = not OK we don’t own him so put him out to pasture because he is a proponent of essential reform needed to break the financial oligarchy.
The Triumph of the Banking Oligarchs continues with two faced ‘change agent’ Obama
April 11th, 2009 at 12:06 pm
DaveO:
I was against the telecom immunity bill (O voted for it). And I in no way support spying on citizens – even if it means increased potential insecurity. My point was that the economy was a late issue to the campaign/political class.
April 11th, 2009 at 12:12 pm
@KM4
Nothing in Barry’s article supports your assertion that Volcker wants to reform the financial industry. As a matter of fact, the article explicitly states that Volcker is AGAINST reform right now…which is the same as saying he’s against reform period.
April 11th, 2009 at 12:24 pm
@franklin411
I am sourcing from more than Barry’s article and suggest you do the same that perhaps will expand your perspective.
For starters did you read these these articles
The Quiet Coup
http://bit.ly/9QobY
The Big Takeover
http://bit.ly/rpHLw
we’re officially, royally fucked so 98% of Americans had better get a new dream and fast !
April 11th, 2009 at 12:29 pm
franklin411 @ 11:54
In simple terms, it’s about trying to pump up the debt bubble versus letting air out of the bubble. Obama wants to pump it up (as would almost any first term President). There’s also the matter of breaking up (or liquidating assets of) some of the “TBTF” institutions.
The surprise is actually that Jimmy Carter gave Volcker as much leeway as he did.
April 11th, 2009 at 12:34 pm
@franklin411: Actually, from clips I’ve seen on Volcker, he’s said the greatest financial innovation of our time was the ATM and he has explicitly criticized all of this financial engineering that has been done over the years, so I think you’re dead wrong about him being against financial regulation.
April 11th, 2009 at 12:38 pm
@km4
I have no respect for anarchist dreamers like Taibbi, but your articles don’t support your assertion that Volcker is some sort of regulatory zealot. Quite the opposite:
From the Quiet Coup:
The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative.
Now, I don’t buy into the anarchists’ “capture thesis,” but your article doesn’t support you.
@DL,
I don’t agree with you, but why not call a duck a duck? Why call it “letting air out of the bubble?” You should call it what it is: “Obama wants to avoid 30% unemployment and the civil insurrection that would naturally result.”
April 11th, 2009 at 12:41 pm
Hers’s what I said about Volcker awhile back:
Steve Barry Says:
February 22nd, 2009 at 2:09 am
He’s very humble…maybe the only prominent or former government figure, unless you count Ron Paul, to predict this was coming. He said 5 years ago we had a 60% chance of a third-world style debt crisis here. If I were hm, I’d be saying “told you mofos so” an awful lot.
April 11th, 2009 at 12:42 pm
@franklin411: We might get our 30% unemployment anyway or worse. Beware the unintended consequences. I don’t think anyone expects him to do nothing about this crisis but I think many of us think he’s doing the wrong things. More of a bottom-up approach would likely work better. Maybe I’m a dreamer thinking this is feasible but from a practical standpoint I think it will work better. One other thing – O had better watch out. He’s already losing some of his supporters and will really lose many, many more if the bank bailouts become a bottomless fiery pit of burning taxpayer money while Rome burns. Just sayin.
April 11th, 2009 at 12:46 pm
I keep thinking about fat cats. You can’t withold food to slim them down or their metabolisms break down.
A cardiologist friend always comments about tub o’ lard patients who smoke and chow down a half gallon of ice cream a day. All you can do is up their dose of cholesterol meds to keep them alive since they ignore lifestyle issues.
Last medical/veterinary metaphor: sometimes tumors involve major blood vessels and can’t just be sliced out.
April 11th, 2009 at 12:49 pm
@ franklin411
Do NOT misquote me i.e. I did not say that Volcker is some sort of regulatory zealot.
Like Mannwich said @ 12:34pm Volcker he more a proponent of essential reform than Obama’s financial coterie ( Summers, Geithner, Benanke, Bair ) who are ‘owned’ by US Banking Oligarchs who influence Obama.
franklin411 how much do the US Banking Oligarchs pay you to shill for them on Barry’s blog
April 11th, 2009 at 12:54 pm
I hope you presented a rhetorical question.
Where’s Stiglitz? My answer to “Where’s Volker?”.
Like, who replaced Geithner at the NY Fed?
Of Significance: Obama has made a choice, at some point he has heard Stiglitz and Volker.
April 11th, 2009 at 12:57 pm
To add to that – - in the clip I saw of Volcker, he actually told the story of how disappointed he was when he that his own grandson was studying to be a quant on Wall Street, so, no, the man was/is clearly not a proponent of the status quote on WS. I think it’s clear that’s the real reason why he doesn’t hold more sway in the administration – - he’s a threat to the status quo that they’re trying to patch up (via taxpayer money act like nothing is fundamentally wrong with the system as-is. The prescription that I would advocate would be dismantling the failing entities that got us into this mess, revamping regulation/oversight, and adding to our safety net for a period of time (that’s the key, for a period of time) for the average worker, including strengthened unemployment, subsidized health care, small business loans (at the zero pct the banks are getting now or least a very low rate for a period of time?)and direct stimulus that those folks would immediately put back into the economy. Propping up the zombies doesn’t help or trickle down they way you seem to think it will. It only lengthens the problem and make it worse while most of the country suffers a long, slow slide into the abyss.
April 11th, 2009 at 12:57 pm
Troops to Pakistan border.
Blackhawks to Mexico.
April 11th, 2009 at 12:59 pm
Maybe at the age of 81, Gramps is just fine with his role.. which apparently isn’t really a role at all, just a name to make people feel better.
The new prez at the NY Fed is William Dudley right? Former partner at Goldman Sachs just to keep the conspiracy theories alive!
http://moneyneversleepsblog.blogspot.com
April 11th, 2009 at 1:00 pm
For Summers and/or Geithner to reverse course now would be to repudiate everything they’ve fundamentally believed to be the universal truth about economics banking, and the financialization of our economy. It ain’t gonna happen any time soon. They will never admit they’re wrong, much like the Bush Administration’s “best & brightest”.
April 11th, 2009 at 1:00 pm
@Mannwich,
I think we’re done, frankly. Unemployment will lag, of course, but the broad economy has hit bottom. Hitting bottom doesn’t mean you get up right away, but we’re not plunging anymore.
I would prefer a bottoms up approach. Actually, I would prefer wiping out every GM bond holder and anyone who has ever spent a day on Wall Street. It’s just not going to happen, though. You can’t have a New Deal without having a 1932-1933. And we never had that, so it’s time to put that aside and legislate.
@km4,
And I’m reacting to the article that seems to have given Barry the idea that the Return of Volcker would mean anything at all. I find it odd that he has such conviction, given that the article actually states that Volcker thinks Obama is proposing *too many* changes to the status quo.
I get a nickel a word plus a penny per electron.
April 11th, 2009 at 1:02 pm
@franklin411: I hear you but that’s where we disagree – - no true lasting recovery can be had without true fundamental, systemic change to the banking system and our economy. This is merely a band aid that will burst again in a much bigger, more epic fashion.
April 11th, 2009 at 1:07 pm
franklin411 @ 12:38
It’s a good thing that the tooth fairy is going to pay for all of this.
My proposal: “bailouts” for the unemployed; screw everyone else.
April 11th, 2009 at 1:10 pm
@franklin411: Is this your idea of a bottoms-up recovery? The more you kiss the hands of those limousine liberals who’ve slapped you, the more they will slap you in the future…..unless, of course, you make it in their little club where they go to charity black tie dinners and boast about their doings for the less fortunate.
http://www.nytimes.com/2009/04/12/us/12deficit.html?hp
Sorry, but this sure doesn’t look like a recovery to me. I’m sure the people who are being affected by these cuts would agree with me.
I’m with you, DL. Bailouts for the people who had nothing to do with this mess and are getting crushed now. Fuck everyone else, especially those who got us into this mess.
April 11th, 2009 at 1:10 pm
Maybe Volker and Summers should switch roles. Summers has a tremendous conflict of interest with hedge funds and investment banks. He cannot possibly be objective.
April 11th, 2009 at 1:12 pm
In the category of “what else can go wrong?”…Chinese drywall is poisoning us.
http://news.yahoo.com/s/ap/20090411/ap_on_bi_ge/chinese_drywall_5
April 11th, 2009 at 1:13 pm
I’m sorry, but it sickens me reading that article that I just posted. In what world do we throw trillions at rich bankers brought us to the brink of a depression, while we cut aid for those innocents who need it most? Funny they can find the money when it comes to bailing out their friends but not so much when it comes to the average person. It’s a sick joke a this point. It really is……
April 11th, 2009 at 1:14 pm
@MA
I agree with the notion of “Ivy League” network poisoning our system. It’s not a meritocracy. Becoming less so by the year since post WWII.
“It’s not what you know, it’s who you know.”
Students will pay $50k a year if they can for a solid Ivy League college network, and get a job on Wall Street.
If they can’t they will spend $20k a year the state university thing, if they can afford it and get a job managing an Arby’s.
And if they can’t afford that they’ll do the affordable JC/Community college thing and get a job changing senior diapers.
April 11th, 2009 at 1:19 pm
@usphoenix: On that note, I posted this before a number of weeks ago, but it’s a great article. Check it out.
http://www.theamericanscholar.org/the-disadvantages-of-an-elite-education/
April 11th, 2009 at 1:21 pm
@Mannwich,
The President doesn’t control the states, and state budgets will lag the recovery along with unemployment. Recovery doesn’t happen all at once, and neither do political revolutions. They have to start somewhere and go from there. I don’t even know what percentage of the states are de facto run by conservatives. California, for example, is run entirely by the rightmost-fringe of the Republican Party. You see, in California, we’ve decided that 34% of Legislature should have the right to veto what the other 66% thinks, because it takes a 67% majority to approve a budget.
April 11th, 2009 at 1:26 pm
@franklin411: I’m not saying he does, but states by law have to balance their budgets, so what do they cut first? Of course, programs for those who need it most. I have no problem with cutting ineffective programs but my guess is in true fashion they’ll cut the most effective ones that help the most people. You’re delusional if you think we’re on the cusp of a true recovery. We may see several false starts along the way, but Obama is just like the rest of our politicians – - bail out the elites at all costs, and hope it trickles down to the rest of us. I, for one, am done voting until I see any material reason to begin doing so again. I don’t have any real representation, so what’s the point?
April 11th, 2009 at 1:33 pm
franklin411 @ 1:21
“…in California …it takes a 67% majority to approve a budget”.
Imagine what deeper shi*t California would be in now if a simple majority could have approved new spending programs.
April 11th, 2009 at 1:40 pm
@Mannwich,
I guarantee you one thing: When the recovery comes (and I think it’s here already), nobody will notice it. Just like the market bottom in early March. Nobody believed in it. Everyone laughed at President Obama when he said to buy stocks. I didn’t listen to him either. And guess what? I lost a major opportunity to get in on the turn.
Even if you don’t buy the recovery-is-here thesis, it’s a fundamental truth that they don’t ring a bell at the top or the bottom.
April 11th, 2009 at 1:46 pm
franklin411 @ 1:40
You’re absolutely right that when the final low in the stock market comes, it will be greeted with skepticism. But I think we’ve got at least one more visit to the 700 level.
April 11th, 2009 at 2:40 pm
I were Volcker, I would resign and follow it by an Open-Letter to the President and speak my mind.
April 11th, 2009 at 4:01 pm
@Steve Barry
You were asking about laws:
I agree Murphy’s Law very much sums it up. I’d just add that it is Murphy’s Law: Justice Division
Also, maybe the pareto principle whereby in this case 20% of the people at the top are making 80% of the people’s lives miserable. Or is it 20% of what’s left of the middle class are paying for the other 80% of those on both sides. Yep, that sounds more accurate
April 11th, 2009 at 4:07 pm
HTCMSI,
w/this: “Or is it 20% of what’s left of the middle class are paying for the other 80% of those on both sides. Yep, that sounds more accurate”
good call, welcome to the 1/9/20/70 class-splits, a long way from the 10/80/10 splits of mythic yore..
also, found this: http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/
to be interesting..
April 11th, 2009 at 5:02 pm
i wouldn’t be so quick to prejudge the current situation, though i can’t say anything concrete against the doubters and pessimists.
it’s extremely unlikely that volcker’s views about the current situation have not been aired privately to the president and to summers and geithner, and in context with the rest of the budget/economic network obama consults. however it’s also likely that the views of many other politicians and economists have been included as well. so to the view that geithner and summers have pushed the big guy around, i’d prefer the view that there are many hands pushing in many directions.
i also have a high regard so far for the tactical smarts of the obama team, and there is something to be said for the political position that a “bank friendly” bailout creates for decisions down the road. (to the bankers: “we gave you guys enough rope to hang yourselves. so now we’re gonna string you up ourselves.”) the ny times has already reported the complaints of bankers about details of the TARP/fed bailouts, on executive pay and on exercising stock warrants. if carrots are big enough they can be used as sticks. i’m willing to wait until may to see how the administration has played their hand.
finally, volcker is known as the inflation slayer, the guy who is willing to call up a big recession if and when the economy needs it. there will come a time when inflation will be a much bigger concern; i’d expect volcker to come to the fore then. after all, geithner and summers both will have their post obama careers to think about; recessions go over badly at goldman sachs.
April 11th, 2009 at 6:09 pm
for a little perspective:
as eloquently described by the Dean of the Newsletter Writers, Richard Russell:
“I still can’t get over the whole Federal Reserve racket.”
Consider the following – - let’s take a situation where the U.S. government needs money. The U.S. doesn’t just issue United States Notes, which, of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.
This is what the U.S. does – - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the Private Owners of The Fed – - Ed. Note) The mind boggles.
The damnable result is that the Fed effectively controls the U.S. money supply. The Fed is …not even a branch of the U.S. government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the U.S. forever in debt – - or I should say in increasing debt along with ever rising interest payments.
How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”
Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007
After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…” Thus we have an early statement about the threat to “democracy” occasioned by The Fed…”
~~
that Russell, what would he know?
April 11th, 2009 at 6:18 pm
of it…you are merely changing the debt from the business world and homeowner to the taxpayer…I also published the new ways government is going to get you
—————————-
True. The problem is systemic to start off so by transfering it to taxpayers it’s still systemic…. Just trying to sweep it under the rug instead of dealing with it.
April 11th, 2009 at 6:36 pm
I’m with you, DL. Bailouts for the people who had nothing to do with this mess and are getting crushed now. Fuck everyone else, especially those who got us into this mess.
———————
My dad’s 62. 1st year Boomer. Hard working, bright and honest man. Frugal yet generous.
I managed to make him downsize his home at the peak. He was going to wait 5 years but I convinced him to do it before all the boomers decided to do the same thing.
I also got him in cash just in time so he did not lose anything. But he keeps on complaining about how the spendthrifts got us all in trouble and now he can only expect low returns because they crashed the system.
I keep on reminding him that he is so well off because of the asset bubble. He should be thanking the spendthrifts.
My mom keeps on complaining about the muni taxes… how retiurees should get a break because they worked hard all their lives and are now on a fixed income.
I keep on reminding her that despite what she thinks, they never paid enough taxes for all the services and infrastrucutre that were offered during their working years. If they had, the national debt would not be where it is. Furthermore, they got to benefit from new infrastructures while their grandchildren are attending the same schools they went too, mostly unrenovated since these were built in the 50s and 60s!
What I am saying here is that we are all in this mess together. I hold most of the top 1% in utter contempt and as for the other 99%, we should roll up our sleeves and finally work together instead of trying to outdo eachother.
April 11th, 2009 at 6:56 pm
further, on a different facet:
“Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.
“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar. All this has been achieved through its ability to continually inflate the money supply.
And, between 1985 and 2005, the Federal Reserve Board has increased the money supply by five times. This extraordinary money creation is merely the catalyst for debt creation. In a fiat money system, money is debt…there is absolutely no way this money can ever be repaid except by continued inflation. But, now that the credit bubble is blown up, inflation is no longer an option; bankruptcy looms.”
“The Federal Reserve…What Has It Done For You Lately? ”
Ian Gordon, December 29, 2007 http://www.axisoflogic.com
To put it bluntly, the “devaluation” of which Gordon speaks is loss of Purchasing Power.
When the United States has, in recent years, been threatened with recession (e.g. 1987 and 2001), the Greenspan-led Fed responded to each threat by ever more massive fiat money (debt) creation. The problem is that each time the fiat money supply is inflated by an ever-greater amount, more money must be printed (and more “interest” paid by U.S. Taxpayers to the Private For-Profit Federal Reserve) in order to stave off recession or depression. One recent calculation has indicated that approximately $6 must now be created (i.e. printed) in order to drive each additional $1 of GDP.
That policy is being amplified by Fed Chairman Bernanke and Fed Progeny, now Treasury Secretary, Geithner…”
sounds like a profitable investment, no wonder the FedRes’ shares aren’t publically-traded..
April 11th, 2009 at 7:21 pm
One fault Americans have is to conflate advertising with reality. Thus Obama’s “I think it’s a good time to buy stocks” and Summers’ “I think the bottom is coming soon” are attempts to talk the market into feeling confident again, when there’s absolutely no reason for it. Why am I so pessimistic? For one, AIG. The Geithner plan doesn’t even begin to address the $1.6 trillion of “hard-to-value” assets they insured. It addresses the hundreds of billions of “legacy” assets the banks weren’t able to offload. If you take a look at the AIGFP insurance portfolio, it is largely made up of CDO-squareds. As defaulted residential and commercial loans are liquidated, these securities take losses at the cube (i.e. the third power) of the loss rate on the underlying loans, so it’s only a matter of time before they are “lights-out”. Liddy’s contention before Congress that AIG would be able to return the $173B they’ve received so far is a bad joke, perhaps innocently offered because he trusted present employees to do the math.
I hope and pray that when TALF is apparant as a failure, Obama will have the good sense to jettison the Geithner crew and bring back Volcker. I hope and pray that is why he has only been asked to be a figurehead for now.
April 11th, 2009 at 7:59 pm
Volcker’s actions in the 1980’s were tough on Americans (inflation hit 13.5% and unemployment went skyhigh), but necessary to solve the problem. I think this administration is looking for a less painful solution, but I don’t think they’re going to find it.
April 11th, 2009 at 8:39 pm
For my money Volcker has been a prop since day one, conveniently trotted out on stage to add gravitas during the election. Previously the UN did the same on another matter.
April 11th, 2009 at 8:42 pm
@Lynn
Yes I agree especially when the debt-drowned United States debt is already 350 percent of G.D.P and rising !!!
Remember back in early 1980’s the USA was beginning to be a debtor nation with assclown Reagan.
note: Iceland’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness.”
98% of Americans had better get a new dream and fast !
April 11th, 2009 at 9:07 pm
I don’t usually do this sort of thing (repost something I’d already written on my blog) but in this instance I’ll make an exception, but with just an excerpt:
…This does not hearken an improvement in the human condition. Volcker, an elder with knowledge and wisdom of what he speaks, needs to be revered, and not shunted aside. Here’s what he said about deficit spending, from Dow Jones:
“One historic way of getting yourself out of this situation — or trying to — is to inflate. Either you do it deliberately or you allow it to happen, and if we permit that to happen then I think all these dollars will come tumbling down on us.”
He also had some observations about the Timmy, Ben and Larry show:
“I get a little nervous when I see the Federal Reserve announcements that they want have the amount of inflation that’s conducive to recovery. I don’t know what ‘the amount of inflation that’s conducive to recovery’ would be appropriate. I’d much rather they say that they want to maintain stability in the currency, which is conducive to confidence and recovery.”
He did a reverse-take on that oft-parleyed mantra “that things are different this time” which is usually some childish excuse for not doing things correctly, or expecting things to turn out differently than time and experience have taught us will be the result of our actions:
“We’re in a government-dependent financial system; I never thought I would live to see the day… We’ve got to fight to get away from that.”
All this, and just today it appears that Obama has finally found a place for shunting Mr. Volcker completely aside, appointing him to head a task force charged with re-writing/reforming the “96 year-old” tax code. From Bloomberg:
March 25 (Bloomberg) — President Barack Obama plans to name a task force to review and overhaul the U.S. tax code, a spokesman for the Office of Management and Budget said today.
Obama will ask the Economic Recovery Advisory Board, led by former Federal Reserve Board Chairman Paul Volcker, for a top- to-bottom review of the 96-year-old law in an effort to “re-balance the federal tax code,” spokesman Tom Gavin said in an interview.
This might seem like a good thing. The tax code is a horrible mess. But adults like Volcker know and understand that “re-balance” of the tax code means simply to remake it to do the sort of sociological engineering that the Obama Administration seeks. Rest assured, the “re-balance” will not serve to simplify the tax code, or make it less unfair. It will serve to re-balance the interests of the new political masters relative to the old ones.
Obama is making a grave mistake to waste Volcker on a project such as this, and thereby implicitly rejecting his leadership on stabilizing the financial system. Just like the late seventies/early eighties, thinking that “things are different this time” will surely yield the same results as runaway deficit spending and dollar printing always have, viz., depreciating dollars with inflation run amok. Worshiping anything has a price. Worshiping youth and new ideas, like the idea that borrowing as much as a percent of GDP as was required to win WWII is costly, especially when wisdom about the ramifications of our actions is what is most desperately needed now.
http://www.typepad.com/site/blogs/6a00e54fd124b9883400e553cf38238833/post/6a00e54fd124b9883401156f4a83b0970b/edit
April 11th, 2009 at 9:18 pm
Patrick Neid Says:
April 11th, 2009 at 8:39 pm
For my money Volcker has been a prop since day one, conveniently trotted out on stage to add gravitas during the election. Previously the UN did the same on another matter.
I believe you are right and it worked! I voted for Obama because he reportedly listened very closely to advice from Volker. Then after the election along comes Emanuel, the Pelosi stimulus package, the cap and trade budget….. me thinks me was snookered by a traditional T&S, big gov. liberal. shoulda known better.
April 11th, 2009 at 9:31 pm
BSNEATH,
it why it’s called:
http://www.youtube.com/results?search_type=&search_query=the+obama+deception&aq=f
April 11th, 2009 at 10:39 pm
these guys remind me of novices playing chess…they’ve begun the game with a queen’s gambit (massive printing of money) but it is like going up against Mikhail Tal, with no idea of the middle game or the end game…we started and now what?
I never have liked what other people like about socialism…to me it is the dumbing down of an entire culture…and I will resent it and what it will do here..
April 12th, 2009 at 12:44 am
@Mark E Hoffer Says: April 11th, 2009 at 6:09 pm
This is what the U.S. does – - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the Private Owners of The Fed – - Ed. Note) The mind boggles.
What shocks and awes me is that ten years ago no mainstream newsletter would dare write the above words for fear of blacklisting. Times have certainly shifted if not changed altogether. I’m even seeing some mainstream media dogs beginning to nip at the ‘master’s hand’. At this rate we may see an end to the fed.
Maybe wishes and dreams really do come true.
My only fear is why they are letting it happen. They must have their closets full of gold
April 12th, 2009 at 2:21 am
obama gets all the advice from the masters he serves his policy is no banker left behind
http://www.businessinsider.com/henry-blodget-is-obama-in-wall-streets-pocket-2009-4
http://www.bloomberg.com/apps/news?pid=20601039&sid=aNMQDysdnKRc&refer=home
http://www.opednews.com/articles/Obama-s-New-World-Order-by-Stephen-Lendman-090410-741.html
April 12th, 2009 at 2:37 am
Mark Hoffer this is also how the common person sees it
http://www.businessinsider.com/henry-blodget-is-obama-in-wall-streets-pocket-2009-4
April 12th, 2009 at 8:19 am
HTCMSI,
with this: “My only fear is why they are letting it happen. They must have their closets full of gold..”
I think you’re correct in thinking that it’s indicative of part of a larger scene..
see:
“One clear inference is that if The Cartel is pushing the Amero or the SSRC as the eventual, and their favored, alternative to the U.S. Dollar, The Cartel certainly intends to continue its interventional efforts at suppressing the prices of Gold and Silver in order to prevent their attaining increasing legitimacy as money, and thus as competitors to their Fiat Currencies and Treasury Securities.
In the event of the success (from The Cartel’s perspective) of the implementation of the End Game Plan, doubtless The Fed intends to transmogrify itself into The (still private and still very profitable) Central Bank responsible for issuing the Amero or the SSRC. Additional details regarding The Cartel’s “End Game” are provided in Deepcaster’s August 3, 2008 Alert and June 2007 Letter available at http://www.deepcaster.com.
Of course, the key question for the long-term is whether The Cartel will be able to pull it off. Certainly they have been instrumental in creating a financial climate, which has crisis potential.
If The Fed is not able to lead its Cartel to success in implementing its “End Game,” the No-Salvation, No-Return Systemic Crisis that its policies will likely create, the ensuing crisis would clearly and publicly be its responsibility.
In that event, is it not highly likely that The Fed would be unable to continue as a privately owned for- profit entity? One can hope…”
also, you may care to check out http://www.lemetropolecafe.com , and gata.org
““Super-sovereign Reserve Currency” (“SSRC”) to which Fed Progeny/Treasury Secretary Geithner recently said he was “open’ – - a surprising but frightening display of candor, and disloyalty to the U.S. Dollar and to the United States.”
–
“international institutions like the International Monetary Fund, as well as broad agreement on a global regulatory reform agenda, will come out of the G-20 summit. He expressed optimism for these outcomes. Describing recent G-20 finance minister meetings, he said: “You know, I sat around these tables for many years in my past, and…I’ve not been at those meetings before with that level of common conviction on not just the basic diagnosis but what it’s going to take and the details of what’s going to be required.”
Asked about the future role of the U.S. dollar, following comments from China’s central bank governor that the world needs a new international currency, Geithner said he interpreted the comments to be a call for expanded Special Drawing Rights–the currency substitute used by the IMF–adding that Washington “is actually quite open to that.” Bloomberg reports that this comment roiled currency markets, sending the dollar tumbling for a short period. Later in the talk, however, Geithner reiterated his view that “the dollar remains the dominant reserve currency and is likely to remain that for a long period of time,” prompting the dollar to surge, making up its earlier losses.”
http://www.cfr.org/publication/18936/geithner_signals_regulatory_shift.html
April 12th, 2009 at 8:29 am
Lori,
” The charitable explanation …”
“Obama has never explained why he’s acting so out of character here, so we have to speculate. The charitable explanation is that Tim Geithner is paralyzed by fear of triggering another post-Lehman credit meltdown and has convinced Obama that that’s what will happen if the government holds banks and their bondholders accountable or just comes clean about the shape that banks are in.
As we’ve said, we disagree with this…”
“…The more disturbing explanation, meanwhile, is that the Obama administration really is in Wall Street’s hip pocket. Jonathan Weil at Bloomberg thinks there’s a chance this is the case. And Obama certainly isn’t doing anything to discourage this.
By maintaining a double-standard and refusing to address the elephant in the room, Obama is risking his credibility and his reputation for telling it like it is. This behavior, both toward the banks and toward Americans, is a disturbing echo of the Bush administration…”
http://www.businessinsider.com/henry-blodget-is-obama-in-wall-streets-pocket-2009-4
all that new Wrapping to give the Same ‘Gift’..it’ll has been, and will be horribly expensive..
Gives a new meaning to ‘Green’, Gardens aside..
April 12th, 2009 at 8:31 am
What shocks and awes me is that ten years ago no mainstream newsletter would dare write the above words for fear of blacklisting
—————-
What shocks and awes me is the small % of people who actually ever took the time to understand how money gets injected into the system.
During spring break, I took my 7 year old daughter to a presentation on money. She basically learned about barter and how bartering can be replaced by using notes. Elementary. After the lesson, quite a few people went up to the teacher and could not understand how playing cards could be used as money!
So the teacher explained the whole notion of fiat vs. gold backing by showing the Chinese compressed tea money tablets from the Ming dynasty. She then went on to explain how inflation took over…. too many compressed tea tablets were printed. I took a mental note that she did not compare it to GDP growth.
Then she quickly went on to state that we’d never see inflation like that in Canada because our leaders are very careful… they don’t print too much money anymore since it’s all done electronically.
Scary.
April 12th, 2009 at 9:16 am
“Then she quickly went on to state that we’d never see inflation like that in Canada because our leaders are very careful… they don’t print too much money anymore since it’s all done electronically.”
“Education” is, often, a euphemism for Indoctrination..
That so many of us trundle our most valuable assets off to be minded by others..yes, including, and beyond, our Children.
http://www.thefreedictionary.com/euphemism
Then we wonder: “What went wrong?”