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Maybe there’s a reason it’s called FOX News September 1, 2010

Posted by WillardWhyte in Economy, Greed, Justice, Politics.
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I see that former Wachovia Corp. Chief Executive Officer Robert Steel is telling the Financial Crisis Inquiry Commission today that he was told by FDIC Chairman Sheila Bair in late Setptember, 2008 to find a dance partner with something left in its pockets, because the mortgage crap it was holding threatened the U.S. banking system.

This Bloomberg News story tells the early tale. Make particular note of this:

Steel, the former U.S. Treasury Department and Goldman Sachs Group Inc. executive, was brought in to lead Charlotte, North Carolina-based Wachovia in 2008 as the lender struggled to recover from the aftermath of its $24 billion purchase of Golden West Financial Corp. The deal saddled Wachovia with about $120 billion of adjustable-rate mortgages that allowed borrowers to skip some interest payments and add them to the loan balance. The concept assumed home prices would go up. Instead, the idea backfired when prices fell, leaving borrowers with mortgages that exceeded the value of their homes and Wachovia with mounting losses.

That’s $120 billion in garbage interest-only and other high-risk mortgages created by the bankers in California to pump new money into the superheated real estate market driven by flippers and other speculators. BIG NOTE: This was not done by government; it was done by the private sector, at the end stage aided and abetted by Fannie Mae and Freddie Mac, also at the time privately held and run by financial industry veterans.

So please don’t swallow the myth being spun — and heavily marketed by Wall Street — that the bubble slime on all of US was OUR fault because of actions by OUR government. It’s just not true.

Sure, many of US were sucked into the interest-only crap, or steered into liar loans.  And many of US benefited from the housing boom, which put a lot of people to work for a very long time making houses, selling houses and producing all the materials that went into what was a major part of the U.S. economy for two decades.

That’s almost all gone now folks — and no amount of “tax cuts” and “getting government off our backs” is going to bring it back. Something else must be built to take its place, and that’s a whole lot harder and will take a long time. Everyone running for Congress needs to explain in detail how they plan to make that rebuilding happen.

We all should watch what is said before this commission and make sure this story is told fully, extensively — and accurately.

Because what all fell down in September 2008 — and the people who made that happen and reasons for it — is why we still are struggling today — and will for the next five years — to rebuild our economy.

And it wasn’t our fault;  it wasn’t our government’s fault. It was the fault of recklessness, greed and fraud by private industry leadership. And many of those foxes want to be put back in charge of the hen house.

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But it’s just a bill … March 15, 2010

Posted by WillardWhyte in Economy, Obama, Politics.
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There is an awful lot to like in the proposed legislation Sen. Chris Dodd proposed today, a bill that already sports the shine of consultation with others of a different mind, a recognition  that evoltionary change  is the wisest course and fueled by a sense of urgency.

Although I have no way of knowing this, I sense that this also is a bill owing greatly to the efforts of Sen. Bob Corker of Tennessee, who may yet vote against it even though he supports much in it. If nothing else, this is a prime example of how this system should work, even if this bill fails to pass into law and even if it does not accomplish everything we might wish for it.

And this I say even of a bill not blessed by a “bipartisan” label, for Sen. Dodd and Sen. Corker worked diligently to get there, but finally agreed to disagree. As gentlemen and, I would say, patriots. They deserve our applause.

I still suspect the Consumer Financial Protection Agency is best established as a standalone entity. If it is to start its life inside of the Federal Reserve, it will fall upon the President and the House and Senate oversight committees to make sure its budget is sound, its authority is not stiffled and its import not lost upon those in the prime seats.

And we still need to see a strong initiative in the control of derivatives trading, not allowing a needed way around the full transpaency of clearinghouses for some instruments to become a loophole that dooms orderly markets that allow investors — and systemic overseers — to have the knowledge needed to avoid bubblicious temptations and shell games.

But the proposal is comprehensive with civil enforcement teeth, includes a firm “Volcker rule” prohibition on banks or near-banks from gambling with publicly guaranteed deposits or liquidity, addresses the abuses by ratings agencies and provides a path for easier stockholder objections.

I’d love to hear what others think of this, knowing that in each caegory what the bill proposes most likely falls short of the firmness some might prefer. But to me this seems a strong stab at responsible controls designed to restore open and honest dealings while preserving plenty of room for markets to make the calls. A cop’s bill. 

Of course, the bill now is a target, with swarms of well-paid jackals ready to knaw and knaw until bone gives way and marrow is consumed. Rep. Frank promises full and open Conference to meld House proposals with this bill, should the Senate move it across the aisle. We would hope that Sen. Corker, for one, gets his day at the mike.

The rest, I suspect, will be up to the President — and us. If we want reform we had better well clammor after it now.

Stimulating idea February 24, 2010

Posted by WillardWhyte in Musings, Politics.
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I find a lot that is encouraging when I read of things like this, even if when you get to the bottom of the tale you learn that maybe these companies were going to do this anyway — because that’s what they do. But someone decided it was important to stand up, add up all their projected plans for investment and hiring and lay it out there with some hoopla to make a point.

And that provides what they call in the management game a “teaching moment” — for you that translates into a lot more work.

As I float around the blogs I find a great debate about whether that big fat stimulus bill Congress ginned up a year ago has worked. And you can’t turn the corner without someone moaning and groaning about the bailout for Wall Street and the car companies. And now everyone also has an opinion about whether another jolt of government cash needs to be Tasered into the economy, or whether even the thought of that means Socialism is upon us and soon they’ll be coming for our guns.

 Much of what I read falls into the same old Red-v-Blue meatgrinder, but all of it seems to have two things in common: A deep loss of memory of — or appreciation for — exactly where we were a year ago, and a recognition of what needs to happen if we are to edge along the ledge to safety. (more…)