First and foremost, it must be realized by now that Jon Corzine has no respect whatsoever for the body in which he used to serve. It will soon be confirmed that he lied to former colleagues during the first Senate hearings on MF Global. Not only does he have no respect for the Senate, but he has no respect for the House of Representatives either (where he was similarly less than honest under oath). Which means he cares for no one but himself. Values nothing about our system of government or any principles on which our nation is based. How a person without honor could rise to such a position of preeminence is telling about our present state of circumstances.
There are many parallels between Sandusky and Corzine. Both crumpled the institutions with which they were associated. Sandusky brought down the venerable Joe Paterno, along with the president and some administrators of the university. Due to him, the number one recruit of the flagship football program has already de-committed, along with some others and further signees soon to follow. He has drastically lowered the perception of the institution and what it claimed to stand for in the eyes of the public. It would be hard to envision more destruction traced to the acts of one man. But he still maintains his innocence. And this scenario will soon be repeated at Syracuse with Bernie Fine, Jim Boeheim and probably others.
Corzine is a similar creature. He maintains his innocence and lack of knowledge about any of the violations by MF Global. Corzine, however. not only brought down MF, but has wrought severe damage to the entire commodities trading industry - if not the entire securities industry. When one's "secure, segregated accounts" are insecure and not segregated - trust properly vanishes. And this just intensifies the pre-existing lack of trust at the forefront of the financial industry.
...............................................................................................
I'm constantly amazed at the big picture corruption and morality issues that Americans consistently believe can't exist until they are shown over and over again that they are real and as described. How many confirmations does it take before we finally conclude that something is, in fact, very wrong in this world? The OWS movement knows it - but I've been reading articles that bemoan the costs associated in controlling & arresting these patriots and cleaning up after them - while ignoring the pillaging of trillions from the system by the true financial villains they are trying to identify and expose.
I grew up in the time of the Kennedy assassinations, the Vietnam deceit and Watergate. As time went by, I hoped that we had progressed beyond these types of things. But we never did - it was all an illusion. Perhaps now is the time when one's first reaction should be to mistrust everything they are told. To question the motives behind the main street media. If we develop a healthy questioning of authority, maybe these parties will think twice about what they try to force feed us. Maybe we can take back what has been taken away - or perhaps given up through lethargy. I fear it won't happen in this election cycle. Hopefully, the populace can derive a clear picture of our "supposed" democracy and come up with and agree to a strategy to bring about the true "hope and change"phrase that Mr. Obama utilized only for the purpose of getting elected.
Purposely generalized pieces about why our system of governance does not work in this financial system dominated world in which we live.
Thursday, December 15, 2011
Sandusky (Penn State) and Corzine (MF Global)
Wednesday, December 14, 2011
A Few More Things About MF Global & Corzine
Corzine and his lackeys, while claiming utter lack of knowledge and denying any culpability whatsoever in the transfer of segregated client accounts, suggested the company's treasury operations would be the place to look. They repeatedly said that they couldn't answer questions without access to records. So lower level "treasury ops" personnel now get to join in on the subpoena/testimony congressional hearings show.
Any affected employee most definitely would not be overwhelmed with joy about this. Under Corzine's perverted leadership style (including determining what to invest in and ensuring his desires are carried out), it would seem treasury operations functions were largely limited to managing cash flows and balancing incoming payments with outflows. That they simply recorded and tried to reconcile what was done by others. It would be unlikely for them to question anything if they wanted to keep their jobs. Recall Corzine's ludicrous testimony about encouraging discussion and input. A former key executive did just that and was summarily fired and replaced. An autocratic work environment does not promote other than doing as told. Now that Corzine has left the company, these staffers might well have much to say about the real goings-on. Because a lot of stuff (responsibility) was deflected upon company treasury staff
..............................................................................
The testimony of Corzine and his top executives brought up a number of credibility issues. One was their flabbergasting decision not to check where the money came from for liquidity to pay off the margin calls. Which actual client accounts were impacted. Instead, they focused all their attention on resolving and reconciling the figures. As was mentioned, these money flows can later be identified and tracked backwards. Hopefully, this will expose who authorized and handled the actual transfers. Somebody or some persons actually transacted these transfers, you know.
.......................................................................................
Another under-reported item was testified to by the CFTC representative on the panel. She said that she only became involved in the audit/investigation later. That CFTC chairman Gensler was heading it until 10/26/11. That everything "was safe" through that date. Gensler worked at Goldman Sachs under Corzine as CEO. I suspect the continuing investigation will show that this "things were fine" was definitely not the case. Whether completely incompetent or covering up for his former boss, I don't think Gensler will be looking too good in the near future. A top regulator clueless or serving someone in this manner a mere 5 days before before the company blew up and filed for bankruptcy with $1.2 billion in segregated customer accounts confirmed as missing certainly isn't done with this matter yet.
............................................................................................
So far, we are left with the position of senior management contending that they knew nothing of "non Rule 1.25" usage of segregated client accounts when it undoubtedly happened. And apparently we are expected to believe that these unauthorized transactions were done by underlings without the knowledge or direction of senior management and against company policy and procures. Either this was one of the worst managed public companies in history with completely ineffective controls or a real juicy expose of a multilevel financial conspiracy will shortly hit the market. Just what we need with the world financial sector one "shock" from collapse.
And it all revolves around an individual whose resume somehow includes being elected as both a US Senator and New Jersey governor. And of course, his experience with The Squid went a long way towards making him what he is today. Finally, don't forget that this "person's" influence and standing resulted in the Federal Reserve's decision to add this outstanding corporation to its august list of Primary Dealers earlier in the year following thorough examination of all company practices.
Any affected employee most definitely would not be overwhelmed with joy about this. Under Corzine's perverted leadership style (including determining what to invest in and ensuring his desires are carried out), it would seem treasury operations functions were largely limited to managing cash flows and balancing incoming payments with outflows. That they simply recorded and tried to reconcile what was done by others. It would be unlikely for them to question anything if they wanted to keep their jobs. Recall Corzine's ludicrous testimony about encouraging discussion and input. A former key executive did just that and was summarily fired and replaced. An autocratic work environment does not promote other than doing as told. Now that Corzine has left the company, these staffers might well have much to say about the real goings-on. Because a lot of stuff (responsibility) was deflected upon company treasury staff
..............................................................................
The testimony of Corzine and his top executives brought up a number of credibility issues. One was their flabbergasting decision not to check where the money came from for liquidity to pay off the margin calls. Which actual client accounts were impacted. Instead, they focused all their attention on resolving and reconciling the figures. As was mentioned, these money flows can later be identified and tracked backwards. Hopefully, this will expose who authorized and handled the actual transfers. Somebody or some persons actually transacted these transfers, you know.
.......................................................................................
Another under-reported item was testified to by the CFTC representative on the panel. She said that she only became involved in the audit/investigation later. That CFTC chairman Gensler was heading it until 10/26/11. That everything "was safe" through that date. Gensler worked at Goldman Sachs under Corzine as CEO. I suspect the continuing investigation will show that this "things were fine" was definitely not the case. Whether completely incompetent or covering up for his former boss, I don't think Gensler will be looking too good in the near future. A top regulator clueless or serving someone in this manner a mere 5 days before before the company blew up and filed for bankruptcy with $1.2 billion in segregated customer accounts confirmed as missing certainly isn't done with this matter yet.
............................................................................................
So far, we are left with the position of senior management contending that they knew nothing of "non Rule 1.25" usage of segregated client accounts when it undoubtedly happened. And apparently we are expected to believe that these unauthorized transactions were done by underlings without the knowledge or direction of senior management and against company policy and procures. Either this was one of the worst managed public companies in history with completely ineffective controls or a real juicy expose of a multilevel financial conspiracy will shortly hit the market. Just what we need with the world financial sector one "shock" from collapse.
And it all revolves around an individual whose resume somehow includes being elected as both a US Senator and New Jersey governor. And of course, his experience with The Squid went a long way towards making him what he is today. Finally, don't forget that this "person's" influence and standing resulted in the Federal Reserve's decision to add this outstanding corporation to its august list of Primary Dealers earlier in the year following thorough examination of all company practices.
Tuesday, December 13, 2011
Duffy Says "Good Night", Mr. Corzine
It wasn't until towards the end of a long day when the Senate Agricultural Committee finally heard some truly meaningful testimony.
CME executive director Terrence Duffy had something to say and said it. And in so doing - he might well have opened up Corzine and perhaps his President/COO to charges of perjury. The Senators were simply unable to get the most basic of answers from Corzine and his chief officers about the simplest of matters. How and where did $1.2 billion in segregated customer account monies go? And how could it have happened? Assuredly Senators, viewers and listeners were appalled, if not angered, by these supposedly accomplished fiduciary experts hemming and hawing (and lying?) about having no knowledge whatsoever until 10/30/11 or so when they were so shocked to learn about it. They either were unwilling to or could not even identify who within the organization even had the ability to authorize or carry out such transfers. I mean, monies can't be transferred out of segregated customer accounts unless somebody can actually do it, right? And somebody has to say it's OK to do it, right? And somebody somewhere has to know it was done. Corzine spent much of his time addressing Rule 1.25 about ways a broker/dealer can actually legally use client funds for its own purposes when this wasn't even really the issue.
But Mr. Duffy laid out a neat time line including information his staffers received from an MF Global employee which contradicted Corzine's (testimony). And Mr. Duffy's statements made a whole lot more sense. His auditors received daily segregated account reconciliation records during the last few tumultuous days. On Thursday and Friday they were told by MF that the "seg accounts" had $200 million in excess funds and things were fine. Then they were told that this was in error and it actually had a $200 million shortfall. ( Corzine contends that everyone at MF was so shocked that they didn't even attempt to figure out what happened, but rather spent the next couple of days furiously trying to reconcile figures). Duffy testified that his staff was finally told on 10/29 that there was a $900 million shortfall. Later, on 10/31, his auditors were told that MF had transferred $950 million from segregated customer accounts to its the broker/dealer arm so they might as well stop looking for any error. This on top of learning that MF had asked a London affiliate to send back $175 million it had loaned to them from co-mingled accounts.. But worst for Corzine,a senior MF employee told his staff that Corzine knew of the transfers and they were directed by management. Mr. Duffy described these activities as illegal, violation of rules and, just as important, efforts to disguise what was going on. No wonder Mr. Duffy was so forthright - his staff had been intentionally misled. And one could easily figure what Mr. Duffy thinks of the (honorable) Mr. Corzine's performance which he witnessed earlier.
So the day was spent hearing from farmers, ranchers and other legitimate parties simply trying to use commodity hedges the way they were intended. They described what happened to their ability to conduct business by addressing agricultural risk factors when Corzine betrayed their trust. Then you had the "maybe lying perjurers" three top MF executives insulting everyone's intelligence. Then you had the CME executive chairman describe a thoroughly plausible scenario of what actually happened. In my mind, Corzine and his henchmen were exposed for what they are. Hopefully, this vitally important matter will continue through the system post-haste before everyone forgets about it or legislators let an ex-Senator and ex-Governor get a free pass. More hearings - quick! And for God's sake - will somebody put some heat on the Department of Justice to actually do something for once.
CME executive director Terrence Duffy had something to say and said it. And in so doing - he might well have opened up Corzine and perhaps his President/COO to charges of perjury. The Senators were simply unable to get the most basic of answers from Corzine and his chief officers about the simplest of matters. How and where did $1.2 billion in segregated customer account monies go? And how could it have happened? Assuredly Senators, viewers and listeners were appalled, if not angered, by these supposedly accomplished fiduciary experts hemming and hawing (and lying?) about having no knowledge whatsoever until 10/30/11 or so when they were so shocked to learn about it. They either were unwilling to or could not even identify who within the organization even had the ability to authorize or carry out such transfers. I mean, monies can't be transferred out of segregated customer accounts unless somebody can actually do it, right? And somebody has to say it's OK to do it, right? And somebody somewhere has to know it was done. Corzine spent much of his time addressing Rule 1.25 about ways a broker/dealer can actually legally use client funds for its own purposes when this wasn't even really the issue.
But Mr. Duffy laid out a neat time line including information his staffers received from an MF Global employee which contradicted Corzine's (testimony). And Mr. Duffy's statements made a whole lot more sense. His auditors received daily segregated account reconciliation records during the last few tumultuous days. On Thursday and Friday they were told by MF that the "seg accounts" had $200 million in excess funds and things were fine. Then they were told that this was in error and it actually had a $200 million shortfall. ( Corzine contends that everyone at MF was so shocked that they didn't even attempt to figure out what happened, but rather spent the next couple of days furiously trying to reconcile figures). Duffy testified that his staff was finally told on 10/29 that there was a $900 million shortfall. Later, on 10/31, his auditors were told that MF had transferred $950 million from segregated customer accounts to its the broker/dealer arm so they might as well stop looking for any error. This on top of learning that MF had asked a London affiliate to send back $175 million it had loaned to them from co-mingled accounts.. But worst for Corzine,a senior MF employee told his staff that Corzine knew of the transfers and they were directed by management. Mr. Duffy described these activities as illegal, violation of rules and, just as important, efforts to disguise what was going on. No wonder Mr. Duffy was so forthright - his staff had been intentionally misled. And one could easily figure what Mr. Duffy thinks of the (honorable) Mr. Corzine's performance which he witnessed earlier.
So the day was spent hearing from farmers, ranchers and other legitimate parties simply trying to use commodity hedges the way they were intended. They described what happened to their ability to conduct business by addressing agricultural risk factors when Corzine betrayed their trust. Then you had the "maybe lying perjurers" three top MF executives insulting everyone's intelligence. Then you had the CME executive chairman describe a thoroughly plausible scenario of what actually happened. In my mind, Corzine and his henchmen were exposed for what they are. Hopefully, this vitally important matter will continue through the system post-haste before everyone forgets about it or legislators let an ex-Senator and ex-Governor get a free pass. More hearings - quick! And for God's sake - will somebody put some heat on the Department of Justice to actually do something for once.
Thursday, December 8, 2011
Quick Thoughts on Corzine Testimony
- This man was CEO of Goldman Sachs before Hank Paulson "back-doored" him out. Corzine never forgot that in trying to return to his former glory.
- This man was on Obama's short list to be the new Treasury Secretary (despite furious denials).
- This man did not have the required current licenses to trade securities. They had expired while he
was a senator and governor of New Jersey. He was bounced from his governorship of NJ in favor of Chris Christie at the first opportunity NJ voters had to rectify their mistake. He was allowed by regulators to activate his security trading licenses without required examination. To take this a step
further, he acknowledged in his testimony that MF was hindered by old style phone transactions
versus competitor's high speed transactions (HFT). What better example of why an expired license
should not be re-granted through cronyism?
- As many representatives stated at the hearing, farmers and growers relying on commodity price
hedging were the primary victims of Corzine's CEO tenure. The only reason they established accounts with MF Global was to hedge future crops and prices. Protection and service to such
accounts and customers was MF Global's stated primary mission.
- Mr. Corzine altered the business model of MF Global from what he felt was a low growth business to a high return mindset. Of course, he acknowledged that company performance in a" high risk- high reward" scenario would increase the potential value of his stock options.
- Basically Mr. Corzine retroactively changed the company with which the farmers and growers were
doing business. I suspect they didn't realize that the focus changed to speculating in the foreign debt of every weak European stepchild other than Greece. Did he inform them in a manner which could be readily understood? Assuredly not.
- Instead, he fired the head risk officer and expanded accumulation of European sovereign risk instruments, He even acknowledged having to defend these bets to his own board of directors.
.....................................................................................................................
More on this later. But any thinking person should realize that THIS is the type of person and
thought process that permeates firms like Goldman Sachs. That THIS is the type of Goldman Sachs
former CEOs that two times out of three had been appointed Treasury Secretary. This man's performance in front of the committee was absolutely pathetic. No wonder our economy and the performance of those who oversee it is similarly pathetic.
- This man was on Obama's short list to be the new Treasury Secretary (despite furious denials).
- This man did not have the required current licenses to trade securities. They had expired while he
was a senator and governor of New Jersey. He was bounced from his governorship of NJ in favor of Chris Christie at the first opportunity NJ voters had to rectify their mistake. He was allowed by regulators to activate his security trading licenses without required examination. To take this a step
further, he acknowledged in his testimony that MF was hindered by old style phone transactions
versus competitor's high speed transactions (HFT). What better example of why an expired license
should not be re-granted through cronyism?
- As many representatives stated at the hearing, farmers and growers relying on commodity price
hedging were the primary victims of Corzine's CEO tenure. The only reason they established accounts with MF Global was to hedge future crops and prices. Protection and service to such
accounts and customers was MF Global's stated primary mission.
- Mr. Corzine altered the business model of MF Global from what he felt was a low growth business to a high return mindset. Of course, he acknowledged that company performance in a" high risk- high reward" scenario would increase the potential value of his stock options.
- Basically Mr. Corzine retroactively changed the company with which the farmers and growers were
doing business. I suspect they didn't realize that the focus changed to speculating in the foreign debt of every weak European stepchild other than Greece. Did he inform them in a manner which could be readily understood? Assuredly not.
- Instead, he fired the head risk officer and expanded accumulation of European sovereign risk instruments, He even acknowledged having to defend these bets to his own board of directors.
.....................................................................................................................
More on this later. But any thinking person should realize that THIS is the type of person and
thought process that permeates firms like Goldman Sachs. That THIS is the type of Goldman Sachs
former CEOs that two times out of three had been appointed Treasury Secretary. This man's performance in front of the committee was absolutely pathetic. No wonder our economy and the performance of those who oversee it is similarly pathetic.
Hank Paulson = Benedict Arnold
Most Americans would think that something unpleasant should happen to a person who commits treason. Within one month in 2008 Treasury Secretary Hank Paulson (former Goldman Sachs CEO) committed two acts of treason One involving a meeting in Russia in late June with the Goldman Sachs board of directors. Another when he willfully lied to reporters by saying that Fannie Mae and Freddie Mac must remain shareholder owned. He repeated this days later by stating a soon to be concluded examination of their books will instill investor confidence. Other parties personally received quite different information - the accurate information on what would be happening with the GSEs.
The position of Secretary of the Treasury obviously calls for a person with high moral principles. This individual is behind only the Federal Reserve Chairman as far as impact on the economy. In a correctly functioning society, a Treasury Secretary would never - under any circumstances - meet with a group of private bankers to give inside information. If the Secretary is too dishonorable to realize it himself, it must be mandated through legislation. But Paulson (who does not even meet the foremost criteria for the office as described above) did it not just once, but at least twice. And there's no reason to suspect it didn't happen on other occasions. I don't know how he defined his job, but these actions were certainly incompatible with any reasonable expectations. The Treasury Secretary position does not exist to alert demonic bankers of market moving measures in advance of the general investing public. To the detriment of the public. If this stuff is not the acts of a traitor, I don't know what is.
As a little background, Paulson - while CEO at Goldman - successfully used his authority and influence to strongly promote the easing of capital requirements so Wall Street banks could use more leverage. Right then, it might have been a good idea not to appoint a serial gambler to the job since this opened up the doors to a profound problem which still has not been reigned in. Paulson, Robert Rubin and Larry Summers pushed the concept of deregulation and convinced stupid people that the financial sector is self governing. That it acts in its own best interests, therefore will self correct any imbalances, and can ultimately be trusted to do the right thing automatically without unnecessary oversight. So George W. Bush instead nominated him and he was overwhelmingly confirmed in 2006. I would love to have seen him take his oath of office.
........................................................................................................................
By the end of June of 2008 Paulson was in office for about two years doing who-knows-what when he decided it would be a good idea to meet with the board of directors of his former company over in Moscow. He gave them the heads up on a major speech he was about to deliver. He also expressed his concerns about Lehman Brothers probably blowing up. What kind of non-traitor would come up with such an idea? This is telling his old company how to prepare. How to maneuver to the winning side. This is beyond poor judgment - this is flat out treason. Undeniably so.
Goldman Sachs was made privy to nonpublic information. And not for any purpose whatsoever other than to allow them to profit from it. A Treasury Secretary cannot do such things. Purposely violating one's oath of office is just cause for immediate termination proceedings - with further charges to follow. Why did this not happen?
But tipping Goldman Sachs off was not enough. On 7/13/08 Paulson told reporters that Fannie Mae and Freddie Mac must remain shareholder owned. As a result, the normal investing public starting bidding up the shares. On 7/21/08 he conned normal investors again by assuring reporters that an upcoming announcement on the GSEs would reassure everyone. Again the shares were bid up. Before he actually did this on the morning of 7/21, he had already scheduled an afternoon meeting the same day with a group of hedge fund managers. A bunch of these were Goldman Sachs-types. Paulson thought it would be a good idea to actually tell this particular group the truth. He described to them a scenario under which the GSEs would enter into receivership and their stock would become worthless. As has since been covered, at least one hedge fund manger contacted legal counsel who told him not to act as the information was in violation of any number of standards. Again, Paulson misled the public, who soon would get creamed on their GSE stock, while hedge fund managers potentially could reap millions shorting it. Again, why has Paulson not been charged with treason? Beyond that, if Eric Holder's Department of Justice and other regulators were not so corrupted, why on earth would it be so difficult to thoroughly examine trading records from 7/21 through the conservatorship announcement? It's only a period of about two months. Hey, maybe it's because Congressmen and other in-the-know federal employees also traded on the hidden news. Who knows? But it's basic stuff.
..................................................................................
Henry J. Paulson engaged in other questionable behavior outside of the above. Really questionable.
- He became phone buddies with NY Fed chief Timothy Geithner, Goldman's Lloyd Blankfein and Morgan Stanley's John Mack. As it turned out, this behavior happened to correspond with the instantaneous approval on 9/21/08 for Goldman and Morgan Stanley to join all the other TBTFs as a bank holding company to gain access to Fed emergency funds and favorable terms on any money desired.
- He bullied and coerced Congress to pass TARP, then turned around and used a substantial portion of the funds in a manner not described. On 10/13/08 he committed funds (cut checks) to nine banks totaling $125 billion. This was the infamous weekend when he called them all to the NY Fed and (supposedly) compelled them all to accept the money so that no one would know which banks really needed it. But the amounts varied. J.P. Morgan, Wells Fargo and Citigroup led the parade with $25 billion each. Then came Bank Of America with $15 billion - followed by Merrill Lynch, Goldman Sachs and Morgan Stanley at $10 billion. Bank of NY Mellon got a puny $3 billion, while State Street brought up the rear with a mere $2 billion. Contemplating the relative amounts certainly tells a tale. And what about all the smaller banks out there? The ones that fund Main Street small business expansion? I guess they're not considered part of the crucial Financial Sector.
- He had his hands all over the AIG counterparty bailout. Under his plan Goldman Sachs (shock!) benefited the most. He misled everybody by saying that AIG's liabilities must be covered to the tune of 100 cents on the dollar to protect the public. $182 billion worth. This was followed by Goldman executives probably perjuring themselves in front of Congress when testifying that monies were received solely to make their customer accounts whole. It was later found that Goldman Sachs profited by $2.9 billion on their own proprietary trades. Can one seriously believe ex-Goldman CEO Paulson had no idea about the firm's personal exposure?
.....................................................................................
Hank Paulson was no public servant. He was planted as the second Goldman Sachs'er out of three to serve Wall Street as Treasury Secretary. Revelations about his phone log history show an alarming amount of calls with the Wall Street titans. When you combine this with the series of steps taken in behalf of the parties who had created the crisis, you do have to wonder who serves whom. And keep in mind that the TBTFs rather quickly got back on firm footing to keep the bonuses flowing.
Look up the definitions of treason and traitor. They both involve violation or betrayal of trust and allegiance to one's country. An appointed official betrayed his trust by serving parties who have proven dangerous to the nation at the expense of the general population - this is one of the purest examples of treasonous activity by a traitor I can think of.
The position of Secretary of the Treasury obviously calls for a person with high moral principles. This individual is behind only the Federal Reserve Chairman as far as impact on the economy. In a correctly functioning society, a Treasury Secretary would never - under any circumstances - meet with a group of private bankers to give inside information. If the Secretary is too dishonorable to realize it himself, it must be mandated through legislation. But Paulson (who does not even meet the foremost criteria for the office as described above) did it not just once, but at least twice. And there's no reason to suspect it didn't happen on other occasions. I don't know how he defined his job, but these actions were certainly incompatible with any reasonable expectations. The Treasury Secretary position does not exist to alert demonic bankers of market moving measures in advance of the general investing public. To the detriment of the public. If this stuff is not the acts of a traitor, I don't know what is.
As a little background, Paulson - while CEO at Goldman - successfully used his authority and influence to strongly promote the easing of capital requirements so Wall Street banks could use more leverage. Right then, it might have been a good idea not to appoint a serial gambler to the job since this opened up the doors to a profound problem which still has not been reigned in. Paulson, Robert Rubin and Larry Summers pushed the concept of deregulation and convinced stupid people that the financial sector is self governing. That it acts in its own best interests, therefore will self correct any imbalances, and can ultimately be trusted to do the right thing automatically without unnecessary oversight. So George W. Bush instead nominated him and he was overwhelmingly confirmed in 2006. I would love to have seen him take his oath of office.
........................................................................................................................
By the end of June of 2008 Paulson was in office for about two years doing who-knows-what when he decided it would be a good idea to meet with the board of directors of his former company over in Moscow. He gave them the heads up on a major speech he was about to deliver. He also expressed his concerns about Lehman Brothers probably blowing up. What kind of non-traitor would come up with such an idea? This is telling his old company how to prepare. How to maneuver to the winning side. This is beyond poor judgment - this is flat out treason. Undeniably so.
Goldman Sachs was made privy to nonpublic information. And not for any purpose whatsoever other than to allow them to profit from it. A Treasury Secretary cannot do such things. Purposely violating one's oath of office is just cause for immediate termination proceedings - with further charges to follow. Why did this not happen?
But tipping Goldman Sachs off was not enough. On 7/13/08 Paulson told reporters that Fannie Mae and Freddie Mac must remain shareholder owned. As a result, the normal investing public starting bidding up the shares. On 7/21/08 he conned normal investors again by assuring reporters that an upcoming announcement on the GSEs would reassure everyone. Again the shares were bid up. Before he actually did this on the morning of 7/21, he had already scheduled an afternoon meeting the same day with a group of hedge fund managers. A bunch of these were Goldman Sachs-types. Paulson thought it would be a good idea to actually tell this particular group the truth. He described to them a scenario under which the GSEs would enter into receivership and their stock would become worthless. As has since been covered, at least one hedge fund manger contacted legal counsel who told him not to act as the information was in violation of any number of standards. Again, Paulson misled the public, who soon would get creamed on their GSE stock, while hedge fund managers potentially could reap millions shorting it. Again, why has Paulson not been charged with treason? Beyond that, if Eric Holder's Department of Justice and other regulators were not so corrupted, why on earth would it be so difficult to thoroughly examine trading records from 7/21 through the conservatorship announcement? It's only a period of about two months. Hey, maybe it's because Congressmen and other in-the-know federal employees also traded on the hidden news. Who knows? But it's basic stuff.
..................................................................................
Henry J. Paulson engaged in other questionable behavior outside of the above. Really questionable.
- He became phone buddies with NY Fed chief Timothy Geithner, Goldman's Lloyd Blankfein and Morgan Stanley's John Mack. As it turned out, this behavior happened to correspond with the instantaneous approval on 9/21/08 for Goldman and Morgan Stanley to join all the other TBTFs as a bank holding company to gain access to Fed emergency funds and favorable terms on any money desired.
- He bullied and coerced Congress to pass TARP, then turned around and used a substantial portion of the funds in a manner not described. On 10/13/08 he committed funds (cut checks) to nine banks totaling $125 billion. This was the infamous weekend when he called them all to the NY Fed and (supposedly) compelled them all to accept the money so that no one would know which banks really needed it. But the amounts varied. J.P. Morgan, Wells Fargo and Citigroup led the parade with $25 billion each. Then came Bank Of America with $15 billion - followed by Merrill Lynch, Goldman Sachs and Morgan Stanley at $10 billion. Bank of NY Mellon got a puny $3 billion, while State Street brought up the rear with a mere $2 billion. Contemplating the relative amounts certainly tells a tale. And what about all the smaller banks out there? The ones that fund Main Street small business expansion? I guess they're not considered part of the crucial Financial Sector.
- He had his hands all over the AIG counterparty bailout. Under his plan Goldman Sachs (shock!) benefited the most. He misled everybody by saying that AIG's liabilities must be covered to the tune of 100 cents on the dollar to protect the public. $182 billion worth. This was followed by Goldman executives probably perjuring themselves in front of Congress when testifying that monies were received solely to make their customer accounts whole. It was later found that Goldman Sachs profited by $2.9 billion on their own proprietary trades. Can one seriously believe ex-Goldman CEO Paulson had no idea about the firm's personal exposure?
.....................................................................................
Hank Paulson was no public servant. He was planted as the second Goldman Sachs'er out of three to serve Wall Street as Treasury Secretary. Revelations about his phone log history show an alarming amount of calls with the Wall Street titans. When you combine this with the series of steps taken in behalf of the parties who had created the crisis, you do have to wonder who serves whom. And keep in mind that the TBTFs rather quickly got back on firm footing to keep the bonuses flowing.
Look up the definitions of treason and traitor. They both involve violation or betrayal of trust and allegiance to one's country. An appointed official betrayed his trust by serving parties who have proven dangerous to the nation at the expense of the general population - this is one of the purest examples of treasonous activity by a traitor I can think of.
Tuesday, December 6, 2011
The Industrial Revolution, The Age Of Information, The Age of Globalization and The Age Of The Financial Sector
Very generally speaking, these four secular cycles neatly trace the rise and fall of middle class America. The greatest emphasis on our current state results from the fallout of the three most recent "ages", whose impact has been devastating and accelerating.
The Industrial Revolution brought prosperity to many and arguably established the middle class. Its origin is best symbolized by Henry Ford, who not only pioneered the assembly line, but raised the wages of the workers so they could actually afford the product being assembled (Ford automobiles). THIS is how an economy should function with foresight. With time, the Industrial Revolution brought the creation of unions to ensure the newly created wealth was more evenly distributed. Yes, the unions might have gone a tad too far - but consider the ramifications without them. The resolution of World War II with all the destruction elsewhere certainly helped America's economic might, but basically it was a good time to be a member of the American middle class. And this population were prudent savers assuredly influenced by memories and scars from the Depression. They actually had a proper sense of values along with their relative comfort.
.............................................................................................................
The Age Of Information progressed from newspapers to radio to television to color television to home computers to the internet. With each progression came the dreaded advertisements. The seeds were planted for the establishment of consumerism. One could not escape constant advertisements for everything under the sun when merely trying to read the news, listen to music or watch a tv show. It simply wore the population down over time until we capitulated. Americans couldn't avoid being swayed in their spending habits by the constant and unforgiving bombardment. This was the genesis of "name brands". A pair of functional jeans or sneakers was no longer enough - they had to be the right brands. If a youngster wore Keds instead of Chuck Taylor Converse All-Stars, he was uncool. The seeds were sown and there was no turning back. The competitive behavior of purchases took root with all the social pressures. And the overpriced "correct" items were determined primarily by advertising budgets - not quality. The first step into the indebtedness trap augmented by the rise of the credit card industry (probably one of the very first societal bastardizations of the financial sector). Credit cards fed the ability to buy the proper things when households basically could not afford them - the old "save to buy" morality was dead. Heck, people even bought the televisions subjecting them to the constant advertisements on credit.
Then the rise of the home computer and the internet brought to our attention other things we needed that were not even mentioned by tv and radio. People gasped: "I didn't even realize this or that even existed, but now that I do, I have to have it". It multiplied temptation a thousand-fold and Americans acted on it. The combination of access to new products and the rapid obsolescence of these products through technological advances brought about the term "disposable item". People purposefully acquired stuff fully knowing that its lifespan was temporary and it would soon be replaced by an advanced replacement. Other than perhaps automobiles or trendy fashions, I can think of no other item that an American in the 1950s or 1960s would view in that manner. They bought things to last.
The internet also greatly contributed to changes in investment behavior. Online research and the ability to trade stocks and other vehicles without broker interference and at greatly reduced rates raised awareness and trading activity. Whether or not this was actually a good thing is debatable. It also contributed to shorter term horizons since instant quotes were readily available. Undoubtedly, many Americans succumbed to buying stocks in questionable companies with the abundance of information out there and further succumbed to trading out of them if they didn't meet their expectations right away. This probably also led to chasing mutual fund performance after the gains had already been made. Also to buying stocks just when the "big boys" had decided to bring them back down so they could reload on the backs of bagholders.
So basically the Age Of Information brought the concepts of consumerism and its attendant indebtedness, followed by the advent of investment patsies. In other words, the age of victim identification.
..................................................................................................................
The Age Of Globalization is somewhat tied to disposable products. If they had it to do over again, trade agreements such as NAFTA and others would have been implemented quite differently. Free trade with countries paying slave wages with horrific working conditions would have been perceived as the competitive roadblocks they are. They crushed whatever was left of American unionization and demolished entire worker industries. Esteemed American corporations fueled their growth by moving manufacturing and even service operations overseas. The combination of automation and overseas labor devastated a substantial portion of our workforce. When you go from a relatively highly paid manufacturing base, to a service economy - only to lose even much of the service economy to foreign replacements, you are in trouble.
All one has to do is look at the back of any piece of electronics. You will see "Made in China", "Made In Mexico" or "Made in Taiwan". (Yes, some will say "Designed in America" or "Designed in Britain" - but the "Assembled in" or "Made in China" is always there). Look at just about anything bought at a discount store and it's the same. Other than food, it would be fascinating if Target, Walmart or even Best Buy were compelled to admit the exact percentage of their products that are made elsewhere.
The Age Of Globalization also neatly dovetails with the disposability of products. You make 'em cheap to last a short period and you replace 'em. Not only because the inexpensive ones are not well made, but because even the more expensive ones that are well manufactured have a short shelf life. The buyer realizes that technology will shortly pass them by. HDTVs are probably the best example of this. Purchasers know that they'll be replacing even the best ones within a few years. I defy anyone to claim they bought a first generation plasma HDTV and have not since upgraded. (Unless they're homeless or unemployed and on food stamps - but that's a different story).
America lost big time in the Age Of Globalization. We were good at R&D, only to nailed by a combination of low wage countries co-opting our technology, aggravated by our own corporations relocating their workforces overseas in search of greater profits. If only these corporations had even a modicum of a sense of patriotism things would be very different. Patriotism has always been the missing ingredient with corporations. They are quick to take advantage of tax breaks, but have no conception of their responsibility to the nation that allows the same breaks. This will never change - they are takers, not givers. They would lay off every American employee without a second thought if it would increase their profit margin.
................................................................................................................
The three "ages" above pale in importance to the middle class relative to the impact of the Age Of The Financial Sector. The Industrial Revolution was pretty much all good. The other "ages" at least had an initial good aspect. But the Financial Industry has become an uncompromisingly destructive force. It rides a pale horse and has brought hell with it. Its present condition has nothing to do with the betterment of mankind. It has spawned an army of psychopaths. These degenerates view their customers solely as beings from whom they can extort money. Parties on whom they can prey.
( Now this applies to the Wall Street-type TBTF banks - not the small banks and credit unions who have retained the old tried and true business model. You know, the ones that must rely on their performance rather than government handouts ).
If the "foul" financial system were to be viewed as a zero-sum game, their goal would be to extract each penny from the losing side. That is their religion and whole meaning of life. They would drive up to a blind street beggar in their BMW and empty his money can if it had any bills in it. But they actually have to do the equivalent with more respected gentlemen. By creating wacked financial products and then going through the hassle of getting them AAA rated and then pawning them off on the unsuspecting. This deviousness in their everyday "transactions" is not considered when they bemoan their long work hours. (Their justification for exorbitant compensation). I'm not entirely sure that spending long hours trying to figure out to to screw the other guy can accurately be defined as work. But the cumulative creations of these psychotics have introduced citizens to the trendy new term "austerity measures". And to think the previous latest jargon "moral hazard", somehow passed from view even though it's still out there in force. There's something about austerity following moral hazard that just doesn't seem quite right. As though it's not fair or something like that. A second grader might question whether this is right or not. Odd that a recent toddler still learning how to read and count would realize the situation that confounds adults.
Probably the biggest problem is that Big Banks now derive the bulk of their income through dark pool, off balance sheet, unregulated products. These derivatives barely contribute to economic growth. Of late, they definitely have actually detracted from it. Why such innovations continue to evolve and prosper is beyond comprehension. It's as though a pension fund manager or other trustee of funds needs to say they are involved in the latest, most supposedly sophisticated products. The fact that they really don't understand them is irrelevant. After all, Lloyd Blankfein and others have testified that they only make a market in this toxic trash as a service because "sophisticated investors" knowingly make their investing decisions and want to get positioned.
In America and worldwide, public involvement with the parties pushing these exotic creations has resulted in public indebtedness well beyond private debt. The brutal combination of entire nations feeling compelled to honor what's owed to the same financial institutions who led them to slaughter, while at the same time using taxpayer money to bail them out of their own obligations, is incomprehensible. It simply doesn't make sense unless one applies the meaning of the latest market buzzword, "crony capitalism". And supplements this by the recently coined phrase "Big Bank gains are privatized, losses are socialized". Then it all becomes clear.
These institutions must be broken up and their political power broken. If not, the Age Of The Financial Sector will be the last "age" of the world as we now know it. The middle class will move backwards in time to their serfdom status that existed before the Industrial Revolution. Backwards evolution is assuredly not what people expected in the 21st century, but it's taking place right in front of our eyes.
The Industrial Revolution brought prosperity to many and arguably established the middle class. Its origin is best symbolized by Henry Ford, who not only pioneered the assembly line, but raised the wages of the workers so they could actually afford the product being assembled (Ford automobiles). THIS is how an economy should function with foresight. With time, the Industrial Revolution brought the creation of unions to ensure the newly created wealth was more evenly distributed. Yes, the unions might have gone a tad too far - but consider the ramifications without them. The resolution of World War II with all the destruction elsewhere certainly helped America's economic might, but basically it was a good time to be a member of the American middle class. And this population were prudent savers assuredly influenced by memories and scars from the Depression. They actually had a proper sense of values along with their relative comfort.
.............................................................................................................
The Age Of Information progressed from newspapers to radio to television to color television to home computers to the internet. With each progression came the dreaded advertisements. The seeds were planted for the establishment of consumerism. One could not escape constant advertisements for everything under the sun when merely trying to read the news, listen to music or watch a tv show. It simply wore the population down over time until we capitulated. Americans couldn't avoid being swayed in their spending habits by the constant and unforgiving bombardment. This was the genesis of "name brands". A pair of functional jeans or sneakers was no longer enough - they had to be the right brands. If a youngster wore Keds instead of Chuck Taylor Converse All-Stars, he was uncool. The seeds were sown and there was no turning back. The competitive behavior of purchases took root with all the social pressures. And the overpriced "correct" items were determined primarily by advertising budgets - not quality. The first step into the indebtedness trap augmented by the rise of the credit card industry (probably one of the very first societal bastardizations of the financial sector). Credit cards fed the ability to buy the proper things when households basically could not afford them - the old "save to buy" morality was dead. Heck, people even bought the televisions subjecting them to the constant advertisements on credit.
Then the rise of the home computer and the internet brought to our attention other things we needed that were not even mentioned by tv and radio. People gasped: "I didn't even realize this or that even existed, but now that I do, I have to have it". It multiplied temptation a thousand-fold and Americans acted on it. The combination of access to new products and the rapid obsolescence of these products through technological advances brought about the term "disposable item". People purposefully acquired stuff fully knowing that its lifespan was temporary and it would soon be replaced by an advanced replacement. Other than perhaps automobiles or trendy fashions, I can think of no other item that an American in the 1950s or 1960s would view in that manner. They bought things to last.
The internet also greatly contributed to changes in investment behavior. Online research and the ability to trade stocks and other vehicles without broker interference and at greatly reduced rates raised awareness and trading activity. Whether or not this was actually a good thing is debatable. It also contributed to shorter term horizons since instant quotes were readily available. Undoubtedly, many Americans succumbed to buying stocks in questionable companies with the abundance of information out there and further succumbed to trading out of them if they didn't meet their expectations right away. This probably also led to chasing mutual fund performance after the gains had already been made. Also to buying stocks just when the "big boys" had decided to bring them back down so they could reload on the backs of bagholders.
So basically the Age Of Information brought the concepts of consumerism and its attendant indebtedness, followed by the advent of investment patsies. In other words, the age of victim identification.
..................................................................................................................
The Age Of Globalization is somewhat tied to disposable products. If they had it to do over again, trade agreements such as NAFTA and others would have been implemented quite differently. Free trade with countries paying slave wages with horrific working conditions would have been perceived as the competitive roadblocks they are. They crushed whatever was left of American unionization and demolished entire worker industries. Esteemed American corporations fueled their growth by moving manufacturing and even service operations overseas. The combination of automation and overseas labor devastated a substantial portion of our workforce. When you go from a relatively highly paid manufacturing base, to a service economy - only to lose even much of the service economy to foreign replacements, you are in trouble.
All one has to do is look at the back of any piece of electronics. You will see "Made in China", "Made In Mexico" or "Made in Taiwan". (Yes, some will say "Designed in America" or "Designed in Britain" - but the "Assembled in" or "Made in China" is always there). Look at just about anything bought at a discount store and it's the same. Other than food, it would be fascinating if Target, Walmart or even Best Buy were compelled to admit the exact percentage of their products that are made elsewhere.
The Age Of Globalization also neatly dovetails with the disposability of products. You make 'em cheap to last a short period and you replace 'em. Not only because the inexpensive ones are not well made, but because even the more expensive ones that are well manufactured have a short shelf life. The buyer realizes that technology will shortly pass them by. HDTVs are probably the best example of this. Purchasers know that they'll be replacing even the best ones within a few years. I defy anyone to claim they bought a first generation plasma HDTV and have not since upgraded. (Unless they're homeless or unemployed and on food stamps - but that's a different story).
America lost big time in the Age Of Globalization. We were good at R&D, only to nailed by a combination of low wage countries co-opting our technology, aggravated by our own corporations relocating their workforces overseas in search of greater profits. If only these corporations had even a modicum of a sense of patriotism things would be very different. Patriotism has always been the missing ingredient with corporations. They are quick to take advantage of tax breaks, but have no conception of their responsibility to the nation that allows the same breaks. This will never change - they are takers, not givers. They would lay off every American employee without a second thought if it would increase their profit margin.
................................................................................................................
The three "ages" above pale in importance to the middle class relative to the impact of the Age Of The Financial Sector. The Industrial Revolution was pretty much all good. The other "ages" at least had an initial good aspect. But the Financial Industry has become an uncompromisingly destructive force. It rides a pale horse and has brought hell with it. Its present condition has nothing to do with the betterment of mankind. It has spawned an army of psychopaths. These degenerates view their customers solely as beings from whom they can extort money. Parties on whom they can prey.
( Now this applies to the Wall Street-type TBTF banks - not the small banks and credit unions who have retained the old tried and true business model. You know, the ones that must rely on their performance rather than government handouts ).
If the "foul" financial system were to be viewed as a zero-sum game, their goal would be to extract each penny from the losing side. That is their religion and whole meaning of life. They would drive up to a blind street beggar in their BMW and empty his money can if it had any bills in it. But they actually have to do the equivalent with more respected gentlemen. By creating wacked financial products and then going through the hassle of getting them AAA rated and then pawning them off on the unsuspecting. This deviousness in their everyday "transactions" is not considered when they bemoan their long work hours. (Their justification for exorbitant compensation). I'm not entirely sure that spending long hours trying to figure out to to screw the other guy can accurately be defined as work. But the cumulative creations of these psychotics have introduced citizens to the trendy new term "austerity measures". And to think the previous latest jargon "moral hazard", somehow passed from view even though it's still out there in force. There's something about austerity following moral hazard that just doesn't seem quite right. As though it's not fair or something like that. A second grader might question whether this is right or not. Odd that a recent toddler still learning how to read and count would realize the situation that confounds adults.
Probably the biggest problem is that Big Banks now derive the bulk of their income through dark pool, off balance sheet, unregulated products. These derivatives barely contribute to economic growth. Of late, they definitely have actually detracted from it. Why such innovations continue to evolve and prosper is beyond comprehension. It's as though a pension fund manager or other trustee of funds needs to say they are involved in the latest, most supposedly sophisticated products. The fact that they really don't understand them is irrelevant. After all, Lloyd Blankfein and others have testified that they only make a market in this toxic trash as a service because "sophisticated investors" knowingly make their investing decisions and want to get positioned.
In America and worldwide, public involvement with the parties pushing these exotic creations has resulted in public indebtedness well beyond private debt. The brutal combination of entire nations feeling compelled to honor what's owed to the same financial institutions who led them to slaughter, while at the same time using taxpayer money to bail them out of their own obligations, is incomprehensible. It simply doesn't make sense unless one applies the meaning of the latest market buzzword, "crony capitalism". And supplements this by the recently coined phrase "Big Bank gains are privatized, losses are socialized". Then it all becomes clear.
These institutions must be broken up and their political power broken. If not, the Age Of The Financial Sector will be the last "age" of the world as we now know it. The middle class will move backwards in time to their serfdom status that existed before the Industrial Revolution. Backwards evolution is assuredly not what people expected in the 21st century, but it's taking place right in front of our eyes.
Friday, December 2, 2011
Payroll Tax Cut Legislation - Have They Lost Their Minds?
The media coverage of the haggling back and forth over the continuation of the payroll tax cut is astonishing. It focuses entirely on the impact to the present economy without even considering the fact that it will destroy the Social Security system. As it is, the system has been running a deficit since 2008. The deficit greatly increased in 2011 with the cut from 6.2% to 4.2%. Now an extension appears to be a lock - and the tax might even be decreased to 3.1% if Obama and the democratic senate have their way. Exacerbated by an additional lowering of contributions on the employer side. You simply cannot cut SS revenues in half when the system is already in serious imbalance with the deficit increasing. This is complete lunacy. Any C-minus accounting student could see this portends bankruptcy. And even more crazed is Congress having the audacity to contend that the costs will be covered by funds from the general Treasury. Are they kidding? Maybe no one told them we are running a national deficit in the trillions and growing. Such a statement is disingenuous at best, if not flat out deceitful. It is stupefying that our economy is so poor that a few additional dollars per paycheck is universally considered mandatory. Trading the future solvency of SS for current consumerism strikes me as approaching treason. What could politicians possibly be thinking?
...........................................................................................................................
Back in the good old days most normal workers believed their Social Security deductions went into a Trust Fund from which future benefits would be paid out. Many figured this dedicated fund would earn some form of return on the contributions to keep it self sustaining. No problem - easy stuff, right?
Well, no. The Trust Fund has been continually tapped in attempts to balance the budget (or at least lower deficit spending with the Treasury effectively issuing IOUs). Since the Great Recession it has been absolutely hammered in terms of inflowing monies relative to outflows. I mean, you can't contribute without a job and those receiving it due to their age can't simply become younger and drop off the rolls. We all know that population demographics are working against its feasibility in the longer term as it stands. This is undisputed.
I believe the Congressional Budget Office's forecasts about the viability of the system are somewhere around 50% off - just like all their forecasts. They were already wrong by about eight years on their prediction about when the running surplus would turn negative. If you want a laugh, peruse their assumptions. They are comical beyond belief - as though they haven't considered reality for one instant. Social Security old age benefits as we know it will be insolvent before those graduating from high school into the workforce get even a dime - if not well before.
The Social Security system was one of the most vital of social programs enacted under FDR. It meant the difference between literally starving or dying of cold or being homeless and actually living. Millions upon millions of people are testament to this. It allowed them a sense of stability in the face of abject poverty. Without it they would have been morgue statistics.
..........................................................................................................................
But nowadays our nation is governed by myopic stop-gap, short sighted, immediate-fix-without-considering-the-consequences, kick the can down the road measures that can't look three years ahead - much less a decade or generation. We are in the process of destroying one of the most valuable safety nets ever created. Utterly dismantling it from without. All in the name of an absurd attempt to prop up an economy which needs to be re-evaluated from top to bottom. Our country simply cannot allow such a sacrifice. Any ideas as to how to stop it from happening?
...........................................................................................................................
Back in the good old days most normal workers believed their Social Security deductions went into a Trust Fund from which future benefits would be paid out. Many figured this dedicated fund would earn some form of return on the contributions to keep it self sustaining. No problem - easy stuff, right?
Well, no. The Trust Fund has been continually tapped in attempts to balance the budget (or at least lower deficit spending with the Treasury effectively issuing IOUs). Since the Great Recession it has been absolutely hammered in terms of inflowing monies relative to outflows. I mean, you can't contribute without a job and those receiving it due to their age can't simply become younger and drop off the rolls. We all know that population demographics are working against its feasibility in the longer term as it stands. This is undisputed.
I believe the Congressional Budget Office's forecasts about the viability of the system are somewhere around 50% off - just like all their forecasts. They were already wrong by about eight years on their prediction about when the running surplus would turn negative. If you want a laugh, peruse their assumptions. They are comical beyond belief - as though they haven't considered reality for one instant. Social Security old age benefits as we know it will be insolvent before those graduating from high school into the workforce get even a dime - if not well before.
The Social Security system was one of the most vital of social programs enacted under FDR. It meant the difference between literally starving or dying of cold or being homeless and actually living. Millions upon millions of people are testament to this. It allowed them a sense of stability in the face of abject poverty. Without it they would have been morgue statistics.
..........................................................................................................................
But nowadays our nation is governed by myopic stop-gap, short sighted, immediate-fix-without-considering-the-consequences, kick the can down the road measures that can't look three years ahead - much less a decade or generation. We are in the process of destroying one of the most valuable safety nets ever created. Utterly dismantling it from without. All in the name of an absurd attempt to prop up an economy which needs to be re-evaluated from top to bottom. Our country simply cannot allow such a sacrifice. Any ideas as to how to stop it from happening?
Thursday, November 24, 2011
Unemployment Extension Revisited & "The Passage of Time"
Well, Congress is in the process of messing up once again. The current federal extension of unemployment benefits is set to expire on 12/31/11. That means that an unemployed individual will not be eligible for an extension unless he or she applies for it no later than the week between 12/25/11 and 12/31/11. Any person laid off after 7/1/2011 will be ineligible for it because the state normally pays 26 weeks of regular benefits.
Any simpleton can see this would be an utter economic disaster. Not only would many relatively long term unemployed be cut off depending on timing, but those losing their jobs any time in the latter half of the year would be cut off after the regular state benefits end (and some states are even cutting the number of basic weeks below 26).
This is a catastrophe for a 70% consumer driven economy. One of the most fiscally irresponsible things imaginable. Unemployment insurance is one of the most cost effective programs in existence. A federal Department of Labor economist I spoke with estimates that it provides a 130% return on each dollar of cost as it is completely re-injected back into circulation. It obviously can also save jobs through purchases at businesses that might be teetering on the brink of going under without such spending. It also relieves states, cities and towns from providing costly assistance to those who had otherwise been relying on unemployment benefits to pay for basic living costs.
Our Congress must be a collection of imbeciles who cannot relate to or cannot see what is happening all over America in order not to realize the immense priority this extension legislation should be given. Which in turn would mean that they have no right to hold their elected positions. They are there to serve their constituency, not to contribute to our floundering economy.
As I see it, this legislation is such an emergency that it should be proposed and enacted as a single piece of legislation with no ridiculous attachments. Just put it to a vote and vote on it immediately - and I mean right away after these "representatives of the populace" return from their Thanksgiving adjournment.
....................................................................................................................................
The above is sort of a macro view of the positive aspects of an unemployment insurance extension for those blasted by a 9% unemployment rate (actually around 18% when you consider underemployment, "fake consultants", part timers looking for full time jobs, etc). But one must look at the micro human-side of the equation. One must view the situation from the standpoint of someone actually in the situation in order to fully comprehend it. There are so many variables - some so cruel as to be almost Machiavellian.
Suppose you were laid off on 6/15/2011, while your neighbor held on to his job until 7/15/11. Assume you both live in a high unemployment state. You would be eligible for an unemployment extension because your regular benefits expired before 12/31/2011. Your neighbor would not since he got regular benefits into 2012.
In the same scenario, one neighbor might get an extension while another was ineligible due to a timing issue involving as little as one week. Everything depends on when you first applied. Heck, one could have delayed applying in hopes of quickly landing a new job, only to have it come back to burn him.
Now, if one had been relying on a $425 weekly unemployment check to pay rent/mortgage, utility bills, groceries, property tax, heat, auto gas and any number of loan payments - what happens when it's cut off? What do you do? Raid your diminished savings or 401(k) retirement account? Sell your possessions on e-Bay or Craigslist? Sell your house? Move back in with your parents? Take a job at McDonald's (as Chicago Mercantile Exchange inhabitants suggest)?
I guess responsible people would try to renegotiate every financial contract they've entered into. Would cut down on cable service features, suspend needed car maintenance, buy generic brands and anything else than could think of. But what happens when you've cut to the bone and you need to fill up your home heating oil tank in February to the tune of $650? Where do you get the money? One answer would be to apply for federally funded fuel assistance or apply for aid from your city/town welfare office. (Another example of misguided supposed savings from ending unemployment extensions).
There are hundreds of thousands, if not millions, of Americans on the way to this set of circumstances. It is just a matter of time. Some earlier, some later - but all in the same boat. Their lives will shortly be drastically changing. And Congress is dangling the lifeboat just outside their reach. This collective body with a less than 9% approval rating is farting around with these people's very existence.
.....................................................................................................................
So here is my philosophy on the "Passage of Time". A concept unappreciated by any bureaucrat, any elected official, any participant in the judicial process and many others. A great value must be placed on the swift implementation of what should have happened from the "get go". It is often simply too late when something that should have occurred from the beginning is accomplished retroactively. There is no appreciation of what transpires in the meantime. (Sorta like "justice delayed is justice never achieved"). This is why I left my position as an administrative law judge/appeal referee for a government agency. They could never understand nor comprehend the devastating impact on families when it took many weeks to get benefits they should have gotten from day one as a result of the ill-training of the initial decision makers. They simply couldn't see what difference it made if they ultimately received what they were entitled to. They couldn't correctly value or perceive the basic fact that a person's life could be destroyed in the intervening time.
I'm completely sure they will pass unemployment extension legislation. But they won't accomplish this basic step until much later - maybe some time in February of 2012. They will make it retroactive to 1/1/2012. By that point, my "passage of time" effects will already have taken place. It will be too late to stave off what already happened to the individuals impacted. The devastation will have already occurred and can't be corrected. Their screw-up will not be able to be reversed.
In preparing this piece, I spoke with the Washington, D.C. offices of my two Senators and Representatives. I simply asked all four what their stance was on extending unemployment insurance beyond 12/31/2011, given the high rate of unemployment. Three offices promised to respond in writing but failed to. The office of one Senator immediately presumed I was unemployed (although I am not and never said I was). This office sent me an e-mail filled with nothingness and political vapor about the Senator supporting whatever is decided by whomever.
And this is why I feel confident that Congress is about to betray us once more. They are either not cognizant of the ramifications of the issue or are unable/unwilling to answer a very simple and incredibly timely question. And these are the very people who are there to serve and preserve the interests of the electorate who are the victims of the behavior of Congress. I'm sure they are all having a wonderful Thanksgiving and planning their unencumbered Christmas celebrations.
Any simpleton can see this would be an utter economic disaster. Not only would many relatively long term unemployed be cut off depending on timing, but those losing their jobs any time in the latter half of the year would be cut off after the regular state benefits end (and some states are even cutting the number of basic weeks below 26).
This is a catastrophe for a 70% consumer driven economy. One of the most fiscally irresponsible things imaginable. Unemployment insurance is one of the most cost effective programs in existence. A federal Department of Labor economist I spoke with estimates that it provides a 130% return on each dollar of cost as it is completely re-injected back into circulation. It obviously can also save jobs through purchases at businesses that might be teetering on the brink of going under without such spending. It also relieves states, cities and towns from providing costly assistance to those who had otherwise been relying on unemployment benefits to pay for basic living costs.
Our Congress must be a collection of imbeciles who cannot relate to or cannot see what is happening all over America in order not to realize the immense priority this extension legislation should be given. Which in turn would mean that they have no right to hold their elected positions. They are there to serve their constituency, not to contribute to our floundering economy.
As I see it, this legislation is such an emergency that it should be proposed and enacted as a single piece of legislation with no ridiculous attachments. Just put it to a vote and vote on it immediately - and I mean right away after these "representatives of the populace" return from their Thanksgiving adjournment.
....................................................................................................................................
The above is sort of a macro view of the positive aspects of an unemployment insurance extension for those blasted by a 9% unemployment rate (actually around 18% when you consider underemployment, "fake consultants", part timers looking for full time jobs, etc). But one must look at the micro human-side of the equation. One must view the situation from the standpoint of someone actually in the situation in order to fully comprehend it. There are so many variables - some so cruel as to be almost Machiavellian.
Suppose you were laid off on 6/15/2011, while your neighbor held on to his job until 7/15/11. Assume you both live in a high unemployment state. You would be eligible for an unemployment extension because your regular benefits expired before 12/31/2011. Your neighbor would not since he got regular benefits into 2012.
In the same scenario, one neighbor might get an extension while another was ineligible due to a timing issue involving as little as one week. Everything depends on when you first applied. Heck, one could have delayed applying in hopes of quickly landing a new job, only to have it come back to burn him.
Now, if one had been relying on a $425 weekly unemployment check to pay rent/mortgage, utility bills, groceries, property tax, heat, auto gas and any number of loan payments - what happens when it's cut off? What do you do? Raid your diminished savings or 401(k) retirement account? Sell your possessions on e-Bay or Craigslist? Sell your house? Move back in with your parents? Take a job at McDonald's (as Chicago Mercantile Exchange inhabitants suggest)?
I guess responsible people would try to renegotiate every financial contract they've entered into. Would cut down on cable service features, suspend needed car maintenance, buy generic brands and anything else than could think of. But what happens when you've cut to the bone and you need to fill up your home heating oil tank in February to the tune of $650? Where do you get the money? One answer would be to apply for federally funded fuel assistance or apply for aid from your city/town welfare office. (Another example of misguided supposed savings from ending unemployment extensions).
There are hundreds of thousands, if not millions, of Americans on the way to this set of circumstances. It is just a matter of time. Some earlier, some later - but all in the same boat. Their lives will shortly be drastically changing. And Congress is dangling the lifeboat just outside their reach. This collective body with a less than 9% approval rating is farting around with these people's very existence.
.....................................................................................................................
So here is my philosophy on the "Passage of Time". A concept unappreciated by any bureaucrat, any elected official, any participant in the judicial process and many others. A great value must be placed on the swift implementation of what should have happened from the "get go". It is often simply too late when something that should have occurred from the beginning is accomplished retroactively. There is no appreciation of what transpires in the meantime. (Sorta like "justice delayed is justice never achieved"). This is why I left my position as an administrative law judge/appeal referee for a government agency. They could never understand nor comprehend the devastating impact on families when it took many weeks to get benefits they should have gotten from day one as a result of the ill-training of the initial decision makers. They simply couldn't see what difference it made if they ultimately received what they were entitled to. They couldn't correctly value or perceive the basic fact that a person's life could be destroyed in the intervening time.
I'm completely sure they will pass unemployment extension legislation. But they won't accomplish this basic step until much later - maybe some time in February of 2012. They will make it retroactive to 1/1/2012. By that point, my "passage of time" effects will already have taken place. It will be too late to stave off what already happened to the individuals impacted. The devastation will have already occurred and can't be corrected. Their screw-up will not be able to be reversed.
In preparing this piece, I spoke with the Washington, D.C. offices of my two Senators and Representatives. I simply asked all four what their stance was on extending unemployment insurance beyond 12/31/2011, given the high rate of unemployment. Three offices promised to respond in writing but failed to. The office of one Senator immediately presumed I was unemployed (although I am not and never said I was). This office sent me an e-mail filled with nothingness and political vapor about the Senator supporting whatever is decided by whomever.
And this is why I feel confident that Congress is about to betray us once more. They are either not cognizant of the ramifications of the issue or are unable/unwilling to answer a very simple and incredibly timely question. And these are the very people who are there to serve and preserve the interests of the electorate who are the victims of the behavior of Congress. I'm sure they are all having a wonderful Thanksgiving and planning their unencumbered Christmas celebrations.
Tuesday, November 15, 2011
Cool MF Global Stuff
According to the proudly displayed MF Global Client Asset Protection Policy Statement:
" The protection of its customer's funds is MF Global's paramount concern ".
" Probably the cardinal safeguard of both futures and securities customer's funds by the
Commodities Enforcement Act, the Securities Enforcement Act and the rules and
regulations of the CTFC and SEC is that the funds be segregated from the funds of
the FCM/broker and may not be used to meet any obligations of the FCM/broker ".
- It appears that MF Global by apparently co-mingling client's funds not only violated its
pronounced paramount concern, but further violated a regulatory cardinal safeguard.
............................................................................................................................
The 2002 Sarbanes-Oxley anti-corporate fraud legislation requires that corporate CEOs
personally certify the accuracies of SEC submissions. By implication, it also called for
accurate statements during public presentations such as earnings calls and other
conference calls. This law was co-written by Jon Corzine when he was US Senator.
- Some filings submitted to the SEC did not list European sovereign debt on the balance
sheet, instead moving it to the obscure and easy to miss off balance sheet section. Other
filings apparently excluded it entirely.
- As late as an October 2011 earnings conference call, Corzine said that the "structure of
of the firm's Euro bond transactions essentially eliminates market and financing risk".
- Recent SEC filings stated that the company's liquidity position remained strong".
This strikes me as wilful and deliberate attempts to evade and circumvent the very law
he was partially responsible for. Another medal of honor for our co-opted present and
former Roman Theater called Congress.
...........................................................................................................................
The New York Fed employs a rigorous process including governance, the existence of
effective internal controls and other thoroughly measured practices before adding an
applying firm to its list of Primary Dealers. MF Global was added to this august group
in February of 2011. This despite the fact that MF Global in the previous 10 years had
been more sanctioned by regulatory agencies than any of its closest peers and within that
time frame had the 2nd highest amount of fines involving risk supervision and record-
keeping. They were the subject of repeated CFTC sanctions and fines totaling $12 million for continual failures in these areas. Not to mention settled civil suites where they were an "unwitting"partner to the use of MF Global accounts to further ponzi schemes. A former
regulatory official summarized the outfit as showing a "pattern of weakness in internal
supervision versus its peers".
- So why did the NY Fed decide to anoint them as a Primary Dealer? They were new to
investment banking and their capital at the time was substantially less than most of
the others. Was it just because Jon Corzine was buddies with ex-Goldman Sachs alum
NY Fed head William Dudley, or because of the very fine MF Global Client Asset
Protection Policy Statement above, or was it just because the dude was ex-Goldman
Sachs, ex-Senator, ex-Governor and all that neat sounding stuff? (Forget that he was
summarily bounced from his NJ governorship the first time NJ voters had the
opportunity to rectify their mistake).
- Some people suggest the the Fed should never have abrogated its supervision of the
Primary Dealers as it did in 1992. This left these upstanding financial institutions
in a virtual reporting playground where the Fed then expected them to submit accurate
data but does not audit the data. Instead expecting them to act voluntarily and with
transparency on their submissions. Sorta like asking the most unethical group around
to suddenly voluntarily act with honor and integrity when they are driven solely by
all the overwhelming temptations surrounding the concept of money.
I actually believe it to be far less than wise to have a private, bank-owned Fed oversee
the accuracy of anything to do with the Primary Dealers. Please give this authority to
some other body - and not any of the inept, morally challenged existing regulators.
....................................................................................................................................
Finally, nothing advantageous ever happens to broker/dealers without the help of the #1
enabler of the financial system. (OK, at least they're in the top 3). Yes, the (formidable)
SEC had to stick their sorry-ass into the mess. In 2004 the SEC voted unanimously
to change the Net Capital Rule to allow those with "tentative net capital" exceeding
$5 billion to increase leverage ratios. Welcome to the 6 x its capital MF Global bet
on European debt.
THE ABOVE PATHETIC-NESS ARE MERELY THINGS TO CHEW ON IN CASE
ONE MISSED IT WHILE AWAITING THE COURT RULING AS TO WHETHER
JP MORGAN CHASE WILL BE GRANTED SENIOR-LIEN HOLDER STATUS
TO SCREW OVER THE "SMALL GUY" ONCE AGAIN IN THE MF GLOBAL
CHAPTER 7 BANKRUPTCY LIQUIDATION PROCEEDINGS.
" The protection of its customer's funds is MF Global's paramount concern ".
" Probably the cardinal safeguard of both futures and securities customer's funds by the
Commodities Enforcement Act, the Securities Enforcement Act and the rules and
regulations of the CTFC and SEC is that the funds be segregated from the funds of
the FCM/broker and may not be used to meet any obligations of the FCM/broker ".
- It appears that MF Global by apparently co-mingling client's funds not only violated its
pronounced paramount concern, but further violated a regulatory cardinal safeguard.
............................................................................................................................
The 2002 Sarbanes-Oxley anti-corporate fraud legislation requires that corporate CEOs
personally certify the accuracies of SEC submissions. By implication, it also called for
accurate statements during public presentations such as earnings calls and other
conference calls. This law was co-written by Jon Corzine when he was US Senator.
- Some filings submitted to the SEC did not list European sovereign debt on the balance
sheet, instead moving it to the obscure and easy to miss off balance sheet section. Other
filings apparently excluded it entirely.
- As late as an October 2011 earnings conference call, Corzine said that the "structure of
of the firm's Euro bond transactions essentially eliminates market and financing risk".
- Recent SEC filings stated that the company's liquidity position remained strong".
This strikes me as wilful and deliberate attempts to evade and circumvent the very law
he was partially responsible for. Another medal of honor for our co-opted present and
former Roman Theater called Congress.
...........................................................................................................................
The New York Fed employs a rigorous process including governance, the existence of
effective internal controls and other thoroughly measured practices before adding an
applying firm to its list of Primary Dealers. MF Global was added to this august group
in February of 2011. This despite the fact that MF Global in the previous 10 years had
been more sanctioned by regulatory agencies than any of its closest peers and within that
time frame had the 2nd highest amount of fines involving risk supervision and record-
keeping. They were the subject of repeated CFTC sanctions and fines totaling $12 million for continual failures in these areas. Not to mention settled civil suites where they were an "unwitting"partner to the use of MF Global accounts to further ponzi schemes. A former
regulatory official summarized the outfit as showing a "pattern of weakness in internal
supervision versus its peers".
- So why did the NY Fed decide to anoint them as a Primary Dealer? They were new to
investment banking and their capital at the time was substantially less than most of
the others. Was it just because Jon Corzine was buddies with ex-Goldman Sachs alum
NY Fed head William Dudley, or because of the very fine MF Global Client Asset
Protection Policy Statement above, or was it just because the dude was ex-Goldman
Sachs, ex-Senator, ex-Governor and all that neat sounding stuff? (Forget that he was
summarily bounced from his NJ governorship the first time NJ voters had the
opportunity to rectify their mistake).
- Some people suggest the the Fed should never have abrogated its supervision of the
Primary Dealers as it did in 1992. This left these upstanding financial institutions
in a virtual reporting playground where the Fed then expected them to submit accurate
data but does not audit the data. Instead expecting them to act voluntarily and with
transparency on their submissions. Sorta like asking the most unethical group around
to suddenly voluntarily act with honor and integrity when they are driven solely by
all the overwhelming temptations surrounding the concept of money.
I actually believe it to be far less than wise to have a private, bank-owned Fed oversee
the accuracy of anything to do with the Primary Dealers. Please give this authority to
some other body - and not any of the inept, morally challenged existing regulators.
....................................................................................................................................
Finally, nothing advantageous ever happens to broker/dealers without the help of the #1
enabler of the financial system. (OK, at least they're in the top 3). Yes, the (formidable)
SEC had to stick their sorry-ass into the mess. In 2004 the SEC voted unanimously
to change the Net Capital Rule to allow those with "tentative net capital" exceeding
$5 billion to increase leverage ratios. Welcome to the 6 x its capital MF Global bet
on European debt.
THE ABOVE PATHETIC-NESS ARE MERELY THINGS TO CHEW ON IN CASE
ONE MISSED IT WHILE AWAITING THE COURT RULING AS TO WHETHER
JP MORGAN CHASE WILL BE GRANTED SENIOR-LIEN HOLDER STATUS
TO SCREW OVER THE "SMALL GUY" ONCE AGAIN IN THE MF GLOBAL
CHAPTER 7 BANKRUPTCY LIQUIDATION PROCEEDINGS.
Thursday, November 10, 2011
Solyndra Will Raise Its Ugly Head....and Huntsman
I suspect the real fallout from the Obama administration's disastrous support and promotion of Solyndra as a green jobs creator has yet to surface. The last thing a candidate for re-election in these times needs is to have to answer for yet another waste of taxpayer dollars in the form of a $500+ million loan to finance a company which was clearly undeserving.
Beyond clearly supportable speculation over whether Solyndra even had a feasible business model - questions will have to be answered surrounding the means by which the obvious fast-track financing decisions were reached. And explanations so far do not look overly viable on the surface. I would not say the allegations of "crony capitalism" appear at all far fetched.
Some blame Solyndra's failure on Chinese unfair competitive cost advantages and all that involves. But that does not address the relative inefficiencies of the company's solar panel designs. What kind of true due diligence was actually done here before so proudly handing over the money? To be specific, was it ever determined how they would spend a significant portion of it? Did the Obama administration realize that they would build a 300,000 square foot state of the art facility with the extra cash? Did they realize that it would include robots whistling Disney tunes, spa-like showers with LCD displays of water temperature and glass walled conference rooms? (seemingly missing only necessities such as $15k umbrella stands). The facility was even described as the Taj Mahal of production plants. Boy, it must have been fun to work there - as long as one was not bothered by the constantly building and unshipped inventory.
The Solyndra debacle has already left a sour taste before the republican party and its presidential candidate have even had a chance to really feast on it. And feast on it they will, along with poor economic leadership in the environment of a clearly unacceptable ~9.0% unemployment rate. Joined by an escalating schism between the fortunes of the wealthy elite and the expanding poor and those barely scraping by living paycheck-to-paycheck with just an unexpected expense or financial setback or pink slip separating them from the abyss. It would be far less than shocking if Solyndra ultimately costs Obama re-election.
.............................................................................................................................................
Meanwhile, the Republican cavalcade of clowns candidates are doing the best they can to make Solyndra a harmless irritant. You have Rick Perry effectively ending his chances by delivering the crowning blow to his debate ineptitude. One had to be in awe of his forceful statement that he would eliminate three government departments - followed by his comical inability to remember more than two of them. Could you envision an actual President delivering such a dunce routine? We need a convincing leader, not comic relief.
Then you have Herman Cain trotting out the old "Clarence Thomas defense" against several sexual harassment allegations in his so-far amateur hour denials. (And never forget how Clarence Thomas and some Supreme Court bullies helped get the 21st century ball rolling when George W. Bush and his gang of "weapons of mass destruction" war mongers, after being handed the election, initiated the never ending military contractor-feeding military occupations of oil-strategic countries. You know, to foster our fabulous democratic values on others while ignoring the class inequality and broken political structure leading to the growing Occupy/99% protests against our own dysfunctional government).
Mitt Romney has shown even less dynamicism than the terminally droll Dukakis and Kerry in arousing any enthusiasm. And his pre-politician career with leveraged buyout specialist Bain Capital does not particularly speak well when such outfits have been known to perceive employees as "liabilities rather than assets" in search of return on investment.
Don't even waste your time considering the antics of Michelle Bachman or Newt Gingrich unless you value wasting your time.
Meanwhile, the main stream media continues with its mission to shut out Ron Paul, despite many feeling he has acquitted himself well. Personally, I have not eliminated him based solely on his long standing position on the poisonous entity known as the Federal Reserve.
This leaves the basically not yet recognized candidacy of Jon Huntsman. I'm fairly impressed with him to this point. But he must get some momentum or he's toast. The man made a very good decision by forgoing the Nevada debate and being the foremost proponent of opposing Nevada moving their presidential caucus ahead of the New Hampshire primary. In doing so, he greatly enhanced his chances of a good showing to propel himself back into the race. Remember that many NH independents and democrats feel betrayed by Obama's policies and selection of Wall Street connected advisers. The NH primary is an open one, meaning that independents can participate. This NH poster is strongly considering temporarily changing my party affiliation from democrat to republican to vote for Huntsman in this one primary. Because I would like to see a process which eliminates the pretenders and promotes the legitimate contenders. At least for one more round until America decides it needs to establish a third party devoted to democratic principles truly responsive to the needs and desires of the electorate.
Beyond clearly supportable speculation over whether Solyndra even had a feasible business model - questions will have to be answered surrounding the means by which the obvious fast-track financing decisions were reached. And explanations so far do not look overly viable on the surface. I would not say the allegations of "crony capitalism" appear at all far fetched.
Some blame Solyndra's failure on Chinese unfair competitive cost advantages and all that involves. But that does not address the relative inefficiencies of the company's solar panel designs. What kind of true due diligence was actually done here before so proudly handing over the money? To be specific, was it ever determined how they would spend a significant portion of it? Did the Obama administration realize that they would build a 300,000 square foot state of the art facility with the extra cash? Did they realize that it would include robots whistling Disney tunes, spa-like showers with LCD displays of water temperature and glass walled conference rooms? (seemingly missing only necessities such as $15k umbrella stands). The facility was even described as the Taj Mahal of production plants. Boy, it must have been fun to work there - as long as one was not bothered by the constantly building and unshipped inventory.
The Solyndra debacle has already left a sour taste before the republican party and its presidential candidate have even had a chance to really feast on it. And feast on it they will, along with poor economic leadership in the environment of a clearly unacceptable ~9.0% unemployment rate. Joined by an escalating schism between the fortunes of the wealthy elite and the expanding poor and those barely scraping by living paycheck-to-paycheck with just an unexpected expense or financial setback or pink slip separating them from the abyss. It would be far less than shocking if Solyndra ultimately costs Obama re-election.
.............................................................................................................................................
Meanwhile, the Republican cavalcade of clowns candidates are doing the best they can to make Solyndra a harmless irritant. You have Rick Perry effectively ending his chances by delivering the crowning blow to his debate ineptitude. One had to be in awe of his forceful statement that he would eliminate three government departments - followed by his comical inability to remember more than two of them. Could you envision an actual President delivering such a dunce routine? We need a convincing leader, not comic relief.
Then you have Herman Cain trotting out the old "Clarence Thomas defense" against several sexual harassment allegations in his so-far amateur hour denials. (And never forget how Clarence Thomas and some Supreme Court bullies helped get the 21st century ball rolling when George W. Bush and his gang of "weapons of mass destruction" war mongers, after being handed the election, initiated the never ending military contractor-feeding military occupations of oil-strategic countries. You know, to foster our fabulous democratic values on others while ignoring the class inequality and broken political structure leading to the growing Occupy/99% protests against our own dysfunctional government).
Mitt Romney has shown even less dynamicism than the terminally droll Dukakis and Kerry in arousing any enthusiasm. And his pre-politician career with leveraged buyout specialist Bain Capital does not particularly speak well when such outfits have been known to perceive employees as "liabilities rather than assets" in search of return on investment.
Don't even waste your time considering the antics of Michelle Bachman or Newt Gingrich unless you value wasting your time.
Meanwhile, the main stream media continues with its mission to shut out Ron Paul, despite many feeling he has acquitted himself well. Personally, I have not eliminated him based solely on his long standing position on the poisonous entity known as the Federal Reserve.
This leaves the basically not yet recognized candidacy of Jon Huntsman. I'm fairly impressed with him to this point. But he must get some momentum or he's toast. The man made a very good decision by forgoing the Nevada debate and being the foremost proponent of opposing Nevada moving their presidential caucus ahead of the New Hampshire primary. In doing so, he greatly enhanced his chances of a good showing to propel himself back into the race. Remember that many NH independents and democrats feel betrayed by Obama's policies and selection of Wall Street connected advisers. The NH primary is an open one, meaning that independents can participate. This NH poster is strongly considering temporarily changing my party affiliation from democrat to republican to vote for Huntsman in this one primary. Because I would like to see a process which eliminates the pretenders and promotes the legitimate contenders. At least for one more round until America decides it needs to establish a third party devoted to democratic principles truly responsive to the needs and desires of the electorate.
Monday, November 7, 2011
Corzine Tells CFTC Regulators What To Do
I guess I was mistaken in thinking that regulators actually perform their function by independently deciding on rules and enforcing them upon the bodies they are charged to oversee.
We now learn that the Commodity Futures Trading Commission was to vote on a rule to address the risky sovereign debt related trades that MF Global was entering into - partly by restricting their ability to borrow from their own customers to finance them. Ex- Goldman Sachs-er Corzine had decided it was a great idea to invest in the sovereign debt of fiscally outstanding nations such as Italy, Portugal and Spain. The passing of the proposed CFTC rule would have hampered their ability to make the big bets to sufficiently satiate their gambling habit.
The other impacted parties apparently just trotted out their usual lobbying teams to press against it. But MF Global's CEO Corzine directly and privately met with most of the five commissioners to enlighten them. He was obviously very convincing in lecturing them to the effect that such a rule was not needed and would hurt the profitability of firms such as MF Global. He so effectively intimidated, swayed and convinced the commissioners that the vote was delayed.
After the boneheaded bet backfired leading to bankruptcy, the issue of the missing $600 million arises. This, in itself invalidates half of Corzine's argument (that the existing accountability methods were fine and needed no further supervision). This leaves only the would hurt the profitability as being the accurate persuasive stance.
A dictionary definition of the term "regulators" most assuredly does not include bending over to the profitability interests of those regulated against the best interests of the general public. I'm so sure that I won't even bother to look it up. But that is precisely what happened here. A maniacal ego-driven habitual gambler personally co-opted the CTFC commissioners authority - and they let him do it by bowing to his "expertise", reputation and perceived credibility.
As the financial industry has taken over world power, I guess it is now time to add to all dictionary definitions affecting financial matters in any way. Terms such as "regulator" should include additional entries beginning with the phrase "when applied to the financial industry it embodies a differing meaning......".
Yes - in this matter involving a proposed CFTC rule - Corzine might just as well have been the head of the CFTC. And the kicker is that the New York Fed saw fit to add MF Global to its list of primary dealers in February of 2011 in the first place. I wonder what the "true" standards for admission to the group are?
Finally, is there any particular reason why subject CEOs and lobbyists are allowed personal and direct access to regulatory commissioners? Any learning disabled observer could see the opportunity for corruption, graft and flat out vote-buying. Why not restrict them to submitting position papers or arms length questions and answers? Most likely around 80% or more of lobbying efforts come from companies trying to avoid further supervisory measures. So why abandon basic tenets of governance by allowing this set of circumstances to exist? Especially when failure to reign them has been repeatedly been found to be so profoundly damaging
We now learn that the Commodity Futures Trading Commission was to vote on a rule to address the risky sovereign debt related trades that MF Global was entering into - partly by restricting their ability to borrow from their own customers to finance them. Ex- Goldman Sachs-er Corzine had decided it was a great idea to invest in the sovereign debt of fiscally outstanding nations such as Italy, Portugal and Spain. The passing of the proposed CFTC rule would have hampered their ability to make the big bets to sufficiently satiate their gambling habit.
The other impacted parties apparently just trotted out their usual lobbying teams to press against it. But MF Global's CEO Corzine directly and privately met with most of the five commissioners to enlighten them. He was obviously very convincing in lecturing them to the effect that such a rule was not needed and would hurt the profitability of firms such as MF Global. He so effectively intimidated, swayed and convinced the commissioners that the vote was delayed.
After the boneheaded bet backfired leading to bankruptcy, the issue of the missing $600 million arises. This, in itself invalidates half of Corzine's argument (that the existing accountability methods were fine and needed no further supervision). This leaves only the would hurt the profitability as being the accurate persuasive stance.
A dictionary definition of the term "regulators" most assuredly does not include bending over to the profitability interests of those regulated against the best interests of the general public. I'm so sure that I won't even bother to look it up. But that is precisely what happened here. A maniacal ego-driven habitual gambler personally co-opted the CTFC commissioners authority - and they let him do it by bowing to his "expertise", reputation and perceived credibility.
As the financial industry has taken over world power, I guess it is now time to add to all dictionary definitions affecting financial matters in any way. Terms such as "regulator" should include additional entries beginning with the phrase "when applied to the financial industry it embodies a differing meaning......".
Yes - in this matter involving a proposed CFTC rule - Corzine might just as well have been the head of the CFTC. And the kicker is that the New York Fed saw fit to add MF Global to its list of primary dealers in February of 2011 in the first place. I wonder what the "true" standards for admission to the group are?
Finally, is there any particular reason why subject CEOs and lobbyists are allowed personal and direct access to regulatory commissioners? Any learning disabled observer could see the opportunity for corruption, graft and flat out vote-buying. Why not restrict them to submitting position papers or arms length questions and answers? Most likely around 80% or more of lobbying efforts come from companies trying to avoid further supervisory measures. So why abandon basic tenets of governance by allowing this set of circumstances to exist? Especially when failure to reign them has been repeatedly been found to be so profoundly damaging
Thursday, November 3, 2011
Econorama: Who Owns The Fed? - Wrong Question
Econorama: Who Owns The Fed? - Wrong Question: Many people have been frustrated when trying to determine who actually owns the private entity known as the Federal Reserve. That's because...
Wednesday, November 2, 2011
Why Didn't The Press Ask Bernanke "The Begged For" Question?
An analysis of the Fed Chairman's press conference performance of 11/2/2011 is up to others.
But the press had the perfect opportunity to ask the one question on the minds of so many citizens and the press blew it.
- It had to do with a question posed regarding the potential increased purchases of mortgage backed securities and how that could revitalize the housing sector. Mr. Bernanke stated that such monetary policy (MBS purchases) had not been as effective as hoped because Americans had been prevented from buying new homes or refinancing by tightened bank credit lending standards. Essentially saying that Banks had choked off the intended supply of credit to the housing market by instead increasing their own coffers.
- SO HERE IS THE OBVIOUS FOLLOWUP QUESTION THAT WAS NOT ASKED :
When the TARP monies were made available to the Biggest Banks by decision of the Treasury Department and Federal Reserve (followed by discount window access and ZIRP) - why were conditions not placed on these banks to ensure that this funding was to flow into the general economy? That it not be allowed to be hoarded and even used to support executive compensation and trader bonuses?
This strikes me as something that goes to the heart of the matter. Something that makes normal Americans question the relationship between the Federal Reserve and the financial system. When opportunities to clarify these types of things are missed, it is a disservice to any person trying to make sense out of our present state.
These institutions seem to want all the privileges of being bank holding companies without the obligations and incumbencies inherent under Federal Reserve regulation that these same newly coined bank holding companies proclaimed when they applied for their new status. And it appears that these inappropriate privileges are being granted.
But the press had the perfect opportunity to ask the one question on the minds of so many citizens and the press blew it.
- It had to do with a question posed regarding the potential increased purchases of mortgage backed securities and how that could revitalize the housing sector. Mr. Bernanke stated that such monetary policy (MBS purchases) had not been as effective as hoped because Americans had been prevented from buying new homes or refinancing by tightened bank credit lending standards. Essentially saying that Banks had choked off the intended supply of credit to the housing market by instead increasing their own coffers.
- SO HERE IS THE OBVIOUS FOLLOWUP QUESTION THAT WAS NOT ASKED :
When the TARP monies were made available to the Biggest Banks by decision of the Treasury Department and Federal Reserve (followed by discount window access and ZIRP) - why were conditions not placed on these banks to ensure that this funding was to flow into the general economy? That it not be allowed to be hoarded and even used to support executive compensation and trader bonuses?
This strikes me as something that goes to the heart of the matter. Something that makes normal Americans question the relationship between the Federal Reserve and the financial system. When opportunities to clarify these types of things are missed, it is a disservice to any person trying to make sense out of our present state.
These institutions seem to want all the privileges of being bank holding companies without the obligations and incumbencies inherent under Federal Reserve regulation that these same newly coined bank holding companies proclaimed when they applied for their new status. And it appears that these inappropriate privileges are being granted.
It Could Be Argued that the Financial Industry Occupation Started in 1970
PART ONE OF A TWO PART VERY GENERALIZED VIEWPOINT ON HOW THE FINANCIAL INDUSTRY WAS ALLOWED TO DETERMINE THE DIRECTION OF AMERICA
Prior to 1970 the New York Stock Exchange prohibited investment banks from going public. They were either partnerships or closely held private corporations. The NYSE relaxed this rule in 1970. This opened the floodgates for investment bank IPOs beginning in the 70s and 80s. It allowed them to raise huge amounts of capital against which to borrow for investing with leverage. It assuredly also spurred the business model of massive reward for short term performance. The new standard of setting aside nearly 50% of earnings for salaries and bonuses for non-partners germinated here. The need for rather conservative stewardship of partner's fortunes was over, replaced by adventurous risk taking Of course, the later proven-faulty risk management provisions were also established to control it. The latter part of the 20th century spawned the growth of all kinds of financial products and instruments that torture us today. Created the chance-taking trader in search of great riches with little to lose if it didn't work out (or if fired - come out well ahead).
By 1999 all the now-despised Wall Street heavyweights had gone public - Morgan Stanley (1998) and Goldman Sachs (1999) being the last. I'm sure the decisions made by these last two holdouts were based on the forthcoming change in the US from fractional to a decimal based trading system. This required substantial investment in computerization to provide the required instantaneous bid/quote spread and speed to profitably address it. It fostered the growth and need for technical talent, financial engineering, computer programs with resultant algorithms - generally a new type of skill set to compete in the new information age driven by the internet.
This profound transformation was accompanied by the ascension to power of two of the most destructive individuals in the history of finance/government. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin. Greenspan tumbled from a widely respected Fed Chief to a tragically misguided clown at the end of his tenure. His legacy was to intensify the Fed's subservience to Banks, implement misguided monetary policy feeding bubbles (lastly the disastrous real estate bubble), to ultimately encourage recklessness and then proceed to not even recognize the bubbles he so greatly helped create. He also formed a tag team with Rubin to promote deregulation of derivatives and other dangerous products in the mistaken belief that markets can be effectively self governed. (Rubin's successor Larry Summers also lent his support and influence). These three, along with Bank lobby-bought politicians such as Phil Gramm were greatly responsible for shepherding through perhaps the most damaging financial related legislation in history. The Glass-Steagall Act so important to the stability of markets was repealed in 1999. (Thanks Congress - good work). No longer were the Investment Banks required to be separate from commercial banking operations. The Gramm-Leach-Bliley Act became law.
Like the ability for Investment Banks to go public, the Investment Houses jumped all over this. They all changed to bank holding company status. J.P. Morgan Chase, Bank Of America, Lehman Brothers, Bear Stearns, Citigroup, etc - followed by Morgan Stanley and Goldman Sachs to complete the foul mess by 2008 Their dream had come true. Their control and influence had become fully solidified. They got permanent access to the discount window and associated access to liquidity and funding. The public was then subject to their cynically comical stated reasons for pursuing the change in status. The "stability, flexibility and opportunity to better serve clients under regulatory supervision that the Fed provides with its full prudential supervision" etc. What a blasphemous way to describe the creation of moral hazard and the term "To Big To Fail". The only member of this august group to actually be allowed to fail was Lehman Brothers - and a 600 page book could be written to cover all the true reasons for that. Needless to say, Hank Paulson, Ben Bernanke and Timothy Geithner later took Congress hostage by deciding that should never happen again. And Congress continued on with its record of subservience to the Banking Elite. A situation still existing today.
PART TWO OF THIS PIECE WILL BE FORTHCOMING SHORTLY
Prior to 1970 the New York Stock Exchange prohibited investment banks from going public. They were either partnerships or closely held private corporations. The NYSE relaxed this rule in 1970. This opened the floodgates for investment bank IPOs beginning in the 70s and 80s. It allowed them to raise huge amounts of capital against which to borrow for investing with leverage. It assuredly also spurred the business model of massive reward for short term performance. The new standard of setting aside nearly 50% of earnings for salaries and bonuses for non-partners germinated here. The need for rather conservative stewardship of partner's fortunes was over, replaced by adventurous risk taking Of course, the later proven-faulty risk management provisions were also established to control it. The latter part of the 20th century spawned the growth of all kinds of financial products and instruments that torture us today. Created the chance-taking trader in search of great riches with little to lose if it didn't work out (or if fired - come out well ahead).
By 1999 all the now-despised Wall Street heavyweights had gone public - Morgan Stanley (1998) and Goldman Sachs (1999) being the last. I'm sure the decisions made by these last two holdouts were based on the forthcoming change in the US from fractional to a decimal based trading system. This required substantial investment in computerization to provide the required instantaneous bid/quote spread and speed to profitably address it. It fostered the growth and need for technical talent, financial engineering, computer programs with resultant algorithms - generally a new type of skill set to compete in the new information age driven by the internet.
This profound transformation was accompanied by the ascension to power of two of the most destructive individuals in the history of finance/government. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin. Greenspan tumbled from a widely respected Fed Chief to a tragically misguided clown at the end of his tenure. His legacy was to intensify the Fed's subservience to Banks, implement misguided monetary policy feeding bubbles (lastly the disastrous real estate bubble), to ultimately encourage recklessness and then proceed to not even recognize the bubbles he so greatly helped create. He also formed a tag team with Rubin to promote deregulation of derivatives and other dangerous products in the mistaken belief that markets can be effectively self governed. (Rubin's successor Larry Summers also lent his support and influence). These three, along with Bank lobby-bought politicians such as Phil Gramm were greatly responsible for shepherding through perhaps the most damaging financial related legislation in history. The Glass-Steagall Act so important to the stability of markets was repealed in 1999. (Thanks Congress - good work). No longer were the Investment Banks required to be separate from commercial banking operations. The Gramm-Leach-Bliley Act became law.
Like the ability for Investment Banks to go public, the Investment Houses jumped all over this. They all changed to bank holding company status. J.P. Morgan Chase, Bank Of America, Lehman Brothers, Bear Stearns, Citigroup, etc - followed by Morgan Stanley and Goldman Sachs to complete the foul mess by 2008 Their dream had come true. Their control and influence had become fully solidified. They got permanent access to the discount window and associated access to liquidity and funding. The public was then subject to their cynically comical stated reasons for pursuing the change in status. The "stability, flexibility and opportunity to better serve clients under regulatory supervision that the Fed provides with its full prudential supervision" etc. What a blasphemous way to describe the creation of moral hazard and the term "To Big To Fail". The only member of this august group to actually be allowed to fail was Lehman Brothers - and a 600 page book could be written to cover all the true reasons for that. Needless to say, Hank Paulson, Ben Bernanke and Timothy Geithner later took Congress hostage by deciding that should never happen again. And Congress continued on with its record of subservience to the Banking Elite. A situation still existing today.
PART TWO OF THIS PIECE WILL BE FORTHCOMING SHORTLY
Sunday, October 30, 2011
The "Occupy" Movement, Class Warfare, Bill Maher, Dr. Cornel West & Ron Christie
I just got finished watching the latest Bill Maher show. Definitely one of his better ones
His last guest was Ron Christie - a black republican ( a former Dick Cheney staffer, but not an elected official).
This individual's biggest point about recent demonstrations was that they are tearing at the fabric of American society. That we must remain unified as a people and not resort to class warfare. That democratic ideals of cooperation and compromise must be adhered to.
If the nation didn't exist as it now does, this might sound reasonable. But it is intellectually insulting to pronounce identifying and addressing the concept of class inequality as a dis-unifying thing when growing class inequality is the status-quo. When the entire 21st century has been an exercise in allowing the 1% to accumulate accelerating wealth at the expense of everyone else. It's almost like this gentleman is saying that citizens do not have the right to question the concentration of 70% of the country's wealth in the hands of the top few percent of the population because that's the way it is and should be accepted as such.
I wonder what rights this person thinks that Americans actually do have? If we can't protest policies that exacerbate the growing rift between the rich and the just-barely-getting-by-if at-all, what is left to protest? History showed that the Vietnam War was ended largely through the voice of the people. So just what segment of the population does this guy believe he is speaking for? Obviously one must make a relatively comfortable living just to be guest on Maher's show in the first place. Does this black man think that the civil rights movement so vital to his present status was an inappropriate attack on the unifying and just social fabric of American society in place at that time?
Ron Christie and people of his ilk are dangerous. When people attack or try to discredit appropriate activism challenging basic unfairness by pretending to champion democratic values - it is beyond destructive. It reveals an attempt to rely on constitutional authority to suppress the very ideals so very important to the magnificence of the Constitution itself. The exact circumstances that the Constitution was promulgated to correct for the new democracy.
I wish Dr. Cornel West and the other guests had not been so quick to shake Christie's hand in gestures of conciliation at the end of the show. Because the man doesn't deserve it. His stance on on the state of our country and support of restrictions to any ability to equalize it is the type of thought process that can be found in the collapse of all the empires which faded throughout the course of recorded history. One cannot defend what is inherently self-destroying from within since its foundation was ill built.
His last guest was Ron Christie - a black republican ( a former Dick Cheney staffer, but not an elected official).
This individual's biggest point about recent demonstrations was that they are tearing at the fabric of American society. That we must remain unified as a people and not resort to class warfare. That democratic ideals of cooperation and compromise must be adhered to.
If the nation didn't exist as it now does, this might sound reasonable. But it is intellectually insulting to pronounce identifying and addressing the concept of class inequality as a dis-unifying thing when growing class inequality is the status-quo. When the entire 21st century has been an exercise in allowing the 1% to accumulate accelerating wealth at the expense of everyone else. It's almost like this gentleman is saying that citizens do not have the right to question the concentration of 70% of the country's wealth in the hands of the top few percent of the population because that's the way it is and should be accepted as such.
I wonder what rights this person thinks that Americans actually do have? If we can't protest policies that exacerbate the growing rift between the rich and the just-barely-getting-by-if at-all, what is left to protest? History showed that the Vietnam War was ended largely through the voice of the people. So just what segment of the population does this guy believe he is speaking for? Obviously one must make a relatively comfortable living just to be guest on Maher's show in the first place. Does this black man think that the civil rights movement so vital to his present status was an inappropriate attack on the unifying and just social fabric of American society in place at that time?
Ron Christie and people of his ilk are dangerous. When people attack or try to discredit appropriate activism challenging basic unfairness by pretending to champion democratic values - it is beyond destructive. It reveals an attempt to rely on constitutional authority to suppress the very ideals so very important to the magnificence of the Constitution itself. The exact circumstances that the Constitution was promulgated to correct for the new democracy.
I wish Dr. Cornel West and the other guests had not been so quick to shake Christie's hand in gestures of conciliation at the end of the show. Because the man doesn't deserve it. His stance on on the state of our country and support of restrictions to any ability to equalize it is the type of thought process that can be found in the collapse of all the empires which faded throughout the course of recorded history. One cannot defend what is inherently self-destroying from within since its foundation was ill built.
Thursday, October 27, 2011
The Truth About Talipes: My Story, Your Story
The Truth About Talipes: My Story, Your Story:
I APOLOGIZE TO ANY INDIVIDUAL WHO MIGHT HAVE ACCESSED THIS BLOG FOR MY USUAL ECONOMIC-RELATED POSTS. I SIMPLY DON'T KNOW HOW TO SEPARATE THIS ONE ON MY GOOGLE ACCOUNT. PLEASE IGNORE IT IF UNINTERESTED.
AGAIN, I APOLOGIZE FOR ITS INCLUSION ON MY BLOG. I SIMPLY LACK THE ABILITY TO FIGURE OUT HOW TO SEPARATE IT FROM "ECONORAMA". I'M SORRY.
Well, as I said earlier - I was an identical twin born with a club left foot. The only way people could distinguish me from my identical twin brother was through my deformity.
This absolutely destroyed my self esteem during adolescence and young adulthood in the 1960s. It may or may not have contributed to my bipolar condition. I most definitely was
impacted by cyclical depression, but experienced no manic phases until my forties. But at the time, I simply didn't realize what the depressive episodes were - they seemed
just part of my life.
I grew up in a supremely athletic, competitive family. I also had an older sister and a younger sister. Both were excellent swimmers. They broke records at our local swim club and had their names on the records plaque above the locker rooms.
Everyone but me were the type who always won the first place ribbons and medals at swim meets.
My parents have told me that the family obsession with competitive swimming actually originated with the decision that swimming would be excellent therapy to maintain flexibility
in my club left foot. That this would help me in life.
Never did they consider the devastating emotional impact it would have. Never. My twin brother was a champion at his events. I would be striving to come in in third place if I
was lucky. I continued swimming until the distance changed from 50 yards (2 laps) to 100 yards (4 laps). My basic performance in freestyle was to be behind after the initial dive into the
water as I couldn't match the distance of others. I would then catch up somewhat towards the end of the first lap. I had a very strong arm stroke, but very poor kicking technique
as I could never properly extend my left foot. At the lap turn, swimmers used what is called "flip turns". My flip turns were a disaster as my feet never coordinated properly to push
off from the wall. So I would again fall behind and try to catch up. Normally I never quite could and ended up in 3rd or 4th place while my brother won.
My swimming coach wanted his team to win at all costs. I remember occasions when there were only two entrants in a the butterfly or backstroke competition. That left the third place
ribbon and points for the team open. My coach would summon me to "get third place for the team". I was terrible at these two styles. I swam the breast stroke and freestyle. But I would
enter as told. Sometimes the opposing coach would size me up and direct another of his own swimmers to enter the event. Now I'm either going to come in third or last. Probably half
the time i came in fourth. So I was humiliated by being forced to swim an event "for the good of the team" only to be embarrassed and get no points. I got out of the water and tried to
keep the tears inside.
So this was a great part of my life from age 10 to about 17 or so. Not only did I swim competitively in the summer, but also in winter swim clubs (YMCA and otherwise). I lacked the fortitude and confidence to simply tell my parents that I wanted out. That this was killing my psyche. That it was devastating to my self evaluation.
Instead, I was compelled to accompany my brother to continual swimming workouts at a place called "Suburban Swim Club". This was a facility whose purpose was to mold champions. Only the best members of my swim club went, along with the best from the area. So what was I doing there? I wasn't among the best and never could be.
It was psychological torture. The coach hated me. He knew I had no business being there and had less than zero compassion. It was not in his nature to do otherwise than develop champions. That was his job. Not to put up with a swimmer who shouldn't even be there and was holding up progress.
I remember doing laps where we used only our feet to improve our "kicking" for events. I could not keep up with the others and cheated by also using my hands to not slow practice down. The coach would actually scream at me for this cheating. Berate me in front of the others. I just held back the tears again.
Toward the end of the swim seasons, they would divide championship competitions into top flight swim meets and other meets for the lesser talented ones. My father would drive my twin brother to the top meets while my mother would take me to mine. I guess my father didn't have the time or interest to fool around with second rate competitive events.
Oddly enough, what I considered to be one of my very best performances took place at one of these winter swim meets. I was entered in the breast stroke 50 yard event. There were a total of six people in my heat - all of whom generally had about the same best times. So basically we were about even in skill level.
I got an excellent start and pulled away from the field. I won by a mile and felt great. I then asked my timekeeper what my time had been thinking it might have been my best ever. He ignored me and looked away. I asked again thinking he might not have heard me. Again I was ignored. When they gave the results it was announced that I had been disqualified for an "illegal kick". Even though I had swum breast stroke in this fashion my whole life, the official thought that my left foot kick was illegal and disqualified me from the race.
Hey man, it was just another blow to my self esteem. I wasn't even mentally strong enough to get angry. I just internalized it. Tried not to think about it. Just go on. I'm not even sure my father even cared enough to ask how I did that day. He was probably bragging about how my twin brother beat one of the top swimmers he had competed against. I also have never forgotten the reaction of my mother. On the drive home, she never really addressed it with me. Almost as though she had to take me to the meet and was reading a book or something instead of watching.
I mean, what's the difference anyway? The only reason I was swimming was to increase the flexibility in my left foot. Who cares how I did or how I felt? It didn't make any difference. Not one family member cared or understood for one instant about the impact this had on my psychological development.
But I now look at this as a life enriching thing - something that contributes to the quality of one's existence as they age. Although it nearly destroyed me at the time, ultimately I'm glad it happened as it made me grow as a person. Life is a strange thing to live through, you know.
Birney K. BrownMoneyloser1@google.com
I APOLOGIZE TO ANY INDIVIDUAL WHO MIGHT HAVE ACCESSED THIS BLOG FOR MY USUAL ECONOMIC-RELATED POSTS. I SIMPLY DON'T KNOW HOW TO SEPARATE THIS ONE ON MY GOOGLE ACCOUNT. PLEASE IGNORE IT IF UNINTERESTED.
AGAIN, I APOLOGIZE FOR ITS INCLUSION ON MY BLOG. I SIMPLY LACK THE ABILITY TO FIGURE OUT HOW TO SEPARATE IT FROM "ECONORAMA". I'M SORRY.
Well, as I said earlier - I was an identical twin born with a club left foot. The only way people could distinguish me from my identical twin brother was through my deformity.
This absolutely destroyed my self esteem during adolescence and young adulthood in the 1960s. It may or may not have contributed to my bipolar condition. I most definitely was
impacted by cyclical depression, but experienced no manic phases until my forties. But at the time, I simply didn't realize what the depressive episodes were - they seemed
just part of my life.
I grew up in a supremely athletic, competitive family. I also had an older sister and a younger sister. Both were excellent swimmers. They broke records at our local swim club and had their names on the records plaque above the locker rooms.
Everyone but me were the type who always won the first place ribbons and medals at swim meets.
My parents have told me that the family obsession with competitive swimming actually originated with the decision that swimming would be excellent therapy to maintain flexibility
in my club left foot. That this would help me in life.
Never did they consider the devastating emotional impact it would have. Never. My twin brother was a champion at his events. I would be striving to come in in third place if I
was lucky. I continued swimming until the distance changed from 50 yards (2 laps) to 100 yards (4 laps). My basic performance in freestyle was to be behind after the initial dive into the
water as I couldn't match the distance of others. I would then catch up somewhat towards the end of the first lap. I had a very strong arm stroke, but very poor kicking technique
as I could never properly extend my left foot. At the lap turn, swimmers used what is called "flip turns". My flip turns were a disaster as my feet never coordinated properly to push
off from the wall. So I would again fall behind and try to catch up. Normally I never quite could and ended up in 3rd or 4th place while my brother won.
My swimming coach wanted his team to win at all costs. I remember occasions when there were only two entrants in a the butterfly or backstroke competition. That left the third place
ribbon and points for the team open. My coach would summon me to "get third place for the team". I was terrible at these two styles. I swam the breast stroke and freestyle. But I would
enter as told. Sometimes the opposing coach would size me up and direct another of his own swimmers to enter the event. Now I'm either going to come in third or last. Probably half
the time i came in fourth. So I was humiliated by being forced to swim an event "for the good of the team" only to be embarrassed and get no points. I got out of the water and tried to
keep the tears inside.
So this was a great part of my life from age 10 to about 17 or so. Not only did I swim competitively in the summer, but also in winter swim clubs (YMCA and otherwise). I lacked the fortitude and confidence to simply tell my parents that I wanted out. That this was killing my psyche. That it was devastating to my self evaluation.
Instead, I was compelled to accompany my brother to continual swimming workouts at a place called "Suburban Swim Club". This was a facility whose purpose was to mold champions. Only the best members of my swim club went, along with the best from the area. So what was I doing there? I wasn't among the best and never could be.
It was psychological torture. The coach hated me. He knew I had no business being there and had less than zero compassion. It was not in his nature to do otherwise than develop champions. That was his job. Not to put up with a swimmer who shouldn't even be there and was holding up progress.
I remember doing laps where we used only our feet to improve our "kicking" for events. I could not keep up with the others and cheated by also using my hands to not slow practice down. The coach would actually scream at me for this cheating. Berate me in front of the others. I just held back the tears again.
Toward the end of the swim seasons, they would divide championship competitions into top flight swim meets and other meets for the lesser talented ones. My father would drive my twin brother to the top meets while my mother would take me to mine. I guess my father didn't have the time or interest to fool around with second rate competitive events.
Oddly enough, what I considered to be one of my very best performances took place at one of these winter swim meets. I was entered in the breast stroke 50 yard event. There were a total of six people in my heat - all of whom generally had about the same best times. So basically we were about even in skill level.
I got an excellent start and pulled away from the field. I won by a mile and felt great. I then asked my timekeeper what my time had been thinking it might have been my best ever. He ignored me and looked away. I asked again thinking he might not have heard me. Again I was ignored. When they gave the results it was announced that I had been disqualified for an "illegal kick". Even though I had swum breast stroke in this fashion my whole life, the official thought that my left foot kick was illegal and disqualified me from the race.
Hey man, it was just another blow to my self esteem. I wasn't even mentally strong enough to get angry. I just internalized it. Tried not to think about it. Just go on. I'm not even sure my father even cared enough to ask how I did that day. He was probably bragging about how my twin brother beat one of the top swimmers he had competed against. I also have never forgotten the reaction of my mother. On the drive home, she never really addressed it with me. Almost as though she had to take me to the meet and was reading a book or something instead of watching.
I mean, what's the difference anyway? The only reason I was swimming was to increase the flexibility in my left foot. Who cares how I did or how I felt? It didn't make any difference. Not one family member cared or understood for one instant about the impact this had on my psychological development.
But I now look at this as a life enriching thing - something that contributes to the quality of one's existence as they age. Although it nearly destroyed me at the time, ultimately I'm glad it happened as it made me grow as a person. Life is a strange thing to live through, you know.
Birney K. BrownMoneyloser1@google.com
What Just Happened to Greeks - Watch Very Carefully !
The newly announced 50% haircut to Greek debt holders is a colossal development. The stock markets have reacted exactly the opposite of the way they should have. It is unfathomable for markets to rise steeply due to this. It is an unmitigated disaster with disastrous ramifications.
It must be realized that billions upon billions of Greek debt is held by Greek Pension Funds. This means that 50% of the asset value of the Greek bond portion of the pension funds has just been wiped out.
Here's an example of what this really means to Greek pensioners and future retirees. I'll use my own situation as a proxy for a Greek citizen.
I worked for state government for 25 years and am now retired. Each and every time I got my paycheck I contributed to my state retirement pension fund (as did the system in my behalf). The fund then invested all the contributions in various assets such as bonds, Treasury's and stocks. The retirement fund directors pursued returns on assets to meet its payout obligations.
OK - just to provide a simplified example. What if my retirement fund held a mixture of investments that included 35% US government debt? What if, as just occurred in Greece, my pension fund and other state pension funds were forced to take a 50% haircut on the value of the US government debt portion? It would immediately destroy the integrity of my retirement program. Each and every retirement system for each and every state would go to crisis mode. They would all become insolvent overnight!
This exceedingly dangerous "solution" to Greece's sovereign debt crisis is catastrophic. Citizens in Italy, Spain and other sovereign debt stressed countries had better follow this very, very carefully. If things unfold resulting in other countries having to apply similar "solutions" - the world financial system will collapse. Completely fall apart.
No one will be safe. It will change the world as we know it. The legacy of worldwide governments will be that their central banks, planners, political bodies and all leaders blew up the world by allowing fraudulent unfree "free markets" and the elite users of weapons of financial destruction to ruin everything. That the fate of the world was handed over to a group who could not have been more wrongly selected. Could not have been more untrustworthy. The group who governments worldwide turned to for answers and guidance - when all they had to offer was destruction while they lived the high life. I predict when all is said and done, history will record the early 21st century as a period where the world could never adjust to the change from manufacturing-driven economies to financial-driven economies, much of whose resultant products brought no value to society. A time when the very definition of the term "bank" was perverted beyond recognition. When civilization caved in and crumbled as a result of continual bowing to the needs and desires of the very, very, very few.
It must be realized that billions upon billions of Greek debt is held by Greek Pension Funds. This means that 50% of the asset value of the Greek bond portion of the pension funds has just been wiped out.
Here's an example of what this really means to Greek pensioners and future retirees. I'll use my own situation as a proxy for a Greek citizen.
I worked for state government for 25 years and am now retired. Each and every time I got my paycheck I contributed to my state retirement pension fund (as did the system in my behalf). The fund then invested all the contributions in various assets such as bonds, Treasury's and stocks. The retirement fund directors pursued returns on assets to meet its payout obligations.
OK - just to provide a simplified example. What if my retirement fund held a mixture of investments that included 35% US government debt? What if, as just occurred in Greece, my pension fund and other state pension funds were forced to take a 50% haircut on the value of the US government debt portion? It would immediately destroy the integrity of my retirement program. Each and every retirement system for each and every state would go to crisis mode. They would all become insolvent overnight!
This exceedingly dangerous "solution" to Greece's sovereign debt crisis is catastrophic. Citizens in Italy, Spain and other sovereign debt stressed countries had better follow this very, very carefully. If things unfold resulting in other countries having to apply similar "solutions" - the world financial system will collapse. Completely fall apart.
No one will be safe. It will change the world as we know it. The legacy of worldwide governments will be that their central banks, planners, political bodies and all leaders blew up the world by allowing fraudulent unfree "free markets" and the elite users of weapons of financial destruction to ruin everything. That the fate of the world was handed over to a group who could not have been more wrongly selected. Could not have been more untrustworthy. The group who governments worldwide turned to for answers and guidance - when all they had to offer was destruction while they lived the high life. I predict when all is said and done, history will record the early 21st century as a period where the world could never adjust to the change from manufacturing-driven economies to financial-driven economies, much of whose resultant products brought no value to society. A time when the very definition of the term "bank" was perverted beyond recognition. When civilization caved in and crumbled as a result of continual bowing to the needs and desires of the very, very, very few.
Tuesday, October 25, 2011
The 12/31/11 end of Unemployment Compensation extensions Legislation
As many know, the federal unemployment extensions legislation is set to expire effective 12/31/11 unless Congress acts. This will immediately cut off millions of UI recipients in the beginning of 2012, followed by many more millions between the start of the new year and June 9, 2012.
One would think that politicians - as of 10/25/11 - would have announced or at least formulated their positions on this matter. This reasonable assumption is incorrect. I contacted the Washington, D.C. offices of my two US Senators and two US Congressmen about this one issue simply to ask their stance on this singular concept. I was unable to get a direct response to this very simplistically basic question.
Before calling these offices I had a discussion with a representative of the Bureau of Employment and Training responsible for the weekly reporting of initial unemployment claims. He was very forthcoming and enthusiastic about his job. Well spoken and thoughtful about a variety of issues. He essentially stated that not 100%, but closer to 130% of UI benefits are re-injected into the economy by the multiplier effect.
For example, before speaking to him I had not realized that budget constrained states had agreed to
relax restrictive "insured unemployment" standards to allow the payment of so-called State-Federal Extended Benefits as long as it was 100% federally funded (instead of 50-50). This EB category generally exists before the federal tier 1 to tier 4 extensions kick in.
My premise before speaking with him was a lingering question about what happens to people who receive a lengthy period of UI benefits and then are fortunate enough to get a new job. Only to be followed by a layoff or closing by the new employer. Would they then not be eligible for a new claim due to failure to accumulate enough earnings in their new eligibility period? ( Normally the first 4 of the last 5 completed calendar quarters).
He confirmed that this could be the case, but that states had created an alternative eligibility period to address this. Unfortunately, this would often result in a substantially lower weekly benefit amount - perhaps as low as $50 per week from a previous benefit amount around $300 per week. Hardly enough to live on.
But back to the premise for this piece. It is beyond my ability to comprehend that about nine weeks prior to the cut-off of extended benefits legislation, politicians are unwilling or unable to articulate their positions on this issue. This is basic stuff! I told the congressional staff that I spoke with that this is an issue on which my vote is decided since they are subject to two year terms - unlike my Senators who can relax until 2014 and 2016.
In summary - we now have congressmen/and or senators presumably nationwide who have either not yet established or are unwilling to provide their stance on the unemployment extension matter. A situation which will rear its monstrous head effective 12/31/11. One which will have a profound impact on our 70% consumer driven economy.
We are governed by a" last-minute-itis" group of clowns. Which just goes to show why the Occupy Wall Street/99% demonstrators are the only group who properly perceive our present state. And further exemplifies why trying to pigeon-hole them into one issue convenience is a mistake promoted by the powers-that-be.
I believe that the OWS group should keep their stance as is. Because there are far too many issues to compartmentalize in the manner that the corporate-controlled main street media and elite would prefer.
One would think that politicians - as of 10/25/11 - would have announced or at least formulated their positions on this matter. This reasonable assumption is incorrect. I contacted the Washington, D.C. offices of my two US Senators and two US Congressmen about this one issue simply to ask their stance on this singular concept. I was unable to get a direct response to this very simplistically basic question.
Before calling these offices I had a discussion with a representative of the Bureau of Employment and Training responsible for the weekly reporting of initial unemployment claims. He was very forthcoming and enthusiastic about his job. Well spoken and thoughtful about a variety of issues. He essentially stated that not 100%, but closer to 130% of UI benefits are re-injected into the economy by the multiplier effect.
For example, before speaking to him I had not realized that budget constrained states had agreed to
relax restrictive "insured unemployment" standards to allow the payment of so-called State-Federal Extended Benefits as long as it was 100% federally funded (instead of 50-50). This EB category generally exists before the federal tier 1 to tier 4 extensions kick in.
My premise before speaking with him was a lingering question about what happens to people who receive a lengthy period of UI benefits and then are fortunate enough to get a new job. Only to be followed by a layoff or closing by the new employer. Would they then not be eligible for a new claim due to failure to accumulate enough earnings in their new eligibility period? ( Normally the first 4 of the last 5 completed calendar quarters).
He confirmed that this could be the case, but that states had created an alternative eligibility period to address this. Unfortunately, this would often result in a substantially lower weekly benefit amount - perhaps as low as $50 per week from a previous benefit amount around $300 per week. Hardly enough to live on.
But back to the premise for this piece. It is beyond my ability to comprehend that about nine weeks prior to the cut-off of extended benefits legislation, politicians are unwilling or unable to articulate their positions on this issue. This is basic stuff! I told the congressional staff that I spoke with that this is an issue on which my vote is decided since they are subject to two year terms - unlike my Senators who can relax until 2014 and 2016.
In summary - we now have congressmen/and or senators presumably nationwide who have either not yet established or are unwilling to provide their stance on the unemployment extension matter. A situation which will rear its monstrous head effective 12/31/11. One which will have a profound impact on our 70% consumer driven economy.
We are governed by a" last-minute-itis" group of clowns. Which just goes to show why the Occupy Wall Street/99% demonstrators are the only group who properly perceive our present state. And further exemplifies why trying to pigeon-hole them into one issue convenience is a mistake promoted by the powers-that-be.
I believe that the OWS group should keep their stance as is. Because there are far too many issues to compartmentalize in the manner that the corporate-controlled main street media and elite would prefer.
Saturday, October 22, 2011
Who Owns The Fed? - Wrong Question
Many people have been frustrated when trying to determine who actually owns the private entity known as the Federal Reserve. That's because the Fed itself has historically taken pathologically profound steps to ensure against it becoming known.
But if you think about it, perhaps ownership - who the shareholders are - might not be as important as who directs its activities. In other words, in whose behalf the Fed actually functions. We hear a lot about the Fed existing to preserve the country's basic banking system and serve the nation by accomplishing its dual mandates.
Consider the relationship between the Fed and the primary dealers. These bodies basically want the public to believe that primary dealers facilitate the Fed's objectives by acting as trading counterparties of the NY Fed. That they ensure the Fed's objectives are implemented to achieve desired results.
But what if this is actually ass-backwards? What if the evolution of the financial industry is such that the Fed now exists to carry out the desires of the banking elite? The most recent development of the Fed supporting Bank Of America transferring toxic assets from its Merrill Lynch division to the bank holding company supported by customer accounts (despite deserved disagreement from the FDIC) appears to support this thesis. The FDIC believes the taxpayer should not again act as a backstop for Merrill's gambling habit while the Fed apparently does. Add this to the $700 billion TARP program, Fed discount window policies and the basic free money with no conditions attached philosophy and it becomes pretty apparent who's running the show. Also the insane decision to allow such entities as Goldman Sachs to become bank holding companies in the first place. Not to even mention exchanging liquid treasuries for "value unknown" pieces of paper (derivatives) or "100 cents on the dollar" decisions. A never ending arrangement of exchanging solid assets for trash.
A quick review of the NY Fed primary dealers list reveals it is filled to brimming over with TBTF banks. While Bank Of America proper is not on it, Merrill is. And the list does not consist only of American institutions. Actually BAC could be said to be on it by some kind of convoluted situation involving Merrill and Banc of America.
The primary dealers constantly meet and interact with the Fed. Interact to the extent that they know before anyone else about forthcoming Fed actions. Getting this information early allows them to front run every QE implementation and Twist policy. To allow them to set up their positions and profit from everything others learn about later. But it gets worse - of late the Fed has even been requesting advice from the TBTFs about moves it is considering.
No, the Federal Reserve does not act to preserve the banking system as a whole - it exists to serve the desires of the primary dealers. The question of who owns the Fed is not the proper one. The appropriate question is who controls the Fed and ensures that it acts in their best interests. The answer to this question is the primary dealers. And the primary dealers list is synonymous with the list of TBTF banks.
The TBTF banks have actually taken over a private entity which profoundly effects the lives of every American. This country is very far from a free capitalism democracy with equal opportunity for all. It has been hijacked by the most greedy, wanton, unpatriotic species known to man. The .01% that the Occupy Wall Street/99% demonstrators target - but Congress, Presidents, Treasury Secretaries and the Federal Reserve serve.
UPDATE : The recent audit of the Fed revealing $16 trillion in secret near-zero interest loans to certain banks and biggest corporations does VERY little to dispel the above and much to support it.
But if you think about it, perhaps ownership - who the shareholders are - might not be as important as who directs its activities. In other words, in whose behalf the Fed actually functions. We hear a lot about the Fed existing to preserve the country's basic banking system and serve the nation by accomplishing its dual mandates.
Consider the relationship between the Fed and the primary dealers. These bodies basically want the public to believe that primary dealers facilitate the Fed's objectives by acting as trading counterparties of the NY Fed. That they ensure the Fed's objectives are implemented to achieve desired results.
But what if this is actually ass-backwards? What if the evolution of the financial industry is such that the Fed now exists to carry out the desires of the banking elite? The most recent development of the Fed supporting Bank Of America transferring toxic assets from its Merrill Lynch division to the bank holding company supported by customer accounts (despite deserved disagreement from the FDIC) appears to support this thesis. The FDIC believes the taxpayer should not again act as a backstop for Merrill's gambling habit while the Fed apparently does. Add this to the $700 billion TARP program, Fed discount window policies and the basic free money with no conditions attached philosophy and it becomes pretty apparent who's running the show. Also the insane decision to allow such entities as Goldman Sachs to become bank holding companies in the first place. Not to even mention exchanging liquid treasuries for "value unknown" pieces of paper (derivatives) or "100 cents on the dollar" decisions. A never ending arrangement of exchanging solid assets for trash.
A quick review of the NY Fed primary dealers list reveals it is filled to brimming over with TBTF banks. While Bank Of America proper is not on it, Merrill is. And the list does not consist only of American institutions. Actually BAC could be said to be on it by some kind of convoluted situation involving Merrill and Banc of America.
The primary dealers constantly meet and interact with the Fed. Interact to the extent that they know before anyone else about forthcoming Fed actions. Getting this information early allows them to front run every QE implementation and Twist policy. To allow them to set up their positions and profit from everything others learn about later. But it gets worse - of late the Fed has even been requesting advice from the TBTFs about moves it is considering.
No, the Federal Reserve does not act to preserve the banking system as a whole - it exists to serve the desires of the primary dealers. The question of who owns the Fed is not the proper one. The appropriate question is who controls the Fed and ensures that it acts in their best interests. The answer to this question is the primary dealers. And the primary dealers list is synonymous with the list of TBTF banks.
The TBTF banks have actually taken over a private entity which profoundly effects the lives of every American. This country is very far from a free capitalism democracy with equal opportunity for all. It has been hijacked by the most greedy, wanton, unpatriotic species known to man. The .01% that the Occupy Wall Street/99% demonstrators target - but Congress, Presidents, Treasury Secretaries and the Federal Reserve serve.
UPDATE : The recent audit of the Fed revealing $16 trillion in secret near-zero interest loans to certain banks and biggest corporations does VERY little to dispel the above and much to support it.
Thursday, September 22, 2011
Thursday 9/22/11 Economics update
Some quick bullet points amidst the crumbling world :
1. Our system of governance has not yet adjusted to the global change from manufacturing driven economies to financial system driven economies.
2. As a result of the above, and other factors, financial institutions direct economic activity worldwide.
3. The far-less-than-honorable group of Primary Dealers totally control how much "free money" ends up in the various economies rather than the bonus pools of these same banks.
4. They have repeatedly shown that their instinct is, in fact, to retain these free monies for their bonus pools.
5. The Fed, the Treasury and other parties have repeatedly trusted Primary Dealers to act as anticipated by injecting free money made available to them into the economy. And they maintain this mistaken trust that they will. This despite the fact that the TARP money "with no strings attached" should have proven to a learning disabled individual that they wouldn't.
6. When such legislation as Dodd-Frank or the Volker Rule was passed, the actual promulgation of attached rules goes out for input . THIS is when financial lobbyists come into play. THIS is when legislators and regulators turn to "financial industry experts" for guidance and advice. THIS is when the financial industry extracts the teeth out of the intent of the original legislation. They will promote and agree to only the aspects that will have the minimum impact on the industry they represent.
7. The combination of #1 and #6 above is in the process of destroying our country.
...........................................................................................................
We as citizens are governed by politicians who have not yet adjusted to the realities of the 21st century world and who are therefore under the thumbs of the ruling financial industry.
1. Our system of governance has not yet adjusted to the global change from manufacturing driven economies to financial system driven economies.
2. As a result of the above, and other factors, financial institutions direct economic activity worldwide.
3. The far-less-than-honorable group of Primary Dealers totally control how much "free money" ends up in the various economies rather than the bonus pools of these same banks.
4. They have repeatedly shown that their instinct is, in fact, to retain these free monies for their bonus pools.
5. The Fed, the Treasury and other parties have repeatedly trusted Primary Dealers to act as anticipated by injecting free money made available to them into the economy. And they maintain this mistaken trust that they will. This despite the fact that the TARP money "with no strings attached" should have proven to a learning disabled individual that they wouldn't.
6. When such legislation as Dodd-Frank or the Volker Rule was passed, the actual promulgation of attached rules goes out for input . THIS is when financial lobbyists come into play. THIS is when legislators and regulators turn to "financial industry experts" for guidance and advice. THIS is when the financial industry extracts the teeth out of the intent of the original legislation. They will promote and agree to only the aspects that will have the minimum impact on the industry they represent.
7. The combination of #1 and #6 above is in the process of destroying our country.
...........................................................................................................
We as citizens are governed by politicians who have not yet adjusted to the realities of the 21st century world and who are therefore under the thumbs of the ruling financial industry.
Wednesday, July 13, 2011
Maxine Waters vs. Ben Bernanke
I actually thought Mr. Bernanke performed OK this time around.
But....................Representative Maxine Waters (D-CA) wounded him at the end with two questions:
1) Asking him why Mrs. John Mack of JP Morgan fame was able to, along with her connected girlfriend, put up $20 Million to obtain a $220 million non-recourse loan through TALF when qualified minorities cannot get a dime. A very symbolic question about why a lot of this stuff supposedly to improve the economy is actually still back door shoveling of money to banker types.
Bernanke claimed not to have read the Rolling Stone article, although he termed it wrong. When Waters pressed him further about details as to who did or did not have access to the funding, he essentially said that couldn't really be done. So he couldn't address her question about minority participation.
2). She asked him whether the Fed had a conflict of interest regarding the BAC settlement negotiations as BAC is partly owned by the Fed. Bernanke said that is incorrect as it is partly owned not by the Fed, but by the Richmond Reserve.
Well - " The Richmond Reserve is one of 12 reserve banks that, together with the Board of Governors, MAKE UP the Federal Reserve System ". Mr Bernanke was far less than accurate.
.............................................................................................
Finally (for now), none of the congressional questioners asked the OBVIOUS QUESTION.
- Given that all but 4 states must enact balanced budgets by July 1, someone should have asked the chairman about the impact of this on jobs/the economy GOING FORWARD. Many of them mentioned cuts having already occurred. But the vast majority of teacher, state and local layoffs haven't shown up yet. They are not presently accounted for in new claims statistics. These only now go through the week ending 7/2/11. But they will be shortly - resulting in my oft-stated opinion that the four week moving average of new claims will exceed 500k by Labor Day.
But....................Representative Maxine Waters (D-CA) wounded him at the end with two questions:
1) Asking him why Mrs. John Mack of JP Morgan fame was able to, along with her connected girlfriend, put up $20 Million to obtain a $220 million non-recourse loan through TALF when qualified minorities cannot get a dime. A very symbolic question about why a lot of this stuff supposedly to improve the economy is actually still back door shoveling of money to banker types.
Bernanke claimed not to have read the Rolling Stone article, although he termed it wrong. When Waters pressed him further about details as to who did or did not have access to the funding, he essentially said that couldn't really be done. So he couldn't address her question about minority participation.
2). She asked him whether the Fed had a conflict of interest regarding the BAC settlement negotiations as BAC is partly owned by the Fed. Bernanke said that is incorrect as it is partly owned not by the Fed, but by the Richmond Reserve.
Well - " The Richmond Reserve is one of 12 reserve banks that, together with the Board of Governors, MAKE UP the Federal Reserve System ". Mr Bernanke was far less than accurate.
.............................................................................................
Finally (for now), none of the congressional questioners asked the OBVIOUS QUESTION.
- Given that all but 4 states must enact balanced budgets by July 1, someone should have asked the chairman about the impact of this on jobs/the economy GOING FORWARD. Many of them mentioned cuts having already occurred. But the vast majority of teacher, state and local layoffs haven't shown up yet. They are not presently accounted for in new claims statistics. These only now go through the week ending 7/2/11. But they will be shortly - resulting in my oft-stated opinion that the four week moving average of new claims will exceed 500k by Labor Day.
Friday, July 8, 2011
Unemployment as a Lagging Indicator - A Mistake
The continuing (mis)perception of unemployment rates as a lagging indicator persists among economists. By treating it as such, they continue to pervert the already "dismal science".
In a 70 percent consumer driven economy it is ludicrous not to assign unemployment as a forward looking indicator. DOES IT NOT OCCUR TO ECONOMISTS THAT SPENDING PRACTICES AND BEHAVIOR GOING FORWARD WILL BE IMPACTED BY NEW OR CONTINUING UNEMPLOYMENT. Let me repeat that, families or individuals without jobs just cannot continue their former spending habits. For the economist asleep in the back row - the rate of unemployment and new claims filed will to a great extent determine the direction of a 70 percent consumer driven economy IN THE FUTURE.
With new claims remaining well above 400k a week (and in my estimation soon to increase with local, state and federal budget cutting layoffs yet to hit) and those already unemployed facing minimal new job creation as confirmed by the June pathetic 18k addition to payrolls - the forthcoming direction of the economy should be quite clear.
Consumer spending will dive and small retail businesses will in turn be shuttered. Restaurants will close, foreclosures will rise, the typical homeowner will continue to see their main asset deteriorate in value. Large businesses will continue to hoard cash and layoff workers to address decreasing demand.
Our government has completely failed us by shoveling trillions to the financial industry through TARP, emergency loans, the discount window, QE2, bailouts of AIG-type monstrosities, foreign banks and the financial arms of multi-national corporations. NONE of this has filtered down to the normal citizenry. NONE of this spending has helped the average American citizen. Trickle down economics has been exposed as a dangerous hoax - a thoroughly discredited fallacy.
Instead, the President's commission on jobs features Jeffrey Inmelt - the prototypical shredder of jobs. This person - surrounded by similar thinking types, defective economists and financial "stalwarts" - will not formulate anything of true value. Just read their preliminary report and see if you can detect any inspirational feature whatsoever. It is a rehash of nothingness - a travesty of wasted dollars of wining and dining.
When one properly focuses on unemployment trends as a FUTURE INDICATOR, it becomes clear that our future will be in a downtrend as our government chose to indiscriminantly fund those who will not contribute to a true recovery, while defunding those who could (government support agencies). This to occur at the same time as more of our citizens will turn to the defunded parties to help them survive a crisis to which they did not contribute. The "oh so important" FUTURE INDICATOR is signalling very lean times coming up. But we discount it at our peril by failing to properly account for it - instead consigning it to the utterly wrong status of lagging indicator.
In a 70 percent consumer driven economy it is ludicrous not to assign unemployment as a forward looking indicator. DOES IT NOT OCCUR TO ECONOMISTS THAT SPENDING PRACTICES AND BEHAVIOR GOING FORWARD WILL BE IMPACTED BY NEW OR CONTINUING UNEMPLOYMENT. Let me repeat that, families or individuals without jobs just cannot continue their former spending habits. For the economist asleep in the back row - the rate of unemployment and new claims filed will to a great extent determine the direction of a 70 percent consumer driven economy IN THE FUTURE.
With new claims remaining well above 400k a week (and in my estimation soon to increase with local, state and federal budget cutting layoffs yet to hit) and those already unemployed facing minimal new job creation as confirmed by the June pathetic 18k addition to payrolls - the forthcoming direction of the economy should be quite clear.
Consumer spending will dive and small retail businesses will in turn be shuttered. Restaurants will close, foreclosures will rise, the typical homeowner will continue to see their main asset deteriorate in value. Large businesses will continue to hoard cash and layoff workers to address decreasing demand.
Our government has completely failed us by shoveling trillions to the financial industry through TARP, emergency loans, the discount window, QE2, bailouts of AIG-type monstrosities, foreign banks and the financial arms of multi-national corporations. NONE of this has filtered down to the normal citizenry. NONE of this spending has helped the average American citizen. Trickle down economics has been exposed as a dangerous hoax - a thoroughly discredited fallacy.
Instead, the President's commission on jobs features Jeffrey Inmelt - the prototypical shredder of jobs. This person - surrounded by similar thinking types, defective economists and financial "stalwarts" - will not formulate anything of true value. Just read their preliminary report and see if you can detect any inspirational feature whatsoever. It is a rehash of nothingness - a travesty of wasted dollars of wining and dining.
When one properly focuses on unemployment trends as a FUTURE INDICATOR, it becomes clear that our future will be in a downtrend as our government chose to indiscriminantly fund those who will not contribute to a true recovery, while defunding those who could (government support agencies). This to occur at the same time as more of our citizens will turn to the defunded parties to help them survive a crisis to which they did not contribute. The "oh so important" FUTURE INDICATOR is signalling very lean times coming up. But we discount it at our peril by failing to properly account for it - instead consigning it to the utterly wrong status of lagging indicator.
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