Skip to content

Carving tentacled souls: Open thread

May 25, 2009

Three cephalopods of coral, ivory and wood. All three have distinct personality and measure less than two inches tall.

Another character to which I could relate: the frustrated rat hunter.

What’s on tap this week? More bankrupt auto companies? First week of summer with bbq’s? Total thermonuclear war?

35 Comments leave one →
  1. Stemella permalink*
    May 26, 2009 6:09 am

    Here’s a very good reason that we need progressive taxation and well funded social safety nets: When It Comes To Charity, Poor Give Too Much, Get Too Little

    and from the source article at good old McClatchy

    “The lowest-income fifth (of the population) always give at more than their capacity,” said Virginia Hodgkinson, former vice president for research at Independent Sector, a Washington-based association of major nonprofit agencies. “The next two-fifths give at capacity, and those above that are capable of giving two or three times more than they give.”

    Indeed, the U.S. Bureau of Labor Statistics’ latest survey of consumer expenditure found that the poorest fifth of America’s households contributed an average of 4.3 percent of their incomes to charitable organizations in 2007. The richest fifth gave at less than half that rate, 2.1 percent.

    The figures probably undercount remittances by legal and illegal immigrants to family and friends back home, a multibillion-dollar outlay to which the poor contribute disproportionally.

    None of the middle fifths of America’s households, in contrast, gave away as much as 3 percent of their incomes.

    “As a rule, people who have money don’t know people in need,” saId Tanya Davis, 40, a laid-off security guard and single mother.

    Knowing people in need might clutter their beautiful minds and offend their well coiffed sensibilities.

    Class war

    • cometman permalink*
      May 26, 2009 9:36 am

      That study probably doesn’t take into account simply helping out friends and neighbors either which still happens in some places at least.

      Made me think of an acquaintance I knew a long time ago. The guy was the town drunk/mascot and pretty much everyone knew about him at least. He was always shabby and disheveled and usually drunk or high from sniffing paint or something. I knew his sister somewhat, enough to know that mental illness was also a problem in his family. I bought him a beer once a long time ago and talked with him for a bit but the bartender made him leave after one drink because he evidently had a history of being a nuisance when he got too loaded. I moved away and didn’t see him for years and years. In fact I never heard of him at all again until his obituary appeared in the paper. He died fairly young, most likely because he didn’t take care of himself very well. But I will always remember that in the obituary several people spoke well of him and one woman mentioned that he would help out people even less fortunate than he was, and specifically told about him showing up with diapers for somebody when they couldn’t afford any for their kid.

      I also remember the “charitable” donation that Battleaxe Bush made after Katrina when she donated a half mil I think it was. Of course this half mil when to her rotten kid’s education company so he could get his programs into the schools they wanted to privatize after the disaster.

    • triv33 permalink
      May 26, 2009 4:04 pm

      All right, that does it! The next time the Loaves and Fishes bag comes home I am keeping that damned can of wax beans.

  2. cometman permalink*
    May 26, 2009 9:45 am

    Aggravating article here about pressure from lobbyists watering down the climate bill going through the legislature. To begin with the bill supports a cap-and-trade policy which is somehow supposed to keep companies from polluting. I don’t see how this will reduce pollution at all, but instead just let some pollute more while others pollute less, and I think what we really need is to simply regulate these industries with strict standards so they stop polluting altogether rather than allowing them to pollute with impunity as long as they buy some credits. Ferchrissakes, who gives a damn whether they pay for some credits if at the end of the day the river is still fouled or the mountaintop is still gone?

    But anyway, it appears that Congress is now busy making exceptions to this cap-and-trade bullshit because the companies that actually pollute the most don’t like it.

    The Democrats’ cap-and-trade climate bill continues to get watered down.

    First it was exceptions for utilities, whose coal-producing power plants produce massive amounts of carbon dioxide.

    Now it’s the ethanol lobby.

    Ethanol producers, who hold sway with a raft of rural Democrats, are taking umbrage with the recent Environmental Protection Agency finding which said that the “indirect land use” involved in ethanol production must be taken into account when calculating the carbon footprint of the gasoline additive. The EPA finding, when indirect land use is taken into account, calls into question the utility of ethanol as a greenhouse-gas-reducing fuel.

    • cometman permalink*
      May 27, 2009 12:07 pm

      Here’s more on the indirect land use issues. From the link above:

      The EPA found earlier that year that ethanol production has unexpectedly unfavorable consequences abroad.

      “For example, they say, if an American farmer decides to respond to the ethanol market by planting corn instead of soybeans — and as a result, Brazilian farmers decide to clear rain forests to grow soybeans — the increased carbon emissions from cutting down the forest would be calculated as a cost of producing ethanol,” Lerer wrote.

      Today I read this article about a Brazilian financier with deep ties to Citigroup. Those bastards have some pretty long tentacles it appears.

      On April 18, seven members of the Brazilian Landless Workers’ Movement (MST) were shot by private security guards on a farm in the Amazon that belongs to Agropecuária Santa Bárbara Xinguara S/A, a company controlled by international banker Daniel Dantas. A billionaire with former ties to Citigroup, Dantas is Brazil’s largest producer of cattle, and presently embroiled in a major financial and political scandal that reaches into the U.S. courts and financial system.

      Dantas was arrested last July and is in a whole lot of trouble right now as his financial empire falls apart and he is fighting to keep his extensive land holdings while Brazilians are trying to implement land reform which would distribute land more equitably among the population. Here’s the part that stuck out:

      Both the MST and the CPT have developed national policies for agro-ecology that mandate land be used for the sustainable production of healthy, culturally-appropriate food for local, regional, and national populations, produced by small and medium-sized family farmers, as opposed to industrial production of commodities for export—such as beef—on vast tracts of land controlled by a few wealthy landowners.

      These grassroots policies and practices fly in the face of Dantas’ plans for the region. With his financial business in shambles, his pending legal battles, and the country’s agro-industrial boom, expansion of large-scale farming appears as a highly attractive business venture. With the expansion of production for bio-fuels and commodity export, lands in Pará stand to be converted from cattle ranching to the more lucrative production of soybeans or sugarcane, pushing the cattle-grazing deeper into the forest. Given the legacy of impunity for rural violence in Brazil, landowners are unafraid of repercussions when repressing those who resist agro-industrialization.

      Exactly what the first article said, right down to the country and the crop! If you read the whole article, you find out more about Dantas’ ties to Citigroup and how they had quite the partnership, at least until Dantas’ activities started to become a PR headache for Citi. Pretty damn tangled web going on here.

  3. cometman permalink*
    May 26, 2009 10:31 am

    Hadn’t heard about this before, but there is proposed legislation to allow the GAO to audit the Fed and shed some light on what these banks are doing with all the money we keep shoveling to them. But as Dean Baker mentions, it is the Democrats in Congress who aren’t really supporting this:

    In a democracy, it is difficult to justify a situation in which the most important economic policy making body is, by design, more answerable to the banking industry than democratically elected officials. The Federal Reserve Transparency Act is a step toward making the Fed accountable. It would simply require that the Government Accountability Office audit the Fed’s books and report to Congress on the bailout and other issues.

    While more than 130 Republican members of the House of Representatives have signed on as co-sponsors of the bill, just over 30 Democratic members are co-sponsors. No one in the Democratic leadership has signed onto the bill. It is difficult to reconcile the Democrats’ position with President Obama’s often- repeated commitment to transparency. The resistance to transparency at the Fed will only encourage the public to believe that there actually is something to hide.

    Guess we’ll have to see if Status Quobama decides it’s worth twisting any arms over this one like he did to get the bailout passed in the first place.

  4. sisdevore permalink
    May 27, 2009 5:40 am

    this must be the place to mention Orlan, if there is one:

    • cometman permalink*
      May 27, 2009 6:38 am

      Whoa. That is some crazy stuff.

      She has even gone to the extremes of exhibiting and selling viles of liquid flesh drained from her operations.

      I think the misspelling by the author of that piece may be appropriate in this case ;)

      On her website there is one photo that looks like she turned her face into a Picasso but it’s hard to tell if that is the actual plastic surgery or just a doctored photo.

      • Stemella permalink*
        May 27, 2009 6:41 am

        Check out the ones where she looks like Mayan sculpture. Faaahreaky Frenchy! The nun shots are pretty amazing too (possibly not safe for work)

        Hell of a way to enjoy breakfast, looking at plastic surgery scars. Sacre!

  5. Stemella permalink*
    May 27, 2009 6:38 am

    The Bankstas (hattip to a commenter at calculated risk) aren’t even pretending anymore. According to a WSJ article quoted here Banks Lobby to Game PPIP

    Was that all part of the original plan, Timmy? Gaaaaaaah!

    • cometman permalink*
      May 27, 2009 8:20 am

      Pretty sure it was part of the plan, although Timmy will never admit it. Paulson tried to put these bad assets up for sale earlier and got no takers. Evidently everyone else knows they are CRAP but the banks still won’t admit it, so Timmy had to create this new shell game which will allow the banks to buy from each other at inflated prices to create the illusion that they’re worth something. Timmy must have felt that just handing them a few hundred billion more directly might have gotten him and his cronies the torch and pitchfork treatment so they went with the byzantine approach instead.

  6. cometman permalink*
    May 27, 2009 8:35 am

    I was catching up on reading some issues of The Nation last night which have been piling up on the coffee table and found this article about the so far unsuccessful efforts to help fix mortgages for homeowners in danger of being foreclosed upon.

    Every effort to date to order that chaos has failed utterly. The mortgage industry got things started in July 2007 with its cruelly named HOPE NOW program. George W. Bush offered a narrowly tailored Federal Housing Authority (FHA) refinancing program, dubbed FHASecure. And last summer, Congressional Democrats finally came in big with HOPE for Homeowners, which put up $300 billion for FHA-administered refinances. All these plans have two things in common: they relied on the industry’s voluntary participation, and they didn’t work.

    HOPE for Homeowners has generated the most laughable data. The program launched in October. As of late March, it has prevented exactly one foreclosure. “Needless to say, the program isn’t working terribly well,” an FHA spokesman deadpanned to

    HOPE NOW’s press shop has been less modest. The program claims to have helped millions avoid foreclosure through loan modifications. But despair lies just below the surface of the industry’s assertions. In early April, the Office of Thrift Supervision (OTS) released a fourth-quarter report that found more than half of all loan workouts last year failed to reduce monthly payments, and nearly one-third actually increased the payments.

    No surprise, then, that 60 percent of loans modified in the first three quarters of 2008 were at least thirty days delinquent at year’s end, according to OTS. Valparaiso University consumer law scholar Alan White describes it as “converting risky subprime loans into risky modified loans.”

    If you read the whole thing, a lot of the problems come from the mortgage servicers. Well, them and the hapless Congress. When the article was written the Senate hadn’t yet crushed the cram down bill that would have allowed judges to adjust mortgages. Anyhow, after reading it I have to say I still don’t really understand what these mortgage servicers actually do. I didn’t understand it when I got my own mortgage a few years ago either and the woman at the credit union couldn’t really explain it to me. All I know is they kept my mortgage in house which was my main requirement. I didn’t want mine sold back and forth 50 times before the ink was even dry. After reading the article I’m really glad I insisted on that because some of the people it describes can’t even tell who they’re supposed to send their checks to anymore.

    If anybody reads the whole thing and can explain to me what these servicers do, I’d really appreciate it. Because from what I can tell, all they do is send me a bill every month and deposit the check somewhere when we send it in. And they seem to make the whole system way more complicated than it needs to be.

    • Stemella permalink*
      May 27, 2009 4:48 pm

      Mortgage servicers (eg Countrywide, First American) are the thugs to whom loans and loan management are outsourced by lenders (bankstas). They are the middlemen heavily responsible for the fraudulence in the real estate bubble.

      As the Nation article shows they are also the Repo men who drive people in foreclosure insane.

      Here’s a faq on Mortgage Servicers (fluffers for bankstas?) from the Federal Trade Commission: Mortgage Servicing: Making Sure Your Payments Count

      Their existence would be unnecessary if banks would get back into the business of loaning directly to homebuyers like they used to in the good old days.

      Here’s an example of one such piece of shit servicer: Ex-Countrywide No. 2 plans IPO for vulture firm Number 2 is right, all right.

      Stanford Kurland, former president of mortgage giant Countrywide Financial, plans an initial public offering for his new venture, a company that invests in distressed debt.

      Kurland, operating under the name Private National Mortgage Acceptance Company (PennyMac), teamed with investors BlackRock Inc. and Highfields Capital Investments LLC to raise money and buy troubled loans. I interviewed him back in June 2008 about it, and he said he was hiring folks from Orange County to work in the Calabasas headquarters — near Countrywide’s HQ.

      On May 18, he formed a real estate investment trust as another way to play the debt market, according to a public filing. The REIT’s IPO might raise $750 million, but that figure is a rough guide, since the filing left open the number of shares to be sold and the price per share.

      The REIT is called PennyMac Mortgage Investment Trust, and has $1,000 in cash to start — clearly Kurland is hoping interest in distressed debt and his reputation are enough to sell shares. The filing says there could be $1 trillion in troubled loans in existence out of $4 trillion whole loans in all — that’s not counting loans turned into mortgage securities.

      If I remember correctly, that Black Rock Inc, was one of the few interested in buying up toxic assets under Geithner’s PIPP.

      So this jerkoff is responsible for boatloads of bad mortgages, gets his complany bought up by zombie BofA and now starts a new company to profit off the disaster he helped make. Vulture to the extreme. Open that link and look at that asshole’s face. Pure rotten greed.

      • cometman permalink*
        May 28, 2009 9:20 am

        Thanks for that faq link. So basically all they do is deposit checks and send out bill unless people people can’t pay on time. Then they actually have to do a little work, which judging by the following quote from the nation article, their business models didn’t plan for:

        Most of the firms absorbed by the big banks had specialized in subprime loans. And servicers generally get paid twice as much to manage subprimes as primes, based on the idea that subprime loans require more work–frequent contact with borrowers and specialized labor. But the boom obscured these costs; because very few loans demanded more than collecting and processing more and more payments, few firms invested in developing the kind of skills necessary to service subprime loans–doing so would have undermined the savings from consolidation, outsourcing and automation.

        The industry’s business model fell apart, however, when the default rate shot up to more than 10 percent–a number that’s getting worse fast, according to OTS. Subprime loans continued failing at high rates last year, but now prime loans are hemorrhaging, too. OTS found that delinquency among formerly stable prime loans more than doubled in 2008, to 2.4 percent, with the most significant rise happening in the fourth quarter.

        So from what I can gather, the servicers are trying to make up for that by jacking people who are delinquent with huge fees, which only makes the problem worse.

        I still don’t understand completely who pays what to whom for what reason though, and I actually worked for a mortgage processor for several months. The servicer collects the checks, and then do they turn around and pay the original lender the premiums? And who pays the servicer for their services, the original lender? After paying the origination fees on my mortgage, all I’m paying is principal and interest, so I’m assuming that the fees that processors and servicers get comes out of the interest payments charged by the original lender.
        And where does the processor come in? All we did was put together the paperwork that came in from various sources. I’m assuming the company I worked for actually purchased the loans for a short time, and once the paperwork was complete, we’d bundle a bunch of loans together and sell them off to Freddie Mac, Wells Fargo, etc as fast as we could. Often the paperwork was not in order and I caught several errors in my time there (for example the borrower got a bigger loan than the paperwork we had said they were approved for), but my boss told me not to worry about it and get the mortgage out the door. The whole thing was like a mortgage sweatshop using untrained cheap temp labor who were fired if they didn’t meet daily quotas and I was pretty appalled to see what was going on there.

        The whole process is so convoluted, and that is where some of the biggest problems come in. Once servicers change, and loans are cut up and bought and sold several times over, nobody can tell who the actual owner of a given loan is anymore. I think you hit the nail on the head by saying we need to get back to the old way of doing things.

        And yeah, I remember Kurland :)

  7. cometman permalink*
    May 27, 2009 12:27 pm

    Worth a read, at least for the humor – David Sirota uses the vernacular to describe the latest attempts at populism with Teabags vs. Douchebags.

  8. cometman permalink*
    May 27, 2009 12:56 pm

    Go Sibel Go! Sibel Edmonds is starting a whistleblower project at her website and is asking people to name names.

    At my new blog, 123 Real Change, I’m happy to present an experimental project, Project Expose MSM, created to provide readers with specific mainstream media blackout and/or misinformation cases based on the documented and credible first-hand experiences of legitimate sources and whistleblowers.123 Real Change is inviting all members of the National Security Whistleblowers Coalition (NSWBC), other active (covert or overt) government whistleblowers, and even reporters themselves, to publish their experiences in regard to their own first-hand dealings with the media, where their legit disclosures were either intentionally censored, blacked out or tainted.

    Yes, we will be naming names — myself included.

    Seeing that she has been under a gag order for several years now, I’m really interested to see what, if anything, she has to say. Maybe this project will not turn up much, or maybe it will be the next Pentagon papers. Stay tuned.

  9. Stemella permalink*
    May 28, 2009 6:22 am

    Geologists have discovered a new fault line south of Whidbey Isld that could wreck havoc in Western Washington some day. I’d heard of a fault along San Juan de Fuca, but apparently there are many more. The article, Earthquake fault much larger, more dangerous than thought says dozens of new faults have been discovered in W. Wa in the last decade.

    • cometman permalink*
      May 28, 2009 8:53 am

      They used to talk about the big one hitting the Seattle area fairly often when I lived there, but that was well before this new info. I was there for this earthquake which was an interesting experience. Tall buildings were swaying for for 20 minutes or so afterward, which they are designed to do, but it was pretty freaky for those who were on the top floors at the time.

      Ran across this article yesterday about an enormous dripping blob in the Nevada area. Scientists seem to think it won’t do much:

      All the numerical models computed by the team suggest that the drip isn’t going to cause things to sink down or pop up quickly, or cause lots of earthquakes.

      There would likely be little or no impact on the people living above the drip. The team believes that the drip is a transient process that started some 15-20 million years ago, and probably recently detached from the overlying plate.

      I’m not so sure. I don’t want to be swallowed by the dripping blob so I’m going to stick to my home poker game instead of going to Vegas to get my gambling fix :)

      • Stemella permalink*
        May 28, 2009 9:02 am

        What the fuck? A giant dripping blob below Vegas? That explains a lot.

        Evidently there are sink holes in Lake Huron where strange purple primordial crawling ooze thrives in the absence of oxygen.

        Kerrrrazy! I love it!

        • cometman permalink*
          May 28, 2009 9:26 am

          These discoveries are really amazing. It really rewrites a lot of what we were taught in school about life needing sunlight and oxygen to exist. I’m thinking that maybe bacteria will be our new overlords :P

  10. Stemella permalink*
    May 28, 2009 6:42 am

    Obama and Biden express excessive optimism about how well the economy is doing along with the usual suspects in the Corporate press, but reality says otherwise.

    The CBO report found that through April only about $19 billion in stimulus funds has been spent.

    In addition, Elmendorf predicted, unemployment is expected to peak at 10.5 percent in the second half of next year. Last month’s rate was 8.9 percent, up from 8.1 percent in February, when the stimulus became law. The number of unemployed increased by 1.26 million during the past two months to 13.7 million.

    The administration’s report Wednesday was nonetheless upbeat, maintaining that in the past 100 days, “We have obligated more than $112 billion, created more than 150,000 jobs and helped communities and tribes in every state and territory.”

    Without the stimulus, said Jared Bernstein, Biden’s chief economic adviser, those jobs wouldn’t have been available.

    Moreover, Biden said, recovery is “more than just a compilation of statistics; it’s the return of hope and optimism about the future that comes with making life better for communities and families across the country.”

    So of the 787 billion stimulus they’ve spent 19 and obligated another 112, creating a total of 150k jobs when 6.7 minimum have been lost. Oh, but don’t pay attention to the numbers says windbag Joe, no, it’s all about a feeling.

    Well, let me tell Joe my feelings about Hope and Optimism. Until those fuckwits in DC actually put down some legislation with teeth and consequences for the Corporate pirates and bankstas I’m going to feel pretty well pessimistic and bitter and the inequality in Joe’s and Quobama’s governance.

    I don’t buy it. At this point all the continued talk about hope, change and optimism, given all the disingenuous bullshit regarding the stimulating of main street vs wall st, is an outright insult. Didn’t they spend all those billions on banksta stimulatin in ten seconds flat? Hoping we’d believe it would trickle down ala Reaganomics and knowing damn well it wouldn’t? And they want us to be optimistic? Fuck off!!

    Here’s a link to the article: Despite Obama’s optimism, economic outlook remains grim

    • cometman permalink*
      May 28, 2009 9:35 am

      IIRC the number of jobs they claim to have created is less than the break even point even in normal times.

      This constant repetition that things are getting better if we just throw a little more money at the problem reminds me of the two-bit shysters you see on the street all the time asking for money because their car ran out of gas. I got tricked by this scam a couple times – actually “felt threatened and handed over a couple bucks” was more like it. But I eventually smartened up and now when somebody tries to stop me on the street with the out of gas story, I just smile and tell the guy that maybe if they’d come up with a different story instead of trying the same one that’s been used all over the country for years on end, I might give them a couple bucks just for the entertainment value. That usually gets a chuckle from the more “honest” panhandlers. Maybe we should try that approach on Geithner et al the next time they come begging.

  11. Stemella permalink*
    May 28, 2009 7:16 am

    PPIP may get the axe. Federal plan to sell bad bank loans may be iced

    The Wall Street Journal reported online late Wednesday that a government program designed to rid banks of bad loans may be put on hold.

    The Federal Deposit Insurance Corp. is supposed to help finance purchases of bad loans from banks. Buyers would also benefit from taxpayer-funded capital placed in investment funds alongside their money. The Journal, citing anonymous sources, says:

    But prospective buyers and sellers have expressed reticence to the FDIC about participating for fear the program’s rules will change in a political atmosphere hostile to Wall Street. In addition, some banks that might have sold troubled loans into the program earlier in the year have become less eager as they regained a sense of stability.

    The Public Private Investment Program was supposed to be split between the FDIC, focusing on whole loans, and Treasury, focused on securities. The Journal says Treasury is expected to move ahead and could start purchases in summer. But the size of the program could be reduced.

    Now axe the Elfin one, Obama. Just do it!

    The transfer of public to private wealth has been accomplished. No need to pretend anymore. Is that what this means?

    • Stemella permalink*
      May 28, 2009 7:26 am

      And more on the PPIP CRAP banks incestuously buying ToxAss from selves and eachother etcetera, from Simon Johnson

      Allowing banks to buy their own assets under the PPIP is a terrible idea

    • cometman permalink*
      May 28, 2009 9:45 am

      You may be right with your assessment at the end there. “….less eager as they regained a sense of stability” sounds a lot like “We already stole more than we really need so thanks” to me.

      This part is a joke:

      In a separate earlier article, the Wall Street Journal reported banking trade groups have lobbied the FDIC to let banks both buy and sell assets in the program. Hence, critics say banks could game the system at taxpayer expense.

      According to National Mortgage News, Bair downplayed the issue, saying, “Banks will not be able to bid on their own assets.”

      That’s some clever parsing if you ask me. They aren’t going to bid on or buy their own assets, but they will buy each others’, which accomplishes the same thing.

      • cometman permalink*
        May 28, 2009 9:52 am

        Ha! I should be an economist! That last comment was supposed to reply to the one above it. Then I went and read the Simon Johnson link and saw:

        Now, even if banks aren’t allowed to buy assets directly from themselves, there are still reasons to be worried. If you think of the banking sector as one big entity, then it’s obviously in the interests of that entity to buy assets from itself exactly as described above – only with Bank A buying from Bank B and Bank B buying from Bank A (or more complicated permutations as required). In other words, there is a massive incentive to collude. Now, collusion is illegal. So the question is whether the banks can get themselves into an equilibrium where they all overpay for each other’s assets – thereby benefiting everyone – without actually conspiring to do so. This is like when one airline raises prices and immediately every other airline follows suit – there’s nothing illegal about it, even though the end result is the same as if they had colluded.

        • Stemella permalink*
          May 28, 2009 10:26 am

          Indeed! :)

  12. cometman permalink*
    May 28, 2009 10:29 am

    From the WAPO via Truthout comes news that the government is considering creating one big regulator to oversee the banks.

    This rather ambiguous statement from anonymous sources sounds like an incredibly bad idea:

    They favor vesting the Federal Reserve with new powers as a systemic risk regulator, with broad responsibility for detecting threats to the financial system. The powers would include oversight of previously unregulated markets, such as the derivatives trade, and of market participants such as hedge funds.

    And who knew that our current system is this fucking dumb:

    Among these ideas is the creation of a single agency to regulate banks. The new regulator would assume responsibility for the safety and soundness of banks, currently divided among the Fed and three other agencies: the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Deposit Insurance Corp. The OCC and the OTS would probably disappear, while the Fed and the FDIC would retain other responsibilities.

    Under the current system, banks can choose their regulator. Because the OCC, OTS and FDIC are funded by fees from the banks, the regulators have an incentive to compete for business by offering more lenient oversight. The system also divides supervision of the largest financial conglomerates among multiple agencies, each with responsibility for certain subsidiaries, creating gaps in coverage that companies have exploited. Many experts say these failures of regulation contributed to the financial crisis.

    Why the hell are we running government as if it were a for-profit system?!?!?! These agencies are extremely important, or at least they should be, considering the overall lack of any oversight which enabled the economic meltdown to get far worse than it should have. A less fucking dumb system would fund these agencies appropriately through tax dollars so government workers’ livelihoods wouldn’t depend on them not doing the job they are supposed to do by offering lax oversight. Jeebus H Tapdancing Xrist!

    We’ll have to see how this progresses, if it does at all. On one hand there are some serious problems which demand immediate oversight. But on the other hand, I can help but think of how FINRA was created a couple years ago, when Bernie Madoff and others lobbied for its creation by combining other regulators so they would face less oversight in the end. If new regulation and consolidation were done properly it would be great. But this is the US government we’re talking about here. What are the odds that they actually do something properly after all the lobbyists and crooked Congresspeople have had their say?

    • Stemella permalink*
      May 28, 2009 12:43 pm

      Agreed. I can’t help but think how this whole thing corresponds to the Rumsfeld and Bush governmental strategy of privatizing all government functions via the Pentagon. They ballooned the expenditures to private contractors and yet expanded and centralized the bureaucracy even more, while maintaining that they were increasing efficiency as they swindled the commons. Totally contradictory. Totally Fubar.

      The Obama people are still looking to supersize regulation while keeping the supersized entities that are unsustainable intact. They are building up giant zombie infrastructure to hold up and support the zombie financial system. More smoke and mirrors, I say.

      Until they deal with the cronyism and corruption inherent in the system, this oversight plan cannot possibly work. They need to break it all up in smaller chunks. Smaller, damnit!!

      It is mind boggling.

  13. cometman permalink*
    May 29, 2009 12:26 pm

    Nice article here about the prevalence of Ponzi schemes. The guy the article focuses on took the honorable way out when he got caught:

    In January, with the economy tanking and Bernard Madoff’s $65 billion scam unraveling, Bruce Kramer met a nervous investor for lunch at Hawthorne’s pizzeria in Mint Hill.

    The investor, a Charlotte consultant who had invested several hundred thousand dollars with Kramer’s foreign currency exchange firm in Cabarrus County, wondered if the money was safe. Kramer reassured him it was, recalled the investor, who asked not to be identified to protect his family.

    Kramer then thanked him for lunch and drove off in a new $90,000 Maserati.

    A month later, Kramer shot and killed himself. Court documents allege he swindled $40 million from 80 clients and spent much of it on luxury cars, a racehorse, art and extravagant parties.


    On Feb. 25, Kramer shot and killed himself at his $1.5 million, 55-acre Cabarrus County estate, police reports say.

    That afternoon, a friend called the Charlotte investor to say Kramer had died. Investors learned the Barki trading account contained less than $600,000.

    At least we won’t have to spend tax dollars prosecuting the guy.

    • Stemella permalink*
      May 29, 2009 12:33 pm

      Zing! I don’t think they’d prosecute him anyway. He probably owned a congresscritter or two.

  14. cometman permalink*
    May 29, 2009 12:34 pm

    Foreclosure and delinquency rates now at record highs and it isn’t just sub-primes that are the problem anymore as more and more people lose their jobs. From McClatchy:

    A record 12 percent of all U.S. mortgages were at least one payment behind or in the foreclosure process during the first three months of this year, a report said Thursday.

    In a reminder that the nation’s economic problems aren’t going away anytime soon, the report also found that the foreclosure rate on prime fixed-rate loans to financially healthy borrowers has doubled in the past 12 months. For the first time since the explosion in subprime lending to borrowers with weaker credit began early in this decade, in fact, the largest percentage of new foreclosures in January, February and March were on prime fixed-rate loans.

    And there was the familiar doublespeak from the banking industry:

    “What appears to be happening (is that) while the effects of the recession are being felt everywhere, in those states where there have already been the biggest price drops, that’s where problems are translating immediately into foreclosures,” said Jay Brinkmann, the chief economist for the mortgage bankers group.

    Brinkmann said that the number of prime mortgages going into foreclosure would only increase because the U.S. economy is expected to continue shedding jobs well into next year, although the recession is expected to end by the last three months of 2009.

    So everybody is going to continue losing jobs but the recession is going to be over? For whom? The people living in a cardboard box or the bankers who got trillions of free money? And I’m sure the tens of thousands of impending layoffs just within the auto industry are really going to help matters.

    • Stemella permalink*
      May 29, 2009 1:01 pm

      For the bankstas, silly. They’ve been bailed out and compensated for getting everyone in DC in positions of power.

      The resta us scmhmoes aren’t going to see real recovery for a decade. This is the new normal as the punditry likes to say. Unless of course we go all zapatos on their asses! :)

      • cometman permalink*
        May 29, 2009 2:11 pm

        Ha! If I can get it together I have a zapato-themed post coming up. Actually it’s a sabot-themed one since the French are at least putting up somewhat of a fight against the banksters and CEOs while we get used to the new normal over here.

        • Stemella permalink*
          May 29, 2009 3:06 pm

          Excellent. I look forward to reading it. I just threw up the new thread to have somewhere to post all that econ stuff I read earlier this morning. If I find any useful info about Timmy’s trip to China I’ll post it under there this weekend.

          I wish people would toss sabots at Geithner, curly toed, pointy ones! :)

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: