Volcker Takes Obama After the Banks
By Barry Ritholtz - January 23rd, 2010, 9:39AM
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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.
January 23rd, 2010 at 9:49 am
Volcker was the latest prop in the ongonig Kabuki that is 100% of American political discourse.
Period. End of story.
January 23rd, 2010 at 9:59 am
Volcker seems to be the only one with the guts to end this ponzi scam whereby “bank holding companies” like Goldman (where are their branches?) have access to TLGP (free money) which they use to buy Treasuries to fund our deficit spending to in effect bail ourselves out of a Depression. They take more money and trade it on prop desks, adding ZERO function to society except to generate massive bonuses for themselves. If they ever were to get into trouble, the taxpayer would bail them out. Anybody who sees this situation as healthy and sustainable is NUTS.
January 23rd, 2010 at 10:24 am
Ditto Steve Barry! There is no easy way out of our mess but going back to “Financialism” is the worst course. I was starting to lose hope that people were able to distinguish between the Ponzi pumpers and the economy of Main Street. Sic ‘em Tall Paul!
January 23rd, 2010 at 10:37 am
Ditto Steve Barry!!!!!!!!!
January 23rd, 2010 at 10:39 am
SB-
that’s why people such as Dennis Kneale are such tools-
http://www.cnbc.com/id/35016052
“Obama’s bank-bashing bent is an ominous sign that Rahm Emanuel and the politicos have taken over the White House, infecting sound economic policy with poll-motivated invective and restrictions that could thwart a strong rebound.”
strong rebound?????? WTF is this dumbass smoking
January 23rd, 2010 at 10:46 am
The W stands for waffle.
January 23rd, 2010 at 10:50 am
If GS and MS are so healthy and able to stand on their own two feet, having paid back TARP with interest and raised capital, then they should rescind their Commercial Bank Charter and be done with the big bad government who is ‘attacking them’. Whatever guarantees that are outstanding stay in place for a fee equal to a spread.
All the bluster coming out of the pundits never seems to pose this most basic point.
Why will they NOT do this? That is the question, the answer to that question is that they NEED the government and will not rescind the guarantees.
January 23rd, 2010 at 10:53 am
@bohemian: Kneale means a “strong rebound” in HIS paper assets. He likes a Potemkin market and economy. If there is ever widespread social unrest in this country, he should be sacrificed first.
January 23rd, 2010 at 10:55 am
And today he directly attacked the Supreme Court decision on corporate contributions saying it “strikes at democracy itself”
I like this new Obama 2.0 fellow. Hope he sticks around.
January 23rd, 2010 at 10:57 am
@polizeros: Of course he did. Kneale is a fascist tool through and through.
January 23rd, 2010 at 10:59 am
Oops, thought you were talking about Kneale. I get a chronic twitch in my face when someone brings up his name. Time to go take my pills. ;-)
Agree with you about O, but only if he’s serious though. It’s going to take A LOT of fortitude and determination to stare down these folks as their lobbyists descend on D.C. to try to water this thing down to the point of nullifying it.
January 23rd, 2010 at 10:59 am
“he should be sacrificed first.”
well manny. . .not a fan of violence . . .but I do have this overwhelming desire to punch him in the face . . .
hopefully I wouldn’t get carried away
January 23rd, 2010 at 11:01 am
“I like this new Obama 2.0 fellow. Hope he sticks around.”
I’ll 2nd that
January 23rd, 2010 at 11:11 am
@bohemian: Oh, me neither. I was using hyberbole for effect and the lack of sun here for what seems like the 20th straight day is making me even crankier than normal today. I’d love to take a swing at him too. LOL.
Please don’t bring his name up again. I haven’t watched CNBC in over a year and I don’t want any references made to that guy. ;-)
January 23rd, 2010 at 11:14 am
50 years ago society really frowned on people who talked too much. There’s not much time or patience for bs in tough times.
I think most people agree with McMia above (even though most probably don’t use the term “kabuki”). As long as partisan rhetoric keeps taking extreme positions and people on CNBC get paid ridiculous money to spout bs they’ll never be accountable for, to me it’s a sign that the US is a junkie that hasn’t hit rock bottom yet.
January 23rd, 2010 at 11:17 am
@Transor: I think you nailed it. Everything today seems to be about narcissism and entertainment. Everyone running around with their hair on fire preening for the cameras saying something qausi-provocative but backing it up with mostly nothing. Some would call it “hot air” or “all hat and no cattle”. Much ado about nothing but it’s fun to watch the histrionics!
January 23rd, 2010 at 11:34 am
@Manny: I’ve been addicted to TV and movies my whole life. I still get drawn in to the drama. I’m a captive to it all, but my “resistance” is to try to deconstruct what’s passing in front of my eyes. I’m pretty lame when you come right down to it. :-)
I was thinking something else just now. Social movements have historically spanned generations. Women’s lib took off in the 1840s and is still working through the system. Civil rights same thing. I saw on History Channel or PBS an itinerant puppeteer in Iran who still tells the story of Darius and Alexander and the Battle of Gaugamela 2300 years ago. Guy learned the puppet craft, story and songs from his father and the whole thing passed down completely by oral tradition.
The cool thing is all of the major facts check out against archaeology.
We all say how short people’s political memories are. But that’s not always the case. So maybe also add ADD to your diagnosis of narcissism! (which I totally agree with, btw)
January 23rd, 2010 at 11:42 am
@polizeros
I, too, was encouraged by Obama’s response the the Supreme Court’s newest assault on America, until I read this:
“”When this ruling came down, I instructed my administration to get to work immediately with Members of Congress willing to fight for the American people to develop a forceful, bipartisan response to this decision. We have begun that work, and it will be a priority for us until we repair the damage that has been done. “”
Forceful BIPARTISAN RESPONSE. We all know how well the “bipartisan” cooperation worked for health care reform, and now this. Doesn’t Obama get it, yet? WTF? No Republican who wants to be reelected will work against their leadership to challenge this ruling.
Populists could care less about being bipartisan, they just want something done, show some leadership without caving to the special interest groups. Again, watch what Obama does, not what he says. I predict nothing will be done besides a few toothless laws being passed with giant loopholes for all of the favored corporations. And the corporation’s lobbyists will be in the room helping to write the legislation, as well.
And now that the SCOTUS has “legislated from the bench”, overturned 100 years of settled law, including McCain Feingold, and has exhibited extreme judicial political activism, where are all of the conservative douche bag critics, now? Crickets.
January 23rd, 2010 at 11:47 am
@Transor: What somewhat amazes me is that even with all of these incredible technological and communication tools out there, it seems the public is even LESS informed and MORE confused by the day. Maybe it’s just hard to sift through all the b.s., since that b.s. probably acccounts for up to 90% of it out there or is the public by and large just too lazy (or busy? or just ensconced in/addicted to superficial b.s?) to sift through it even with all of these tools at our disposal? Or is it just a case of NOT wanting to know the truth and closing our eyes in willful delusional ignorance, hoping it will all go away and “work out” in the end? Repeat after me: “There’s no place like home, there’s no place like home……”
OK, gotta run and get the dogs out (and me as well……winter cabin fever runs amok here).
January 23rd, 2010 at 11:49 am
Exactly, dss. And the GOP by and large will not back Obama on anything that could be actually constructive because they mainly just want him to fail badly (no matter the harm to the country, who cares about that?) so they can take all the reigns again by ’12 and push us even further to the brink.
January 23rd, 2010 at 11:53 am
I read the CNBC piece as satire. The guy was serious ?
Maybe the system is beyond repair, but you have to start somewhere. Frankly, I’m impressed by how quickly Obama adjusted this past week, given prior indications of his inability to stand up to anyone. If the Volcker prop is what he needed, so be it. Positive reinforcement in one area will lead to strength of conviction in other areas. Obama 2.0 indeed !
January 23rd, 2010 at 11:53 am
McMia Says:
January 23rd, 2010 at 9:49 am
“Volcker was the latest prop in the ongonig Kabuki that is 100% of American political discourse.
Period. End of story.”
McMia, I hear ya and I would not be surprised if you aren’t right, but I truly hope you are wrong.
David Brooks wrote an op ed in the NYT today that, while somewhat OT, addresses the distrust that many of us share today. Fortunately Volcker is a straight shooter and the fact that he has the President’s ear is a good development. Perhaps Obama is beginning to understand that it is better to be straight up with the public rather than to play political gamesmanship. Time will tell.
Op-Ed Columnist
Politics in the Age of Distrust
By DAVID BROOKS
http://www.nytimes.com/2010/01/22/opinion/22brooks.html
January 23rd, 2010 at 12:16 pm
The smartest, most insightful thing about that cartoon is how Obama is facing the wrong direction, riding backwards on Volcker.
January 23rd, 2010 at 12:16 pm
The Volcker plan, had it been in place a few years ago, probably would have done nothing to prevent the downfall of Lehman, Bear Stearns or AIG, or the losses at Fannie/Freddie. The Volcker plan does nothing about “TBTF”. It doesn’t get at the heart of the problem. There’s also the matter of putting large U.S. banks at a competitive disadvantage vis a vis their foreign counterparts.
Nevertheless, I am not convinced that, for the economy as a whole, the costs of the Volcker plan would outweigh the benefits (as many have argued).
January 23rd, 2010 at 12:21 pm
@hgordon,
I am impressed that Volcker was brought out front and center, but given Obama’s record so far on the banksters, Geithner, Summers, and Bernanke, not to mention the disastrous health care debacle, I will only be encouraged if some concrete proposals emerge, and fast.
Volcker was shunned and tossed aside last year but if he was smart he said to Obama “sure, I’ll come and help you fix this mess, but it is my way or the highway”. He was strong enough to stand up to everyone before and despite the great unpopularity and extreme hardship that his proposals caused, they worked and set the stage for the enormous economic recovery that followed.
Will he be given the power to stand up to GS, JPM, and the rest of the banksters? Only time will tell, but we are at a point where if something isn’t done, this country is spiral downward out of control.
January 23rd, 2010 at 12:27 pm
Volcker is our economic Churchill.
January 23rd, 2010 at 12:29 pm
> Will he be given the power to stand up to GS, JPM, and the rest of the banksters? Only time will tell, but we are at a point where if something isn’t done, this country is spiral downward out of control.
Corpocracy vs Democracy 2.0
IMO if Obama does not get rid much of his vampire squid from hell infested economic team Dems take a big hit in Nov 2010 then he’s done in 2012
January 23rd, 2010 at 12:38 pm
Risk reduction at the banks needs to start at some point with with someone who has the cojones big enough to take on the establishment…please, please tell me someone more qualified than Volcker. Let the foreign banks have the “competitive” advantage of under regulated risk.
January 23rd, 2010 at 1:48 pm
@bsneath – there’s a great follow-up to the Brooks op-ed in Brooks response to Collins:
http://opinionator.blogs.nytimes.com/2010/01/20/what-the-results-in-massachusetts-mean/#more-36365
January 23rd, 2010 at 1:51 pm
How to disrupt Wall Street
http://cdixon.org/2010/01/23/how-to-disrupt-wall-street/?utm_source=twitterfeed&utm_medium=twitter
January 23rd, 2010 at 2:14 pm
Floyd Norris:
http://www.nytimes.com/2010/01/23/business/economy/23charts.html?ref=business
“With this week’s release of the November estimate of foreign holdings, China is on course to lend just 4.6 percent of the money the government raised during the year. That compared with 20.2 percent in 2008 and a peak of 47.4 percent in 2006.”
This is happening, as net government issuance to fund bailouts and stimulus is off the charts at 1.5T last year and probably more this year. The Fed would have a serious problem, if not for their Ponzi scheme…The banks are taking the cheap TLGP money and buying the massive supply of longer dated treasuries that China isn’t…borrow short, lend long. We are literally trying to bail ourselves out, with the banks getting a nice chunk of change for their trouble and getting to play mark-to-make believe again as well. They would be stupid to lend to consumers and small business, as this fool-proof money making machine is humming. Even this profit is not enough for them…they want high frequency proprietary trading profits as well, which I can’t conclude is anything but a tax on the investment capital that should fund productivity.
It probably could have kept going, but, surprise, they got greedy again with the bonuses and people have had enough.
January 23rd, 2010 at 2:23 pm
All -
The SC ruling this week on campaign finance is earth shaking to say the least and this represents a stunning tilt toward judicial activism with about a hundred years of precedent thrown out the window (Scalia is rubbing his hands together in glee as we speak – you just know he’s been waiting for this one).
That said, I think Obama has a chance to make some lemonade here. Instead of a knee jerk effort to push new, arcane finance rules through a fractured and feckless congress he could push for a simple clean bill that requires full, immediate, electronic disclosure of all campaign contributions, and full, proper identification of groups who spend unlimited amounts of money on third party ads. In other words, spend all the money you want for political purposes (and they do already) but as a voter I want to know exactly where it goes and who is behind it.
There isn’t a single congressman on either side of the aisle who would have the balls to vote ‘no’ on such a bill IMHO.
January 23rd, 2010 at 2:59 pm
the bohemian:
You know what’s truly funny about Kneale’s remarks? It’s that Emanuel is a tool of the banksters. He was once one himself. And committed Democrats hate him because of his time heading the DCCC. He recruited a former Republicans and Republican-lites to run for office. So more of Kneale not knowing a damn thing about what he speaks. My guess is that Rahm hates(along with Timmeh!!) the idea of Obama going after Wall Street but given Coakley’s loss he has no choice.
January 23rd, 2010 at 5:51 pm
“By the pricking of my thumbs, something wicked this way comes”.
January 23rd, 2010 at 7:02 pm
Thanks for sharing BR, this cartoon is classic!!!
January 23rd, 2010 at 7:49 pm
This is old news to the bankers and is one of the reasons they continued to take the bonuses that they did, they understood that the writing was on the wall, something serious has to be done and shown to be done even though and despite the politicians being owned by the bankers, so it’s no surprise that they had early warning and continued to raid the vaults. The people who “own the country” as George Carlin used to say, are no dummies and are way out ahead of everybody despite what they have left in their wake.
The horse is out of the barn and the funds are irretrievable in the biggest bank heist in the history of the world.
Let the fees to the banks be increased and they will be passed on to the customers and the bonuses in one form or another will continue to flow.
Thanks to the fog of economics and finance Joe Six Pack hasn’t a clue what happened to him, Greenspan was not called the Maestro without good reason – though most people do not view it from this perspective. If Hunter S. Thompson were around today he’d probably be saying something like they ought to be hunted down like poison trolls… and that’s perhaps why, as it was reported in a Bloomberg story, that the GS execs have secured firearm permits. Even the Chinese government have an inkling of how nasty it could get and it’s no coincidence that they ratcheting up control of the internet at this time.
Down in the polls Obama has nothing to loose by administering the medicine that’s the least painful of a limited amount of options and secures a place in history by implementing the right but exceedingly painful policies. If he stands up and straightens his backbone and shows leadership then it cannot impair his standing much more. Volker can play the tough cop to Obamas good cop and doubly secure his place in history.
January 23rd, 2010 at 8:57 pm
drey; agree – FULL disclosure should be the first counter attack.
January 23rd, 2010 at 9:12 pm
“Hope Obama 2.0 fellow sticks around” .. I’ll 3rd that
“Social movements have historically spanned generations” .. a problem in these make or break days
“SCOTUS has legislated from the bench, overturned 100 years of settled law” .. USA = voters or $s?
the POTUS Will not/Can not .. resort to tanks in WashingtonDC or elsewhere .. it would be a Civil War .. this country is nearly 50/50 DR in team associations for bringing home the bacon to local contractors .. and don’t tell me thats why we need less government .. our world needs the super-corps to supply modern world needs at a cost plus basis .. cost PLUS is the problem today in a super-inter-connected super-corp world .. we are in the process of monopoly making
we need to enable voters choosing policy direction .. candidates and office staff writing law and hiring via bids for needed work .. and if the laws/hiring turn sour .. candidates get recalled & go back to shovel work
“now? Crickets”