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Simple answers to simple questions

Mike Lux asks Are Greedy, Selfish, Utterly Immoral People the Only Ones Who Can Save Our Economy?

The quick answer is Yes, of course!

The real answer depends on which of the three kinds of leftist* you are:

1. Finance Left: Yes, of course. But what do you mean, "immoral"? See under The Treasury View, Idiot Bastard Son of. See also Paulson, Hank and Geithner-san, Timmy.

2. Labor Left: [sigh] Yes. But let's make sure to cap those bonuses!

3. "Pioneer" Left**. This question isn't even wrong! And what do you mean, "our" economy?

* I've been thinking about this post a lot. Stirling didn't hit this one out of the park; he hit it beyond the park, as it were.

** Stirling doesn't have a name for the third left. So I'm trying this one out. Let's see if if propagates!

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bringiton's picture
Submitted by bringiton on

and a must-read to understand the magnitude of the challenge we face. Saw your comment, so glad you liked it. I'll be bringing it back around myself in a post on the structure of American politics, and hopefully others will take off from his analysis and consider what it is we need to do to move forward. We have a mountain to climb.

Submitted by jawbone on

Forget the right or left, just plain Finance. They control and or manipulate both sides? Scary that Nader might have had some good reason for what he said about not a dime's worth of difference between the two parties.... At least about finance....

Firedoglake diarist notes that Goldman and Barclay's (aren't they a British bank?) will be the middlemen between FDIC and hedge funds willing to borrow under most favorable conditions.

Apparently, GS and Barclay's have been in talks with the Obama admin "for weeks," per Robert Lenzner of

What does this mean? Damned if i know--but Goldman's is very well connected, indeed.

Submitted by jawbone on

toxic mortgage trash...I'm not sure what to make of this. She asks if gaming of the system has begun.

Read, see what you think.

It certainly looks as if Citigroup and Bank of America are using TARP funds, not to lend, which was one of the primary goals of the program, but to scoop up secondary market dreck assets to game the public private investment partnership.

And it fleeces the taxpayer a second way: the public has spent enough money on both banks so that in an economic sense, they ought to have been natinoalized. Yet for reasons that are largely ideological and cosmetic (the banks' debt would need to be consolidated were they owned 100% by Uncle Sam), they remain private. So not only are they seeking to extract far more than was intended even with the already generous subsidies embodied in this program, but this activity is also speculating with taxpayer money.

This sort of thing was predicted here and elsewhere. Welcome to yet more looting.

Submitted by jawbone on

Why would anyone write a contract that is triggered by this or that executive leaving? Then again - if I would be such an executive, such contracts would give me quite some power ...

AIG Fights a Fire at Its Paris Unit - Executives' Resignations Put Billions in Contracts at Risk of Default

Amid the flap over bonuses at American International Group Inc. two of the company's top managers in Paris have resigned. Their moves have left the giant insurer and officials scrambling to replace them to avoid an unlikely but expensive situation in which billions in AIG trading contracts could default.

Representatives of the Federal Reserve, AIG's lead U.S. overseer, are talking with French regulators and AIG officials to deal with the consequences of a complicated legal scenario in which the departures of the managers in Banque AIG, a subsidiary of AIG's Financial Products unit, could trigger defaults in $234 billion of derivative transactions, according to people familiar with the situation and a document AIG provided to the U.S. Treasury.
Posted by: b | Mar 26, 2009 6:18:31 AM

Good grief, these side bet CDS's are snake pits!

Submitted by lambert on

One way to think about the derivatives companies is that they're like a rogue programming company. As in the NDAs.

Submitted by jawbone on

The Phil Gramm secret addition of the deregulation of CDS's is covered. For those blaming Bill Clinton for this, Partnoy points out the actual story is that Gramm added the measure in secret at the last minute in an 11,000 page omnibus spending bill. It was never discussed, never had committee hearings, and no one except its backers knew it was in the bill when Clinton signed it.

Banksters had been working for many years to get this measure passed, and when it was, CDS's took off like a rocket, leading to our current situation where bets on bets on actual CDS insurance have proved ruinous to the financial system.

This program give another chance to get a better grasp on the various instruments behind the Big $shit Pile and Big Meltdown--audio available now. Fresh Air blurb on Partnoy:

Years before the current economic crisis, law professor and former Wall Street trader Frank Partnoy was warning about the dangers of risky financial practices. ">Years before the current economic crisis, law professor and former Wall Street trader Frank Partnoy was warning about the dangers of risky financial practices.

In his 1997 book FIASCO: Blood in the Water on Wall Street, Partnoy detailed how derivatives — financial instruments whose value is determined by another security — were being used and abused by big financial firms. Partnoy used his experiences as a derivatives trader at Morgan Stanley to give the book an insider's perspective. In the preface to FIASCO, Partnoy wrote about the growing influence of derivatives:

"Derivatives have become the largest market in the world. The size of the derivatives market, estimated at $55 trillion in 1996, is double the value of all U.S. stocks and more than 10 times the entire U.S. national debt. Meanwhile, derivatives losses continue to multiply."

Partnoy said toward the end of the interview that for some reason he was not asked to sign a nondisclosure agreement when he left his Wall Street position and thus was able to write his insider view of Wall Street. Most people are required to sign such agreements, which is one reason there is not that much disclosure from those in the know.

Submitted by jawbone on

negotiating with Big Bidness. Definitely, things are different in France.

If only...this could be applied to our Big Banksters. To our recalcitrant Dems.... To Big Insurance! Big Pharma! Workers of the World, Unite. Citizens, out of your homes and into the streets. Downsizees, to the executive suites!

Of course, there are the Blackwaters (now Xes?) here....

Oh, well, won't happen here in the good ol' US fo A--probably would mean being disappeared into some Navy brig.... Via Tina at The Agonist, French workers hold exec hostage while demanding changes to lay off terms! From The Guardian article:

Luc Rousselet, the French director of the US company 3M, had been held captive since arriving at the plant in Poithievers south of Paris for a visit on Tuesday. Staff took turns to guard him over 24 hours while demanding better severance packages for laid-off staff and better conditions for those remaining. The company, an industrial conglomerate best known for known for Post-It notes and Scotch tape, confirmed Rousselet had experienced no violence. Journalists saw him through the blinds of his office eating a lunch tray of a plate of meat and mashed potato, an apple and mineral water. Last night staff said he would be served mussels and chips for dinner if he was kept the whole night.

"This action is our only bartering tool, but there is no aggression involved," said Jean-François Caparros, a delegate from the Force Ouvriere union. "It's out of the question that the director leaves the site unless we get something," he added, after initial talks through mediators failed. Workers at the plan began a strike on Friday over company plans to cut 110 of the site's 235 jobs....

Bossnapping! Brilliant! I'd chip in for scallops and an unpretentious white wine.

Exec now released after agreeing to renegotiate terms.