Gensler (along with Geithner and Summers, but those guys are water under the bridge) fought long and hard for the Commodity Futures Modernization Act of 2000, first as Assistant Secretary of the Treasury, and then as Undersecretary of the Treasury, which deregulated derivatives and swaps, and is one of the architects of the current meltdown, and Sanders is 100% correct in objecting to his having a any role in further regulation of derivatives.
Then there is also the matter of his brother being hip deep in Wall Street too, running a fund for T. Rowe Price, and Gary Gensler himself is another Goldman Sachs alum.
Enough is enough. We need people who aren’t the ones who created the problem in the first place in charge of policing those who were.
Un-dirtyword-believable, and good for Sanders to stand up for a semblance of competence and honesty in Barack Obama’s economic team.
So, the plan has been announced, and it’s pretty much what I said over the weekend: A massive subsidy to big investment firms, and the little guy can’t get in on the “3% down and that’s all you lose” deal.
It’s the buy the sh%$pile with taxpayer money thing all over again….and again….and again.
Geithner has an OP/ED in the Wall Street Journal,† where he rolls out the Treasury’s new weasel words for financial toxic waste, “Legacy Assets.”
I’m sure that he thinks of Chernobyl as an “accelerated sunshine facility” too.
We know that the financial masters of the universe love the subsidies, because players like BlackRock and Pimco are falling all over themselves to get in.
I won’t go over the problems with the plan here, you can look at my Saturday post for that, but the short form is that Wall Street is mugging you.
*Really Barack Obama’s plan, because he is where the buck stops, though a lot of the blame goes to Larry Summers too. †Which, considering the WSJ’s editorial page reputation for outright deception, is utterly appropriate.
The US and its European allies are preparing to plant a high-profile figure in the heart of the Kabul government in a direct challenge to the Afghan president, Hamid Karzai, the Guardian has learned.
The creation of a new chief executive or prime ministerial role is aimed at bypassing Karzai. In a further dilution of his power, it is proposed that money be diverted from the Kabul government to the provinces. Many US and European officials have become disillusioned with the extent of the corruption and incompetence in the Karzai government, but most now believe there are no credible alternatives, and predict the Afghan president will win re-election in August.
Hooccoodanode that George “Heck of a job, Brownie” Bush would appoint people completely inept and corrupt to critical positions?
An auction of the big sh#@pile, which is a bad thing, because it only serves to expand taxpayer exposure.
The FDIC will lend about 85% of the money to buy this.
These FDIC loans will be non-recourse loans, which means that if those assets bought with that particular loan would be used to repay. Any further losses would be eaten by the taxpayer.
The Treasury will match, “the private money that each of the firms [4-5 investment firms hired by the Treasury, meaning Goldman and the rest of the usual suspects] puts up on a dollar-for-dollar basis with government money,” which means that the 15% that they have to buy to get the assets is now 7½%
The Treasury/Federal Reserve TALF lending program will be used to further expand lending to buy this toxic waste.
This is what Geithner has been pushing for a long time, some sort of program to overvalue assets at taxpayer expense, all while, “firmly against imposing any restrictions on pay for companies investing money in the rescue effort rather than receiving money from it,” except, of course, any participants in this are receiving federal money because of the subsidies.
Dean Baker notes that the that unlike Timothy “Eddie Haskell” Geithner and Lawrence “Shoggoth” Summers and their Evil Minions™, the current market values of the securities are probably accurate, because real estate prices remain 20% above the historical trend, and if houses fall another 20%, these mortgage backed securities now selling for 30¢ on the dollar, which are the very top tranches, would be near a dime on the dollar.
The Illness- reckless and irresponsible betting led to huge losses The Diagnosis- Insufficient gambling. The Cure- a Trillion dollar stack of chips provided by the house. The Prognosis- We are so screwed.”
Seriously, tag team of Geithner/Summers may very well be worse for the economy than Hank Paulson.
For your amusement, here is Rep Brad Sherman (D-CA) opening up a can of whup ass on the CNBC Wall Street apologists
That being said, Mugabe’s attempts to maintain his political power have gotten truly surreal:
On his first day as education minister in a government so broke that most schools were closed and millions of children idle, David Coltart said he got a startling invitation.
“Come and get your brand-new white Mercedes,” an official told Mr. Coltart, a veteran opposition politician, as President Robert Mugabe peered down from a portrait on the minister’s office wall.
The offer of an E-Class Mercedes to every minister in the month-old power-sharing government was vintage Mugabe, an effort to seduce his political enemies with the lavish perks he has long bestowed on loyalists.
(I would have offered him silver, or metallic blue, myself.)
I’m an optimist, and see this as a sign of weakness.
Mugabe had previously dismissed the MDC entirely, and how he is trying to bribe them.
It’s clear that there was a lot of outright criminality, and the broken window theory of law enforcement works with white collar criminals too:
Of course, it isn’t clear whether deterrence works against white collar criminals, but the flip side is William Bratton style zero tolerance policing was successful in seemingly ungovernable New York. The theory was that allowing minor infractions, like window breaking, to go unpunished sent a very visible signal that misdeeds were tolerated. Of course, zero tolerance wasn’t the only technique used by Bratton (he also was big on flexible deployment, shifting officers to neighborhoods that suffered an increase in crime), but it is considered to be an effective policing tool. And Wall Street is so far from having any meaningful policing that it’s a joke.
It seems anything short of regulatory or legal moves that limit career options (read future earning power) is an insufficient disincentive to risky trader and investor behavior.
I would argue that the Wall Street crooks have more to lose than a corner dope dealer.
After all, if they get caught, thrown in jail, and their assets,and possibly those of their spouses and perhaps their children’s college funds, are forfeit, that’s a lot more to lose than getting 3 to 5 in a prison when you had nothing before.
On some level I understand just how this is really a very small part of the bailout, but from news, to outrage, to bill passing the house is about 4 days, and it means something, though I’m not sure who gets that yet.
Ironically, just last week, Van Susteren decried people thinking she’s “so close to the Palin family.” “The only way that I’ve met them is by interviewing them,” she said, never mentioning her husband’s relationship to Palin.
If I’m reading Michael Hirsh right, the non financial products division part of AIG, the part that was supposed to be the well run real insurance company, may very well be insolvent too:
Thomas Gober, a former Mississippi state insurance examiner who has tracked fraud in the industry for 23 years and served previously as a consultant to the FBI and the Department of Justice, says he believes AIG’s supposedly solvent insurance business may be at least as troubled as its reckless financial-products unit. Far from being “healthy,” as state insurance regulators, ratings agencies and other experts have repeatedly described the insurance side, Gober calls it “a house of cards.” Citing numerous documents he has obtained from state insurance regulators and obscure data buried in AIG’s own 300-page annual reports, Gober argues that AIG’s 71 interlocking domestic U.S. insurance subsidiaries are in hock to each other to an astonishing degree.
Seriously, we need to start sending people to jail.
While Bernanke is unfirable, I think that this is another nail in his reputation, and I think that we will start seeing increasing pressure for him to resign.
Well, notwithstanding the obvious, that Geithner is unwilling to do the tough things, and that he keeps coming back to the bad bank, but it may very well be the AIG bonus fiasco that does him in.
Ignoring the fact that Geithner was at the center of the first AIG bailout, we are now seeing the signs of panics with Treasury department pointing the finger at Senator Chris Dodd, despite the fact that it was Treasury Secretary Timothy Geithner and Lawrence Summers who waged all out war against meaningful regulation of executive bonuses, and Dodd proposed strong regulations against excessive bonuses:
(4) a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient;
But Geithner’s indulgence of bankers’ indulgences is fast becoming the Obama administration’s Achilles’ heel. The AIG debacle is the latest in a series of bewildering Geithner decisions that threaten to undermine the administration’s efforts to restart the economy. So long as it’s Be Kind to Bankers Week at Treasury — and we’ve had eight straight such weeks since the president was inaugurated — American banking, and the economy it is supposed to serve, will remain paralyzed. The Geithner plan to restart the banks provides huge taxpayer subsidies to hedge funds, investment banks and private equity companies to buy the banks’ toxic assets without really having to assume the risk. That’s right — the same Wall Street wizards who got us into this mess, using the same securitization techniques that built mountains of debt within a shadow financial system that remains unregulated, are the saviors whom Geithner has anointed to extricate us — with our capital, not theirs — from the mess that they created.
It isn’t entirely fair: It was clear that this is what Timothy Geithner was when Obama first nominated him, so it is fair to say that Geithner’s policies are Obama’s policies.
One hopes that Obama dumps the policy, and Geithner (and Summers) shortly.
Mark Ames just penned a post titled, “How To Find The Nearest AIG Financial Products Office , which has a picture of a murdered banker(actually from a Turkish terrorist attack), which appears to be a specific and deliberate incitement to violence.
I do not approve, even though it speaks to how a lot of us feel.
This would protect this home against civil litigants, though I’m not sure what it would do against the Federal prosecutors who have already filed their intent to seize this home, though it clearly is now more difficult than their New York penthouse.
This is not surprising. What is surprising is that the Feds haven’t filed some sort of conspiracy charges over this, because if this were a drug case, they would have already done so.
[on edit]I should have read the fine print more carefully, she, “applied for the tax exemption Sept. 18 and received it Jan. 12, according to the appraiser’s office.”
The scandal broke on December 10, which implies that someone behind the change in residence knew that the house of cards was collapsing, and made the move to save the house.
The first thing that would make me feel a little bit better toward them (is) if they’d follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.
He later backed off his suicide comment, which was an exaggeration for the purpose of emphasis, but “Have you no shame,” has already been said about Joseph McCarthy.
The government said in a court filing yesterday that it intends to seize assets including the Madoffs’ $7 million Upper East Side apartment in Manhattan and homes in Montauk, New York, Palm Beach, Florida, and France. Prosecutors will also seek $17 million in cash and $45 million in bonds in accounts in Ruth Madoff’s name, Acting Manhattan U.S. Attorney Lev Dassin said.
Ruth Madoff was Bernie Madoff’s bookkeeper for 3 decades, and her assets were at one point or another his assets: he transferred them to her to protect them, so this action is appropriate.
Note that they are going after what appears to be everything, including the piano and silverware.
It’s all proceeds of a criminal activity, and it will serve to deter people like Mr. Madoff if they know that transfer of assets will not protect his family.
So, basically, they wrote blackmail terms into their contract, which seems to me a awful lot like a sysop writing a back door into the computer network, and at least as illegal.
I think that though of facing the United States generally inhumane prison system will have them folding like overcooked broccoli for the privilege of spending a few years in a British prison.
Mark Ames just penned a post titled, “