Pulitzer prize winning investigative reporter Jesse Eisinger — he insists I write that intro every time I mention his name (heh heh) — has an interesting ProPublica/NYT column out this morning looking at the many empty appointments at key agencies in Washington DC:
“The administration has inexplicably left open the vice chairman for banking supervision, a new position at the Federal Reserve created by the Dodd-Frank Act, despite having a candidate that many people think is an obvious choice: Daniel K. Tarullo. The new Consumer Financial Products Board chairman is unnamed. There are some lower-level positions that don’t have candidates, including the head of the Treasury’s Office of Financial Research and the Financial Stability Oversight Council insurance post.
Perhaps most important, the Office of the Comptroller of the Currency, is being headed by an acting comptroller, John Walsh, who took over the agency last August. Nine months have passed without a leader who might better reflect the Obama administration’s views on banking regulation, a time lag made worse by the office’s coddling of the banks even as they have acknowledged rampant abuse and negligence in the foreclosure process.”
You have to love this paragraph:
“Even low-level appointments are now deeply partisan affairs, the playthings of score-settling senators with memories like elephants and the social responsibility of hyenas (which probably insults hyenas).”
My solution? Go a little Seal Team 6 on the Senate minority GOP leadership. Tell them to sit down with the President’s list and hammer out a compromise. The alternative to obstructionism is to pull a page out of George W. Bush playbook and after 2 years of foot dragging, fill the full slate via recess appointments — including Elizabeth Warren as FCIC Chair.
Its time for the kiddies in DC to grow up and behave like adults.
This months Rolling Stones magazine has a list of the 100 Best Albums of the Nineties.Trust me, they are not. By design, these lists are subjective, debate provoking and lots of fun. They are great link bait (I bit the hook).
However, it doesn’t take long to find a few WTFs in any such list. Subjectivity is one thing, but when the 2nd paragraph of the intro reads “Eighties holdovers U2 and R.E.M. reaching creative peaks with Achtung Baby and Automatic for the People,” I know we have crossed the chasm of opinion and entered the realm of cluelessness. We can debate Achtung Baby, but Automatic for the People? C’mon!
Regardless, these are good for arguments and laughs.
David Stockman, the former OMB director under President Reagan, speaks with Bloomberg Television’s Tom Keene on “Surveillance Midday” about the U.S. debt crisis.
The Economic Collapse has put together a stupendous list of 20 startling facts about the US housing market:
1. According to Zillow, 28.4% of all single-family homes with a mortgage in the United States are now underwater.
2. Zillow has announced that the average price of a home in the U.S. is about 8% lower than it was a year ago;
3. U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.4. During the first quarter of 2011, home values declined at the fastest rate since late 2008.
5. According to Zillow, more than 55% of all single-family homes with a mortgage in Atlanta have negative equity and more than 68% of all single-family homes with a mortgage in Phoenix have negative equity.
7. In February, U.S. housing starts experienced their largest decline in 27 years.
8. New home sales in the United States are now down 80% from the peak in July 2005.
9. Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent. Today, it is up around 4.5 percent.
10. According to RealtyTrac, foreclosure filings in the United States are projected to increase by another 20 percent in 2011.
12. Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.
13. Sales of foreclosed homes now represent an all-time record 23.7% of the market.
14. 4.5 million home loans are now either in some stage of foreclosure or are at least 90 days delinquent.
15. According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.
16. In September 2008, 33% of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.
17. During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded.
Things were falling apart. We had no playbook and no tools…Life’s about choices. We had no good choices…We allowed this huge financial system to emerge without any meaningful constraints…The size of the shock was larger than what precipitated the Great Depression.
Geithner also warned that another financial crisis will hit:
“It will come again. There will be another storm,” warned Geithner, who in early 2009 succeeded Paulson as treasury secretary. “But it’s not going to come for a while.”
***
“I’m certain we will” experience another catastrophe—he just couldn’t say when or what kind.
“You will not know,” he answered when Sorkin tried to pin him down. “It’s not going to be possible for people to capture risk with perfect foresight and knowledge.”
Would the American people stand for the lack of any real reform if they knew that the financial system will likely melt down again within the next 5 years? [given that the crisis started in 2007, that means that the next crisis will hit in 2012 ... if nothing blows up in the meantime]
Geithner has been a big part of the problem.
He’s previously said that his job as head of the New York Fed wasn’t as a regulator, even though one of the Fed’s core jobs is to regulate. As Dylan Ratigan writes:
In Geithner’s own words during confirmation hearings in March: “First of all, I’ve never been a regulator…I’m not a regulator.” According to the New York fed bank’s Web site, that was your job!!Quoting from the Fed’s website: “As part of our core mission, we supervise and regulate financial institutions in the Second District.” That district of course is the epicenter for bailed out banks and billion dollar bonuses.
(In other words, the 2007-2008 shock was even bigger than the one leading up to the Great Depression because Geithner and the other regulators were sitting on their hands.)
It’s “deeply unfair” that some financial institutions that got taxpayer-paid bailouts are emerging in better shape from the recession than millions of ordinary Americans.
Geithner also argued that President Barack Obama had no choice when confronted with a financial crisis.
“As the president has said, we had to do some very unpopular things,” Geithner said. “People looked at what had happened.”"It’s not fair. It’s deeply unfair,” he said. “He (Obama) had to decide whether he was going to act to fix it or stand back … and that would have been calamitous for the American economy.”
There are only a couple of minor inaccuracies in Geithner’s statements:
Geithner’s entire approach is wrong, because the economy can’t recover until many of the “financial institutions that got taxpayer-paid bailouts [and] are emerging in better shape” are broken up
The government has been anemic in addressing unemployment
Moreover, it is not like their approach fell on them and they couldn’t do anything about it. Geithner … and the boys made a conscious decision to side with the oligarchy at the expense of the people.
[There was a] point at which the government had to decide if it would defend the financial oligarchy from populist outrage, or whether it would reform the financial system that brought us the financial crisis and severe recession. We do not think it was an easy choice. But ultimately Obama and his advisers chose to bet on the bankers they knew. The result has been even larger banks and an even more concentrated financial sector.
***
Geithner ended the interview with this pearl of wisdom:
“What happened in our country should never happen again,” he said. “People were paid for taking enormous risks. It was a crazy way to run a financial system.” Geithner said, “It’s the government’s job … to do a better job of restraining that kind of risk-taking.”
Indeed … too bad that Geithner and the boys are still encouraging that kind of risk-taking.
Geithner was, of course, largely responsible for much of the failure of the government to restrain risk-taking in the first place.
Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth.
And pushed to pay AIG’s CDS counterparties at full value, and then to keep the deal secret.
And as Robert Reich notes today, Geithner was “very much in the center of the action” regarding the secret bail out of Bear Stearns without Congressional approval.
(So the shock was even bigger than the one leading up to the Depression because Geithner and his buddies helped blow the bubble and try to cover up wrongdoing on Wall Street.)
Geithner has been equally bad as Treasury boss. Indeed, there is hardly a single independent economist who thinks he has been responding appropriately to the economic crisis.
Even worse, Geithner has been called an idiot by Nassim Taleb and a “con man” by Time Magazine.
No wonder we’re going to eventually have another crash …
And because Geithner (along with Bernanke) have insisted that the big banks be bailed out at Main Street’s expense, that the status quo be protected instead of reformed, and that the U.S. insure the debts of the too big to fails, the next crisis will be even bigger than the last.
• Apple IPad’s ‘Buzz Saw’ Success Cuts PC Sales at HP, Dell (Bloomberg)
• Against the ‘strong dollar.’ And the ‘weak dollar.’ (Washington Post)
• Rating Agencies Face Crackdown (Dealbook)
• Some Simple Deficit Reduction Arithmetic (The Street Light)
• Foreign Buyers Getting Firesale Prices on U.S. Housing (Real Time Economics) They don’t draw a salary in dollars!
• Gasoline Tax Rates by State (GasPriceWatch)
• Why Does a Salad Cost More Than A Big Mac? Um, Farm Subsidies? (Good Medicine)
• Wikipedia And The Death Of The Expert (The Awl)
• Playboy Interview: Marshall McLuhan (Next Nature.net)
• Space Shuttle Twitpic Launches Woman to Tweeting Fame (Mashable)
I love Faux Tech Jargon, and that is why this is our Quote of the Day:
“We use CopyBuoy via Hoster Broaster, because it streams really easily into a Plaxo/LinkedIn yak-fest meld. When you register, click “Endless,” and under “Contacts” just list everyone you’ve ever met. It would be great if you could post at least six hundred words every day until further notice.
If you already have a blog, make sure you spray-feed your URL in niblets open-face to the skein. We like Reddit bites (they’re better than Delicious), because they max out the wiki snarls of RSS feeds, which means less jamming at the Google scaffold. Then just Digg your uploads in a viral spiral to your social networks via an FB/MS interlink torrent. You may have gotten the blast e-mail from Jason Zepp, your acquiring editor, saying that people who do this sort of thing will go to Hell, but just ignore it.”
After 3 quarters in a row that averaged just 1.2%, Q4 GDP grew 2.8%, a touch below expectations of 3.0% BUT Nominal GDP grew well below forecasts. Because the price deflator was up just .4% vs the estimate of 1.9%, Nominal GDP was up 3.2% vs the estimate of 4.9%. Personal Consumption rose 2.0% vs the forecast of 2.4%. Fixed Investment rose 3.3% helped by a 5.2% increase in equipment and software spending and residential construction rose by 10.9%. Trade was a slight drag on GDP growth and government spending was as well led by a 12.5% decline on national...
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