Moonangie wrote:

SupremeCommander wrote:lol... if you say something against the Democratic party and the smug following, that's the typical type of discourse you get. BTW, I voted for Obama in the last election and probably will in this one too. But that's because Romney may or may not be the anti-Christ. That doesn't mean Obama has delivered on any of his many grandiose promises

I understand and agree with the sentiments people here have expressed about how the President has come up short on his promises. But I still believe in him. He did not anticipate (nor should he have) the level of obstructionism the House Republicans would bring. That has never happened before. He also has to face the issue of getting re-elected: No first term President can throw all of his political capital into the game in his first term and hope to get re-elected. We have a sharply divided population (i.e., social wedge issues anyone?) and that prevents the sort of big idea implementations the country needed since 2008. Second term? That's a different story, at least as far as Obama is concerned. Then it becomes about his place in history, and I think he cares deeply about that.

BRIGGS, please vote. If you think that not voting is simply an act of conscience (it may be) please don't think that it has no bearing on the election outcome. Sitting on the fence won't help you or anyone else in this country. Yes, Obama has been somewhat underwhelming, but given the circumstances, he did a bang-up job. I think the economy will start to grow above 3% in the next four years, maybe a lot more. He will have an opportunity to reap the rewards of his patient approach. Please reconsider your position and vote. It matters so much.

the political capital comment is a sad commentary on the state of American politics. I don't disagree with you, just would like to bitch about how friggin ridiculous that is. My personal criticism of Obama has been and will continue to be is that I think he wakes up every morning, looks at himself in the mirror, and says "history is going to remember you fondly." I think what he cares about most is how middle school textbooks remember him. Initiate banking "reform" and then healthcare reform and not see either through to completion? What the ****?

holfresh wrote:Let's see...Avoid a global depression..Save the U.S./global banking system, Save the auto industry, when everyone tells u the contrary and GM now sell the most cars on the planet, Killed Osama our primary nemesis the last twenty years with two other Presidents failing didn't pull the trigger when they needed to...Simmered the Arab hatred towards the U.S. garnered over the previous 8 years...enacted a Healthcare bill that Presidents the last 60 years couldn't pull off... the DOW went from 7,000 up to 13,000, ...Stabilized a job market that was losing 700k per month to now making about 100k per month...Changed the face of Global warfare against Al Qaeda primarily using drones...Carefully and correctly navigated the Arab Spring without deep U.S. involvement contrary to what most Republicans wanted...Successfully negotiated an additional Nuclear reduction treaty with Russia...Got BP to fork over 20 billion to help with Gulf clean up and business re-reimbursement...Gays in the military, equal pay for women, Children get healthcare automatically...All that and he gets a C+...All in the face of stiff and absolute( not one congressman voting for his bills) Republican opposition as a strategy to win the 2012 general election...All that!!!..In the face of Europe on the brink of collapse...C+...Wow...Tough crowd...

Great Summation Holfresh. Well done...Couldn't agree more....

SupremeCommander wrote:

JesseDark wrote:I disagree with you here about promises. The list of promises kept is longer than that of broken promises. Democrates have learned to fight fire with fire. By that I mean the Obama team throws a couple of punches and sharp elbows just like republicans have done for years.
Health care..check
End Iraqi war..check
Osama...check
Auto industry...check
tax cuts...check

What I want from the president in the next 4 years is to be more firm with congress. I think they were playing him taking his kindness as a weakness.

SupremeCommander wrote:lol... if you say something against the Democratic party and the smug following, that's the typical type of discourse you get. BTW, I voted for Obama in the last election and probably will in this one too. But that's because Romney may or may not be the anti-Christ. That doesn't mean Obama has delivered on any of his many grandiose promises

we're using different rubrics... I don't see any of those things as completed either quickly, smartly, prudently, or with finality. for example, Obama withdrew our troops from Iraq, yes. But what about Afghanistan. And the Iraq war is hardly over. Search some news articles. People are still dying there. Right or wrong I have no idea, but all Obama did was decide to withdraw. That's not ending the Iraqi war.

another example, I really do applaud his decision to take down Osama. That was a masterstroke. But you want to give him credit for that as a campaign promise? come on. That's the one thing every American can agree upon regardless of politics. And the fact that Obama and/or his supporters would use that as marketing is appalling and uncouth

Please, for 10 years the only thing any Republican would say when they were campaigning was a noun, a verb, and 9/11 one of the greatest tragedies and failures of this government that this country has ever seen. But Obama mentioning that he actually got the guy who did it is beyond the pale.

loweyecue wrote:

GustavBahler wrote:Bush II was the worst president in my lifetime, and Obama is easily the most disappointing. I voted for the president in 08', but I won't be voting for either him or Romney. Some reasons why...

Barack Obama is a brand. And the Obama brand is designed to make us feel good about our government while corporate overlords loot the Treasury, our elected officials continue to have their palms greased by armies of corporate lobbyists, our corporate media diverts us with gossip and trivia and our imperial wars expand in the Middle East. Brand Obama is about being happy consumers. We are entertained. We feel hopeful. We like our president. We believe he is like us. But like all branded products spun out from the manipulative world of corporate advertising, we are being duped into doing and supporting a lot of things that are not in our interest. Chris Hedges

http://www.sltrib.com/sltrib/opinion/54351480-82/corporations-tpp-foreign-trade.html.csp

This may be one of the most important stories ever ignored by the media. It’s unlikely you’re losing sleep over U.S. trade negotiations, but the unfolding agreement between the United States and eight Pacific nations — the Trans-Pacific Partnership (TPP) — should cause every U.S. citizen, from the Sierra Club to the tea party to get their pitchforks and torches out of the closet and prepare to "storm the Bastille."

The TPP negotiations have been going on for two years under extreme secrecy, no information has been made available to either the press or Congress about the U.S. position. But on June 12 a document was leaked to the watchdog group, Public Citizen, revealing the current U.S. position and the reason for the secrecy. The contents are surreal and shocking.
Photos

The leaked document reveals that the trade agreement would give unprecedented political authority and legal protection to foreign corporations.

Specifically, TPP would (1) severely limit regulation of foreign corporations operating within U.S. boundaries, giving them greater rights than domestic firms, (2) extend incentives for U.S. firms to move investments and jobs to lower-wage countries, (3) establish an alternative legal system that gives foreign corporations and investors new rights to circumvent U.S. courts and laws, allowing them to sue the U.S. government before foreign tribunals and demand compensation for lost revenue due to U.S. laws they claim undermine their TPP privileges or their investment "expectations."

Despite NAFTA’s failures, corporations are arm-twisting the federal government to pursue trade agreements as inevitable and necessary for economic progress. But 26 of the 28 chapters of this agreement have nothing to do with trade. TPP was drafted with the oversight of 600 representatives of multinational corporations, who essentially gave themselves whatever they wanted; the environment, public health, worker safety, further domestic job losses be damned.

http://rt.com/usa/news/tpp-obama-corporations-trade-725/

Last month, Senator Ron Wyden (D-Oregon) introduced legislation that specifically targets the Obama administration by demanding that the White House open up on details about the proposed TPP. Despite serving as chair of the United States Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness, Sen. Wyden has been largely left uninformed about the details of the TPP all while the White House has opened up to the multinational corporations expected to profit through the proposal.

http://www.huffingtonpost.com/miles-mogulescu/ny-times-reporter-confirm_b_500999.html

This should be big news. Even while President Obama was saying that he thought a public option was a good idea and encouraging supporters to believe his healthcare plan would include one, he had promised for-profit hospital lobbyists that there would be no public option in the final bill.

http://www.counterpunch.org/2012/09/04/obamas-secret-plan-to-prop-up-housing-prices/

Private Equity firms are piling in to the housing market to take advantage of bargain basement prices on distressed inventory. The Obama administration is stealthily selling homes to big investors who are required to sign non-disclosure agreements to ensure that the public remains in the dark as to the magnitude of the giveaway. Aside from the steep discounts on the homes themselves, the government is also providing “synthetic financing to reduce the up-front capital required if they agree to form a joint venture with Fannie Mae and share proceeds from the rental or sale of properties.” (Businessweek)

In other words, US-taxpayers are providing extravagant financing for deep-pocket speculators who want to reduce their risk while maximizing their profits via additional leverage. The plan resembles Treasury Secretary Timothy Geithner’s Public-Private Partnership Investment Program, (PPIP) which Columbia University professor Joseph Stiglitz denounced in an op-ed in the New York Times. Here’s what he said:

“The Obama administration’s $500 billion or more proposal to deal with America’s ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose.”

The same rule applies here. Speculators are getting lavish incentives (gov financing, low rates, and severe discounts) in secret deals to buy distressed inventory which should be available to the public at market prices. If that’s not a ripoff, then what is?

http://www.rollingstone.com/politics/blogs/taibblog/obama-goes-all-out-for-dirty-banker-deal-20110824

A power play is underway in the foreclosure arena, according to the New York Times.

On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.

On the other side is the Obama administration, the banks, and all the other state attorneys general.

This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.

This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.

http://www.rollingstone.com/politics/blogs/taibblog/obama-and-geithner-government-enron-style-20111220

The notion that what Wall Street firms did was merely unethical and not illegal is not just mistaken but preposterous: most everyone who works in the financial services industry understands that fraud right now is not just pervasive but epidemic, with many of the biggest banks committing entire departments to the routine commission of fraud and perjury – every single one of the major banks, for instance, devotes significant manpower to robosigning affidavits for foreclosures and credit card judgments, acts which are openly and inarguably criminal.

Banks and hedge funds routinely withhold derogatory information about the instruments they sell, they routinely trade on insider information or ahead of their own clients’ orders, and corrupt accounting is so rampant now that industry analysts have begun to figure in estimated levels of fraud in their examinations of the public disclosures of major financial companies.

Beyond that, as Jeff points out, Obama is simply not telling the truth about the supposedly insufficient penalties available to regulators. Employing the famous "mistakes were made" use of the passive tense, Obama copped out in his December 6 speech by saying that “penalties are too weak." As Jeff points out, what Obama should have said is that "the penalties my own regulators chose to dish out were too weak":

Moreover, the President is misleading us when he says that Wall Street firms violate anti-fraud law because the penalties are too weak. Repeat financial fraudsters don't pay relatively paltry -- and therefore painless -- penalties because of statutory caps on such penalties. Rather, regulatory officials, appointed by Obama, negotiated these comparatively trifling fines. This week, the F.D.I.C. settled a suit against Washington Mutual officials for just $64 million, an amount that will be covered mostly by insurance policies WaMu took out on behalf of executives, who themselves will pay just $400,000. And recently a federal judge rejected the S.E.C.'s latest settlement with Citigroup, an action even the Wall Street Journal called "a rebuke of the cozy relationship between regulators and the regulated that too often leaves justice as an orphan."

What makes Obama’s statements so dangerous is that they suggest an ongoing strategy of covering up the Wall Street crimewave. There is ample evidence out there that the Obama administration has eased up on prosecutions of Wall Street as part of a conscious strategy to prevent a collapse of confidence in our financial system, with the expected 50-state foreclosure settlement being the landmark effort in the cover-up, intended mainly to bury a generation of fraud. Here’s how Jeff puts it:

In Ron Suskind's book, Confidence Men, he quotes Treasury Secretary Timothy Geithner as saying, "The confidence in the system is so fragile still... a disclosure of a fraud... could result in a run, just like Lehman." The Obama Administration is pushing hard for a 50-state settlement with the major banks for their fraudulent foreclosure practices, even though several state attorneys general have rejected this approach because, in their view, it would shield too much wrongdoing. Regrettably, Obama's top officials and lawyers seem more eager to restore the financial sector to health than establish criminal accountability among the executives who were in charge.

In other words, Geithner and Obama are behaving like Lehman executives before the crash of Lehman, not disclosing the full extent of the internal problem in order to keep investors from fleeing and creditors from calling in their chits. It’s worth noting that this kind of behavior – knowingly hiding the derogatory truth from the outside world in order to prevent a run on the bank – is, itself, fraud!

http://www.guardian.co.uk/commentisfree/2012/aug/20/us-drones-strikes-target-rescuers-pakistan

The US government has long maintained, reasonably enough, that a defining tactic of terrorism is to launch a follow-up attack aimed at those who go to the scene of the original attack to rescue the wounded and remove the dead. Morally, such methods have also been widely condemned by the west as a hallmark of savagery. Yet, as was demonstrated yet again this weekend in Pakistan, this has become one of the favorite tactics of the very same US government.

I am not worried about private equity buying foreclosed homes. If the government gets to make money out of it, that's ok too. People in general are completely averse to home buying compared to the available supply. Letting the homes sit a d rot isn't going to help anyone. And the piece is written like a conspiracy theory and makes me skeptical. The Govt is not in the business of dictating home values. Fannie-Freddie hold large number of foreclosures and need to get rid of them.

The one about the TPP really worried me though. I will do more research on that and try to read up on it. Doesn't look like the election will not impact that outcome since they both seem to be wanting to sign it. I will look to find some independent corroboration of that. Thanks for posting the links on these articles. I had no line of sight to the TPP thing before.

As for accusations of Fraud, I would just ask these people if they really WANT full disclosure??? Do people really want a run on banks? Collapse of the financial system? These same conspiracy theorists would turn on a dime to blame Obama for letting it happen.

I strongly disagree with your take on Mike Whitney who wrote that piece on the foreclosed homes. Whitney was one of the few writers who was sounding the alarm bells to the housing bubble years in advance, the danger of those toxic CDO's, and also called the meltdown on Wall Street long before it happened as well. He is no conspiracy theorist.

The banks are intentionally keeping millions of foreclosed homes off the market to prop up prices so yes they are dictating the price so we have to pay for their mistakes, and it looks like its a two tiered system. Equity firms pay pennies on the dollar for properties in secret agreements and we have to pay an artificially inflated market value. They should release these homes to the general public and let the market set the price instead of these back room deals.

I don't like the idea of these firms getting preferential treatment. I'm looking for a home right now and I don't appreciate wealthy investors getting to buy properties at steep discounts with sweetheart financing. Even money many of them are the same characters who caused this meltdown. Don't like the non-disclosure agreement as well. Its like the administration is trying to hide something.

As far as the "too big too fail" banks, They are bigger than they were before the meltdown. Politicians were literally threatened with martial law if the no strings attached bailout wasn't approved. What did they do with all the money they got from the govt?

http://www.sanders.senate.gov/newsroom/news/?id=bf584e1c-ff74-4ded-9049-eb4aef4bdf92

April 26, 2011

BURLINGTON, Vt., April 26 - A study requested by Sen. Bernie Sanders (I-Vt.) found numerous instances during the financial crisis of 2008 and 2009 when banks took near zero-interest funds from the Federal Reserve and then loaned money back to the federal government on sweetheart terms for the banks.

The banks pocketed interest on government securities that paid rates up to 12 times greater than the Fed's rock bottom interest charges, according to a Congressional Research Service analysis conducted for Sanders.

"This report confirms that ultra-low interest loans provided by the Federal Reserve during the financial crisis turned out to be direct corporate welfare to big banks," Sanders said. "Instead of using the Fed loans to reinvest in the economy, some of the largest financial institutions in this country appear to have lent this money back to the federal government at a higher rate of interest by purchasing U.S. government securities."

The Federal Reserve claimed at the time that the emergency loans were needed so banks could provide credit to small- and medium-sized businesses that desperately needed money to create jobs or to prevent layoffs. "Instead of using this money to reinvest in the productive economy, however, it appears that JPMorgan Chase, Citigroup, and Bank of America used a large portion of these near-zero-interest loans to buy U.S. government securities and earn a higher interest rate at the same time, providing free money to some of the largest financial institutions in this country," Sanders said.

Americans don't have faith in the market because of the rampant fraud. Nobel prize winning economists like Krugman and Stieglitz say that this won't happen until some high level execs are taken to court and the true extent of the fraud is known. I agree with them. Time to break up the banks and enact real reform.

Iceland was the only country which let their banks fail and it wasn't the doom and gloom that people predicted.

http://www.google.com/hostednews/afp/article/ALeqM5hsxBKSMtE2DxfKI-jqYZLnclB4fg?docId=CNG.2fc2939539c3556330d5a93c55faac22.481

REYKJAVIK — Three years after Iceland's banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say.

The North Atlantic island saw its three biggest banks go belly-up in the October 2008 as its overstretched financial sector collapsed under the weight of the global crisis sparked by the crash of US investment giant Lehman Brothers.

The banks became insolvent within a matter of weeks and Reykjavik was forced to let them fail and seek a $2.25 billion bailout from the International Monetary Fund.

After three years of harsh austerity measures, the country's economy is now showing signs of health despite the current global financial and economic crisis that has Greece verging on default and other eurozone states under pressure.

"The lesson that could be learned from Iceland's way of handling its crisis is that it is important to shield taxpayers and government finances from bearing the cost of a financial crisis to the extent possible," Islandsbanki analyst Jon Bjarki Bentsson told AFP.

"Even if our way of dealing with the crisis was not by choice but due to the inability of the government to support the banks back in 2008 due to their size relative to the economy, this has turned out relatively well for us," Bentsson said.

Iceland's banking sector had assets worth 11 times the country's total gross domestic product (GDP) at their peak.

Nobel Prize-winning US economist Paul Krugman echoed Bentsson.

"Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net," he wrote in a recent commentary in the New York Times.

"Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver," he said.

As far as TPP, I found this to be a good report on some of the pitfalls of this agreement by an Australian professor.

http://www.dfat.gov.au/fta/tpp/subs/tpp_sub_tienhaara_100519.pdf

Australia decided not to sign on to TPP. These trade agreements have been a disaster for the US. 50,000 factories have been shuttered since NAFTA. 2 million Mexican farmers lost their jobs because of it. Obama's job czar GE CEO Jeffrey Immelt was a pioneer at offshoring jobs.

GustavBahler wrote:
I strongly disagree with your take on Mike Whitney who wrote that piece on the foreclosed homes. Whitney was one of the few writers who was sounding the alarm bells to the housing bubble years in advance, the danger of those toxic CDO's, and also called the meltdown on Wall Street long before it happened as well. He is no conspiracy theorist.

The banks are intentionally keeping millions of foreclosed homes off the market to prop up prices so yes they are dictating the price so we have to pay for their mistakes, and it looks like its a two tiered system. Equity firms pay pennies on the dollar for properties in secret agreements and we have to pay an artificially inflated market value. They should release these homes to the general public and let the market set the price instead of these back room deals.

Ok so I don't follw the logic here. Are banks just supposed to SELL foreclosures at the lowest possible price? What would drive them to do that instead of holding on to the mortgages to see if they can ge better value? Banks are in teh business of making money like everyone else, not saying I like what hey do, but I don't expect them to do something out of the goodness of their hearts. And if they just flooded the market with foreclosed properties that would collapse home prices all over the country and it would penalize homeowners who kept paying their loans throughout the crisis by now suddenly lowering the value of their homes to probably below what hey owe. What am I missing?

GustavBahler wrote:
I don't like the idea of these firms getting preferential treatment. I'm looking for a home right now and I don't appreciate wealthy investors getting to buy properties at steep discounts with sweetheart financing. Even money many of them are the same characters who caused this meltdown. Don't like the non-disclosure agreement as well. Its like the administration is trying to hide something.

As far as the "too big too fail" banks, They are bigger than they were before the meltdown. Politicians were literally threatened with martial law if the no strings attached bailout wasn't approved. What did they do with all the money they got from the govt?

I don't like the secrecy either but equity firms had nothing to do with the mortgage meltdown and ensuing crisis, if they benefited from it it was purely as by product of what went down. Private Equity firms didn't write subprime loans.

I am never going to defend TBTFs, if you see my first post and subsequent discussions with Knickshot you will see I was arguing against he repeal of Glass-Steagall act which as Holfresh pointed out started in 1990 and ended with the Three Stooges Act.

I usually like Krugman and have very little knowledge of Iceland. I would guess multiple years of Austerity measures isn't exactly going to be very popular, probably even less popular than the bailouts. My take on the bailouts was that Paulson messed up and didn't set restrictions on what the banks could do with the money. But the bailouts worked in the sense they prevented the total collaps of the banking system.

SupremeCommander wrote:

GustavBahler wrote:http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

The Fed Audit

wow... I know it was bad but this is friggin ridiculous

Its not actually 16 trillion but it shows who got thrown the life preservers while the less fortunate where left to drown in a sea of debt. No matter what people say, we are in a depression, real unemployment is closer to 25 percent, they changed the way that the numbers were tabulated a while back. This is a bipartisan failure.

http://www.shadowstats.com/alternate_data/unemployment-charts

The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers. The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

GustavBahler wrote:http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

The Fed Audit

July 21, 2011

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall
Street."

Edit: Should point out that the taxpayer isn't on the hook for this but I don't believe that lending banks money at a near zero interest rate with no strings attached as far as how they do business going forward is the way to go. They stay "too big to fail" and the taxpayers end up paying the price in one way or another. The real amount is close to a trillion in loans but I don't remember main street getting this kind of a sweetheart deal.

Finally someone is focusing at a big part of the problem the FED. Now strictly speaking the FED is NOT a Govt organization, its a privately held bank. So Congress can't just dictate the what FED should do. The directors on the FED board are political appointees, but the basis of the structure of the FED allows it to operate independently of the GOVT. It is owned by banks, run by bankers and acts mainly in their interests. Anyone who thinks otherwise is selling themselves short.

GustavBahler wrote:

loweyecue wrote:

GustavBahler wrote:
I strongly disagree with your take on Mike Whitney who wrote that piece on the foreclosed homes. Whitney was one of the few writers who was sounding the alarm bells to the housing bubble years in advance, the danger of those toxic CDO's, and also called the meltdown on Wall Street long before it happened as well. He is no conspiracy theorist.

The banks are intentionally keeping millions of foreclosed homes off the market to prop up prices so yes they are dictating the price so we have to pay for their mistakes, and it looks like its a two tiered system. Equity firms pay pennies on the dollar for properties in secret agreements and we have to pay an artificially inflated market value. They should release these homes to the general public and let the market set the price instead of these back room deals.

Ok so I don't follw the logic here. Are banks just supposed to SELL foreclosures at the lowest possible price? What would drive them to do that instead of holding on to the mortgages to see if they can ge better value? Banks are in teh business of making money like everyone else, not saying I like what hey do, but I don't expect them to do something out of the goodness of their hearts. And if they just flooded the market with foreclosed properties that would collapse home prices all over the country and it would penalize homeowners who kept paying their loans throughout the crisis by now suddenly lowering the value of their homes to probably below what hey owe. What am I missing?

GustavBahler wrote:
I don't like the idea of these firms getting preferential treatment. I'm looking for a home right now and I don't appreciate wealthy investors getting to buy properties at steep discounts with sweetheart financing. Even money many of them are the same characters who caused this meltdown. Don't like the non-disclosure agreement as well. Its like the administration is trying to hide something.

As far as the "too big too fail" banks, They are bigger than they were before the meltdown. Politicians were literally threatened with martial law if the no strings attached bailout wasn't approved. What did they do with all the money they got from the govt?

I don't like the secrecy either but equity firms had nothing to do with the mortgage meltdown and ensuing crisis, if they benefited from it it was purely as by product of what went down. Private Equity firms didn't write subprime loans.

I am never going to defend TBTFs, if you see my first post and subsequent discussions with Knickshot you will see I was arguing against he repeal of Glass-Steagall act which as Holfresh pointed out started in 1990 and ended with the Three Stooges Act.

I usually like Krugman and have very little knowledge of Iceland. I would guess multiple years of Austerity measures isn't exactly going to be very popular, probably even less popular than the bailouts. My take on the bailouts was that Paulson messed up and didn't set restrictions on what the banks could do with the money. But the bailouts worked in the sense they prevented the total collaps of the banking system.

I'm not suggesting dumping them all of them at once. I agree its a double edged sword. I was speaking mostly about Fannie Mae which the government seized and are now giving some firms sweetheart deals, if its a choice between them and average citizens, I say give the public a chance to buy them first.

Those private equity firms packaged and sold those toxic CDOs which were composed of subprime loans (among other loans) which brought down the market. They might not have made the loans but they packaged them and sold them to unsuspecting customers. As far as austerity, we've had it. Hundreds of thousands of government workers have been laid off, police and fire departments being cut, govt services across the board have been cut back while the banks were made whole. And they have their eyes set on SS and Medicare.

I agree about glass steagall. What also did in the economy was the Commodity Futures Modernization Act (thanks Clinton) which made sure that derivatives would stay deregulated. This is a great documentary about Brooksly Born who tried to warn people about the danger of not regulating those derivatives.

http://www.pbs.org/wgbh/pages/frontline/warning/view/

Have to disagree about Private Equity - These are firms like Mitt Romney's Bain Capital and they exist for the sole purpose of doing LBOs and focus on undervalued assets.

Systemic crises also are commonly related to the collapse of very speculatively-valued assets, as seen
most recently in speculative mortgages and the securities and derivatives based on those mortgages.
The investment focus of private equity funds on potentially undervalued firms should largely preclude a
systemic crisis arising from the collapse of overvalued assets. At a minimum, our dataset does not suggest
speculative bubbles in the assets purchased by these large private equity funds during the period
examined here. Private companies do not have standard price-earnings ratios, since there is no public
market price for each share; but the most widely used measure of the ratio of value to earnings in privately-
held firms, the “enterprise-value multiple” (EVM), averaged a moderate 9.5 for 63 large transactions
undertaken by eight large U.S. private equity firms from 2002 to 2005. Some observers claim that several
private equity purchases in the last two years have been overpriced but data for 2006-07 are incomplete
and cannot provide the basis for a credible analysis.

http://www.sonecon.com/docs/studies/RoleofPEinUSCapitalMarkets-FINAL.pdf

CFMA was again written and passed by a republican congress, Clinton was lame duck president who signed it. Not saying he is not to blame, just pointing out that "deregulation" is part of the right wing agenda.

GustavBahler wrote:

loweyecue wrote:

GustavBahler wrote:

loweyecue wrote:

GustavBahler wrote:
I strongly disagree with your take on Mike Whitney who wrote that piece on the foreclosed homes. Whitney was one of the few writers who was sounding the alarm bells to the housing bubble years in advance, the danger of those toxic CDO's, and also called the meltdown on Wall Street long before it happened as well. He is no conspiracy theorist.

The banks are intentionally keeping millions of foreclosed homes off the market to prop up prices so yes they are dictating the price so we have to pay for their mistakes, and it looks like its a two tiered system. Equity firms pay pennies on the dollar for properties in secret agreements and we have to pay an artificially inflated market value. They should release these homes to the general public and let the market set the price instead of these back room deals.

Ok so I don't follw the logic here. Are banks just supposed to SELL foreclosures at the lowest possible price? What would drive them to do that instead of holding on to the mortgages to see if they can ge better value? Banks are in teh business of making money like everyone else, not saying I like what hey do, but I don't expect them to do something out of the goodness of their hearts. And if they just flooded the market with foreclosed properties that would collapse home prices all over the country and it would penalize homeowners who kept paying their loans throughout the crisis by now suddenly lowering the value of their homes to probably below what hey owe. What am I missing?

GustavBahler wrote:
I don't like the idea of these firms getting preferential treatment. I'm looking for a home right now and I don't appreciate wealthy investors getting to buy properties at steep discounts with sweetheart financing. Even money many of them are the same characters who caused this meltdown. Don't like the non-disclosure agreement as well. Its like the administration is trying to hide something.

As far as the "too big too fail" banks, They are bigger than they were before the meltdown. Politicians were literally threatened with martial law if the no strings attached bailout wasn't approved. What did they do with all the money they got from the govt?

I don't like the secrecy either but equity firms had nothing to do with the mortgage meltdown and ensuing crisis, if they benefited from it it was purely as by product of what went down. Private Equity firms didn't write subprime loans.

I am never going to defend TBTFs, if you see my first post and subsequent discussions with Knickshot you will see I was arguing against he repeal of Glass-Steagall act which as Holfresh pointed out started in 1990 and ended with the Three Stooges Act.

I usually like Krugman and have very little knowledge of Iceland. I would guess multiple years of Austerity measures isn't exactly going to be very popular, probably even less popular than the bailouts. My take on the bailouts was that Paulson messed up and didn't set restrictions on what the banks could do with the money. But the bailouts worked in the sense they prevented the total collaps of the banking system.

I'm not suggesting dumping them all of them at once. I agree its a double edged sword. I was speaking mostly about Fannie Mae which the government seized and are now giving some firms sweetheart deals, if its a choice between them and average citizens, I say give the public a chance to buy them first.

Those private equity firms packaged and sold those toxic CDOs which were composed of subprime loans (among other loans) which brought down the market. They might not have made the loans but they packaged them and sold them to unsuspecting customers. As far as austerity, we've had it. Hundreds of thousands of government workers have been laid off, police and fire departments being cut, govt services across the board have been cut back while the banks were made whole. And they have their eyes set on SS and Medicare.

I agree about glass steagall. What also did in the economy was the Commodity Futures Modernization Act (thanks Clinton) which made sure that derivatives would stay deregulated. This is a great documentary about Brooksly Born who tried to warn people about the danger of not regulating those derivatives.

http://www.pbs.org/wgbh/pages/frontline/warning/view/

Have to disagree about Private Equity - These are firms like Mitt Romney's Bain Capital and they exist for the sole purpose of doing LBOs and focus on undervalued assets.

Systemic crises also are commonly related to the collapse of very speculatively-valued assets, as seen
most recently in speculative mortgages and the securities and derivatives based on those mortgages.
The investment focus of private equity funds on potentially undervalued firms should largely preclude a
systemic crisis arising from the collapse of overvalued assets. At a minimum, our dataset does not suggest
speculative bubbles in the assets purchased by these large private equity funds during the period
examined here. Private companies do not have standard price-earnings ratios, since there is no public
market price for each share; but the most widely used measure of the ratio of value to earnings in privately-
held firms, the “enterprise-value multiple” (EVM), averaged a moderate 9.5 for 63 large transactions
undertaken by eight large U.S. private equity firms from 2002 to 2005. Some observers claim that several
private equity purchases in the last two years have been overpriced but data for 2006-07 are incomplete
and cannot provide the basis for a credible analysis.

http://www.sonecon.com/docs/studies/RoleofPEinUSCapitalMarkets-FINAL.pdf

CFMA was again written and passed by a republican congress, Clinton was lame duck president who signed it. Not saying he is not to blame, just pointing out that "deregulation" is part of the right wing agenda.

Have to disagree with your disagreement

http://www.bloomberg.com/news/2012-06-13/private-equity-has-too-much-money-to-spend-on-homes-mortgages.html

If you look at some of the names on the list in this article, some of them are same players who sold CDOs during the boom and are now buying tens of thousands of foreclosed homes.

As far as Clinton, it was his treasury secretary (Rubin) who convinced Clinton against regulation.

I don't know which firms listed here wer responsible for selling CDOs, I have no doubt they are buying homes now. I just dont see them as main culprits of the meltdown. We can agree to disagree.
For me the following are the main reasons for the meltdown-

1. Subprime loans - 80% of which were originated by non bank lenders and small banks outside the purview of the minorities related law from 1973. - this was greed's finest hour
2. Faliure of the FED to step in and keep the housing bubble from going out of control and their wilful denial of the problem in the deregulated swaps markets and worst of all Greenspan's move to start the repeal process of the Glass Steagall act in 1990
3. Failure of ratings agencies like Moody's, S&P and Fitch - they were in a wink wink arrangment with the banks to relabel junk mortgages as "AAA" rated which allowed te entire new cottage industry in CDOs and MBS' to develop.
4. Complete lack of any type of regulation of Credit Default Swaps and other derivatives
5. Repeal of GSA - allowing Retail Banks to firts act like and then merge with Investment banks - allowing them access to huge pools of savings money for speculative investments