Category Archives: bailout

The Crimes of Donald Trump

By Joseph Ballin

5/13/2017 7:10 PM EST

The one thing I hate most about being American is the hypocrisy of our views towards life and rule of law. This brings me to Donald Jay Trump, a guy you may have heard of. So Trump paints himself as his good moral god fearing Christian man who cares about muh fetuses, while on the side grabbing pussy. However, Trump has no problem dropping drones on innocent people while the orange cunt eats chocolate cake in Mar-a-Lago. I do not know the exact numbers of innocents murdered under the fascist Trump regime. The Obama regime considered any male 16 years or older killed as “terrorists”. It is hard to tell when the US is propping up proxy regimes like Egyptian General Sisi and funding secret covert terrorists in Syria since 2005. If I had to estimate he’s killed at least a couple thousand if not ten thousand innocent people since January 20.

For all the Trump voters out there who thought he was the peacenik to Hillary’s war mongering, where are you now? He’s given the CIA and generals the power to kill anyone at any time and deploy US ground troops to any country at any time. We’ve seen an massive escalation in drone strikes under the Trump regime, along with a $100 billion arms deal for Saudi Arabia. There is a build up of US ground troops in Afghanistan and Iraq, along with deployment of US ground troops in Syria and Somalia. He allowed his generals to drop MOAB on Afghanistan and we still do not know how many people were killed from that strike because nobody has been allowed anywhere near the blast. And he is pushing us towards war with North Korea and Iran, all while striking the Syrian government over a chemical attack committed by the al-Qaeda white helmets. Relations with Russia are at the worst they have ever been and we are already probably in a new cold war with them. Trump’s foreign policy is basically a return back to the times of the Golden Horde.

Again all of this doesn’t mean Hillary was the peace candidate, far from it, but we didn’t have people like Trump supporters out right lying saying she was. If I had it my way I would have Trump, Hillary, Obama, Bush, Bill Clinton, GWB, GHWB, Jimmy Carter, and pretty much almost the entire US government on trial for war crimes against humanity and a sentence of life imprisonment without parole, since I don’t believe in the death penalty. I think Dr. Cornel West summed it up best when he said “That means that a child in Yemen, Somalia, and a child in Pakistan has the same value as a child in Newtown, Connecticut, Southside Chicago, Chinatown, barrio and an Indian reservation. A child is a precious child, no matter what. Somebody’s got to be accountable for that.”

Everyone being treated the same aka equality right? You would think in the good old US of A that would be the case, but equality under the law in US is bullshit. If I kill someone I go to jail, if someone in the US government kills someone they get medals. Jefferson Beauregard Sessions III, the near dead fossil and AG for the US, is rebooting the War on Drugs (that never ended since it’s declaration by Richard Nixon), telling prosecutors to seek the “most serious” charges and stricter sentences on the issue of drugs. So smoking a plant winds your ass in jail for life because private prisons demand cheap slave wage labor. Meanwhile wallstreet can steal from us and get tax payer bail out in order to keep the gravy train of capitalism going for another 10 years till the next crash.

“If voting made a difference, they wouldn’t let us do it” said Mark Twain, a man who was centuries ahead of his time. Until we call out the hypocrisy of both Republicans and Democrats we will never been free of this unless cycle of the War on so called “Terror” and War on so called “Drugs.” These wars are actually wars on the poor and non-white people. A lot of so called liberals hated Bush, but where ok with Obama putting a nice face on Bush’s policies. Now with Trump, the nice face has been replaced with an ugly orange turd, which is good for the left in the sense it wakes people up to just how fucked our government is. We need to move past this D vs R bullshit, end all these bullshit wars for profit, and move together as horizontally organized global workers party.


Forgive me ATH for I have sinned

I really went too far this time.  I attended a Bruins game at the Garden and sat in the Bank of American luxury box.  I ate and drank all night on a tab known as “the taxpayer’s stimulus money” from the best view in the house (center ice on the player’s bench side) and didn’t feel an ounce of guilt or regret……until now.  To be honest, the guys that invited us couldn’t have been nicer but one piece of conversation stuck out in my mind.  We were talking about the banks that have sponsored the Garden over the years like Bay Bank, Bank of Boston, Fleet, and now TD Bank.  Apparently they all get gobbled up by these uber banks like Bank of America, TD (Toronto Dominion), Citi, and JP Morgan.  In fact I looked up some of the mergers and aquisitions over the past few decades and the list is mind boggling.  Can this concentration of wealth be healthy?  It gives me some wicked heartburn (or maybe that was just from stuffing my face with chowdah, quesadillas, and heineken)….that and making a withdrawal from a Bank of America atm when you don’t have an account with them….

So how many hail marys do I have to throw?  Or say?  Help me out here I’m not Catholic.  And speaking of hail marys, Let’s go Saints!

Blame it on Bubba

The tire iron wielding Bubba isn’t alone in his hatred, ignorance and xenophobia…the folks over at Wall Street feel the same way toward the poor masses. How else could one explain their continued adherence to the notion that the nations poor are to blame for the worst global financial meltdown in 100 years? This quote from the WSJ Op-Ed pages is patently ridiculous to anyone with even a basic understanding of what caused the meltdown:

Fifty percent of the high-risk loans are estimated to be CRA (Community Reinvestment Act) loans, with much of the remainder useful to the GSEs (Government Sponsored Enterprises) in meeting their affordable-housing goals.

The flood of CRA (Community Reinvestment Act) and affordable-housing loans with loosened underwriting standards, combined with declining mortgage interest rates-to 5% in 2003 from 10% in early 1991-resulted in a massive increase in borrowing capacity and fueled a house price bubble of unprecedented magnitude over the period 1997-2006.

So the government is to blame for the crisis because they made it so much easier for poor people to buy a home…right.

The reality of what happened is pretty well summarized in “Fool’s Gold”…I think this review of the book is spot on. The only way bad mortgages take down the entire financial system is when they are used as the ‘raw material’ for speculation by the investment community, whose insatiable appetite for risk, for betting on just about anything, and unfettered greed will always destroy any sane conventional system of banking. History has shown us this several times…Greenspan’s now infamous ‘shocked disbelief’ is laughable when you consider a historical perspective. Or maybe it was those irresponsible poor people who didn’t read the fine fine fine print on the terms of their sub-prime mortgage, right Wall Street?

Rich Man Step On My Poor Head

Professor Krugles brings us this nice graph chronicling the rise of our corporate masters:

What you’re seeing is the percentage of total income as earned captured by the richest 0.01% of the population.  The ridiculous jumps in income inquality of recent years have clear parallels with the run up to the Great Depression.  Interestingly, the data only runs through 2007, so does not yet reflect last year’s market crash.

Unlike the correction that happened in the 30’s, I have absolutely zero expectation that the astronomical earnings percentages of recent years will collapse back down to reasonable levels.  So far the government has shown no willingness to rein in the bankers, having spent trillions of dollars propping up their criminal enterprise, while the bankers rub our collective noses in it for the trouble. Meanwhile, the bankers are able to pocket all that loot, because the top marginal tax bracket is pathetically low by historical standards.  (Not just the tax rate itself, but, more importantly, the income threshold).  Check this graph out:

Note that all dollar amounts have been adjusted for inflation.  And yes, the spread from the highs of the 1940’s (upwards of $70 million!) to today’s threshold ($372,951+) is so outlandish that the y-axis has to be represented in logarithmic form in order that the graph be legible.  The top marginal tax rates in those days were nothing to sneeze at either:

Make no mistake, these were taxes on the super-wealthy.  We haven’t had a proper tax on millionaires since roughly 1970, at which point those marginal millions were being taxed at a 70% rate. (Bear in mind, the marginal rate means that only those dollars over and above the threshold are being taxed at the highest rate.  That first $50 grand, etc, is being taxed at the same rate as everyone else.  Not everyone understands this.)

Getting back to the present reality, the failure to obtain proper warrants for all the bailout money, or even to enact the most minimal of financial reforms (much less tax reform), is truly enfuriating. The one big reform so far has actually been a step backward: relaxing shitcanning mark-to-market accounting rules that previously forced an honest valuation of company assets.  Suddenly – magically! – toxic assets are not so toxic, the stock market is up, and the crisis is over!  (Oh, wait…)

I obviously know nothing about high finance.  But all the financial regulation in the world means precisely squat if no one enforces it.

Most former and current SEC officials spoke on condition of anonymity because they were discussing confidential legal matters or were not authorized by the agency to comment. But in a report last month, the Government Accountability Office, after interviewing many enforcement lawyers, concluded that the SEC penalty policies in 2006 and 2007 “led to less vigorous pursuit of corporate penalties, may have made penalties less punitive in nature and could have compromised the quality of settlements.”

During Cox’s tenure, penalties imposed on companies fell 84 percent, from $1.59 billion in 2005 to $256 million in 2008.

For a long time now, rich folks have been wringing money out of this country like sweat from ONE’s teeshirt after hoops in the summer.  (Or hoops in the winter…  Or a brisk walk…  Or a short nap…) And just like ONE’s sweat, by the time everything is over, it’s all on our backs.  (Ugh, this metaphor is making me ill, wrap it up…)

I have no faith that government regulators can ever truly curtail Wall Street shenanigans, which is why the only practical solution is to re-institute some new top marginal tax brackets.  Currently the cutoff for the top bracket is $372,951, with a rate of 35% (set to revert to 39.6% when the Bush tax cuts expire at the end of this year).  I hereby propose an additional tax of 50% on all dollars earned annually over and above… (cue Dr. Evil)… one million dollars.  By historic standards, that’s downright modest.

Teevee news I would watch

This is for all the Saturday morning InRoads monkeys out there…

Don’t know if anyone has been keeping track in the sidebar, but Matt Taibbi has opened up a floodgate of Goldman Sachs bashing, which I love of course.  To be fair, they’ve brought it on themselves, with their recent announcement of record bonus payments in the midst of the worst recession since the Great Depression.  But Taibbi has made it mainstream to call them out for the swindlers they are.  Here’s all the must-read/watch pieces:

Taibbi: The Great American Bubble Machine

What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

Elliot Spitzer on Bloomberg teevee

More Taibbi: The Real Price of Goldman’s Giganto-Profits

Taken altogether, what all of this means is that Goldman’s profit announcement is a giant “fuck you” to the rest of the country. It is a statement of supreme privilege, an announcement that it feels no shame in taking subsidies and funneling them directly into their pockets, and moreover feels no fear of any public response. It knows that it’s untouchable and it’s not going to change its behavior for anyone. And it doesn’t matter who knows it.

Paul Krugman: The Joy of Sachs

The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.

Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

Then there’s the new scandal brewing involving the former employee who supposedly stole their software that has the ability to unfairly manipulate markets.  Interesting that Goldman would come forward with this info only after the software was released into the wild.  Surely they themselves never used it for nefarious purposes while it was still under their control!  What makes this story all the juicier is that prior to the news, Zero Hedge had been tracking Goldman’s “program trading” volume on the NYSE for months and became convinced that they were manipulating markets.  Possibly through “front-running”, in which, oh, say, they had a program that monitored their online client’s stock purchases.  Before letting a purchase through, Goldman would then pre-buy the stock themselves, then let the client’s buy happen, then sell their own recently bought shares, which would have appreciated in value by an infinitessimal amount over the previous microsecond.  Consider that Goldman’s online trading volume is twice as high as its nearest competitor.  Further consider that as speculation mounted, NYSE suddenly announced they would no longer issue their daily program trading reports that Zero Hedge was analyzing.  Cap that off with the twin announcements of rogue software and record bonuses, and I’m declaring it’s once again pitchfork and torch time.

Alan Grayson: kickin’ ass and takin’ names

I’ve been meaning to pimp up newly minted U.S. Rep. Alan Grayson (D-FL) ever since I stumbled across his campaign website prior to the election. Dude seemed almost too good to be true, but so far he’s been nothing short of a champ. He campaigned on the basis of having successfully sued war profiteers (aka military contractors) for ripping off taxpayers and endangering troops (see link above). Upon taking office he hired lefty blogger Matt Stoller as a policy advisor and landed a seat on the House Financial Services Committee, a gig which has kept him busy ripping new ones into those involved in the bank bailout debacle, five minutes at a time.  I’ve assembled some choice videos.  Enjoy!

Feb 11, questioning Citigroup CEO, Vikram Pandit:

Here’s a link to the full exchange if you are so inclined.
Continue reading

Meet the New Deal, same as the Old Deal

Here’s an open question: now that the fascists are officially running the country, what is the best choice of second language for my 3-year old to learn?  I just want her to have options.  And please, don’t tell me “Chinese”.  I need to know: Mandarin or Cantonese?… is there another?… be specific!  Is Canada the future (parlez vous?) or India?  If India, which state is most hospitable to the carpetbagging white devil?  My provincial upbringing leaves me unequipped to deal with current realities, so any and all suggestions are welcome.

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James Galbraith’s reaction to Geithner’s plan to subsidize the purchase of toxic bank assets?  EXAMINE THE LOAN TAPES.  Contrary to the oft-repeated claim that the true value of the mystery toxic assets is unknowable (“these new-fangled financial instruments are so gosh darn complex, nobody really knows what they’re worth!”), Galbraith believes a comparison to the IndyMac portfolio will reveal “whether these loans or derivatives based on them have any right to be marketed in an open securities market”…

Note that even a small loss of capital, relative to the purchase price, completely wipes out the interest earnings on the Treasury’s loans, putting the government in a loss position and giving the banks a windfall.

If I’m right and the mortgages are largely trash, then the Geithner plan is a Rube Goldberg device for shifting inevitable losses from the banks to the Treasury, preserving the big banks and their incumbent management in all their dysfunctional glory. The cost will be continued vast over-capacity in banking, and a consequent weakening of the remaining, smaller, better- managed banks who didn’t participate in the garbage-loan frenzy.

This will not achieve the stated goal, of bringing on new lending, for reasons already explained at length.  It’s all about not-measuring true asset quality at the big banks, permitting them to escape a clean audit, and therefore preserving them as institutions, while forcing the inevitable shrinkage of the financial sector to occur elsewhere. In short, the plan seems to me to be a very bad idea.

But the way to determine whether Geithner’s and the banks’ stated view of the toxic assets has any merit, is to demand an INDEPENDENT EXAMINATION OF THE LOAN TAPES, particularly looking to establish the prevalence of missing documents, misrepresentation, and fraud.  This can be done by a sufficient sample.  If the tapes look bad, it will be very difficult to justify the bank/Treasury view that the RMBS actually have value, which is somehow not realizable on the marketplace today because of “liquidity shortages” or “fire-sale conditions.”  Maybe there actually was a fire.

What’s most enfuriating in all of this is the thought of how quickly they can shovel money at these greedy fuckers, when for years we’ve been told there’s no money to expand the social safety net, universal single payer health care, social security, what have you…

Wait, did I say most enfuriating?  That would be the absolute disinterest on the part of the Obama administration to treat this like a massive swindle.  What’s enfuriating is that the unfolding trainwreck of events compels me to spend my free time trying to understand the difference between a CDO and CDS, just so I can pretend to understand what crooked scheme brought down the republic.

Am I being alarmist?  Hey, it’s just money after all, right?

One more link I need to get out of my system.  This one to an article Matt Taibbi wrote during the election that really took the wind out of my sails at the time.  It’s all about the way Wall Street rallied bahind Obama (and vice versa) after he took the Democratic nomination.  I sincerely hoped Taibbi was being overly cyncial, that the army of small donors could overwhelm the monied interests once Obama was firmly in charge.  Now that seems doubtful.

Other companies are getting in on the ground floor with the new chief by stuffing money in his ears. Overall, Obama is flat-out kicking McCain’s ass when it comes to Wall Street contributions, raking in nearly $9 million from securities and investment executives, compared to $6.2 million for McCain. Obama has received more contributions from Goldman Sachs than from any other employer — more than $627,000 at this writing — not to mention $398,021 from JP Morgan Chase, $353,922 from Lehman Brothers and $291,388 from Morgan Stanley. Even among hedge-fund executives, who have an unequivocal interest in electing McCain, Obama is whipping the Republican, collecting $500,000 more than McCain. All of which begs the question: Why would corporate giants like these throw so much weight behind a man who promises to strip them of billions in tax breaks?

Why, indeed?  Especially since, to a cynical observer, the financial panic triggered in September by the collapse of Lehman Bros was perfectly timed to allow the Bush Administration to bestow one last parting gift to Big Business (i.e. $700 billion of TARP funds).  I guess when you’ve lost trillions of dollars in careless speculation, it’s best to cover all your bases.  Well played, assholes!

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Lastly, some low budget econo-rock… (for the record, this guy’s got nothing on Jimmy Reefercake, though I liked the Turbo Tax line)

Sadly, I fear Krugman may have just jumped the shark…

Class Warfare and AIG

Lots of hand-wringing out there about the 90% tax on bailout bonus money… to which I say…

Why don’t you take a flying fuck at a rolling donut?…

Set aside for a moment the fact that if AIG were a regular company, they would be in the midst of bankruptcy proceedings, with employees no longer receiving paychecks, much less bonuses.  Pretend, if you will, that AIG is not/was not a massive criminal enterprise engaged in fraudulent behavior only one step removed from Bernie Madoff.  The fact remains that the 10% take-home on a million dollar bonus is still $100,000.  Not too shabby!

The sense of entitlement from our ruling class is just appalling.  Here’s a graph from Ezra Klein that does a nice job of illustrating contemporary political and media opinion toward wealth.

The first thing to note: McCain has no business commenting on economic affairs. None. His conception of “rich” makes the $1.6 million earned by the top 0.1% seem reasonable by comparison. Somebody find him a Canasta game and get him off the national scene already. 

And yet, one hardly suspects that his views are unusual around the Senate.  And because rich folks aren’t in the business of taking money from other rich folks (that’s what the rubes are for), his colleagues are currently in the process of cutting the nuts out of the bonus tax, opting for 35% instead.  

I’ve got news for them: we already have that, it’s called the income tax.  You may not know this, but it already applies to the bonus money.  At least that’s how it works for the rest of us.  Maybe quit wasting everyone’s time on this?

Honestly, all I ask is that once they get past the grandstanding, if nothing else comes out of this economic fiasco, let it be the end of Wall Street business as usual.  Brad DeLong makes a great argument against the whole concept of the guaranteed bonus.  This paragraph was especially compelling:

The failure of the major institutions of Wall Street to adopt Silicon Valley compensation schemes in the 1980s and 1990s was always a great worry to regulators and policymakers. The strong view was that the venture capitalists of Silicon Valley knew what they were doing and were acting as prudent and responsible agents of their investors when they insisted on SVCS for their startups. So why didn’t the shareholders of the major banks do the same with their traders, quants, and strategists? The decisive argument in regulatory and policymaker bull sessions about this issue was that this was the shareholders’ business–that if the shareholders of these companies thought that there was good reason to elect board members and CEOs who did not impose SVCSs, the government should be cautious about stepping in. And the argument that “maybe the shareholders know of some good reason not to adopt SVCSs” no longer applies: we are the shareholders, we know of no reason, and we see no reason not to align the interests of our employees at AIG and at TARP-receiving companies with the long-run interests of the U.S. Treasury.

In other words, their license to steal is not a God-given birthright.  There are in fact other, better ways to incentivize corporate initiative (and part of that is to penalize failure). Granted, the Big Money Boys were riding high in the go-go 80’s, until junk bonds and the savings & loan scandal spawned the phrase “Die Yuppie Scum”. But the aftermath of those crises never resulted in the kind of institutional reforms that could prevent the rise of the over-leveraged shitstorm we see today.  

The point is, there has been ample opportunity in our recent history to reign in the greed train that is high finance, but the weasels always manage to slip the collar.  That’s what’s most disturbing about Treasury’s various bailout schemes (TARP, AIG, Citibank, etc).  The message seems to be that we’re going to do whatever it takes to restore these failed institutions.  But it’s not apparent that there will be any consequences for their failure (that is, not counting the consequence of putting the economy in a ditch for the rest of us).

Hey, Geithner, it’s official! They crashed the car! Now take away the keys! Krugman:

At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.

Suddenly all the “Obama is a socialist” talk begins to make sense… Rather than being the failed electoral strategy it seemed at the time, perhaps big business saw their house of cards tumbling and decided to get out in front of “nationalization” by keeping pressure on Obama to make it the option of last resort, lest he reveal his “true” communist nature. Even though in a perfect world these banks would already be in receivership.

Who the fuck knows?  So long as Obama doesn’t let it stop him.  For a great article on the current state of the crisis and what needs to be done, be sure to read James Galbraith’s article, “No Return to Normal“.

And just to finish my earlier thought:

…why don’t you take a flying fuck at the MOOOOOOOOOOOOON!!

(with apologies to Kurt Vonnegut)

Bo(eh)ner prefers a smaller package

I know that seems “hard” to believe, but Boehner is taking exception to some of the spending in the bailout bill. Obama, on the other hand, wants to extend the package! No gimmicks or herbal supplements. Who could be against extending the package? These folks are the same members of congress who, without thinking twice, throw billions of dollars at the failure in Iraq and then get upset when Obama wants to invest in THIS country. Look around you. There are all kinds of potential public works projects. Our infrastructure is old and tired. And the civil engineers are crying for a bigger package than the one Obama is proposing. It’s time for Obama to stand up to the punks who want tax cuts for the rich (or make Bush’s tax cuts permanent). I can appreciate reaching out to the other side after eight years of being ignored by Bush, but on Nov 4th America chose Obama’s economic policy. Obama himself reminded us just the other day of exactly who won. Besides, as David Sirota points out, if you dilute the bailout bill with weak Republican ideas, and this causes it not to be effective, then Obama looks like he failed and the GOP may look a little more respectable-like.

The Hypocrisy of Credit Scores

In light of us pouring billions of dollars into the banks, so they can keep buying corporate jets and eventually ask for another bailout when they can’t collect on their moronic loans that they have written, I would like to take a look at the utterly stupid and hypocritical nonsense known as credit scoring.

I am not going to try to explain all the mumbo jumbo complexity of credit scores, but the hypocrisy part of this story is pretty simple. In theory the credit scoring system is supposed to keep banks from lending money to folks who can not pay it back. It supposed to be a measure of how credit worthy a person is. Instead, banks use it to charge a higher interest rate to folks who have had credit mishaps. In other words, the banks have said, “if you have financial problems, sure we’ll lend you the money, but we’ll charge you higher interest, and variable rates, that will actually make it more likely that you can not pay it back. Look at me. My name is jackass banker.”

A bank should have every right to decide HOW MUCH money they want to lend you, but why should they be able to penalize folks with higher interests rates? This is exactly the kind of process that has led to all these foreclosures. Am I right or am I right?

How about while we are bailing these jerks out, we reform this whole bogus system so that everyone gets a fair shot at a decent loan that they can afford to pay back?