As is expected, Janet Yellen was nominated as vice chairman of the Fed No. 2, along with Sarah Raskin and Peter Diamond.
Yellen is known as an inflation Dove, which is a good thing, though I don’t think that she will be the next Fed chair, she is 63, and neither would Mr. Diamond, he is 70.
Assuming that they are confirmed, it will mean that Obama has now appointed a majority of the permanent members of the FOMC.
Not a whole bunch of detail yet, but it appears that the SEC referred the issues in its civil fraud complaint against Goldman Sachs to the US Attorney in Manhattan, and they are now investigating. (See also here)
Obviously, an investigation does not prove guilt, nor does it guarantee a successful prosecution, though I think that the Prosecutors will have a lot to go on, because Goldman Sach’s personnel policy has employees regularly filling out self evaluation forms, and very likely these have some admissions of wrongdoing.
I think that a judge would be far more willing to grant a warrant for these records in a criminal investigation than he would for a civil investigation.
Well, the Federal Reserves Open Market Committee (FOMC) has spoken, and it has kept its benchmark rate at effectively 0, and repeated its statement that the rates will remain low for an extended period.
Not an unexpected development. After all, the economy still sucks.
In real estate, mortgage applications fell overall, but home purchase applications rose. This is probably the interplay of rising rates versus the expiration of the home purchase tax credit.
In the real world, the American Trucking Aassociation’s Trucking Tonnage Index rose in March, indicating that there is something positive going on.
In the world of sovereign debt, the US Treasury 5-year bonds’ yeild rose to 2.54%, though compared to the yield on 2-year Greek bonds, which are now over 20% (!), it’s pretty cheap money.
Also note that in the continuing euro zone meltdown, Spain’s debt rating was cut S&P.
In energy and currency, oil rose on the news that the FOMC’s posture is unchanged, and the dollar rose on continued Euro zone problems.
The Senate has agreed to start a debate on the financial reform package.
What the Republicans were angling for was a pre-approved package, with back room Ben Nelson(DINO-NE)-type deals cut in secret, so that they would get what they wanted without their finger prints on the deals.
Well, now it looks as if the bill will be in flux on the floor, which means that the sellouts will have to be public, as will voting in opposition to some of the amendments to strengthen the bill.
Harry Reid has hung tough, and the Democrats have been effective in painting Republican obstructionism for what it is.
This needs to be the rule, not the exception.
Even the right-wing Belo Corporation journalism cancer known as the Dallas Morning News
And the Mooney Times
Media Matters has a large selection of newspaper front pages, and it looks like Mitch McConnell’s ploy to kill financial reform is not playing in Peoria.
The lede is all about the filibuster, and how the ‘Phants are doing their best to kill and slow-walk the process, even in reliably right wing newspapers.
Here’s hoping that the Dems notice, and double down on making the Republicans do this again, and again, and again, and again.
Keep up the good work.
Do not compromise on financial reform, you already have, make them crawl to you, and scatter some broken glass in their path.
An article from Time magazine from June 5, 1933 about the creation of deposit insurance:
Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed by both houses of Congress would rivet upon their institutions what they considered a monstrous system of guaranteeing bank deposits. Such a system, they felt, would not only rob them of their pride of profession but would reduce all U. S. banking to its lowest level. They saw their deposits which they had spent a lifetime to build up and protect with their good names confiscated by the Government to pay for the mistakes and dishonesty of every smalltown bankster.
Don’t think that our masters of the universe believe anything different than that these masters of the universe believed.
They always believe that they are good, and noble, and brilliant, and that it’s always someone else’s fault.
So, after releasing an ambitious plan to reign in the exotic insurance-like financial instruments known as swaps, Blanche Lincoln is saying that she thinks that the proposal will not survive the Senate:
Senator Blanche Lincoln said she isn’t sure her plan to make banks wall off their swaps-trading desks has enough support to become part of financial-regulatory overhaul, while calling the provision effective change.
……
“I don’t know if I have the votes” for the provision, Lincoln said today. When the measure comes to the floor for debate, senators could vote to remove her plan, Lincoln said.
Let’s be clear, Senators don’t say things like this about proposals of theirs that they want to pass, they say it about proposals of theirs that they want someone else to kill.
Lincoln is trying to present herself as the liberals’ great white hope in the primary, but it’s just a pose, which is why the US Chamber of Commerce is doing a TV ad blitz for her.
Do not be deceived: She is owned by Walmart, the big banks, the health insurers, and the rest of those pig felching rat bastards.
So, the Senate attempted to begin debate on the financial reform package, and the vote failed by 57-41, with Ben Nelson (DINO-NE) voting with the ‘Phants.
Reid voted “no” as well, but included a motion to reconsider, which is a parliamentary trick to get a do-over.
Still, the most effective thing that the Dems could do right now is to take action against Ben Nelson.
If they start taking real actions against recalcitrant members of their own caucus, it makes it that much easier for them to deal with the Republicans, because they won’t get knifed by the Liebercrats.
Unlike with healthcare, where he sat by idly while he allowed Ben Nelson (DINO-NE) to confab with 3 Republicans in the hopes of making the bill bipartisan, this time Harry Reid has said that, “The games of stalling are over.
Basically, he is saying that if Republicans want a deal, they had better talk now, and if not, they will filibuster financial reform, and the ads will go up, the ugly ones in black and white with the sinister music and the gravely voided announcer, in the states of the ‘Phants who are up for reelection in 2010.
I only wish that he had slapped down Nelson about this on healthcare. It would have made for a much better bill.
His conclusion is all too true:
But the fact is that we’ve been devoting far too large a share of our wealth, far too much of the nation’s talent, to the business of devising and peddling complex financial schemes — schemes that have a tendency to blow up the economy. Ending this state of affairs will hurt the financial industry. So?
Until people in power realize that the basic problem with our financial system is that it is too big relative to the rest of the economy, and that it needs to be cut down to size, we will continue to have failures like these.
And here they are, ordered, and numbered for the year so far.
Seven Banks, all of them in Illinois, that’s a bit odd.
So, here is the graph pr0n with trendline:
The Democratic candidate for his seat is State Treasurer Alexi Giannoulias, and as I’ve noted, before he entered politics, he worked at the troubled Broadway Bank as their chief loan officer, as well as being the son of the owner
The FDIC has just seized the bank, so his opponent, Republican Mark Kirk, who has already made much of his involvement with the bank, will doubtless be using this as a club with with to beat Mr. Giannoulias.
While it is true that senior enforcement personnel at the SEC spent a lot of time downloading pr0n on their PC’s, this story has been around for years, as ProPublica notes, and the reason that it’s hitting the media spin cycle now is because the Republicans, Darrell Issa specifically, are pushing the story because they want to stop reform.
Basically, they want to say that the failures were because of a few bad apples at the SEC, and pr0n is a good way for them to illustrate this, because pr0n attracts the media, and it is a simple narrative, which attracts the incompetent.
So it’s a win-win for the Republicans who want to side-track reform: It’s a pretty bauble to distract the press with, and they can claim that it shows that government shouldn’t regulate.
Not surprising considering that the yields on their latest 2-year bond spiked to 11.61%, so they have asked for the activation of the financial rescue package:
Describing his country’s economy as “a sinking ship,” the Greek prime minister formally requested on Friday an international bailout, testing the solidarity of the European Union as never before.
“We drew up a plan, we took difficult and painful measures,” Prime Minister George A. Papandreou said in a nationally televised address. “But the markets did not respond.”
Concerns about the Greek budget deficit — an estimated 13.6 percent of gross domestic product last year — have pushed interest rates on Greek bonds above those of emerging countries like India and the Philippines, leading to talk of a potential default and years of stagnant growth.
(emphasis mine)
Note that as screwed up as Greece is, and it is arguably the closest to 3rd world nation status among the Euro zone members, it ain’t the Philippines.
Part of the reason for the spike is clearly heard panic mentality, but my guess is also that some of the wonderful new instruments that have come into existence over the past 20 years, credit default swaps (CDS) and the like, which make it profitable to bet on a neighbor’s house burning down, and then torching it.
These instruments magnify both risk and volatility, and this is why they need to be severely restricted or banned.
Remember when I said that Blanche Lincoln’s strong proposals on derivatives reform were, just for show?
I said the following:
I’m with David Dayen, this all happened within days of her primary challenger, Bill Halter (Reminder, he’s on My Act Blue Page) releasing ads saying that she was too close to the banking industry.
Everyone on Capitol hill know that her proposals will never go beyond a press release, and that behind the scenes, she will continue to do the big banks’ bidding.
This is just electoral politics, and a full court press from her Congressional Colleagues and the White House.
And sure as the sun rises in the east, and sets in the west, it’s happening.
Before the Republicans even got into the room, Democrats are weakening her proposals, with Gillibrand, Casey, and Stabenow taking point.
It’s what Glen Greenwald calls, “Villain Rotation“.
Basically, when an incumbent needs an electoral boost, they come out with a populist proposal, and then it gets killed by someone else, and when that person needs an electoral boost, they change places.
Here.
Economic Minister Christine Lagarde is calling for a full investigation.
So, that makes the SEC, the Limeys, the Krauts, and now the Frogs.
Is this a 2 week thing that will blow over, or the beginning of the death of a thousand cuts?
I’m rooting for the latter.
I saw it, actually read it in the closed caption, I was at the gym on a stationary bicycle, and my reaction was that it was a missed opportunity.
He asked the banks to get on board, basically scolding them, but did not name names, or otherwise get medieval on them.
The American public hates the big banks, which, BTW, should be referred to exclusively as Wall Street Banks, even if the effect on poll numbers on financial reform are minor, as I have argued.
The bankers are not stake holders, they are malefactors, and should be treated as such.
Saying, “Can’t we all just get along,” is both bad politics, and bad policy.
On Morning Joe, Mark Halperin, a long time hack best known for the phrase, “Matt Drudge rules our world,” feels compelled to call it for what it is when he says, “They are willfully misreading the bill or they are engaged in a cynical attempt to keep the president from achieving something.” (emphasis mine)
Except for the fact that he should have said and not or, he is telling the truth, and when Mark Halperin feels compelled to call bullsh%$, you know that Republican spin has crossed some sort of “Shoe Event Horizon” where the normal punditocracy simply ceases to function.
The first part of the video is Austan Goolsbee ably defending the program (full disclosure, I made a post that he objected to in the comments, see here, and I posted his response here),* but Joe turns to Halperin for a “fair and balanced appraisal, and Halperin calls them full of it too.
H/t Steve Benen.
*I don’t have a problem with his objecting, my family calls me full of it all the time, it sticks in my head because I was stunned that he read my little old blog in his capacity as an economic advisor to the Obama campaign.
Admittedly, the full 7:47 isn’t about Jim Cramer, just the first 2:28, but anything that finishes with:
You get the sense that if Jim Cramer was around in 1912 he would have said ‘you’re not going to hear this from anyone else, but my sources tell me the Titanic has the best buffet on the high seas. And by the way if you want to get there faster, try the Hindenburg.
Stewart then goes on to the talking heads on the financial networks are describing the case in terms indicative of a, “Traumatic brain injury,” and then he proceeds to describe everything in terms that we can all understand.
And then he gets to Goldman Sachs, and the fact that the fraud division will be getting billions in bonuses, because, I guess, their job is to create fraud, not stop it.
At the end, as a bonus, he describes the Republican mindset on governance.
So, Gallup has a poll, which reveals a much higher level of support for regulating “Wall Street” than it does for regulating “Big Banks”.
The net goes from +3% to +14% thus “showing” that regulating Wall Street is much more popular.
The thing is, the delta for “In Favor” is only +4%, and the delta for “No Opinion” is only +3%, and, “Qne can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.”
So, we can say that while the drop in opposition -7% is significant, but the other ones are within the margin of error, though the sample size is ½ that of the full survey, and I am not sure that it effects the MOE.
If you want to argue that this points to a good frame to use on the argument for reform, feel free.
There is a measurable improvement in the polling by using “Wall Street”, but the change in terminology is not a silver bullet to Mitch McConnell’s filibuster werewolf.