FedUpUSA » larry summers

The World Must Insist That Larry Summers Go Feet First

Stephanie — Mon, 19 Sep 2011 23:49:55 +0000

… into a wood chipper. Politically and economically of course, not physically.

The title of the linked article is:

The world must insist that Europe act

This is sort of like the world insisted that Germany act, or that Japan act, right?

We know how those episodes ended, which is why my answer to those that argue such things is that they should be fed feet-first into a wood chipper with their pontifications on a political and economic basis.

There can be no return to the pre-crisis status quo. It is now clear that market discipline within monetary union is insufficiently potent and credible to assure sound finance. It is equally clear that the risk of self-fulfilling confidence crises becomes substantial when banks and sovereigns have no access to lender of last resort financing. The responsibilities of the ECB, national financial and regulatory authorities and EU officials can be defined in different ways. But there must now be simultaneously an increase in the central financial commitment to the financial stability of member states, and a reduction in their financial autonomy, if the common currency is to survive.

The real problem that Larry doesn’t want to admit to is that at its core this crisis was a function of his economic policies. This entire mess (and it’s a big mess) is fundamentally about lying.

Lying to ourselves, lying about solvency, lying about balance sheets, lying about being able to stop drinking from the “cheap credit” well any time we want.

It’s all been a lie, and we’re all suffering from it.

The ridiculous “fear” of the boogeyman deflation is a chimera. Once one puts together 30 years of massive inflation of credit reversion to the mean is not deflation, it is removing the influence of a massive and pernicious bubble.

Oh sure, those who “profited” from that bubble will get creamed if and when that is done. But their “wealth” was never real in the first place. It was not earned, manufactured or innovated – it was stolen through artifice and fraud and in fact never really existed.

Can we avoid recognition of the truth, here or in Europe? For a while, perhaps.

But forever?

No.

The premise of our so-called “booming economy” was a lie. Larry was a chief promoter of that lie. Now that it’s coming apart, in fulfillment of the we’re screwed, they’re screwed worse basic statement of beliefs that I have put forward for the last few years, Larry and many others are cowering under the desk screaming for more booze to calm their shakes.

It won’t work because it can’t work.

Can the EU bail out the banks over there? Maybe, although doing so will simply goad the markets to press into the next nation in the (correct) belief that the EU’s firepower is finite and the damage to be absorbed exceeds that firepower’s capacity. But the EU shouldn’t bail out anyone. Instead they should tell them all to twist and default the bad debt. Remove the excess liquidity and credit, returning the economy to stability.

Will this require new banks as many of the current ones turn into smoking holes? Sure. We have to have a clearing mechanism for commerce. That is, we need banks but not these specific banks that have manipulated people and nations both with the claim of “easy money” that in fact is nothing but a gigantic pyramid scheme that they knew must eventually fail.

That, in fact, is the key: These institutions knew this scheme could not continue forever. They understand the math. They just believe they can force you, the taxpayer, both here and abroad, to pick up the cost of their foolishness.

It is time to stand and say “no” while we still have the ability to determine the path that this cleansing takes, lest it become disorderly and not subject to our desires, whims and control.

The lies are no longer working. We must choose truth.

The Market-Ticker

Discussion (registration required to post)

Only Poor People Should Be Allowed To Fail

Stephanie — Wed, 20 Jul 2011 21:59:43 +0000

I don’t usually post twice in one day, but there is a story which requires our immediate attention (hat tip, Mish). This post’s title is riff on Arthur Fullerton’s Only poor people can be allowed to fail. His story is short & sweet. I believe it speaks for itself.

Reading Lawrence Summers in the Financial Times yesterday I came across this statement as his third principle of dealing with the Euro crisis:

…there must be a clear commitment that, whatever else happens, no big financial institution in any country will be allowed to fail. The most serious financial breakdowns – in Indonesia in 1997, Russia in 1998, and the US in 2008 – came when authorities allowed doubt over the basic functioning of the financial system. This responsibility should rest with the ECB, with the requisite political support.

And so we have a clear unambiguous statement of the principle of socialism for the rich and powerful, and capitalism, red in tooth and claw, for the poor. Notice that too big to fail has now gone global.

I felt the need to publish this immediately because Fullerton notes that coverage has been lacking.

Over the past 24 hours this has been sitting out there with no push back or comment from the media. Is it simply an accepted fact that governments around the world — including our own — will now maintain a system where no large financial institution — no matter how corrupt or incompetent — will be allowed to fail?

This post is my pushback.

My regular readers surely remember George Carlin’s Great Big Club, the one you’re not in. The club’s members are the elites who have a large say in how the U.S. (and world) economy is run. They often come from the world of Big Finance. Usually they are former (and future) employees of the big Wall Street banks. There is no overt conspiracy to run the world. Instead, there is a loose but incredibly effective coalition of common interests. Washington politicians, at least the important ones, are often in their pocket.

Larry Summers carries water for those interests. He is their mouthpiece and back in 1999 under Clinton, he was their enforcer. There he is (far right) on the cover of Time Magazine in February, 1999 along with Bob Rubin and Alan Greenspan. And how was this 3-man committee to save the world going to accomplish this great feat? By deregulating derivative securities, repealing Glass-Steagall, etc.

When Barack Obama won the election in 2008, the meltdown of unregulated derivatives (like credit default swaps) had only recently brought the financial system, and the U.S. economy, to its knees. One of Obama’s first acts before he actually assumed the presidency was to appoint Larry Summers to be his chief economic adviser, and Tim Geithner to be his Treasury secretary. (See the video below.) Thus, the Change You Can Believe In was thrown out with the trash even before it had a chance to begin.

I have a small problem with Fullerton’s title. It is incomplete with respect to the true wishes of the financial elites. Perhaps it should read something like this—

Only poor people should be allowed to fail, and if they don’t fail, we should rip them off, just pound the shit out of them, until they do

When you watch this video, and you really should watch it, sit up and take notice at the 3:00 minute mark. You’ll see what I mean. Americans have been f&*ked over to a far greater extent than most of them will ever know.

http://www.youtube.com/watch?v=qP4d5paLECs

Decline of Empire

Bill Black Lands A Knockout Punch

FedUpUSA — Thu, 28 Oct 2010 14:58:00 +0000

directly on Obama’s nose….

I passed up the obvious title: “Heckuva Job Larry!” That was the moment of President Obama’s appearance on The Daily Show with Jon Stewart that set all Americans cringing. Yes, he really said that Summers “did a heckuva job.” The candidate that was gifted the opportunity to run against the legacy of one of the worst presidents in U.S. history has, as president, used Bush as his role model to continue many disastrous policies. It was strangely fitting that he would channel Bush’s infamous praise (“Heckuva job Brownie”) for the FEMA chief who failed New Orleans so badly in the hurricane.

….

President Obama’s appointment of Summers as his chief economic advisor made the administration’s overall response to the crisis predictable. (Robert Kuttner gives a detailed explanation of the policies that Rubin’s protégés championed in his new book, A Presidency in Peril.) The response would follow the disastrous Japanese model that has harmed their economy and damaged their integrity. The dominant characteristics can be summarized quickly: (1) the government would act for the benefit of the largest financial firms and their CEOs, even when they directed massive frauds, by (2) engineering a cover up of the banks’ losses and the CEO’s misconduct; (3) the administration would use the fictional reports generated to conduct the cover up to declare victory (due to their brilliance); and (4) the same strategy would impair the recovery. (For more on the cover up, see here and here.)

Yep.

And worse, the losses are still there. They’re just being hidden under the rug, but just like shoveling rotting fish under the carpet, it doesn’t make it stink less – it just makes it hard to see them – for a while.

There was no silver bullet. The administration made the losses disappear the old-fashioned way — with fictional accounting. I have already explained how the administration allowed the Chamber of Commerce, American Bankers Association, and the Fed to enlist the Congress to extort FASB to pervert the accounting rules so that most of the SDIs’ losses disappeared. The Fed also took over a trillion dollars in toxic, largely fraudulent collateral — and carefully avoided conducting due diligence to discover either the value or the fraud incidence of the collateral. In essence, the Fed took the toxic stuff off the balance sheets.

Extort is the correct word too. And the ugly part of it is that a loan that has a loss embedded in it when made only gets worse over time. That is, the recovery value always deteriorates in the general sense, as each month’s payment is not made. This is why “the first loss is the best loss” when it comes to these issues; there’s no way out of the box other than to admit to what happened and swallow.

Third, integrity is important. I really shouldn’t have to explain this. It depresses me that I have to argue that it is wrong to lie. Our democracy, our economy, our society, and our souls depend on restoring our integrity and the rule of law. Randy Wray and I have proposed a step that would demonstrate the president’s complete repudiation of Summers’ strategy and a return to the rule of law: Place Bank of America in receivership for its tens of billions of dollars in fraudulent loans and its multitude of foreclosure frauds. Don’t talk about doing the right thing — do it — and do it to a major contributor. Don’t do it because it’s a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership.

Yep.

But integrity never matters to Washington DC Bill. Nor does it matter to Wall Street.

Only money matters to both, which is obvious from the market reaction since the extortive act against FASB was committed – and that, it is clear, is what “turned the stock market” in 2009.

It wasn’t a “recovering economy” – there has been no meaningful recovery. It certainly wasn’t anything in the employment situation, nor in the common weal.

Rather, it was that theft and fraud were ratified as a “legitimate” business enterprise – so said Washington – and whether Obama like it or not, it was his Administration that did it.

Good stuff over at HuffPo from Bill Black – and well worth a read.

Remember when you go to the polls folks – if you think you’re voting to “stop” The Republicans from “allowing” the fraud to happen again, you’re not.

You’re just voting for which of the two bank robbers you like being assaulted by more – the guy with the red ski mask or the one with the black one.

Discussion (registration required to post)

The Market-Ticker

"Banking System Still Quietly Insolvent" ; Larry Summers' Imagination Reaches Escape Velocity

FedUpUSA — Tue, 13 Apr 2010 02:28:19 +0000

“Banking System Still Quietly Insolvent” ; Larry Summers’ Imagination Reaches Escape Velocity

Inquiring minds are reading an excellent post by John Hussman about Stock Market Valuations, Extend and Pretend Banking, Public Policy on Housing Bailouts, and Solvency of the Banking System. Here are a few snips from Extend and Pretend.

Over the past 12 years or so, I’ve been repeatedly astonished at the tendency of investors to do things that they should have known to avoid simply with the use of a calculator and basic arithmetic. We’ve used numerous metrics during this period to show that the estimation of long-term market returns (7-10 years and beyond) doesn’t require calculus or statistics, but fairly direct methods to normalize earnings, plus a bit of arithmetic. Rich valuations are predictably followed by sub-par returns. As a result, investors have earned an average annual total return of just 2.4% in the S&P 500 over the past 12 years, while enduring two separate instances where they have lost about half of their money as part of the ride. Essentially, we have gone nowhere in an interesting way. At present, investors have priced the market at a level that makes a continuation of this experience likely for several years to come.

As of last week, the S&P 500 remained strenuously overvalued on the basis of normalized fundamentals. From that perspective, even if the trough we observed in March 2009 was the ultimate price low of the secular bear market since 2000, it’s not likely to represent the ultimate valuation trough. Given the current state of valuations, and the likelihood of several years of additional credit deleveraging, it seems that economic conditions, valuations, and the typical duration of secular bear markets converge on the likelihood of several more years of interesting but unrewarding market volatility. Secular bull market periods tend to begin with quite low multiples to normalized earnings (historically, on the order of 7), which is what provides the platform for a very long period of subsequent gains.

Extend and Pretend

With regard to credit conditions, the U.S. financial system continues to pursue a strategy of “extend and pretend.” … The impact of “extend and pretend” is to create a gap between the reported value of assets and the value they would have on the basis of the cash flows that those assets can reasonably be expected to generate over their maturity.

Moreover, regulatory changes over the past year have affected what actually gets reported as “troubled.” As the New York Times recently observed, ” A bank owed, say, $4 million on a property now worth $3 million would previously have had to classify the entire loan as troubled. Now it can do that to the $1 million difference only.”

As for policy efforts to reduce delinquencies, I’ve long argued that it is a bad idea for policy makers to announce delinquency prevention plans that have, as their centerpiece, publicly subsidized reductions in mortgage principal. It’s one thing to extend the loan in a way that preserves its present value, by swapping a claim on future appreciation in return for principal reduction, but it’s quite another to offer to cut the principal outright. The reason is that instead of confining the assistance to presently troubled borrowers, you create a whole new set of borrowers who then choose to be troubled in order to get the assistance. According to a University of Chicago study, “strategic defaults” – where people choose to default on their mortgages even though they can afford to pay – accounted for 35% of all residential defaults in December 2009, up from 23% in March 2009. Offering public subsidies for this behavior, when too many homeowners are already legitimately struggling, does not smack of a bright idea.

The real concern from my perspective remains the potential for a second wave of delinquencies beginning in data as of the first quarter of 2010 and extending well into 2011. …

In short, my impression is that investors are deluding themselves about the solvency of the banking system. People learned in the 1930′s that when you don’t require the reported value of assets to have a clear and tangible link to the value that the assets would have in liquidation, bad things happen. Yet this is what regulatory and accounting rules are allowing for the banking system at present. While I do believe that bank depositors are safe to the extent of FDIC guarantees, my impression is that the banking system is still quietly insolvent.

There is much more in the article including a series of charts on bank loans, real estate loans, and credit card loans.

Global Banking System Extend and Pretend Insolvency

I happen to agree with John Hussman on all points mentioned. Moreover, it is not just the U.S. banking system that is insolvent, the global banking system is nothing but a giant extend and pretend operation including the PIIGS (Portugal, Ireland, Italy, Greece, Spain), China, the UK, and even Canada as soon Canada’s gigantic housing bubble crashes.

Just as U.S. housing policy encourages more walk-aways, the EU’s subsidized loans to Greece (See Grecian Formula 16 Now On Sale) practically guarantees the EU will need to offer the same deal to Spain and Portugal at a minimum.

Note too, that European banks have their own extend and pretend game going in regards to loans based in Euros to the Baltic states. Those loans cannot possibly be paid back.

George Soros is talking about a pound devaluation for the U.K. Please see Former Fed Gov. Poole Blasts Fed’s Favoritism; Soros Bought More Gold, Says Pound Devaluation is Option for details.

Canada did not avoid a crisis because their banks were better or smarter or used less leverage. Canada avoided a crisis because for whatever reason, their housing bubble did not yet blow sky high. However it will, and Canada’s banking crisis is yet to come.

To understand why, please see California USA vs. Ontario Canada – Which State (Province) Is In Worse Shape? Canadian Banks vs. US Banks Comparison.

There are so many reports on bubbles in China that I hardly know where to begin. Here are a couple of them. GMO has a white paper on 10 Signs of Speculative Mania in China. In response to that paper, please consider an Email from a Chinese on China’s Real Estate Bubble.

Finally, in the US, please consider an interactive map of the $3+ trillion public pension plan deficit, state by state: Interactive Map of Public Pension Plans; How Badly Underfunded are the Plans in Your State?

In short, consumer and bank debt simply cannot be paid back in a global wage arbitrage economy, with massive consumer and corporate debt and no source of jobs.

Escape Velocity

Amazingly, Larry Summers says that problems with healthcare, education, and even long term fiscal deficits are being addressed. That is proof economists are starting to believe their own nonsense on extend and pretend.

“I think the economy appears to be moving towards escape velocity.” said Summers.

One thing that has reached escape velocity is Larry Summers’ imagination.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Dear Santa, Here's My Xmas List

Econophile — Tue, 22 Dec 2009 06:33:08 +0000

From The Daily Capitalist.

Dear Santa:

Since you give away stuff for free, I hope you aren’t a socialist and ignore my wish list during the annual potlach. By the way, it seems that the Obama Administration is way ahead of you in giving out free stuff to everyone. I hope you can catch up.

I think I’ve been a pretty good boy this year. I have regularly bitten my tongue in my commentary so as not to be accused of being a flamer. I don’t think I’ve defamed anyone. And I try to write as much original material as possible to avoid being labeled a “scraper” (lifting stuff off the Net and publishing it under my own name). And, I haven’t sold out my opinions for mere money. For a blogger, that’s a pretty good record.

Here’s my wish list. I couldn’t find where to post it on Amazon, so here goes:

1. Kill The Bill

No, not the Uma Thurman thing. I’m talking about the health care “reform” bill going through Congress right now. If your magical powers extend that far, please put economic sense into our politicians’ collective heads that government control over the system is not a way to “save money” or create “efficiency.”

2. Put in the Fix

Instead of eliminating market forces in health care, please convince Congress to fix it by peeling back the convoluted rules and regulations that have screwed it up in the first place. Suggest these four little things we could try first that actually would work, save billions, and cover more people:

Give Medicare enrollees a voucher and the freedom to choose any health plan on the market;

Give workers control over their health care dollars with “large” health savings accounts which would allow them to purchase secure health coverage from any source;

Break up state monopolies on insurance and allow insurance companies to compete across state lines; and

Block-grant Medicaid and the State Children’s Health Insurance Program to prevent massive waste and encourage states to target resources to the truly needy.

3. Turn the Sausage Makers into Sausage

I understand it’s Christmas and it would be kind of negative to wish political ill fortune on someone, but, there’s this especially despicable sentator, Ben Nelson, that I would like for you to arrange to catch him with a hooker or taking a bribe. Whatever you think would work, Santa. Make sure there are tapes. I have lots more names, but I’d be happy with Ben.

4. Firing Suggestions

Please arrange for Obama to fire Ben Bernanke, Larry Summers, Timmy Geithner, and Christina Romer.

5. Hiring Suggestions

To replace the above, how about Ron Paul at the Fed, and the following economic advisers: Walter Block, Russ Roberts, and Joseph Salerno. They are all fine economic scholars and would steer our President in the right direction.

6. Freeze Congress

Don’t let Congress pass any more bills until they’ve all read, and discussed with the No. 5 guys, Economics in One Lesson by Henry Hazlitt, the best little book on economics, ever. Televise it.

7. Bring Back the Real Constitution

Please have Obama appoint strict constructionists to the Supreme Court. Nominees who understand natural law, and that the Ninth and Tenth Amendments actually mean something. Maybe we’d get our individual sovereignty back.

8. Make Work is No Work

Let Mrs. Pelosi and Mr. Reid see the folly of the American American Recovery and Reinvestment Act of 2009, a useless $787 billion bill that is nothing other than intergenerational theft. Someone has to pay for it and I’m afraid it will be my children, grandchildren, and ten generations of my great-grandchildren.

9. Beautiful Sunsets

Require Congress to sunset every spending law they pass. You know how they promise that a program will be very effective and that it will only cost so much? Make them prove it, say every two years. If the bill fails to cure the perceived ill, get rid of it. If the program exceeds its budget, get rid of it. It will also provide us with a handy voting guide at election time.

10. Let a Thousand Flowers Bloom

Sprinkle some free market magic dust on the economics departments of our major universities. Maybe that will help the sheep break from Keynesian orthodoxy and actually begin to think.

Thank you, Dear Santa. I’m forever hopeful.

Econophile

US Treasury – Deep Thinking?

Bruce Krasting — Tue, 22 Dec 2009 02:10:34 +0000

I was down in Washington on a business trip. That ended at four and I
headed for a bar. I found a spot between Pennsylvania and Kentucky
Avenues. Nice place. Two barkeeps, me and another guy who looked like
he had been drinking gin for the past few hours. Quiet, just the way I
like it.

Sure enough, at five the place fills up. It’s a young crowd. Good
looking. Well dressed. This looked like an Ivy League group. I was
thinking that they could be DOJ, possibly IRS (they looked too happy,
but who knows). They could have been Treasury folks; the headquarters
is not far off. Anyway, they had two drinks gossiped for and hour and
left. I stayed.

At one point I happened to look under the now empty stool next to me.
Some folded up papers. Being the nosey S.O.B. that I am, I picked them
up and took a look. Bingo!

I am just guessing, but these initials could stand for Geithner,
Volker, Summers, Goolsbee and Romer. Of course they could stand for
anything. I will leave it to you to draw any conclusions that might be
appropriate after a look at this. Judging from the notes that were
taken, this must have been an interesting meeting. I am using the
Scribd format so you can enlarge this. Enjoy!

Found Memo

If you haven’t as yet, take a look at the ‘labels for this post’. Life is a comedy. We’re all a part of it. Happy Holiday.
bk

The Consequences Of 'The Big Lie'

Stephanie — Mon, 14 Dec 2009 04:58:47 +0000

Posted by Karl Denninger

The Consequences Of “The Big Lie”

It may be “politics as usual” to never talk about how bad the economy really is – never talk about the budget deficit in honest terms – and never talk about how revenues are and have been cratering across the board for governments.

But when you are facing a truly horrific situation in this regard, and you need everyone on board to make sacrifices – especially government positions where employees feel especially entitled - ”politics as usual” is particularly dangerous.

This weekend Ireland’s largest public sector union has called the situation “explosive”:

Speaking today Peter McLoone, the general secretary of Impact and the chairman of the Public Services Committee of the Irish Congress of Trade Unions said that trust had effectively broken down between unions and the Government and that there was no basis that the parties would be able to go back into discussions in the short term.

Mr McLoone told RTE’s “This Week” programme that he could not rule out the possibility of all-out strikes as the reaction from members to the pay cuts was very strong.

He also indicated that public sector workers would no longer be prepared to engage with the Government on reforms along the lines of those proposed in the talks on an alternative for reducing the public sector pay bill without cutting pay rates.

And by the way, what’s “especially dangerous” mean? Strikes? Many government workers would do us all a favor if they went on strike. That would solve budget problems, you see – you don’t pay people who don’t work voluntarily, and a strike is voluntary! To that I say: Go ahead and strike as it will HELP the budget situation.

If this is a thinly-veiled threat of violence, well, we’re already seeing that in Greece. I guess we can add Ireland to the mix without too much trouble eh? Or shall we talk about Italy, where it appears Berlusconi was punched – that is, literally assaulted:

OME (AP) — Italian Premier Silvio Berlusconi was punched in the face at the end of a rally on Sunday by a man holding a small statue in his hand, leaving the 73-year-old media mogul with a bloodied mouth and looking stunned, police said. The 42-year-old man accused of attacking Berlusconi in Milan as he signed autographs was immediately taken into custody.

How far are we away from boiled rope and lamp posts folks?

The problem here, like in New York and other US States, is that Ireland, like The United States, refuses to confess to the full extent of the economic damage – nor will they confess to the fact that it is not getting better at any material rate.

Instead, we have the litany of “pumpers” and misleading (if not outright false) so-called “economic indicators” that are put forward with a smug smile, claiming that “we are out of recession.”

Oh really?

Then why is New York’s financial situation so bad that Governor Paterson has felt the need to do this?

ALBANY – Gov. Paterson will announce Sunday that he is taking the dramatic step of unilaterally withholding 10% in scheduled payments this month to schools and local governments, including New York City, the Daily News has learned.

“He’s basically paying out 90 cents on the dollar,” one source said.

This of course is going to provoke some pretty strong responses – including lawsuits. Not that it matters; you can’t get what doesn’t exist, no matter how much you want to complain about it.

This is not limited to New York and Ireland. Indeed, it is pretty much “pick your state” in the US, and among other nations, the list is long and distinguished – especially in Eastern Europe.

The distortions that governments (and traders acting on the “free money” paradigm) have applied to the markets in the last two years are unprecedented. Oil, for example, is trading around $70 – but why? Cushing (the main oil terminal in the US) is full to overflowing, banks are literally parking tankers full of oil at anchor rather than selling it, and every place you can buy and cram a barrel, it has been bought and crammed. This has “created demand” for that oil, but since the oil has not been actually consumed it is false demand – and that supply must, at some point, go to the market.

Kuwait’s recent announcement that they may pull their deposited funds (custodial funds) from Citibank is more likely due to their government’s knowledge of the book cooking (and oil demand cooking) and radical deterioration in their state finances. Eventually the piper must be paid, and these distortions will disappear. When they do, so will the oil price – and I suspect Kuwait knows this full well.

Never mind the usual government game: When challenged, simply black it out.

Yes, that’s an actual FOIA response. I guess I should go long Sharpie markers?

Don’t even get me started on the financial reform bill. Oh, I’ll have commentary on it – but my first read is that the lobbyists have once again done it to us, cold, dry and hard. The most-blatant example that I found with about 30 seconds of skimming are subtle changes in the so-called derivatives “regulation” section that allows a person to be an alternative “exchange.” That’s right. That would include an artificial person (e.g. Corporation) since it doesn’t say otherwise, which means that our dear old big banksters (represented in their lobbying by ”Do-we Cheatem and How”) have managed to actually remove what little regulation currently exists – while claiming to be for “strong and sound regulation of derivatives.”

That’s right – this “bill” will actually weaken financial supervision of the most dangerous part of the markets, and therefore increase, not decrease, systemic risk.

Pay no attention to Obama’s faux “anger”; he’s lying as well.

If he was actually pissed he would have directed Geithner to refuse to allow TARP repayments. He didn’t and what’s more important, he and Summers are playing kabuki theater with you:

One of the White House’s economic advisors, Larry Summers, also stated his frustration with Wall Street on CNN’s “State of the Union” Program. Summers commented, “Here is what I think they don’t get…It was their irresponsible risk-taking in many cases that brought the economy to collapse.”

That’s why you and Obama have put a stop to that irresponsible risk-taking, right? All derivatives are now on a public exchange, all positions marked to the market nightly with appropriate posted margin, the former 14:1 leverage limit has been re-imposed and Glass-Steagall is being put back together and enforced on the banks.

Oh wait – none of that is actually happening, is it Larry? You’re a liar and so is your boss. You, in particular, were one of the chief architects of this mess with your “deregulate everything” approach to financial institutions.

How long will you sit for this folks?

Will it be before or after you are out in the street, jobless, homeless and hungry when you finally wake up and say “enough damnit!”

Democrats Push For Reinstatement Of Glass-Steagal

Tyler Durden — Tue, 08 Dec 2009 01:52:49 +0000

In what is the start of the biggest uphill battle in D.C., arguably even bigger than deposing the printing press leprechaun, five democrats are proposing an amendment to reinstate Glass-Steagal, whose repeal, through the Larry Summers orchestrated Gramm-Leach-Bliley Act, in 1999 set the economy on the collision course that culminated with the implosion of every single Goldman Sachs FICC competitor in 2008. The five Democrats who have undertaken the sisyphean task of taking on both Wall Street and their direct boss, are Maurice Hinchey of New York, John
Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington,
and John Tierney of Massachusetts.

If adopted, the measure would give banks one year to choose between
being commercial banks or investment banks. The nation’s biggest –
those now commonly referred to as “too big to fail” — would be broken
up. The Obama administration opposes the measure.

Obama, presumably a Democrat, continues to persist in endorsing each and every Republican legacy when it comes to Wall Street’s landed interests (and risk “management” practices). Of course, the last thing the administration needs is for the populace to comprehend the chameleonic nature of the administration’s action.