• About

Desperado's Outpost

Desperado's Outpost

Tag Archives: Robert Reich

GFY, S&P

27 Wednesday Jul 2011

Posted by Craig in economy, Financial Crisis, Wall Street

≈ Leave a comment

Tags

AAA ratings, collateralized debt obligations, credit rating, debt, deficit, financial meltdown, junk bond status, mortgage backed securities, Robert Reich, Standard and Poor's, Wall Street

As the extortionists at Standard and Poor’s threaten a credit rating downgrade, not just if the debt ceiling isn’t raised but if the deficit isn’t cut by $4 trillion, Robert Reich points out that if the crooks at S& P had done their effin’ jobs the deficit and debt that they demand be cut wouldn’t be where it is today:

“Who is Standard & Poor’s to tell America how much debt it has to shed in order to keep its credit rating? Standard & Poor’s didn’t exactly distinguish itself prior to Wall Street’s financial meltdown in 2007. Until the eve of the collapse it gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.”

A practice from which S&P profited handsomely:

“S&P’s net annual revenues from ratings nearly doubled from $517 million in 2002, to $1.16 billion in 2007.”

And what happened to those securities S&P stamped AAA?

“…90% of the subprime-backed mortgage securities S&P and its competitors rated AAA in 2006-2007 – which means they’re as sound as Treasury notes – were later downgraded to junk bond status.”

Back to Reich:

“Standard & Poor’s (along with Moody’s and Fitch) bear much of the responsibility for what happened next. Had they done their job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn’t have become so large – and their bursts wouldn’t have brought down much of the economy.

Had Standard & Poor’s done its job, you and I and other taxpayers wouldn’t have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn’t have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.

In other words, had Standard & Poor’s done its job, today’s budget deficit would be far smaller.

And where was Standard & Poor’s…during the George W. Bush administration – when W. turned a $5 trillion budget surplus bequeathed to him by Bill Clinton into a gaping deficit? Standard & Poor didn’t object to Bush’s giant tax cuts for the wealthy. Nor did it raise a warning about his huge Medicare drug benefit…or his decision to fight two expensive wars without paying for them.

Add Bush’s spending splurge and his tax cuts to the expenses brought on by Wall Street’s near collapse – and today’s budget deficit would be tiny.

Put another way: If Standard & Poor’s had been doing the job it was supposed to be doing between 2000 and 2008, the federal budget wouldn’t be in a crisis — and Standard & Poor’s wouldn’t be threatening the United States with a downgrade if we didn’t come up with a credible plan for lopping $4 trillion off it.”  

So why in the hell is anybody listening to what Standard and Poor’s has to say? If we had a Justice Department that was actually interested in justice, the S&P analysts would be behind bars instead of issuing threats.

Financial Crisis Round-Up

04 Sunday Apr 2010

Posted by Craig in bailout, economy, Financial Crisis, financial reform, financial regulation, Politics, too big to fail, Wall Street

≈ Leave a comment

Tags

13 Bankers, Baseline Scenario, Debt Disaster Ahead, How Washington Abetted the Bank Job, Jamie Dimon, Market Oracle, McClatchy, Moody's board, New York Times, Politico, Reuters, Robert Reich, Simon Johnson, Sniveling Scamster, The Fed in Hot Water, The Most Dangerous Man in America, Thomas Hoenig, Timothy Geithner, Wall Street cabal, Zero Hedge

The constraints of time, due in large part to my newly-arrived copy of 13 Bankers, doesn’t allow extensive commentary on any of these posts from around the financial blogosphere, but all are deserving of a closer look:

Speaking of 13 Bankers, co-author Simon Johnson has a piece at Baseline Scenario on how a combination of political savvy and public relations acumen make JPMorgan Chase CEO Jamie Dimon “The Most Dangerous Man in America.”

Mike Whitney’s “Timothy Geithner is a Sniveling Scamster” at The Market Oracle describes how President Obama’s new mortgage modification program is “just another stealth bailout” for the banksters.

Tyler Durden at Zero Hedge comments on  Kansas City Fed President Thomas Hoenig’s extensive interview with Shahien Narisirpour of the Huffington Post.

Robert Reich’s “The Fed in Hot Water” on the belated admission of its taking tens of millions of bad loans off Bear Stearn’s books in order to facilitate their takeover by JPMorgan Chase.

Susan P. Koniak, George M. Cohen, David A. Dana and Thomas Ross in a New York Times op-ed entitled “How Washington Abetted the Bank Job” on the D.C buck-passing in regards to the regulators who were either incompetent or complicit (I choose the latter) in the Lehman Brothers Enron-like bookkeeping scam.

Speaking of inept, incompetent, or complicit so-called regulators, a McClatchy article asks, “Where was Moody’s board when top-rated bonds blew up?”

Herbert Lash at Reuters on the “Wall Street cabal” blocking derivative reform.

Finally, Rick Berman at Politico on the “Debt Disaster Dead Ahead.”

Recent Posts

  • Turn Out the Lights, the Revolution’s Over
  • Climbing Aboard the Hillary Train
  • You Say You Want a Revolution…
  • Proud to be a War Criminal
  • Drug Testing Welfare Applicants Struck Down in Florida

Archives

  • March 2016
  • February 2016
  • January 2016
  • April 2014
  • January 2014
  • April 2012
  • March 2012
  • February 2012
  • August 2011
  • July 2011
  • June 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008

Blogroll

  • Bankster USA
  • Down With Tyranny
  • Firedoglake
  • Memeorandum
  • naked capitalism
  • Newshoggers
  • Obsidian Wings
  • Taylor Marsh
  • The Market Ticker
  • Tom Dispatch
  • Zero Hedge

Categories

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 7 other followers

  • RSS - Posts
  • RSS - Comments

Create a free website or blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • Desperado's Outpost
    • Already have a WordPress.com account? Log in now.
    • Desperado's Outpost
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar