Posts filed under “Really, really bad calls”

2008 Geithner to AIG on Goldman: Shhhhh!

This is simply infuriating:

“The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.”

Between Summers and Geithner, it appears that President Obama has made the exact same mistake that one George W. Bush did: Instead of filling his administration’s most important posts with his own people, he reached back to prior admins (Cheney, Rumsfeld, etc) and loaded up on incompetent retreads.

Barack W. Obama indeed . . .

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UPDATE: Some of the emails in question can be found at Dealbook.

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Source:
Geithner’s New York Fed Told AIG to Limit Swaps Disclosure
Hugh Son
Bloomberg, Jan. 7 2010
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXIvW4igKV38

Category: Bailouts, Really, really bad calls

Letter from Chicago: F

In a post yesterday, my west coast pal Paul discusses how the Chicago School of Economics Circling the Theoretical Drain: “In the current issue of the New Yorker there is an alternatively depressing and fascinating piece (Letter from Chicago) by John Cassidy about how the Chicago School of economics – monetarism, rational expectations, efficient market…Read More

Category: Psychology, Really, really bad calls

Statistics: Scientific Consensus on Climate Change?

One of the memes I’ve heard recently in the climate debate is that there is no scientific consensus — that there is actually strong disagreement. The main basis of this argument is that 31,486 dissenting scientists have signed a petition against the belief that Global Warming is man made at the PetitionProject.org. I don’t want…Read More

Category: Mathematics, Really, really bad calls, Science

Stiglitz: 6 Harsh lessons We Failed to Learn

Economics Nobel laureate and Columbia University professor Joseph E. Stiglitz has what very well be the best year end piece I have seen to date; “The best that can be said for 2009 is that it could have been worse, that we pulled back from the precipice on which we seemed to be perched in…Read More

Category: Bailouts, Politics, Really, really bad calls, Regulation

Luskin: Buy Stocks, Buy Citi (11/07) Sell Stocks (3/09)

Invictus is a bulge bracket asset manager with $100+ million AUM. He has no patience for money losers, hacks, partisans pretending to be financial analysts . . .  this is the first in a series of critical looks at analysts, media, economists, financial TV. Feel free to share any thoughts in comments. Here’s Invictus: ~~~…Read More

Category: Analysts, Media, Really, really bad calls, Research

Morgan Stanley’s Commercial Jingle Mail

Here is a fascinating twist on the underwater homeowner walking away fromt heir bad purchases: This time, its Morgan Stanley. They spent over $8 billion on commercial property in 2007 — the peak of commercial real estate in the US.  Now, they are going to preemptively “Walk Away” from five San Francisco office buildings, letting…Read More

Category: Bailouts, Credit, Real Estate, Really, really bad calls

Why Obama’s Poll Numbers Are Plummetting

The political buzz today is all about the President’s falling approval ratings. He has now fallen faster than President Bush did (prior to 09/11). The simple solution for the White House: Stop jerking around with Financial Reform. When there is high unemployment, people don’t want to see bailed out bankers making a killing. Fix what…Read More

Category: Politics, Really, really bad calls

THE TIGER (with apologies to William Blake)

A hedge fund manager in Tokyo sends this along: > Tiger, Tiger bonking bright in the fleshpots of the night what immortal eye or hand could restore your tarnished brand? On what porn star’s breasts and thighs, burnt the fire of your eyes on what course did your ball run as you sunk a hole in one? You always looked…Read More

Category: Humor, Really, really bad calls

Volcker’s anti-Geithner, anti-Summers World Tour

“Bankers and regulators have not come anywhere close to responding with necessary vigor” to the worst economic crisis in 70 years. There is a lot of evidence that financial weaknesses brought us to the brink of a great depression . . . The proposed changes are like a dimple.” -Paul A. Volcker, Dec. 8. at…Read More

Category: Bailouts, Credit, Really, really bad calls, Regulation

The Folly Of Economic Forecasts

> Interesting discussion on one of my favorite subjects — The Folly Of Forecasts — on NPR with Chicago/Austrian economist Russ Roberts, now at George Mason University. click here for audio > Previously: Apprenticed Investor: The Folly of Forecasting Barry Ritholtz TheStreet.com, June 07, 2005 http://www.thestreet.com/story/10226887/apprenticed-investor-the-folly-of-forecasting.html Source: The Folly Of Economic Forecasts NPR, December 7,…Read More

Category: Analysts, Economy, Really, really bad calls