08 Saturday May 2010
Posted in Congress, financial reform, financial regulation, Politics
The gutlessness of our elected representatives never ceases to amaze. In Thursday night’s vote on the Brown–Kaufman amendment to limit the size of the big banks, 6 Senators voted “abstain”:
* Sen. Robert Bennett [R, UT]
* Sen. Jim Bunning [R, KY]
* Sen. Robert Byrd [D, WV]
* Sen. Jim DeMint [R, SC]
* Sen. Richard Lugar [R, IN]
* Sen. David Vitter [R, LA]
Profiles in cowardice.
06 Thursday May 2010
I’ve been considering relocating from Texas to the Sunshine State, since it looks like we may be in for another 4 years of Secessionist Rick here. Alan Grayson’s latest shot across the bow of the U.S.S Turbo Timmy might be enough to tip the scales. From Zero Hedge:
“In today’s ABC Top Line, Alan noted, “when Tim Geithner says that he doesn’t want to see the Fed audited, what he’s really saying is he doesn’t want to see Tim Geithner audited…”
“He was the head of the New York Fed for years and years. This audit would apply to him. And the actions he took — which he can now take in secret and, when this bill passes, will no longer be secret — we’ll be able to see and understand the decisions that he made that among other things put huge amounts of bailout money into the hands of private interests.” Grayson added: “It’s one of the biggest conflicts of interest I’ve ever seen.”
[…]
“The Fed doesn’t want to be audited. Who does? Do you want to be audited? I don’t want to be audited, but sometimes it’s necessary,” he said. “When you’re handing out a trillion dollars at a time — a trillion dollars at a time, which works out to $3,000 for every man woman and child in this country — don’t we have a right to know what happened to it?”
“It’s central to the bill. We’ve had secret bailouts from the Fed to private interests now for the past two years without any exposure whatsoever. … We need to know what happened to our money, because when the Fed hands out our money, every dollar in your pocket, every dollar in your checking account, every dollar in your 401(k) becomes that much cheaper and less in value.”
Dialing 1-800-MOVERS.
06 Thursday May 2010
Posted in Congress, economy, financial reform, financial regulation, Politics, too big to fail, Wall Street
Tags
amendments, Barbara Boxer, financial regulation, liquidation, Richard Shelby, Senate, taxpayer bailouts
Any time I see that the Senate has passed something by a vote of 93–5 or 96–1 I can be sure of one thing—it’s meaningless. It’s the equivalent of a proclamation naming Sunday as the official first day of the week. Such was the case yesterday with 2 amendments to the financial regulatory bill:
“The Senate on Wednesday approved two amendments to the financial regulatory bill that both Democrats and Republicans claimed would end the prospect of taxpayer-financed bailouts for companies deemed “too big to fail.”
[…]
By a vote of 93 to 5, the Senate approved an amendment by Senator Richard C. Shelby of Alabama, the ranking Republican on the Banking Committee [which] eliminated a $50 billion fund that was designed to help bridge financial shortfalls while a failing company was undergoing liquidation. Mr. Shelby said the fund was “a honey pot” that would facilitate “backdoor bailouts.” (Somewhere Frank Luntz is smiling).
[…]
The Shelby amendment also requires the Federal Deposit Insurance Corporation to oversee the liquidation of a systemically important financial company that is failing, using money provided by a special line of credit with the Treasury.”
And where does the Treasury get its money again?
“The Senate also approved, by a vote of 96 to 1, an amendment by Senator Barbara Boxer, Democrat of California, saying that no taxpayer money may be used to keep a ailing financial company alive.”
Wow, earthshaking stuff there too. Wake me up when (or should that be if) they get around to the Brown–Kaufman amendment.
02 Sunday May 2010
OMAHA, Neb.— Warren Buffett offered a vigorous defense of Goldman Sachs Group Inc. Saturday, saying the embattled firm hadn’t engaged in improper activity and shouldn’t be blamed for the losses of its clients.
[…]
Mr. Buffett’s comments—which came early in the day at Berkshire Hathaway Inc.’s annual shareholders meeting—offer a powerful vote of confidence in Goldman, which has seen its shares slide since the SEC announced the investigation on April 16. Goldman’s stock fell 9.4% on Friday alone after it emerged that the Manhattan district attorney’s office was conducting a preliminary criminal probe into its mortgage-trading activities.
[…]
The billionaire investor said he fully supported Goldman CEO Lloyd Blankfein. Asked if he could choose a successor for Mr. Blankfein, Mr. Buffett said: “If Lloyd had a twin brother I’d go for him.”
But he does, Mr. Buffett, he does.
01 Saturday May 2010
Tags
amendment, filibuster, financial reform, Huffington Post, Richard Eskow, Senate Republicans, Sherrod Brown, Ted Kaufman, too big to fail
Now that the Senate Republicans have abandoned their filibuster (after perusing the public opinion polls on Wall Street and observing the tap-dancing by Goldman Sachs execs at the Senate Subcommittee on Investigations hearings, I assume) financial reform legislation is set for debate.
Richard Eskow at the Huffington Post has a one-question test we can apply to our elected representatives to tell if they are serious about reforming the financial system or just being a posturing, pontificating blowhard—something that comes naturally to most politicians.
“This quick, easy-to-use test can be applied from the comfort of your own home (if you still have one), from that third job you’ve got to work every evening (too bad you can’t help the kids with homework anymore) … why you can even use it while you’re waiting on line to collect the last of your unemployment benefits!
As long as there’s a television droning away in the waiting area while you wait for that job interview, or a newspaper somebody left behind on that park bench, as long as you can learn how your politician voted, you can learn whether he’s really on your side or just another bank lackey.
Here’s the test: Will they vote to break up the big banks or not? It’s as simple as that … really.
…Yesterday Sens. Ted Kaufman and Sherrod Brown officially introduced an amendment that limits the size of banks and the amount of risk they can take. Under this amendment, no bank could become either so big or so leveraged that its collapse could threaten the economy… An identical amendment was introduced in the House by Reps Brad Miller, Keith Ellison, Steve Cohen, and Ben Chandler.
…What’s striking about the proposal is how simple and effective it is. No bank could hold more than 10% of the nation’s deposits, nor could it leverage (take risks with) sums that amount to more than 2% of the GDP.
What’s also striking is how few institutions it would affect. Only the three biggest banks would be affected by the size limit, and the cap on liabilities would only affect an estimate nine institutions or so.
These amendments offer our representatives in the House and Senate a simple choice: Support a safer and more rational banking system, or be counted among those whose votes are being swayed by the influence of Wall Street money. And they give the rest of us an invaluable tool. We’ll be able to see whether our leaders really means those words about “too big to fail” and “no more bailouts” by seeing whether or not they vote for these amendments.
If they do, they’ve passed the test. If they don’t, they’ve failed. Simple as that.
Here’s the greatest benefit this new test offers to frustrated voters everywhere. It lets us say to politicians, once and for all, on one of the most crucial issues of our day, those words every citizen longs to say to a long-winded public servant:
Put up or shut up.”
29 Thursday Apr 2010
Posted in bailout, Congress, economy, financial reform, financial regulation, Politics, too big to fail, Wall Street
Tags
Alan Grayson, audit, Bernie Sanders, Federal Reserve, GAO, Ron Paul, TARP
…at least on the need to audit the Fed:
“As unusual a coalition as can be crafted in the Senate plans to fight for an amendment to the Wall Street reform bill that would open the Federal Reserve to a serious audit by the Government Accountability Office. Sponsored by Sen. Bernie Sanders (I-Vt.), the language is modeled after an amendment that passed the House, sponsored by Reps. Alan Grayson (D-Fla.) and Ron Paul (R-Texas).
Sanders is joined by four Republicans of varying politics: John McCain (Ariz.), Jim DeMint (S.C.), David Vitter (La.) and Sam Brownback (Kan.). If Democrats in the Senate back the measure, it would have at least 63 votes…The chairman of the Judiciary Committee, Sen. Pat Leahy (D-Vt.), is also a cosponsor, as is Sen. Russ Feingold (D-Wisc.).”
A letter by Sen. Sanders reads, in part:
“The American people have a right to know who received over $2 Trillion in financial assistance from the Federal Reserve.
Since the beginning of the financial crisis, the Federal Reserve has provided over $2 trillion in taxpayer-backed loans and other financial assistance to some of the largest financial institutions and corporations in the world. Unfortunately, the Fed is still refusing to tell the American people or the Congress who received most of this assistance, how much they received or what they are doing with this money. This money does not belong to the Federal Reserve, it belongs to the American people, and the American people have a right to know where their taxpayer dollars are going.
[…]
While the Senate financial reform bill attempts to address the lack of transparency at the Fed, as currently drafted, much of the information regarding the details of who received this financial assistance could be kept secret forever.
As long as the Federal Reserve is allowed to keep the information on their loans secret, we may never know the true financial condition of the banking system. The lack of transparency at the Fed could lead to an even bigger crisis in the future.
[…]
For nearly nine decades, the GAO has a proven track record of conducting objective, fact-based, nonpartisan, non-ideological, fair, and balanced audits. Through these audits, the GAO helped save the American taxpayers $50 billion last year alone by rooting out waste, fraud, and abuse in the federal government.
Let’s not equate independence with secrecy. We cannot let the Fed operate in secrecy any longer. There is simply too much money at stake.”
Hear, hear.
28 Wednesday Apr 2010
Posted in economy, financial reform, financial regulation, Goldman Sachs, Politics, Wall Street
Former Goldman Sachs executive Daniel Sparks put on a demonstration of bobbing, weaving, ducking, and dodging yesterday in response to Sen. Carl Levin’s questioning about Goldman’s “shitty deal” the likes of which I haven’t seen since Muhammad Ali was in his prime. Take a look:
Kudos to Sen. Levin, but it can’t stop with the theatrics of a televised hearing. Refer this to the DOJ and let the indictments begin. Those responsible must be held accountable.
28 Wednesday Apr 2010
Tags
Br'er Rabbit, campaign donations, financial reform, Goldman, Lloyd Blankfein, Republicans, Wall Street
OK, now I’m suspicious. Goldman CEO Lloyd Blankfein says Wall Street will be the “biggest beneficiary” of financial reform:
“A financial regulatory reform bill has at least one supporter outside of Congressional Democrats, Lloyd Blankfein, the head of investment bank Goldman Sachs. “I’m generally supportive,” Blankfein told the Senate Permanent Subcommittee on Investigations. Wall Street will benefit from the bill because it will make the market safer, Blankfein said.
“The biggest beneficiary of reform is Wall Street itself,” he said.
I think one of the commenters at The Hill has the right analogy. “Oh please don’t throw me in the briar patch, said Br’er Rabbit.”
Or it could be that Blankfein and his fellow banksters are anticipating a favorable return on their investment:
“For the first time since 2004, the biggest Wall Street firms are now giving most of their campaign donations to Republicans.
A Wall Street Journal analysis of 12 large financial services companies, including J.P. Morgan Chase & Co., Goldman Sachs Group Inc. shows that they have collectively made $1.4 million in political donations, with 52% going to Republicans so far this year.”
27 Tuesday Apr 2010
Tags
Ben Nelson, Berkshire Hathaway, derivatives, filibuster, Senate Agriculture Committee, Warren Buffett
“Financial weapons of mass destruction” eh, Warren? What’s up with this ? (emphasis added) :
“The Senate Agriculture Committee inserted language into its derivatives bill last week [a provision pushed by Warren Buffett’s Berkshire Hathaway Inc] at the request of Sen. Ben Nelson (D., Neb.) that would have exempted any existing derivatives contracts from new collateral requirements—the money set aside to cover potential losses…a change one analyst predicted could force the Nebraska company to set aside up to $8 billion.
Berkshire has $63 billion in derivatives contracts, and Mr. Buffett has boasted he holds very little collateral against these products.”
Then after that was taken out of the legislation, lo and behold Buffett’s boy Benny:
“…did an abrupt about-face and became the only Democrat to help filibuster legislation to revamp Wall Street regulations…”He was on board until today and the only thing that changed was the removal of that provision,” said one Democratic aide, who definitively said Nelson changed his vote because the Buffett carveout was removed.”
Yes boys and girls and sports fans everywhere, the Orifice of Omaha is just another member of the oligarchy, gaming the system for his own personal gain. And Benny Nelson is nothing more than his errand boy.
27 Tuesday Apr 2010
Tags
Carl Levin, Goldman Sachs, Lloyd Blankfein, mortgage securities, Senate Permanent Subcommittee on Investigations, shorting the market, subprime
By the summer of 2006, Goldman Sachs executives realized that the subprime mortgage market and its related securities were headed for a fall, “a very unhappy ending” as senior trader Michael Swenson wrote in a 2007 memo. They also knew their firm was heavily invested in this ticking time bomb.
What to do? The solution from Typhoid Lloyd (Blankfein) and the Goldman gang? Let’s find some suckers to dump this trash on, tell them it’s treasure, bet on it to fail, and rake in the dough.
And rake it in they did.
“The firm, which had profited handsomely off packaging and selling securitized subprime home mortgages to investors during the housing boom, switched directions in early 2007, furiously shedding its home mortgage-linked risk and buying as much insurance as it could, effectively shorting the market throughout the year — a move that netted the firm “billions and billions” at the expense of its clients, according to the documents released by the Senate Permanent Subcommittee on Investigations.The firm was “spreading the poison throughout the system,” Levin charged.
“Goldman Sachs made billions of dollars from betting against the housing market, and it placed those bets in some cases at the same time it was selling mortgage-related securities to its clients,” said the committee’s chairman, Carl Levin (D-Mich.).”
Poison is the sanitized version. Goldman exec Tom Montag put the appropriate tag on it:
“One particular security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds’ movements, lost 80 percent of its value within five months of issuance. A senior executive…remarked in a June 22, 2007, email, “Boy, that timberwolf was one shi**y deal.”
Which is precisely what Goldman’s clients got—one shi**y deal.
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