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The only reason for the stress tests was to find out how big The Big Give will be

Check. Got it:

The Fed says the 19 companies that hold one-half of the loans in the U.S. banking system won't be allowed to fail — even if they fared poorly on the stress tests. The tests are intended to measure whether banks have enough capital to withstand losses on mortgages and other assets if unemployment rises and home prices fall further. Investors had feared the tests would highlight some banks' vulnerability to failure.

What a relief!

And the same familiar faces will be in charge!

NOTE Another massive called shot from The Onion: November, 2008. "My father worked two jobs to we could put money in the money hole, and he never complained!"

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Damon's picture
Submitted by Damon on

You hear that? There's your pony. So, you can put that pony in your pipe and smoke it. On second thought, given current American law, that'd probably be illegal.

Submitted by jawbone on

Commission on tonight. Michael Perino is the author--seems less audacious than Simon or Krugman.

While this financial failure has it's own peculiarities, it's still very much the same old/same old.

The author of the book is saying there's a danger of going overboard, that just recently the questions have changed from "what went wrong" to "who caused this." Moyers pushed back on that, saying aren't both important.

Author countered with problem was it becomes easy to just focus on a bad guy or several bad guys. Says both can be done.

Pecora not only investigated individuals, but also on just how Wall Street worked. His findings became basis for SEC and Glass-Steagall Act (however, per author, ideas for those had been floating around since 1930's, Pecora's evidence made need very clear; act passed within 6 months).

Moyers pointed out Pecora Hearings became something of a circus. One owner of Ringling Bros' Circus showed up with midget, thought photo of richest man in world with midget on his lap. would be good idea. Carter Glass did not approve of Pecora's approach, wanted quieter, more academic approach.

Simon Johnson speaking up for Elizabeth Warren, approves of how she's investigating. Nothing about refusal of Treasury and banks to respond to her queries.

Now, banks are threatening that if investigations are carried out, the recovery will take longer. Banks said same thing in Great Depression. Author says Pecora never found basic causes of Depression, but did show banksters behaving badly.

Moyers asks if Warren is new Pecora. Simon says, could be. She's not compromised, not too close to financial power. Might need prosecutorial background, someone who pursues questions for days if necessary.

Moyers: Is Senate Banking Committee compromised? Simon says, well, all those contributions to those senators make many uncomfortable. Needs to be on the table.

Author says Pecora's drawback was that he did not have Wall Street experience, deep knoweldge of finance. Too complicated today for someone not deeply involved in fianance to take on. Simon disagrees: Pecora was quick study; not impossible to find someone who could do so today. Staff important.

Simon says does need investigation into details. How did all these bad investments get sold? What did banksters know and understand? Must know these things in order to construct new rules. (Take that, Oh Forward Looking One!)

Transcript will be up soonish (Monday?) at Moyers' site.

Simon suggests boring public utility for normal banking activites, Lambert! Stiglitz saying roughly same thing. Let the risk takers take risks with their own venture capital (equity). Wall St. was using debt.

Simon: Sensible regulation of behavior is what we got from the 30's. Problem is that regulators get captured. Oligarchs make this more likely (I think I heard him say--thank goodness for transcripts). Simon sees arrogance of power, bcz the banksters think they won. And they have--they got whatever they wanted. Guys who remain have even more power. Fears gov't has blinked. Shit! Banks feel that if things just slow down in sinking, they can just wait things out and people won't be as angry as they are now. Just need to even things out, even if at a low level of recovery.

Simon sees bottoming out, with sluggish recovery. Problem of dangerous financial industry beginning in the 1980's will continue. Gets to his fears of Argentina type problems. Massive additional tax burden will mean longterm high taxes for all. How keep risktakers from getting so big they're Too Big to Fail. Moyers: Without real change, we will be facing ongoing bad problems. What to do? Simon says there is hope....

Author sees undoing the Too Big to Fail situation as very, very difficult. WTF! We're doomed.

OK, stopping trying to live blog now. There's still more discussion.