Obama's Economic Stimulus Bill is Slippin into Darkness...

#1
The more time that passes, the worse it looks. I see why he was in a big hurry. It is now carry the derisive tag, "The 800 Billion Dollar Mistake." Economists are coming out in force against it. Even took a full page ad in the NY Times stating thier opposition. Strange how both Obama and Biden said every economist they spoke with was in favor of it. The concerns are the same as mine. Almost no monies are going where needed. Not enough to create jobs, and close to nothing to help housing market to get back on track. It looks like a mistake. And it will near 900 billion as it stands.

Last time I checked we are ten trillion dollars in debt. That is a "T". As in trillions. If every American taxpayer donated $35,000, it will still be there. So now we are going to make this year another couple of trillion worse. Two of the largest banks in the land are on the brink of failure. That could require several more Trillion, since they are FDIC. Who is going to bail the US out, after they are done bailing everyone else out?

The 200 that signed the NY Times are some of the brightest economists in our country, including a Nobel Prize winner, for you guessed it, economics. Hardly bipartisan politics. This money is not going to stimulate anything other than make Obama look good to the big money backers that got him elected by rewarding them. And putting our country into debt for maybe four generations. We cannot sustain trillion dollar deficits. Yet Obama says, we will have them for some time. Who's counting? Not him, trillion dollar deficits are a way of life for his government.

And how is the previous money being spent? We all saw the CEO's of the Big three up on Capitol Hill begging for bailout money. Assuring us they were going to reinvest in America and keep the jobs here we need badly. Now GM announces they are investing 1 billion of our taxpayer monies in Brazil, to avoid American problems. They lied, our politicians lied, and we get caught holding the bill, to help Brazil. While our country, possibily even posters here lose thir jobs so some Brazilian can have a good life. Why don't they just spit in our faces and laugh. I'm ready to take off my shoes and start throwing them.

Many are saying scrap the entire bill. Rewrite it to stimulate housing, construction, infrastructure. Create jobs, here. Sort of like Americans thought it would be. It isn't. This money will go to every fat cat, wall street banker, and Obama supporter that needs a huge bonus. The taxpayers that bankroll it get squat. Now that the bill has been studied carefully, and the economists have come out in force denouncing it, public support has eroded rapidly. Now down to 40%, and dropping. It's got to the point they can't even get an economist to come out and say it is good, as they don't want to look incompetent supporting a nightmare piece of legislation. Just another couple trillion dollar deficit this year, but who's counting?

Best Wishes...OF :+waving-5
 
#4
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

http://thinkprogress.org/2009/02/02/demint-stimulus[/url] /

Senate GOP?s ?stimulus plan? costs 3.5 times as much as Obama?s.?

This morning, Senate Minority Leader Mitch McConnell (R-KY) said that President Obama?s recovery package, priced at roughly $819 billion, is too expensive. GOP ?members? believe that they can pass a ?very robust? stimulus at a cheaper price, he said:

Most of my members believe that we could pass a very robust stimulus for less than the amount currently before us. We have been throwing figures around like it was paper money. We are already looking at, before we even do this, at over a trillion dollar deficit for this year. We all agree that we need to do something, but I don?t think we should not just completely act like the amount is irrelevant.

But McConnell?s cheaper plan doesn?t exist. Sen. Jim DeMint (R-SC) is pushing the Senate GOP?s only alternative, ?American Option: A Jobs Plan That Works.? A new Wonk Room analysis finds that DeMint?s plan will cost $3.1 trillion over ten years, more than 3.5 times the cost of Obama?s:

 
#6
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Porky Pig would be proud of this spending.

Useful or wasteful?

Supporters say key provisions of the $825 billion economic stimulus bill will help create jobs and revive the U.S. economy, but critics see some of the spending as wasteful. Here's a sampling of how some of the money would be used:
$44 million for repairs at the Agriculture Department headquarters in Washington.
$200 million to rehabilitate the National Mall.
$360 million for new child care centers at military bases.
$1.8 billion to repair National Park Service facilities.
$276 million to update technology at the State Department.
$500 million for the Transportation Security Administration to install bomb detectors at airports.
$600 million for General Services Administration to replace older vehicles with alternative fuel vehicles.
$2.5 billion to upgrade low-income housing.
$400 million for NASA scientists to conduct climate change research.
$426 million to construct facilities at the Centers for Disease Control and Prevention.
$800 million to clean up Superfund sites.
$150 million for the Coast Guard to repair or remove bridges deemed a hazard to navigation.
$6.7 billion to renovate and improve energy efficiency at federal buildings.
$400 million to replace the Social Security Administration's 30-year-old National Computer Center.

Looks like the Obama government justs want the government to get better, bigger and more modern. And that National Mall landscaping, that should help us out of the ditch, and give the Obamas a pretty view.


And even worse, the itty bitty parts of help like infrastructure jobs that are really beneficial are so tied up in red tape that only a fraction will get there this year. While we see jobs disappear daily. They even have Obama's new yes man, budget director Peter Orszag completely disputing a Congressional Budget Office study. Who are you going to believe here?

"The Democratic plan took a hit when the Congressional Budget Office estimated that only 7 percent of infrastructure money would make its way into the economy by the end of the year, and only 38 percent would be spent by the end of the 2010 fiscal year. Obama's new White House budget director, Peter Orszag, disputed the findings, saying 75 percent of the money would be spent by fiscal 2010."


And people wonder why I am so disillusioned with our government. The more Nancy Pelosi speaks, the worse it gets. She has had some real doozies so far, but her comeback to Boehner's contraceptive was so far off the mark I had to laugh.

Contraceptives

House Minority Leader John Boehner, R-Ohio, criticized a part of the bill's $87 billion package to help states with Medicaid costs that would allow states to expand their family planning services. Leaving a White House meeting with Obama on Friday, Boehner said, "How can you spend hundreds of millions of dollars on contraceptives? How does that stimulate the economy?"

House Speaker Nancy Pelosi, appearing on ABC's "This Week" on Sunday, defended the spending. "The family-planning services reduce cost," she said. "The states are in terrible fiscal budget crisis now, and part of it, what we do for children's health, education, and some of those elements, are to help the states meet their financial needs."

Medicaid and every other state program are in dire straights because the states are broke and in debt, because of the recession. It's the economy stupid. This is like spending billions on the Titanic, gold plating lounge chairs and upgrading the menu with pork while the entire vessel sinks because the root cause was never addressed.

And so many monies besides boosting governemnet agencies is being steered towards low income and no income programs. Low income housing, medicaid. I have never benefitted once in my entire life with these programs, as most taxpayers have not either. Again, fix the economy we can start to pay for these programs.

Here is a url so you can see exactly what is transpiring.

http://www.washingtonpost.com/wp-dy...020100154.html?sid=ST2009020202988&s_pos=list


I love how it says pos=list. And bear in mind, the watchdog here is the Congressional Budget Office, totally nonpartisan, not some Obama appointee yes man.

Best Wishes...OF :+waving-5
 
#7
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The Trainwreck?

Brick: lets see ... the Illegal War of Bush is going to cost this country
up to SEVEN TRILLION DOLLARS?

Any comments as I love seeing folks who cheered on THE WORSE this
country has ever seen for the past 8 yrs now showing "financial concerns"
 
#8
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Frog:

how did things run under Bush?

How did we end up with a 11 trillion dollar debt?


Hmmmm ..... shit happens with those wonderful tax cuts and an illegal wars
based on 935 lies in a country that Bush publically admitted had nothing to
do with 9-11


Your crowd all "concerned" now about a Stimulus Package is like John
Daly all concerned because some dude next to him is drinking a case of
beer


Nice try ... you cheered on Bush so enjoy the after effects of continual
failed Bush policies that have this country at its breaking point
 
#9
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

How long are you going to ride the trainwreck Doc?
Doc is so caught up in the bipartisan battle he can never objectively state the facts. Right now I refuse to listen to these us vs. them mental midgets any longer. I want something to directly say, nonpartisan. I want politics left out. I want direct honest answers. None of this the republicans would be worse. What a deflection of core issues. This is an American problem. Divided we fall.



Taking Apart the $819 billion Stimulus Package

The centerpiece of President Obama's domestic agenda is an $819 billion economic stimulus plan. The Senate will consider the measure this week, with an eye toward the amount of tax cuts and spending. Republicans and Democrats spar over what to consider a tax cut. An analysis by the nonpartisan Congressional Budget Office tallies the tax-cut portion to be significantly less than the one-third Democrats claim it to be.


SOURCE: Congressional Budget Office | Reporting by Karen Yourish, graphic by Laura Stanton - The Washington Post - February 01, 2009



Bipartisan doc, do you comprehend that or is it more they are worse, Rush is wrong and look at that idiot Palin. I am looking at a full fledged disaster, nonpartisan.

Best Wishes...OF :+waving-5
 
#12
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The Trainwreck?

Brick: lets see ... the Illegal War of Bush is going to cost this country
up to SEVEN TRILLION DOLLARS?

Any comments as I love seeing folks who cheered on THE WORSE this
country has ever seen for the past 8 yrs now showing "financial concerns"

Your bipartisan blame game is a falling on deaf ears. You are so stuck on your anti Republican, anti Rush, anti Palin rhetoric it is downright sad. You just don't fuckin get it do you? This is not an old Republican problem, or a new Democratic problem, it is our country, America, facing a complete disaster of epic proportions. So while our great country sinks into financial abyss of debt, you constantly blabber on on how bad the Republicans are. You are part of the problem. Educate people of what is transpiring right now, today, and let them form thier own nonpartisan American opinions.

Best Wishes...OF :+waving-5
 
#14
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Ya wouldn't know it

The GOP base has no answers or solutions .... except TAX CUTS, TAX CUTS, etc and "Bi Partianship"

America had no options did they? I was in Paul's corner until I realized FOX NEWS was gonna fuck him hard to make sure he was not the nominee

I don't hear or see any solution from Boehner and company except the same ol bulllshit

The GOP base is a joke ... how in the hell do ya think we got in this mess?

Interesting how the Majority of REPUBLICAN Governors .... including Palin .. are backing Barack on his Stimulus package

The GOP offered McCain and Palin .... Barack ad Biden were the only choice and considering what he has inherited I give the guy a passing grade for his efforts and painting a realistic picture of the economy unlike the pack of lies that Bush was famous for on a daily basis

You loved Bush .... you cheered on him ... enjoy the after effects of the Bush nuclear bomb he dropped on this country
 
#15
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Hard to believe Obama has brain washed you in such a short amount of time. He needs to prove himself, and imo it isnt starting out good.
 

soli

EOG Dedicated
#16
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Doc don't waste your time...these guys don't want Obama to do well and it's obvious..
 
#17
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Its 11:46am CST

I bet $100 Brick has "Rush" going on in the background and Frog is holding
online reciting the following:

"Ditto Rush .... Its a great honor to talk to you Sir .."
 
#18
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

I vote frog as smartest poster on this forum.

I don't know about that. I would say concerned parent. I look at my kids, my three year old and think, my generation is requiring your grandchildren to payoff our debts. What kind of legacy is that? Where did it all go wrong? What can I do? I have never seen anything this bad in my life. I don't play the blame game. My concern is also short term, as I think we are on the brink of a tremendous economic collapse. And the bill that is being presented just adds to the disaster. Many smartest economists around are saying the same thing, and they are nonpartisan. I trust them a lot more than the bipartisan politicians that have lied to be forever now. Wonder how long that line at Denny's is?

Best Wishes...OF :+waving-5
 
#20
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Doc don't waste your time...these guys don't want Obama to do well and it's obvious..

That could not be less true. I am just as concerned as the 200 economists that signed that full page ad in the NY Times. I had high hopes for Obama or more or less wishful thinking. He has dashed my hopes already and has our ship steered straight for the icebergs full speed ahead. My #1 concern is the economy. This bill is not even coming close to what we need, in fact, I feel it is totally counterproductive. I know what I want, and I will state it since you could not even grasp the obvious if you tried. I want our country to be great again.

Best Wishes...OF :+waving-5
 

pioneer

EOG Dedicated
#21
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Hard to believe Obama has brain washed you in such a short amount of time. He needs to prove himself, and imo it isnt starting out good.
Speaking of brain washing....who posted this little gem of delusion?

"I vote frog as smartest poster on this forum."
 
#24
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Lets see

How fucked are we??

<style></style> By James Lieber

Tuesday, January 27th 2009 at 2:46pm <noscript>http://oascentral.villagevoice.com/RealMedia/ads/click_lx.ads/www.villagevoice.com/news/content/L33/280100739/Middle/TheVoice/vv_theuninvited_012809_all_addva/vv_theuninvited_012809_addva_300.html/516b51756b6b6d4433426b41414e7a65?http://bs.serving-sys.com/BurstingPipe/BannerRedirect.asp?FlightID=733103&Page=&PluID=0&Pos=1671 </noscript><!-- _RM_EMPTY_ is to be sent from third party server -->

It's 2009. You're laid off, furloughed, foreclosed on, or you know someone who is. You wonder where you'll fit into the grim new semi-socialistic post-post-industrial economy colloquially known as "this mess."
You're astonished and possibly ashamed that mutant financial instruments dreamed up in your great country have spawned worldwide misery. You can't comprehend, much less trim, the amount of bailout money parachuting into the laps of incompetents, hoarders, and miscreants. It's been a tough century so far: 9/11, Iraq, and now this. At least we have a bright new president. He'll give you a job painting a bridge. You may need it to keep body and soul together.
The basic story line so far is that we are all to blame, including homeowners who bit off more than they could chew, lenders who wrote absurd adjustable-rate mortgages, and greedy investment bankers.
Credit derivatives also figure heavily in the plot. Apologists say that these became so complicated that even Wall Street couldn't understand them and that they created "an unacceptable level of risk." Then these blowhards tell us that the bailout will pump hundreds of billions of dollars into the credit arteries and save the patient, which is the world's financial system. It will take time?maybe a year or so?but if everyone hangs in there, we'll be all right. No structural damage has been done, and all's well that ends well.
Sorry, but that's drivel. In fact, what we are living through is the worst financial scandal in history. It dwarfs 1929, Ponzi's scheme, Teapot Dome, the South Sea Bubble, tulip bulbs, you name it. Bernie Madoff? He's peanuts.
Credit derivatives?those securities that few have ever seen?are one reason why this crisis is so different from 1929.
Derivatives weren't initially evil. They began as insurance policies on large loans. A bank that wished to lend money to a big, but shaky, venture, like what Ford or GM have become, could hedge its bet by buying a credit derivative to cover losses if the debtor defaulted. Derivatives weren't cheap, but in the era of globalization and declining American competitiveness, they were prudent. Interestingly, the company that put the basic hardware and software together for pricing and clearing derivatives was Bloomberg. It was quite expensive for a financial institution?say, a bank?to get a Bloomberg machine and receive the specialized training required to certify analysts who would figure out the terms of the insurance. These Bloomberg terminals, originally called Market Masters, were first installed at Merrill Lynch in the late 1980s.
Subsequently, thousands of units have been placed in trading and financial institutions; they became the cornerstone of Michael Bloomberg's wealth, marrying his skills as a securities trader and an electrical engineer.
It's an open question when or if he or his company knew how they would be misused over time to devastate the world's economy.
<hr width="150" noshade="noshade"> Fast-forward to the early years of the Clinton administration. After an initial surge of regulatory behavior in favor of fair markets, especially in antitrust, that sort of behavior was abandoned, and free markets triumphed. The result was a morass of white-collar sociopathy at Archer Daniels Midland, Enron, and WorldCom, and in a host of markets ranging from oil to vitamins.
This was the beginning of the heyday of hedge funds. Unregulated investment houses were originally based on the questionable but legal practice of short-selling?selling a financial instrument you don't own in hopes of buying it back later at a lower price. That way, you hedge your bets: You cover your investment in a company in case a company's stock price falls.
But hedge funds later diversified their practices beyond that easy definition. These funds acquired a good deal of popular mystique. They made scads of money. Their notoriously high entry fees?up to 5 percent of the investment, plus as much as 36 percent of profits?served as barriers to all but the richest investors, who gave fortunes to the funds to play with. The funds boasted of having genius analysts and fabulous proprietary algorithms. Few could discern what they really did, but the returns, for those who could buy in, often seemed magical.
But it wasn't magic. It amounted to the return of the age-old scam called "bucket shops." Also sometimes known as "boiler rooms," bucket shops emerged after the Civil War. Usually, they were storefronts where people came to bet on stocks without owning them. Unlike their customers, the shops actually owned blocks of stock. If customers were betting that a stock would go up, the shops would sell it and the price would plunge; if bettors were bearish, the shops would buy. In this way, they cleaned out their customers. Frenetic bucket-shop activity caused the Panic of 1907. By 1909, New York had banned bucket shops, and every other state soon followed.
In the mid-'90s, though, the credit-derivatives industry was hitting its stride and argued vehemently for exclusion from all state and federal anti-bucket-shop regulations. On the side of the industry were Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, and his deputy, Lawrence Summers. Holding the fort for the regulators was Brooksley Born, who headed the Commodity Futures Trading Commission (CFTC). The three financial titans ridiculed the virtually unknown and cloutless, but brilliant and prophetic Born, who warned that unrestricted derivatives trading would "threaten our regulated markets, or indeed, our economy, without any federal agency knowing about it." Warren Buffett also weighed in against deregulation
But Congress loved Greenspan?a/k/a "the Maestro" and "the Oracle"?and Clinton loved Rubin. The sleepy hearings received almost no public attention. The upshot was that Congress removed oversight of derivatives from the CFTC and preempted all state anti-bucket-shop laws. Born resigned shortly afterward.
Soon, something odd started to happen. Legitimate big investors, often with millions of dollars to place, found that they couldn't get into certain hedge funds, despite the fact that they were willing to pay steep fees. In retrospect, it seems as if these funds did not want fussy outsiders looking into what they were doing with derivatives.
<hr width="150" noshade="noshade"> Imagine that a person is terminally ill. He or she would not be able to buy a life insurance policy with a huge death benefit. Obviously, third parties could not purchase policies on the soon-to-be-dead person's life. Yet something like that occurred in the financial world.
This was not caused by imprudent mortgage lending, though that was a piece of the puzzle. Yes, Fannie Mae and Freddie Mac were put on steroids during the '90s, and some people got into mortgages who shouldn't have. But the vast majority of homeowners paid their mortgages. Only about 5 to 10 percent of these loans failed?not enough to cause systemic financial failure. (The dollar amount of defaulted mortgages in the U.S. is about $1.2 trillion, which seems like a princely sum, but it's not nearly enough to drag down the entire civilized world.)
Much more dangerous was the notorious bundling of mortgages. Investment banks gathered these loans into batches and turned them into securities called collateralized debt obligations (CDOs). Many included high-risk loans. These securities were then rated by Standard & Poor's, Fitch Ratings, or Moody's Investors Services, who were paid at premium rates and gave investment grades. This was like putting lipstick on pigs with the plague. Banks like Wachovia, National City, Washington Mutual, and Lehman Brothers loaded up on this financial trash, which soon proved to be practically worthless. Today, those banks are extinct. But even that was not enough to cause a worldwide financial crisis.
What did cause the crisis was the writing of credit derivatives. In theory, they were insurance policies for investors; in practice, they became a guarantee of global financial collapse.
As insurance, they were poised to pay off fabulously when these weak bundled securities failed. And who was waiting to collect? Well, every gambler is looking for a sure bet. Most never find it. But the hedge funds and their ilk did.
<hr width="150" noshade="noshade"> The mantra of entrepreneurial culture is that high risk goes with high reward. But unregulated and opaque derivatives trading was countercultural in the sense that low or no risk led to quick, astronomically high rewards. By plunking down millions of dollars, a hedge fund could reap billions once these fatally constructed securities plunged. Again, the funds did not need to own the securities; they just needed to pay for the derivatives?the insurance policies for the securities. And they could pay for them again and again. This was known as replicating. It became an addiction.
About $2 trillion in credit derivatives in 1989 jumped to $8 trillion in 1994 and skyrocketed to $100 trillion in 2002. Last year, the Bank for International Settlements, a consortium of the world's central banks based in Basel (the Fed chair, Ben Bernanke, sits on its board), reported the gross value of these commitments at $596 trillion. Some are due, and some will mature soon. Typically, they involve contracts of five years or less.
Credit derivatives are breaking and will continue to break the world's financial system and cause an unending crisis of liquidity and gummed-up credit. Warren Buffett branded derivatives the "financial weapons of mass destruction." Felix Rohatyn, the investment banker who organized the bailout of New York a generation ago, called them "financial hydrogen bombs."
Both are right. At almost $600 trillion, over-the-counter (OTC) derivatives dwarf the value of publicly traded equities on world exchanges, which totaled $62.5 trillion in the fall of 2007 and fell to $36.6 trillion a year later.
The nice thing about public markets is that they act as canaries that give warnings as they did in 1929, 1987 (the program trading debacle), and 2001 (the dot-com bubble), so we can scramble out with our economic lives. But completely private and unregulated, the OTC derivatives trade is justly known as the "dark market."
<hr width="150" noshade="noshade"> The heart of darkness was the AIG Financial Products (AIGFP) office in London, where a large proportion of the derivatives were written. AIG had placed this unit outside American borders, which meant that it would not have to abide by American insurance reserve requirements. In other words, the derivatives clerks in London could sell as many products as they could write?even if it would bankrupt the company.
The president of AIGFP, a tyrannical super-salesman named Joseph Cassano, certainly had the experience. In the 1980s, he was an executive at Drexel Burnham Lambert, the now-defunct brokerage that became the pivot of the junk-bond scandal that led to the jailing of Michael Milken, David Levine, and Ivan Boesky.
During the peak years of derivatives trading, the 400 or so employees of the London unit reportedly averaged earnings in excess of a million dollars a year. They sold "protection"?this Runyonesque term was favored?worth more than three times the value of parent company AIG. How could they have not known that they were putting at risk the largest insurer in the world and all the businesses and individuals that it covered?


This scheme that smacks of securities fraud facilitated the dreams of buyers called "counterparties" willing to ante up. Hedge fund offices sprouted in Kensington and Mayfair like mushrooms after a summer shower. Revenue from premiums for derivatives at AIGFP rose from $737 million in 1999 to $3.26 billion in 2005. Cassano reportedly hectored ever-willing counterparties to "play the power game"?in other words, gobble up all the credit derivatives backing CDOs that they could grab. As the bundled adjustable-rate mortgages ballooned, stretched home buyers defaulted, and the exciting power game became about as risky as blasting sitting ducks with a Glock.
People still seem surprised to read that hedge principals have raked in billions of dollars in a single year. They shouldn't be. These subprime-time players knew how to score. The scam bled AIG white. In mid-September, when it was on the ropes, AIG received an astonishing $85 billion emergency line of credit from the Fed. Soon, that was supplemented by another $67 billion. Much of that money, to use the government's euphemism, has already been "drawn down." Shamefully, neither Washington nor AIG will explain where the billions went. But the answer is increasingly clear: It went to counterparties who bought derivatives from Cassano's shop in London.
<hr width="150" noshade="noshade"> Imagine if a ring of cashiers at a local bank made thousands of bad loans, aware that they could break the bank. They would be prosecuted for fraud and racketeering under the anti-gangster RICO Act. If their counterparties?the debtors?were in on the scam and understood that they didn't have to pay off the loans, they could be charged, too. In fact, this scenario played out at subprime-pushing outlets of a host of banks, including Washington Mutual (acquired last year by JP Morgan Chase, which itself received a $25 billion bailout); IndyMac (which was seized by FDIC regulators); and Lehman Brothers (which went belly-up). About 150 prosecutions of this type of fraud are going forward.
The top of the swamp's food chain, where the muck was derivatives rather than mortgages, must also be scrutinized. Apparently, that is the case. AIGFP's Cassano has hired top white-collar litigator and former prosecutor F. Joseph Warin (profiled in the 2004 Washingtonian piece, "Who to Call When You're Under Investigation!"). Neither Cassano nor his attorney responded to interview requests.
AIG's lavishly compensated counterparties were willing participants and likewise could be considered for prosecution, depending on what they knew. Who were they?
At a 2007 conference, Cassano defined them as a "global swath" that included "banks and investment banks, pension funds, endowments, foundations, insurance companies, hedge funds, money managers, high-net-worth individuals, municipalities, sovereigns, and supranationals." Abetting the scheme, ratings agencies like Standard & Poor's gave high grades to the shaky mortgage-backed securities bundled by investment banks such as Goldman Sachs and Lehman Brothers.
After the relative worthlessness of these CDOs became clear, the raters rushed to downgrade them to junk status. This occurred suddenly with more than 4,000 CDOs in the first quarter of 2008?the financial community now regards them as "toxic waste." Of course, the sudden massive downgrading raises the question: Why had CDOs been artificially elevated in the first place, leading banks to buy them and giving them protective coloring just because the derivatives writers "insured" them?
After the raters got real (i.e., got scared), the gig was up. Hedge funds fled in droves from their luxe digs in London. The industry remains murky, but some observers feel that more than half of all hedges will fold this year. Not necessarily a good sign, it seems to show that the funds were one-trick ponies living mainly off the derivatives play.
We know that AIG was not the only firm that sold derivatives: Lehman and Bear Stearns both dealt them and died. About 20 years ago, JP Morgan, the now-defunct investment bank, had brought the idea to AIGFP in London, which ran with it. Seeing the Cassano group's success, Morgan jumped in with both feet. Specializing in credit default swaps?a type of derivative triggered to pay off by negative events in the lives of loans, like defaults, foreclosures, and restructurings?Morgan had a distinctive marketing spin. Its "quants" were classy young dealers who could really do the math, which of course gave them credibility with those who couldn't. They abjured street slang like "protection." They pitched their sophisticated swaps as "technologies." The market adored them. They, in turn, oversold the product, made huge commissions, and wounded Morgan, which had to sell itself to Chase, becoming JP Morgan Chase?now the country's biggest bank.
Today, the real question is whether the Morgan quants knew the swaps didn't work and actually were grenades with pulled pins. Like Joseph Cassano, such people should consult attorneys.
<hr width="150" noshade="noshade"> Secrecy shrouds the bailout. The 21 banks that each received more than $1 billion from the Fed won't disclose how, or even if, they're lending it, which hardly quells fears of hoarding. The Treasury says it can't force disclosure because it took only preferred (non-voting) stock in exchange for the money.
If anything, the Fed had been less candid. It stonewalls requests to reveal the winners (mainly banks and corporations) of $1.5 trillion in loans, as well as the securities it received as collateral. A Freedom of Information Act (FOIA) suit to obtain this information by Bloomberg News has been rebuffed by the Fed, which insists that a loophole in FOIA exempts it. Bloomberg will probably lose the case, but at least it's trying to probe the black hole of bailout money. Of course, Barack Obama could tell the Fed to release the information, plus generally open the bailout to public eyes. That would be change that we could believe in.
As for Bloomberg, its business side, Bloomberg L.P., has been less than forthcoming. Requests to interview someone from the company?and Michael Bloomberg, who retains a controlling interest?about the derivatives trade went unanswered.
In his economic address at Cooper Union last spring, Obama argued for new regulations, which he called "the rules of the road," and for a $30 billion stimulus package, that now seems quaint. In the OTC swaps trade, the Bloomberg L.P.'s computer terminals are the road, bridges, and tunnels for "real-time" transactions. The L.P.'s promotional materials declare: "You're either in front of a Bloomberg or behind it." In terms of electronic trading of certain securities, including credit default swaps: "Access to a dealer's inventory is based upon client relationships with Bloomberg as the only conduit." In short, the L.P. looks like a dominant player?possibly, a monopoly. If it has a true competitor, I can't find it. But then, this is a very dark market.
Did Bloomberg L.P. do anything illegal? Absolutely not. We prosecute hit-and-run drivers, not roads. But there are many questions?about the size of the derivatives market, the names of the counterparties, the amount of replication of derivatives, the role of securities ratings in Bloomberg calculations (in other words, could puffing up be detected and potentially stop a swap?), and how the OTC industry should be reported and regulated in order to prevent future catastrophes. Bloomberg is a privately held company?to the chagrin of would-be investors?and quite private about its business, so this information probably won't surface without subpoenas.
<hr width="150" noshade="noshade"> So what do we do now? In 2000, the 106th Congress as its final effort passed the Commodity Futures Modernization Act (CFMA), and, disgracefully, President Clinton signed it. It opened up the bucket-shop loophole that capsized the world's economic system. With the stroke of a presidential pen, a century of valuable protection was lost.
Even with that, the dangerous swaps still almost found themselves subjected to state oversight. In 2000, AIG asked the New York State Insurance Department to decide if it wanted to regulate them, but the department's superintendent, Neil Levin, said no. The question was not posed by AIGFP, but by the company's main office through its general counsel, a reminder that not long ago, AIG was a blue chip with a triple-A rating that touted its integrity.
We can't know why Levin rejected the chance to regulate the tricky trade. He died in the restaurant at the top of the World Trade Center on the morning of 9/11. A Pataki-appointed former Goldman Sachs vice president, Levin may have shared other Wall Streeters' love of derivatives as the last big-money sure thing as the IPO craze wound down. Or maybe he saw swaps as gambling rather than insurance, hence beyond his jurisdiction. Regardless, current Insurance Superintendent Eric Dinallo told me, "I don't agree with his answer." Maybe the economic crisis could have been averted if Levin had answered otherwise. "How close we came . . ." Dinallo mused.
Deeply occupied with keeping AIG, the parent company, afloat since the bailout, Dinallo saw the carnage that the swaps caused and, with the support of Governor Paterson, pushed anew for regulatory oversight, a position also adopted by the President's Working Group (PWG), which includes the Treasury, Fed, SEC, and CFTC.
But regulation isn't enough to stop a phenomenon called "de-supervision" that occurs when officials can't, or won't, oversee a market. For instance, the Fed under Greenspan had authority to regulate mortgage bankers and brokers, the industry's cowboys who kicked off this fiasco. Because Greenspan's libertarian sensibilities prevented him from invoking the Fed's control, the mortgage market careened corruptly until the wheels came off. Notoriously lax and understaffed, the SEC did nothing to limit investment banks that bundled, pitched, and puffed non-prime mortgages as the raters cheered. It's doubtful that any agency can be relied on to control lucrative default swaps, which should be made illegal again. The bucket-shop loophole must be closed. The evil genie should go back in the bottle.
Will Obama re-criminalize these financial weapons by pushing for repeal of the CFMA? This should be a no-brainer for Obama, who, before becoming a community organizer in Chicago, worked on Wall Street, studied derivatives, and by now undoubtedly knows their destructive power.
What about the $600 trillion in credit derivatives that are still out there, sucking vital liquidity and credit out of the system? It's the tyrannosaurus in the mall, the one that made Henry Paulson, the former Treasury Secretary who looks like Daddy Warbucks, get down on his knees and beg Nancy Pelosi for a bailout.
Even with the bailout, no one can get their arms around this monster. Obviously, the $600 trillion includes not only many unseemly replicated death bets, but also some benign derivatives that creditors bought to hedge risky loans. Instead of sorting them out, the Bush administration tried to protect them all, while keeping the counterparties happy and anonymous.
Paulson has taken flack for spending little to bring mortgages in line with falling home values. Sheila Bair, the FDIC chief who often scrapped with Paulson, said this would cost a measly $25 billion and that without it, 10 million Americans could lose their homes over the next five years. Paulson thought it would take three times as much and balked. Congress is bristling because the Emergency Economic Stabilization Act (EESA) could provide mortgage relief?and some derivatives won't detonate if homeowners don't default. Obama's nominee for Treasury Secretary, Timothy Geithner, could back such relief at his hearings.
The other key appointment is Attorney General. A century ago, when powerful trusts distorted the market system, we had AGs who relentlessly tracked and busted them. Today's crisis is missing, so far, an advocate as dynamic and energetic as the mortgage bankers, brokers, bundlers, raters, and quants who, in a few short years, littered the world with rotten loans, diseased CDOs, and lethal derivatives. During the Bush years, white-collar law enforcement actually dropped as FBI agents were transferred to antiterrorism. Even so, according to William Black, an effective federal litigator and regulator during the 1980s savings-and-loan scandal, by 2004, the FBI perceived an epidemic of fraud. Now a professor of law and finance at the University of Missouri?Kansas City, Black has testified to Congress about the current crisis and paints it as "control fraud" at every level. Such fraud flows from the top tiers of corporations?typically CEOs and CFOs, who control perverse compensation systems that reward cheating and volume rather than quality, and circumvent standard due diligence such as underwriting and accounting. For instance, AIGFP's Cassano reportedly rebuffed AIG's internal auditor.
The environment from the top of the chain?derivatives gang leaders?to the bottom of the chain?subprime, no-doc loan officers?became "criminogenic," Black says. The only real response? Aggressive prosecution of "elites" at all stages in this twisted mess. Black says sentences should not be the light, six-month slaps that white-collar criminals usually get, or the Madoff-style penthouse arrest.
As staggering as the Madoff meltdown was, it had a refreshing side?the funds were frozen. In the bailout, on the other hand, the government often seems to be completing the scam by quietly passing the proceeds to counterparties.
The advantage of treating these players like racketeers under federal law is that their ill-gotten gains could be forfeited. The government could recoup these odious gambling debts instead of simply paying them off. In finance, the bottom line is the bottom line. The bottom line in this scandal is that fantastically wealthy entities positioned themselves to make unfathomable fortunes by betting that average Americans?Joe Six-Packs and hockey moms?would fail.
Black suggests that derivatives should be "unwound" and that the payouts cease: "Close out the positions?most of them have no social utility." And where there has been fraud, he adds, "clawback makes perfect sense." That would include taking back the ludicrously large bonuses and other forms of compensation given to CEOs at bailed-out companies.
No one knows how much could be clawed back from the soiled derivatives reap. Clearly, it's not $600 trillion. William Bergman, formerly a market analyst at the Chicago Fed in "netting"?what's left after financial institutions pay each other off for ongoing deals and debts?makes a "guess" that perhaps only 5 percent could be recouped, which he concedes is unfortunately low. Still, that's $30 trillion, a huge number, more than 10 times what the Fed can deploy and over twice the U.S. gross domestic product. Such a sum, if recovered through the criminal justice process, could ease the liquidity crisis and actually get the credit arteries flowing. Not everyone would like it. What's left of Wall Street and hedge funds want their derivatives gains; so do foreign banks.
<hr width="150" noshade="noshade"> A tangle of secrecy, conflicts of interest, and favoritism plagues the process of recovery.
Lehman drowned, but Goldman Sachs, where Paulson was formerly CEO, was saved. The day before AIG reaped its initial $85 billion bonanza, Paulson met with his successor, Lloyd Blankfein, who reportedly argued that Goldman would lose $20 billion and fail unless AIG was rescued. AIG got the money.
Had Goldman bought from AIG credit derivatives that it needed to redeem? Like most other huge financial traders, Goldman has a secretive hedge fund, Global Alpha, that refuses to reveal its transactions. Regardless, Paulson's meeting with Blankfein was a low point. If Dick Cheney had met with his successor at Halliburton and, the very next day, written a check for billions that guaranteed its survival, the press would have screamed for his head.
The second most shifty bailout went to Citigroup, a money sewer that won last year's layoff super bowl with 73,000. Instead of being parceled to efficient operators, Citi received a $45 billion bailout and $300 billion loan package, at least in part because of Robert Rubin's juice. While Treasury Secretary under Clinton, Rubin led us into the derivatives maelstrom, deported jobs with NAFTA, and championed bank deregulation so that companies like Citi could mimic Wall Street speculators. After he joined Citi's leadership in 1999, the bank went long on mortgages and other risks du jour, enmeshed itself in Enron's web, tanked in value, and suffered haphazard management, while Rubin made more than $100 million.
Rubin remained a director and "senior counselor" at Citi until January 9, 2009, and is an economic adviser to Obama. In truth, he probably shouldn't be a senior counselor anywhere except possibly at Camp Granada. Like Greenspan, he should retire before he breaks something again, and we have to pay for it. (Incidentally, the British bailout, which is more open than ours and mandates mortgage relief, makes corporate welfare contingent on the removal of bad management.)
The third strangest rescue involved the Fed's announcement just before Christmas that hedge funds for the first time could borrow from it. Apparently, the new $200 billion credit line relates to recently revealed securitized debts including bundled credit card bills, student loans, and auto loans. Obviously, it's worrisome that the crisis may be morphing beyond its real estate roots.
<hr width="150" noshade="noshade"> To say the bailout hasn't worked so far is putting it mildly. Since the crisis broke, Washington's reaction has been chaotic, lenient to favorites, secretive, and staggeringly expensive. An estimated $7.36 trillion, more than double the total American outlay for World War II (even correcting for inflation), has been thrown at the problem, according to press reports. Along the way, banking, insurance, and car companies have been nationalized, and no one has been brought to justice.
Combined unemployment and underemployment (those who have stopped looking, and part-timers) runs at nearly 20 percent, the highest since 1945. Housing prices continue to hemorrhage?last fall's 18 percent drop could double. Holiday shopping fizzled: 160,000 stores closed last year, and 200,000 more are expected to shutter in '09. Some forecasts place eventual retail darkness at 25 percent. In 2008, the Dow dropped further?34 percent?than at any time since 1931. There is no sound sector in the economy; the only members of the 30 Dow Jones Industrials posting gains last year were Wal-Mart and McDonald's.
Does Obama's choice for Attorney General, Eric Holder, have the tenacity and will to tackle the widest fraud in American history? Parts of his background don't necessarily augur well: He worked on a pardon for Marc Rich, the fugitive billionaire tax evader once on the FBI's Most Wanted List whom Clinton cleared. After leaving the Clinton era's Justice Department, Holder went to work for Covington & Burling, a D.C. firm that represents corporate heavies including Big Tobacco. He defended Chiquita Brands in a notorious case, in which it paid a $25 million fine for using terrorists in Columbia as security. Holder fits well within the gaggle of elite D.C. lawyers who move back and forth between government and defending corporate criminals. He doesn't exactly have the sort of r?sum? that startles robber barons.
Can Holder design and orchestrate a muscular legal response, including prosecution and stern punishment of top executives, plus aggressive clawbacks of money? There seems little question that he has the skill, so the decision on how aggressive the Justice Department will be is up to Obama.
Holder could ask for and get well-organized FBI white-collar teams. The personnel hole caused by shifts to antiterrorism would have to be more than filled to their pre-9/ll staffing if the incoming administration decides to break this criminogenic cycle rather than merely address it symbolically.
Black contends that aggressive prosecution would be good for the economy because it may help prevent cheating and fraud that inevitably cause bubbles and destroy wealth. The Sarbanes-Oxley law passed in Enron's wake, for instance, is supposed to make corporations now keep the kinds of documents necessary to assess criminality. Whether the CEOs, CFOs, and others who controlled the current frauds will do so is another matter.
"Don't count on them keeping records for long," Black warns. "It's time to get out the subpoenas."





 

PalmTree

EOG Dedicated
#26
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The stimulus bill is going to come out OK. The SEante Democrats seem to get it. Claire McCaskill is pushing for a bill that does two things: get the economy going and get people back to work. Her and her buddies are going tostrip all the bullshit out and shove down Pelosi's throat, where it belongs.

Frog is right, we are at a crisis point. I believe that there are enough intelligent Senators to do the right thing, which will result in a real stimulus package, whichwe clearly don't have now. And that will be areal shot at Pelosi and Harry Reid, two idiots who deserve no better.

Everyone needs to give the President a chance. He was very specific about what he wanted in the bill, but Pelosi had her own ideas. She has been rebuffed, and now it is up to the statesmen to do the right thing. I believe they will, and that President Obama will have a significant bipartisan victory, the country will be better off, and the two idiots PElosi and Reid will be totally discredited. That's a win, win, win.
 

soli

EOG Dedicated
#27
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

That could not be less true. I am just as concerned as the 200 economists that signed that full page ad in the NY Times. I had high hopes for Obama or more or less wishful thinking. He has dashed my hopes already and has our ship steered straight for the icebergs full speed ahead. My #1 concern is the economy. This bill is not even coming close to what we need, in fact, I feel it is totally counterproductive. I know what I want, and I will state it since you could not even grasp the obvious if you tried. I want our country to be great again.

Best Wishes...OF :+waving-5
I really don't mean any harm....but 14 days into office and this is your conclusion. What did those ecomonmist say when Bush was in Office? Don't answer...It didn't matter what they said.. Did you marry your wife withing 14 days? Did you know how fucked up this country would be by Bush in 14 days? Don't answer....it didn't matter....It only matters with Obama...Don't judge a man from where he stands...Judge him from where he started....This shyt was handed to Obama and now you want him to take your blame in 14 days ...I'll check back with ya in 14 days..
 
#28
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Thank God Daschle is pulling his nomination .....

Ya fuck up Barack ..... move forward and make the necessary changes

Shit .... this damn board is getting too crowded so get em jobs Barack
so we can thin things out
 

soli

EOG Dedicated
#29
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Thank God Daschle is pulling his nomination .....

Ya fuck up Barack ..... move forward and make the necessary changes

Shit .... this damn board is getting too crowded so get em jobs Barack
so we can thin things out
:LMAO
 

janus

EOG Dedicated
#31
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The stimulus bill is going to come out OK. The SEante Democrats seem to get it. Claire McCaskill is pushing for a bill that does two things: get the economy going and get people back to work. Her and her buddies are going tostrip all the bullshit out and shove down Pelosi's throat, where it belongs.

Frog is right, we are at a crisis point. I believe that there are enough intelligent Senators to do the right thing, which will result in a real stimulus package, whichwe clearly don't have now. And that will be areal shot at Pelosi and Harry Reid, two idiots who deserve no better.

Everyone needs to give the President a chance. He was very specific about what he wanted in the bill, but Pelosi had her own ideas. She has been rebuffed, and now it is up to the statesmen to do the right thing. I believe they will, and that President Obama will have a significant bipartisan victory, the country will be better off, and the two idiots PElosi and Reid will be totally discredited. That's a win, win, win.

the crisis point came & went; nobody noticed because 'american idol' was on. no plan from either side of the aisle can save the us economy from catastrophic collapse. its too late. that's a lose, lose, lose.
 
#32
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

I wish Reid and Pelosi would rent some space on the 97,000 Bush escape ranch in Paraguay

Tired of hearing the SHEEP HERDERS bitch when Bush spent trillions on
that little nitemare known as Iraq
 

janus

EOG Dedicated
#34
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

you just can't let go of the political aspect, can you doc? its like playing volleyball on the deck of the titanic.
 
#35
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The Political aspect?

look at the title of the thread

This country is fucked ..... this blame game on Barack 2 weeks in is for the complete DITTOHEADS of this country

This mess has nothing to do with Barack and the real crooks are Greenspan, Clinton, Bush 43 and Bloomberg
 
#36
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

Doc Mercer slippin into the darkness. What do you think about Obama lying to everyone after 2 weeks in office. You would probably give him a "fist bump" for it because you have your head so far up his butt.
 

janus

EOG Dedicated
#37
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

The Political aspect?

look at the title of the thread

This country is fucked ..... this blame game on Barack 2 weeks in is for the complete DITTOHEADS of this country

This mess has nothing to do with Barack and the real crooks are Greenspan, Clinton, Bush 43 and Bloomberg
i viewed the thread as a review of the potential impact of the proposed stimulus on a wrecked economy, not a review of the wrecked economy to determine who wrecked it. yapping about bush makes all the sense in the world in the latter context & none in the former.
 
#38
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

What has he lied about exactly?

The man is working 7 days a week and attempted to reach out to the GOP asswipes and found out their true colors ASAP

I find it funny how DITTOHEADS like yourself forget what 8 yrs of Bush was like:

ATTORNEYGATE
KATRINA AND THAT DISASTER W/BUSH FUCKING W/BLANCO TRYING TO IMPLEMENT MARTIAL LAW WHILE FOLKS DROWNED
PLAMEGATE
TORTURE ENDORSED
ILLEGALLY INVADING A COUNTRY ON 935 LIES THAT BUSH ADMITTED PUBLICALLY HAD NOTHING TO DO WITH 9-11
TURNING A SURPLUS INTO AN AN 11 TRILLION DOLLAR DEBT
HARRIET MIERS TRYING TO BE RAMRODDED ONTO THE SC COURT
BUYING OFF OF THE MEDIA SUCH AS ARMSTRONG WILLIAMS FOR 250K AS WELL AS PLANT FAKE STORIES OVER IN IRAQ
4000 PLUS DEAD AMERICAN SOLDIERS
ILLEGAL WIRE TAPS
ENRON MEETINGS IN THE WH WITH CHENEY DAYS BEFORE THE SCANDAL BROKE
JACK ABRAMOFF
BUSH HIRING A MALE HOMO ESCORT OWNER TO BE A PLANT INSIDE THE WH PRESS CORP
TED HAGGARD AND JAMES DOBSON INVOLVED IN POLICY DECISIONS
9-11 W/CHENEY OVERSEEING NORAD OPPS AND RUMSFELD ADMITTING A MISSLE HIT THE PENTAGON

SHALL WE CONTINUE?
 

janus

EOG Dedicated
#39
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

ENRON MEETINGS IN THE WH WITH CHENEY DAYS BEFORE THE SCANDAL BROKE
i just watched the documentary 'enron: the smartest guys in the room' the other day... i knew enron had ties to the bush's but never realized the extent of it until watching that show. amazing.
 
#40
Re: Obama's Economic Stimulus Bill is Slippin into Darkness...

This isnt really about Bush, but atleast he could go his first couple weeks being honest. You read that article i posted earlier, thats what im referring to. Yes. Please continue, but stay on topic here as we both know this thread wasnt about Bush at any point.
 
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