Posts filed under ‘Financial Crisis’
Republicans are vicious, cold-hearted partisans who are willing to see over a million people suffer because they don’t want anything — anything — good to happen on Obama’s watch:
If Congress does nothing, and fails to extend a jobless-aid program, 1.3 million people will lose unemployment insurance only a few days after Christmas — perhaps leading to a series of stories about real people’s economic travails during the slow-news holiday season.
I’m told House Dems will hold a hearing on Thursday into the plight of those set to lose unemployment insurance if Congress fails to extend the Emergency Unemployment Compensation program, as part of an effort to pressure Republicans to agree to an extension. Sources tell me it will be presided over by Dem Reps. Nancy Pelosi, Chris Van Hollen, Sander Levin, and others, and will hear from witness who stand to lose those benefits.
Meanwhile, sources tell me that in private discussions, House Republicans are giving the thumbs down to Dem entreaties for an unemployment benefits extension. According to a senior Senate Democratic leadership aide, Dems have pushed for the extension to be included in ongoing budget conference talks. “So far, they’ve resisted,” the aide tells me. “They don’t want to do that.”
I wish “senior Senate Democratic leadership aides” like the one Greg Sargent spoke to above, would be a little, no, a lot less charitable when talking about this. It’s just outrageous what Republicans are doing here.
I can’t decide if this is some sort of twisted poverty porn or a way for privileged people to have what could be an enlightening experience:
Shanty Town for a Unique Accommodation Experience in Bloemfontein
Millions of people are living in informal settlements across South Africa. These settlements consist of thousands of houses also referred to as Shacks, Shantys or Makhukhus. A Shanty usually consists of old corrugated iron sheets or any other waterproof material which is constructed in such a way to form a small “house” or shelter where they make a normal living. A paraffin lamp, candles, a battery operated radio, an outside toilet (also referred to as a long drop) and a drum where they make fire for cooking is normally part of this lifestyle.
Now you can experience staying in a Shanty within the safe environment of a private game reserve. This is the only Shanty Town in the world equipped with under-floor heating and wireless internet access!
The Shanty Town is ideal for team building, braais, fancy theme parties and an experience of a lifetime. Accommodates up to 52 guests. Our Shantys are completely safe and child friendly.
My gut feeling is that this is pretty revolting. I mean, show me a South African shanty town that has “under-floor heating and wireless internet access” that’s “completely safe.” If they want to truly recreate the experience of living in a shanty town, do it. It isn’t just about the look of the shanties.
You probably heard that the government has apparently reached a deal with J.P. Morgan/Chase’s [JPM] CEO Jamie Dimon which would cause JPM to pay a supposedly gigantic fine of $13 billion for its involvement in the sub-prime mortgage fiasco. Again, the media wants us to believe the fine is, well, “massive.”
But, as usual, if you look just a wee bit under the covers, you find that the “massive” penalty amounts to only 2.5 cents on every dollar JPM pocketed:
One way to determine whether JPMorgan [will pay a "massive" penalty] is to calculate the settlement payments as a percentage of the subprime and Alt-A mortgages that the bank sold. From 2004 through 2007, JPMorgan, along with Washington Mutual and Bear Stearns, sold around $1 trillion of mortgages, according to Inside Mortgage Finance, an industry publication. So far, JPMorgan has paid or set aside about $25 billion to meet claims that the loans should not have been sold. In other words, that sum is 2.5 percent of the total, though that figure could increase as the bank strikes other settlements.
So, yeah, when I hear the number $13 billion being thrown around my eyes bug out and I immediately think the government really stuck it to them but in the end, JPM brought in an unfathomable $1 TRILLION and $13 billion ain’t squat in comparison.
I guess we’re supposed to weep with joy at Walmart’s supposed compassion here but the bottom line is, Walmart doesn’t pay its employees enough to afford a Thanksgiving meal for God’s sake:
The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton [Ohio]. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.
This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
So, so, sad. We ought to be ashamed as a nation that this is happening in our midst.
Last night British Prime Minister David Cameron spoke at the Lord Mayor’s Banquet in London and called for permanent austerity:
The government is to forge a “leaner, more efficient state” on a permanent basis, David Cameron has said as he signalled he had no intention of resuming spending once the structural deficit has been eliminated.
“We are sticking to the task. But that doesn’t just mean making difficult decisions on public spending. It also means something more profound. It means building a leaner, more efficient state. We need to do more with less. Not just now, but permanently.”
Here’s a photo.
Need I say more?
I’ve got to start keeping track of the infrastructure failures that are occurring all across the United States; everything from water main breaks to computer glitches. I read about them here and there almost every day. They seem small on their own but together, they add up.
Our country is falling apart. Literally. The thing is, the failures aren’t happening in areas where rich white people live so we aren’t hearing about them.
Case in point. This is an emergency:
Power Outage Shuts Down Food Stamp Program In 17 States
SACRAMENTO, California (Reuters) – Food stamp recipients in 17 states lost access to the electronic system used by stores to verify their benefits on Saturday, leaving many unable to buy groceries, the company that manages the system said.
People enrolled in the government food assistance program use plastic vouchers similar to debit cards. Starting at about 11 a.m. EDT (1500 GMT), some of those cards stopped working, Xerox spokesman Kevin Lightfoot said.
A power outage that started the problem was fixed within 20 minutes, Lightfoot said, but shoppers continued to run into difficulties throughout the day. By early evening, the problem still had not been fixed.
States States experiencing problems included Alabama, California, Georgia, Iowa, Illinois,Louisiana, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Jersey, Ohio,Oklahoma, Pennsylvania, Texas and Virginia, Lightfoot said.
My food bank-volunteer-self knows this is going to hurt so many people in so many ways. The ripple effect will be tremendous lest it’s fixed tonight. Get that “electronic system” up and running ASAP! Oh, wait, the government’s shut down. Shi*t.
We are watching the United States collapse from within:
A new, eye-opening study shows that the United States is not only falling behind in scientific research, but now we are in danger of losing our scientists, too.
In a study called, “Unlimited Potential, Vanishing Opportunity,” The American Society For Biochemistry and Molecular Biology (ASBMB) surveyed nearly 4,000 scientists from nearly all fields of research about the effects of budget cuts and sequestration on scientific research. The results are quite disturbing for anyone who cares about the future of science in our country.
In its press release summarizing its findings, the ASBMB wrote that the cuts are “tearing at the fabric of the nation’s scientific enterprise” while having a “minimal impact” on our national debt and deficit. Also, “The overwhelming majority of scientists in all fields believes the U.S. has lost its position as the global leader in scientific research.”
Sam Stein, at the Huffington Post, dug through the weeds and found, “Nearly one-fifth of scientists are considering going overseas to continue their research because of the poor funding climate in America.”
Eric Holder Vows ‘Significant’ Financial Crisis Prosecutions Against Banks
Wall Street should brace for “significant” civil or criminal charges from the Department of Justice (DOJ), according to Attorney General Eric Holder. The promise comes amid intensifying criticism of the DOJ’s financial enforcement decisions.
In an interview with the Wall Street Journal on Tuesday, the nation’s top law enforcement official refused to give specifics about what sort of charges his department will be filing and would not discuss the number or type of cases he expects to pursue.
What? Is Obama suddenly worried about this legacy?
This is grim:
More Than 28,000 Italians Apply for 200 Ikea Jobs
Swedish furniture giant Ikea has attracted 28,616 applications for just 200 jobs at its new store in Pisa. Gaià Paradiso, a 25-year-old student at the University of Florence, told The Local there are “few options” for young jobseekers in Italy.
Temporary jobs that is:
From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them – about 12 percent of everyone with a job.
Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren’t willing to hire for the long run.
The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million – the most on government records dating to 1990. In no other sector has hiring come close.
I don’t think corporations are afraid to “hire for the long run” because the economy is still jittery. I think the economy is still jittery because when corporations hire temporary workers they (1) aren’t paid as much, (2) they don’t have any job security whatsoever, and (3) they probably aren’t getting any health care benefits so they’re either afraid to spend or they don’t have any extra money to spend.
This is about people being desperate for jobs and corporations taking advantage of them. You know, beggars can’t be choosey and corporations know it.
Madison — In a raucous clash on the state Senate floor Wednesday that recalled the bitter divides of 2011, Republicans abruptly cut off debate and forced a vote mandating that women seeking abortions get ultrasounds.
The morning’s brief floor session included sharp exchanges and one senator claiming abortions “became the thing to do” in the 1960s.
Democrats protested the bill’s merits and the process by which it was passed, saying Senate Majority Leader Scott Fitzgerald of Juneau and his fellow Republicans were trampling on democracy by ending debate after about 20 minutes.
“My first advice to the majority leader is that he seeks psychological help,” Sen. Bob Jauch (D-Poplar) said at a news conference after the vote.
[...]“Here we go again,” Fitzgerald said. He described Democrats’ approach as, “We don’t like what’s happening from a public policy perspective, so we’re not going to play by the rules.”
The abortion measure passed 17-15, with all Republicans for it and all Democrats against it. Sen. Luther Olsen (R-Ripon) was absent.
It now goes to the Assembly, which is expected to take it up Thursday. GOP Gov. Scott Walker has said he would sign the bill.
Wisconsin Republicans are spending their time on this instead of creating ah, hello!, JOBS: No matter how you spin job numbers, Wisconsin near bottom compared to other states. But I’m sure, come the heat of the 2014 campaign, they’ll start screaming about them again. It’s a thing they bring up every two years for a little while and then they go back to their real love: oppressing people.
Nothing speaks to the plight of the working poor better than this, which I read early this morning. It has haunted me all day. The poor are, well, poor; vicious shysters are (legally) taking advantage of them, lawmakers are sitting around at the beach somewhere and yes, this is supposedly the Greatest Country on Earth. My God:
When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn’t afford to buy a new set.
So they decided to rent instead.
The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.
“I know you have to pay a lot more this way,” said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn’t using it to get to his job as a prison guard. “But we didn’t really have a choice.”
Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.
Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation’s economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can’t get a loan anywhere else. But that access doesn’t come cheap.
Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can’t make them go away.
Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.
I guess renting tires is something you have to do if a nurse doesn’t get paid enough to buy new ones (Problem #1) but if that’s the case, let’s put limits on the amount of interest folks like Rent-N-Roll can charge these poor people (Problem #2).
Ugh. This just makes me sick.
My quote of the day from venture capitalist and entrepreneur Nick Hanauer who testified before the Senate a few days ago on income inequality:
I’ll argue here that prosperity in capitalist economies never trickles down from the top. Prosperity is built from the middle out. As an entrepreneur and investor, I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all would have failed and all those jobs would have evaporated.
That’s why I am so sure that rich business people don’t create jobs, nor do businesses, large or small. What does lead to more employment is a “circle of life” like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring.That’s why the real job creators in America are middle-class consumers. The more money they have, and the more they can buy, the more people like me have to hire to meet demand.
Exactly. So let’s put this trickle-down BS to bed, once and for all. I mean, how long are we going to wait before we say: Hello! It ain’t workin’.
On a related note, check out this post: Labor’s Falling Share, Everywhere
Here’s the money quote. Prosperity is, in fact, trickling up:
The share of income going to labor as a whole is falling, and also a greater share of labor income is going to those at the highest levels of income. Both trends mean that those with lower- and middle-incomes are having a tougher time.
UPDATED @6:31 EDT below.
People marching this afternoon against the proposed closure of 61 public schools in Chicago.
Remember back in the day when schools had to hold bake sales while the military got everything it needed? Fast forward to today and heck, forget bake sales. They’re just freakin’ closing the schools now.
What kind of values and priorities are those?
And now, of course, the police, representing the establishment — the folks who want to close the schools — are arresting people (in front of Chicago City Hall) who are trying to protect our kids:
What a country.
Last Saturday the Cypriot government came up with the lamebrained idea of skimming a percentage of funds off the top of the guaranteed savings accounts (like our FDIC) of its citizens in order to bail out its banks.
What astonishingly arrogant chutzpah.
After the whole world rightly shrieked in horror, the government backed down but it closed all the banks to give it time to work on a new plan. They’re still closed. Initially they were going to open this past Tuesday but now they will be closed until at least next Tuesday.
Meanwhile, this is what’s going on on the street there:
NICOSIA, March 21 (Reuters) – Forget the plastic. In Cyprus, cash is king.
“I plan to have at least 1,000 euros on me at all times,” Constantinos Tsissios, a 34-year-old banker, said at a downtown ATM in the capital, Nicosia.
“We’ve taken as much out as we could,” he said on Thursday. “You don’t know what might happen over the next few days.”
Five days after Cyprus’s panicked leaders ordered banks to close their doors, the fate of the financial system hangs in the balance and credit cards are going out of fashion.
Reluctant to accept the promise of payment from customers, shop owners say wholesalers are demanding cash on delivery. Some petrol stations, too, are refusing credit cards. Retailers with only Cypriot bank accounts are struggling to ship supplies in from abroad. Gentlemanly arrangements are bridging the gap.
“Because of what’s going on the suppliers ask for a small amount, say 50 percent, in cash, so they can meet their costs,” said Federico Basonidis, a 25-year-old worker at a kiosk selling cigarettes, newspapers and sweets.
Spooked by an aborted bid to tax their savings, Cypriots are fast losing confidence that their money will still be there when – or if – banks reopen, on Tuesday at the earliest.
Rumours on Thursday that one teetering bank would be allowed to fall saw queues grow at ATMs at a downtown branch, as staff behind locked doors replenished cash machines.
Some of the bank’s employees, fearing for their jobs, faced off with riot police outside parliament.
“We have children studying abroad and next month we need to send them money so they can eat,” protester Stalou Christodoulido said through tears. “We’ll lose what money we had and saved for so many years if the bank goes under.”
It sounds awful. I can feel the stress the people are under oozing out between the words here.
There seems to be no end to the suffering greedy, irresponsible bankers and their political enablers have caused, and continue to cause.
The answer is a loud: HELL NO!
Who are the “Don’t Know/Can’t Say” people? Who doesn’t have an opinion about this?
Follow the vote here. The results above are preliminary.
P.S. We here in the U.S. are already giving up our “savings” to save the banks. More on that later.
Because of this — which is causing worldwide outrage and panic — we’re seeing the likes of this:
A Planned Tax [the word tax should be in quotes] on Cyprus Bank Depositors [as in average citizen savers] as Part of a European Union Bailout is Sending People Rushing to ATMs to Withdraw Cash
Tomorrow is going to be wild.
The powers that be are screwing people all over the place:
Cyprus’s parliament will decide on Monday whether savers must pay a levy on bank deposits under terms for an international bailout to avert bankruptcy – with approval far from certain.
The euro zone demand on Saturday that savers pay up to 10 percent of deposits as a condition for the 10 billion euro ($13 billion) bailout drew fury in the eastern Mediterranean island and caused some jitters elsewhere in the region.
Cypriots emptied ATMs after news emerged of bailout terms which broke a previous euro zone taboo on protecting depositors in its efforts to address the regional debt crisis.
Cyprus’s parliament was due to convene on Sunday in an emergency session to discuss the proposed penalties on deposits: 9.9 percent for those exceeding 100,000 euros and 6.7 percent on anything below that.
Banks and the banking establishment, i.e., politicians, regulators, etc., allowed the financial crisis to happen but ordinary citizens are going to have their savings accounts raided to help bail them out?
This is SO wrong and it doesn’t bode well for ordinary citizens around the world that any government would cross this threshold. It’s an extremely ominous precedent to set.
(They sure have a pretty flag.)
UPDATE @ 1:17 p.m. ET: Geezus: UNDER threat of litigation, the Bank of Cyprus (BoC) has awarded former CEO Andreas Eliades compensation to the tune of some €2 million ($2.6 million).
Thought I’d put this outrageous clip up for the record. I have a feeling historians will marvel at it and I don’t mean in a good way:
Chuck Grassley: On the issue of bank prosecution, I’m concerned that we have a mentality of too big to jail in the financial sector of spreading from fraud cases to terrorist financing and money laundering cases and I cite HSBC. So, I think we’re on a slippery slope so then that’s background for this question: Ah, I don’t, I don’t have recollection of ah the DOJ prosecuting ah, any high-profile financial criminal convictions in either companies or individuals.
Assistant general, ah, attorney general brewer said that one reason why DOJ has not brought these prosecutions is that it reaches out to “experts” to see what affect the prosecutions would have the financial markets. So then on January 29, Senator Brown and I requested details on who these so-called experts are. So far we’ve not received any information. Ah, maybe you’re going to, buy why have we not yet ah, been provided the names of the experts that DOJ consults with as we requested on January 29 because we need to find out ah, why we aren’t having these high-profile cases.
And then I’ve got one follow-up so maybe you can answer that quickly.
Eric Holder: Well, we’ll endeavor to answer your letter ah, Senator.
Ah, we did not, as I understand it, retain experts outside of the government in making determinations with regard to HSBC. Now if we could just put that aside for a minute though, the concern that you have raised is one that I frankly share, and I’m not not talking about HSBC now. That may be, not be appropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, ah, it will have a negative impact on the national economy, perhaps even the world economy, and I think that is a function of the fact that some of these institutions have become too large.
Again, I’m not talking about HSBC. This is just a more general comment. I think it has an inhibiting influence, impact on our ability to bring resolution that I think would be more appropriate and I think that is something that we, you all need to consider. So the concern that you raise is actually one that I share.
Is he saying the banks have blackmailed the government?
Think about this for a minute:
Jack Lew’s Golden Parachute
Treasury secretary nominee Jack Lew’s original employment contract at Citigroup included a bonus guarantee if he left the bank for a “high level position with the United States government or regulatory body,” the Wall Street Journal reports.
So, the thinking apparently is if Lew got a “high level position” he’d be able to influence the making of laws and policy such that they would benefit Citigroup. If this isn’t illustrative of how government is in bed with corporations I don’t know what is.
And to think a guy — Lew — who came from that culture has been nominated Treasury secretary. Citi must be jumping for joy.
GAO Reports that the Losses from the Financial Crisis “Could Exceed $13 Trillion”
“GAO [Government Accountability Office] released a Report today on the ‘Financial Crisis Losses and Potential Impacts of the Dodd-Frank Act,’ which states that those ‘losses could exceed $13 trillion.’ The Report is a welcome and long overdue analysis of what the Wall Street caused financial crisis has cost the country,” said Dennis Kelleher, President and CEO of Better Markets, Inc., an independent, nonprofit organization that promotes the public interest in the financial markets.
“There is a nonstop drumbeat from Wall Street and its many allies baselessly complaining about the cost to them of the laws and rules passed to protect the American people from another financial crisis. They never mention that it was Wall Street’s reckless investments and trading that caused the biggest financial collapse since the Great Crash of 1929 or the trillions of dollars in costs they inflicted on our country, giving us the worst economy since the Great Depression. That economic wreckage can still be seen from coast to coast in unemployment, foreclosed and underwater homes, lost retirements and educations and so much more,” Mr. Kelleher said.
$13 trillion and no one has spent a day in prison.
A Southern California man was sentenced Monday [January 9] to 10 years in federal prison for operating medical marijuana dispensaries, even though they are legal in the state.
Rancho Cucamonga resident Aaron Sandusky, 42, ran three Inland Empire dispensaries known as G3 Holistics. “I want to apologize to those with me and their families who have been victimized by the federal government who has not recognized the voters of this state,” Sandusky said in court Monday. His G3 dispensaries served 17,000 medical marijuana patients, according to marijuana advocacy group Americans for Safe Access.
“It’s really sad that Justice Department is able to find the resources to repeatedly undermine President Obama’s campaign pledges not to interfere with state medical marijuana laws,” Tom Angell, chairman of marijuana advocacy group Marijuana Majority, told The Huffington Post.
The U.S. Attorney’s Office said Sandusky was abusing the state system on a large scale — with at least 1,000 marijuana plants — and making a large profit. In a memo, prosecutors said Sandusky is an “unrepentant manipulator who used the perceived ambiguity surrounding ‘medical’ marijuana to exploit a business opportunity for himself.”
Iceland’s president Olafur Ragnar Grimsson is a really, really cool guy:
Here is some of what he says:
We didn’t follow the prevailing, traditional orthodoxies of the last 30 years. We introduced currency controls, we let the banks fail, we ah, we provided support for the poor, we didn’t introduce austerity measures of the scale you’re seeing here in Europe, and the end result, four years later, is that Iceland is enjoying progress and a recovery very different from the other European countries that suffered from the financial crisis.
Asked if he thinks Iceland’s policy of letting the banks fail would have worked for the rest of Europe, he said,
I think so. … Why do [people] consider the banks to be the holly churches of the modern economy? Why are [inaudible] banks not like airlines and telecommunication companies allowed to go bankrupt if they have been conducted in an irresponsible way? The theory that you have to bailout banks is a theory about bankers enjoying for their own profit the success, and then letting ordinary people feel the failure through taxes and austerity and people in enlightened democracies are not going to accept that in the long run.
Tonight’s edition of FRONTLINE looks good:
FRONTLINE investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages.
The folks who rule the world are going to have a party on Wednesday:
Goldman Sachs Bankers to Reward Themselves a Staggering £8.3 Billion in Bonuses
Britain’s army of bankers will re-ignite public fury over lavish pay rewards as staff at Goldman Sachs are expected to reward themselves £8.3 billion in bonuses on Wednesday.
The American investment bank, which employs 5,500 staff in the UK, will be the first to unveil its telephone number-sized rewards – an average of £250,000 a person – as part of the latest round of bonus updates.
The increase, up from £230,000 last year, comes as British families are still struggling to make ends meet five years after banks brought the economy to the brink of meltdown.
According to my little converter gizmo, 8.3 British pounds equals $13+ billion U.S. dollars:
Goldman Sachs is so arrogant it doesn’t care if this is a PR nightmare.
Yesterday we heard AIG was considering suing
the federal government We the People because the $182 billion bailout we sprang for in 2008 had some glitches in it they’ve decided they don’t like.
Understandably, and rightly, there was a huge outcry. I particularly like this letter to AIG from Democratic Reps. Peter Welch of Vermont and Michael Capuano of Massachusetts:
According to The New York Times, AIG is actively considering suing the U.S. government for monetary damages after American taxpayers rescued your company from its reckless conduct with a $182 billion bailout.
Don’t do it.
Don’t even think about it.
AIG became the poster company for Wall Street greed, fiscal mismanagement, and executive bonuses – the taxpayer and economy be damned.
Now, AIG apparently seeks to become the poster company for corporate ingratitude and chutzpah.
Taxpayers are still furious that they rescued a company whose own conduct brought it down. Don’t rub salt in the wounds with yet another reckless decision that is on par with the reckless decisions that led to the bailout in the first place.
Anyway, to make a long story short, AIG has decided not to sue.
Hey guys, GOOD THINKIN’ for once.
Word is out that President Obama intends to nominate Jacob Lew to replace Timothy Geithner as Treasury Secretary.
Get a load of this from Lew’s 2010 Senate confirmation hearing to head the Office of Management and Budget:
A former top executive at Citigroup who participated in the deregulation of Wall Street during the Clinton administration and recently was tapped by President Barack Obama for a top White House post told a Senate panel last week that deregulation didn’t lead to the recent financial crisis.
Jacob “Jack” Lew, Obama’s nominee to lead the Office of Management and Budget, the White House agency entrusted with ensuring that federal regulations reflect the president’s agenda, was asked Thursday during his confirmation hearing before the Senate Budget Committee by Sen. Bernie Sanders whether he believed that the “deregulation of Wall Street, pushed by people like Alan Greenspan [and] Robert Rubin, contributed significantly to the disaster we saw on Wall Street.”
Lew, a former OMB chief for President Bill Clinton, told the panel that “the problems in the financial industry preceded deregulation,” and after discussing those issues, added that he didn’t “personally know the extent to which deregulation drove it, but I don’t believe that deregulation was the proximate cause.”
The White House declined to clarify Lew’s remarks from last week, instead writing in an e-mail that “Mr. Lew gave a nuanced and thoughtful answer to a question on a matter on which he, admittedly, is not an expert,” said Kenneth Baer, communications director for OMB.
If you have time, read the whole article. It documents how wrong Lew is regarding deregulation and the “problems in the financial industry preceding deregulation.”
Not only that, the White House admitted that Lew “is not an expert” on banks and regulations? Great. He sounds like the perfect guy to be in charge of ah, banks and regulations. That is, if you’re a bank.
The unmitigated gall:
At the same time American International Group Inc. has been running high-profile ads thanking America for the bailout that saved the company, the insurance giant reportedly is considering joining a shareholder suit against the U.S. government for the rescue.
The AIG board will meet Wednesday and could decide to join a $25-billion suit led by former chief executive Maurice “Hank” Greenberg, the New York Times reported.
The suit by Greenberg’s Starr International Co. alleges that the 2008 bailout of AIG by the Treasury Department and Federal Reserve Bank of New York in which the government received an 80% ownership stake in the company violated the rights of shareholders. The ownership stake later climbed to 92%.
The suit in the U.S. Court of Federal Claims in Washington alleges that the bailout cost shareholders billions of dollars and violated the 5th Amendment, which prohibits the taking of private property for public use “without just compensation.”
The company received the single largest bailout of the financial crisis, leaving the government on the hook for more than $182 billion.
But now it’s whining that the deal wasn’t sweet enough. Insofar as (gag) corporations are people now, AIG is a psychopath. Elizabeth Warren (D-MA) gets it right:
“Beginning in 2008, the federal government poured billions of dollars into AIG to save it from bankruptcy. AIG’s reckless bets nearly crashed our entire economy. Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough. Even today, the government provides an ongoing, stealth bailout, propping up AIG with special tax breaks — tax breaks that Congress should stop. AIG should thank American taxpayers for their help, not bite the hand that fed them for helping them out in a crisis.“
Aside from Republicans in Washington hating on everything and everyone, this is the big news today:
Ten Banks Settle Foreclosure Charges for $8.5 Billion
Ten major U.S. banks and mortgage companies will pay $8.5 billion to settle complaints that they improperly foreclosed on some homeowners, federal regulators announced Monday.
The settlement package includes $3.3 billion in direct payments to eligible owners and $5.2 billion in loan modifications, forgiveness of deficiency judgments and other assistance, according to announcements by the Federal Reserve and the Office of the Comptroller of the Currency (OCC).
Eligible homeowners who should have been allowed to stay in their homes will receive compensation ranging from hundreds of dollars to as high as $125,000, depending on the type of possible mortgage servicing error.
More than 3.8 million borrowers whose home loans at these 10 banks were foreclosed on in 2009 and 2010 will receive some compensation in a timely manner, regulators said.
A payment agent will be appointed to administer payments. The agent is expected to contact eligible borrowers by the end of March with payment details, regulators said. Borrowers will not have to take any further action.
The settlement includes Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, MetLife Bank, PNC, Sovereign, Sun Trust, U.S. Bank and Aurora. The financial firms have operated under what is known as enforcement actions since April 2011. Federal regulators ordered the enforcement actions after they found evidence the banks mishandled paperwork or improperly sped up foreclosures by bypassing required procedures.
I heard someone on the CBS radio news this morning say that in order for this settlement to reflect the damage done by these banks it would have to be more in the range of $40 billion, not $8.5. And on his show today Thom Hartmann said he heard that the Obama administration was afraid these banks would collapse if they pushed it that far. (Fine, let them freaking collapse already!)
Not only that, I can only imagine what a fiasco dispensing this money is going to be.
This is one of those bits of information that is so frustrating and so infuriating it might be best not to know it. But, in the interest of staying aware and fully present, here we go:
In 2010, a stunning 93 percent of all income gains went to the top 1 percent of Americans. Also astonishing: just 15,000 households received 37 percent of all of those income gains. In no other period in recent American history have economic gains been concentrated so disproportionately in an elite sliver. (The red bars indicate recessions.)
(Filed under Outrage Overload.)
As I’ve said before, the lobbyists hired by the rich and the corporatocracy have earned their money in spades. They’ve bribed our dear leaders into structuring the US economy and its tax laws such that they benefit them and essentially, no one else.
Go here for more, especially if you’re a fan of depressing charts.
SARASOTA – A homeless man spent the night in jail Sunday after police arrested him for charging his cellphone in a public picnic shelter at Gillespie Park.
Darren Kersey, 28, was charged with theft of utilities after Sarasota Police Sgt. Anthony Frangioni spotted him charging his phone at about 9:20 p.m. Sunday. Unable to come up with the $500 bail for the misdemeanor, Kersey had no choice but to stay in jail.
In his arrest report, Frangioni wrote that he told Kersey that the “theft of city utilities will not be tolerated during this bad economy.” Frangioni also told Kersey that he should charge his phone at local shelters, according to the report.
So, I guess Kersey stole maybe 35c worth of electricity from Sarasota taxpayers.
What’s wrong is wrong but what gets me is that we aren’t, as a society, treated as equals: Wall Street bankers crashed the worldwide economy and they owe We the People $1.54 trillion but as far as I know, nobody has spent so much as a minute in jail.