By Marc Pitzke in New York ... In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that's changing. Bear Stearns, Lehman Brothers, Merrill Lynch -- overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and -- at least in Morgan Stanley's case -- have prepared themselves for the end. "Nothing will be like it was before," said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. "The world as we know it is going down." ... But what's really happening? Experts have so far been unable to agree on any conclusions. Is this the beginning of the end? Or is it just a painful, but normal cycle correcting the excesses of recent years? Does responsibility lie with the ratings agencies, which have been overvaluing financial institutions for a long time? Or did dubious short sellers manipulate stock prices -- after all, they were suspected of having caused the last stock market crisis in July. The only thing that is certain is that the era of the unbridled free-market economy in the US has passed -- at least for now. The near nationalization of AIG, America's largest insurance company, with an $85 billion cash infusion -- a bill footed by taxpayers -- was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.
...
In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that's changing. Bear Stearns, Lehman Brothers, Merrill Lynch -- overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and -- at least in Morgan Stanley's case -- have prepared themselves for the end.
"Nothing will be like it was before," said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. "The world as we know it is going down."
But what's really happening? Experts have so far been unable to agree on any conclusions. Is this the beginning of the end? Or is it just a painful, but normal cycle correcting the excesses of recent years? Does responsibility lie with the ratings agencies, which have been overvaluing financial institutions for a long time? Or did dubious short sellers manipulate stock prices -- after all, they were suspected of having caused the last stock market crisis in July.
The only thing that is certain is that the era of the unbridled free-market economy in the US has passed -- at least for now. The near nationalization of AIG, America's largest insurance company, with an $85 billion cash infusion -- a bill footed by taxpayers -- was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.
(All emphasis mine) *Lunatic*, n. One whose delusions are out of fashion.
The Financial Services Authority (FSA) banned "short selling" of bank shares from midnight last night, after warnings that the practice helped fuel market turmoil that forced the dramatic £12.2bn takeover of HBOS by Lloyds TSB. This came as the New York Attorney announced his office had launched an investigation into illegal manipulation to profit from short selling. The move is to uncover whether speculators have spread misleading information or acted in concert to purposely drive down share prices. Wealthy hedge fund traders, heavy users of the shorting strategy, have sparked fury after making millions from the collapse in value of UK banking stocks.
The Financial Services Authority (FSA) banned "short selling" of bank shares from midnight last night, after warnings that the practice helped fuel market turmoil that forced the dramatic £12.2bn takeover of HBOS by Lloyds TSB. This came as the New York Attorney announced his office had launched an investigation into illegal manipulation to profit from short selling. The move is to uncover whether speculators have spread misleading information or acted in concert to purposely drive down share prices.
Wealthy hedge fund traders, heavy users of the shorting strategy, have sparked fury after making millions from the collapse in value of UK banking stocks.
But hey, when your only policy is distraction, it's par for the course. In the long run, we're all dead. John Maynard Keynes
Short selling can be simulated at relatively low cost with options and futures. But the SEC and FSA have not banned options or futures on financial stocks.
Also, as the long/short hedge funds all, simultaneously adjust their portfolios to react to the new regulations you're going to see some deleveraging (which, when done by all, simultaneously is a Bad Thing™) and some large sector movements (blowing away the stability of correlation estimates).
It's all for show. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Congressional budget writers are already starting to worry that the massive federal government bailout of Wall Street could have drastic repercussions on how the government spends money next year and beyond, regardless of the make-up of either end of Pennsylvania Avenue. Rep. Jim Cooper (Tenn.), a senior Democrat on the House Budget Committee, as well as a former investment banker, stressed that the moves by the federal government to prop up the financial markets are positive and necessary. Still, the investments -- just because of the sheer dollar amounts involved -- could freeze Congress's ability to spend money on a host of things well into next year and beyond, he added. "This cripples the domestic policy priorities of the next president, whoever it is, because it soaks up so much cash," said Cooper, a senior Democrat on the House Budget Committee and a former investment banker. "In the long term, it is good news because it will encourage better behavior from everyone." Treasury Secretary Henry Paulson said Friday the measure would cost "hundreds of billions" of dollars. "Don't assume there will be revenue next year when we do this," said Rep. John Campbell (Calif.), a Budget Committee Republican, former CPA and member of the conservative Republican Study Committee who supports the Treasury proposal. "I mean, we are talking what I think could be a half-trillion dollars," Campbell said, adding that while it's hard to say to what exact impact the bailout will have on the budget, there will be widespread pressure to keep federal spending low.
Rep. Jim Cooper (Tenn.), a senior Democrat on the House Budget Committee, as well as a former investment banker, stressed that the moves by the federal government to prop up the financial markets are positive and necessary. Still, the investments -- just because of the sheer dollar amounts involved -- could freeze Congress's ability to spend money on a host of things well into next year and beyond, he added.
"This cripples the domestic policy priorities of the next president, whoever it is, because it soaks up so much cash," said Cooper, a senior Democrat on the House Budget Committee and a former investment banker. "In the long term, it is good news because it will encourage better behavior from everyone." Treasury Secretary Henry Paulson said Friday the measure would cost "hundreds of billions" of dollars.
"Don't assume there will be revenue next year when we do this," said Rep. John Campbell (Calif.), a Budget Committee Republican, former CPA and member of the conservative Republican Study Committee who supports the Treasury proposal.
"I mean, we are talking what I think could be a half-trillion dollars," Campbell said, adding that while it's hard to say to what exact impact the bailout will have on the budget, there will be widespread pressure to keep federal spending low.
Neocon win! They keep the money, and destroy public spending on essentials.
I hope we get more than pennies on the dollar from the estates of the millionaires and billionaires who fleeced the system for the last several years. I fully presume that the bankruptcy estate manager of the US will claim back everything that they stole plus more.
Will we have to pay for their dinners and the dinners of their families while they are in their holding cells, awaiting trial? Or will they work on chain gangs. I can only imagine that if people taking pictures of them pay a dollar or so per, that this will be more monetarily remunerative than whatever service they are providing; trimming hedges on the road, etc.
I wonder if we should short some of the drug companies since all the rich won't be able to buy their 'mother's little helpers' as they do now. Geez, in that scenario, Prada, Chris-Craft, et al will be in dire straits. How will the world survive? Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
"In the long term, it is good news because it will encourage better behavior from everyone."
Better behavior? As in, "begging us for their survival, and obeying our every orders and whims because they have no other choice to survive?"
The Shock Doctrine has come home. In the long run, we're all dead. John Maynard Keynes
In a highly unusual statement on the issue from the US Defence establishment the officer, who requested anonymity, stressed that a diplomatic solution was imperative to solve the crisis. The commander, in the heart of US military policy-making, said that there was "a lot of rhetoric" over Israel's repeated threats to carry out air-strikes to stop Iran developing a nuclear arsenal. However, he said, that an exercise by over 100 Israeli war planes in the skies above the Mediterranean in June showed the Israelis were practising for a possible offensive. "But it would not be the right thing to do, it will open up another front and this is not going to help the situation in the region, Iraq or Afghanistan," said the officer. "A diplomatic solution is the only logical answer to this."
In a highly unusual statement on the issue from the US Defence establishment the officer, who requested anonymity, stressed that a diplomatic solution was imperative to solve the crisis.
The commander, in the heart of US military policy-making, said that there was "a lot of rhetoric" over Israel's repeated threats to carry out air-strikes to stop Iran developing a nuclear arsenal.
However, he said, that an exercise by over 100 Israeli war planes in the skies above the Mediterranean in June showed the Israelis were practising for a possible offensive.
"But it would not be the right thing to do, it will open up another front and this is not going to help the situation in the region, Iraq or Afghanistan," said the officer. "A diplomatic solution is the only logical answer to this."
In a statement issued before the three-day session of the ANC executive body, the President denied he had put pressure on prosecutors to charge his political rival, Jacob Zuma, with corruption. The case against Mr Zuma, who is the leading candidate to replace Mr Mbeki as South African president after being elected party leader last December, was dropped last week. ... Mr Mbeki has been fighting for his political survival after being accused by a Durban high court judge of colluding with the country's national prosecuting service, in violation of the constitution, to lay a raft of corruption and fraud charges against Mr Zuma. ... It was understood last night that the ANC leadership would adopt a resolution asking Mr Mbeki to resign voluntarily, instead of hounding him from office through an impeachment procedure or a vote of no confidence motion in parliament. That would see power temporarily moving to the Speaker of Parliament, Mbaleka Mbete, before Mr Zuma takes over in elections due early next year.
In a statement issued before the three-day session of the ANC executive body, the President denied he had put pressure on prosecutors to charge his political rival, Jacob Zuma, with corruption. The case against Mr Zuma, who is the leading candidate to replace Mr Mbeki as South African president after being elected party leader last December, was dropped last week.
Mr Mbeki has been fighting for his political survival after being accused by a Durban high court judge of colluding with the country's national prosecuting service, in violation of the constitution, to lay a raft of corruption and fraud charges against Mr Zuma.
It was understood last night that the ANC leadership would adopt a resolution asking Mr Mbeki to resign voluntarily, instead of hounding him from office through an impeachment procedure or a vote of no confidence motion in parliament. That would see power temporarily moving to the Speaker of Parliament, Mbaleka Mbete, before Mr Zuma takes over in elections due early next year.
The potentially pivotal ultra-orthodox party Shas immediately laid down tough financial and political terms for remaining in a government led by Ms Livni. She defeated the former military chief of staff Shaul Mofaz for the party leadership by just 431 votes.While making it clear to Ms Livni he accepted the result of Wednesday's contest, Mr Mofaz confounded claims that he would seek a senior post in her government by saying that he did not want a ministerial or parliamentary post. He would instead find "additional ways to contribute to the state of Israel and my family."
The potentially pivotal ultra-orthodox party Shas immediately laid down tough financial and political terms for remaining in a government led by Ms Livni. She defeated the former military chief of staff Shaul Mofaz for the party leadership by just 431 votes.
While making it clear to Ms Livni he accepted the result of Wednesday's contest, Mr Mofaz confounded claims that he would seek a senior post in her government by saying that he did not want a ministerial or parliamentary post. He would instead find "additional ways to contribute to the state of Israel and my family."
(A plague on both houses, is my opinion) *Lunatic*, n. One whose delusions are out of fashion.
Now he needs to make an ad about not meeting with Zapatero. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
my favorite part is the "bleeping" of words in spanish that the english audience of course would not understand or be offended by.
However, a lot of the Spanish-speaking US vote is "white" in Latin American terms - Chávez and Morales are too "indian".
You shouldn't underestimate the anti-indigenous racism in Latin America. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
The Pain in Spain Falls Mainly on McCain - TIME
Of course, there's a worst-case scenario: that McCain would, if elected, maintain his predecessor's chilly relationship with Spain. Spaniards may, on the whole, revile American politics and American comida de basura (junk food), but they still tend to measure their Prime Minister's international worth by the esteem with which the U.S. President holds him.
That's Aznarite concern trolling - everyone knows Bush is an asshole and influence in the EU Council counts for much more.
As for the rest, see my comments in Thursday's Salon, Friday's Salon and Thursday's Open Thread. I am intensely annoyed by the attention paid to this non-event. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
BTW, "I will stand up to those who want to harm the United States" sounds bellingerent to me. *Lunatic*, n. One whose delusions are out of fashion.
McCain's intervention reads like "can you drop that Zapatero guy? I'm here to talk about Chávez and Morales". A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Obama should make an ad about "McCain will not talk to Zapatero if elected" based on this footage. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
(My thinking BTW is that Juan Carlos's behaviour was even more off than Chávez's: stupidly enacting the image of a Spanish monarch still believing himself to be Emperor of all Spanish-speaking lands.) *Lunatic*, n. One whose delusions are out of fashion.
I agree the King was simply off... A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Solar-to-salt energy start-up gets $140 million in financing LA Times Money & Co. Blog 4:00 AM, September 19, 2008 From Times staff writer Edward Silver: Money may be evaporating on Wall Street, but $140 million is on its way into the accounts of a promising Santa Monica-based solar start-up. SolarReserve, an offshoot of aerospace giant Rocketdyne, tackles the challenge of intermittency -- storing energy when the sun don't shine. At the core of the utility-scale solution is a simple substance: salt, specifically a combination of sodium and potassium nitrate. It's the inventive way the salt is used that prodded venture investors to reach for their checkbooks this week to provide second-round financing for the firm. Saltshaker_2 In SolarReserve's blueprint, arrays of specialized mirrors, called heliostats, track the sun's path and concentrate the heat on receiving towers that turn the salt molten. The salt holds its heat long enough to enable electric power companies to shift their output to peak times or nighttime. That power can fetch a premium price when demand is most intense and coal typically fills the bill. Chief Executive Terry Murphy plugs the flexibility of the system, a traditional weak spot for renewables: "If you put energy into molten salt, you can store it in an insulated tank and use it on demand. We liken it to pumped solar," he said. The technique proved itself in the Solar Two test project in the California desert, sponsored by the Department of Energy. Rocketdyne crafted some of the key technology for Solar Two and will equip SolarReserve's expansive plants
LA Times Money & Co. Blog 4:00 AM, September 19, 2008
From Times staff writer Edward Silver:
Money may be evaporating on Wall Street, but $140 million is on its way into the accounts of a promising Santa Monica-based solar start-up.
SolarReserve, an offshoot of aerospace giant Rocketdyne, tackles the challenge of intermittency -- storing energy when the sun don't shine.
At the core of the utility-scale solution is a simple substance: salt, specifically a combination of sodium and potassium nitrate. It's the inventive way the salt is used that prodded venture investors to reach for their checkbooks this week to provide second-round financing for the firm.
Saltshaker_2 In SolarReserve's blueprint, arrays of specialized mirrors, called heliostats, track the sun's path and concentrate the heat on receiving towers that turn the salt molten. The salt holds its heat long enough to enable electric power companies to shift their output to peak times or nighttime. That power can fetch a premium price when demand is most intense and coal typically fills the bill.
Chief Executive Terry Murphy plugs the flexibility of the system, a traditional weak spot for renewables: "If you put energy into molten salt, you can store it in an insulated tank and use it on demand. We liken it to pumped solar," he said.
The technique proved itself in the Solar Two test project in the California desert, sponsored by the Department of Energy. Rocketdyne crafted some of the key technology for Solar Two and will equip SolarReserve's expansive plants
The technique proved itself in the Solar Two test project in the California desert, sponsored by the Department of Energy.
This reminds me: I want a good percentage of all the sponsoring of tests like this, and all the bail-outs that my tax money is funding (plus the tax money of a few other of my com-patriots).
The right-wing 'flush it down the toilet' criminals and the selfish rich who took advantage of the hole they tried to build have all made a deep mistake. While it was only a few of us who said that history showed that capitalism doesn't work, is easily manipulated and requires bail-outs every 5-10 years (and the Great Depression was no fluke)...now there will be armies of us who know this and will refuse to listen to pandering 'representatives' or otherwise cooperate with their corporate socialism.
Rocketdyne...I grew up with them in my backyard. They left a huge tainted scar in the water supply, and for all their alleged imagination they couldn't help tossing engineers out of work whenever the feds got a skinny budget or gave the money to someone more compliant. Now they are using DOE money to prove their ideas and equipment...I want my percentage.
/rant Never underestimate their intelligence, always underestimate their knowledge.
I am glad, howerver, to see them putting their expertise to more beneficial uses. The ability to time shift the availability of solar power is important.
I don't disagree. I just am grousing at the ability of schools and corporations to suck money from us all, then patent what they develop...so that I get to pay for it again at top dollar.
If it is going to be capiralism, then I want a piece. If it is socialism, then lower the prices so that we all really profit, not just the execs. Never underestimate their intelligence, always underestimate their knowledge.
Europeans on left and right ridicule U.S. money meltdown They list greed and Greenspan among the culprits, and there are comparisons to . . . Albania. But amid the gloating, there is fear for financial systems in Britain, Spain, Italy and elsewhere. By Sebastian Rotella and Janet Stobart, Los Angeles Times Staff Writers 1:59 PM PDT, September 19, 2008 LONDON -- It's a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street. The economy minister of Italy's conservative and pro-U.S. government warned of nothing less than a systemic breakdown. Giulio Tremonti excoriated the "voracious selfishness" of speculators and "stupid sluggishness" of regulators. And he singled out Alan Greenspan, the former chairman of the U.S. Federal Reserve, with startling scorn. "Greenspan was considered a master," Tremonti declared. "Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis." In an interview Thursday in the Italian newspaper Corriere della Sera, Tremonti drew a comparison to corruption-ridden Albania in 1997, when a nationwide pyramid scheme cost hundreds of thousands of people their savings and ignited anarchic civil conflict. "The system is collapsing, exactly like the Albanian pyramids collapsed," Tremonti said. "The idea is gaining ground that the way out of the crisis is mainly with large public investments. . . . The return of rules is accompanied by a return of the public sector." On the other end of the political spectrum, among leftists who have long predicted calamity for what they call the "savage neoliberal capitalism" of Wall Street, there were gleeful allusions to the stock market crash of 1929. "Between the dread of a world in the midst of collapsing and the shiver of pleasure that finally something serious is happening to the kingdom of liberalism, how to orient oneself?" Eric Aeschimann wrote Thursday in the newspaper Liberation, a voice of French intellectuals whose disdain for capitalism persists in the 21st century. Expressing nostalgia for "the good old days when bankers jumped out of windows," Aeschimann condemned as "extortion" the rescue of U.S. corporate giants by the very state that free-marketeers resent.
They list greed and Greenspan among the culprits, and there are comparisons to . . . Albania. But amid the gloating, there is fear for financial systems in Britain, Spain, Italy and elsewhere. By Sebastian Rotella and Janet Stobart, Los Angeles Times Staff Writers 1:59 PM PDT, September 19, 2008 LONDON -- It's a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.
The economy minister of Italy's conservative and pro-U.S. government warned of nothing less than a systemic breakdown. Giulio Tremonti excoriated the "voracious selfishness" of speculators and "stupid sluggishness" of regulators. And he singled out Alan Greenspan, the former chairman of the U.S. Federal Reserve, with startling scorn.
"Greenspan was considered a master," Tremonti declared. "Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis."
In an interview Thursday in the Italian newspaper Corriere della Sera, Tremonti drew a comparison to corruption-ridden Albania in 1997, when a nationwide pyramid scheme cost hundreds of thousands of people their savings and ignited anarchic civil conflict.
"The system is collapsing, exactly like the Albanian pyramids collapsed," Tremonti said. "The idea is gaining ground that the way out of the crisis is mainly with large public investments. . . . The return of rules is accompanied by a return of the public sector."
On the other end of the political spectrum, among leftists who have long predicted calamity for what they call the "savage neoliberal capitalism" of Wall Street, there were gleeful allusions to the stock market crash of 1929.
"Between the dread of a world in the midst of collapsing and the shiver of pleasure that finally something serious is happening to the kingdom of liberalism, how to orient oneself?" Eric Aeschimann wrote Thursday in the newspaper Liberation, a voice of French intellectuals whose disdain for capitalism persists in the 21st century.
Expressing nostalgia for "the good old days when bankers jumped out of windows," Aeschimann condemned as "extortion" the rescue of U.S. corporate giants by the very state that free-marketeers resent.
This bailout is beyond anything even remotely intelligent. The buggers stole their way up, stole their way down, and are now getting trillions to save their butts so they can steal some more.
And the average American just says, "D'oh?"
I wish I'd moved to Sweden back when I had the chance.
Food/gas shortages. That's the ticket. In the end, might makes right. Nothing has changed since the caveman.
IIRC, the swedish bailout consisted mainly of two things: an unlimited guarantee for bankcustomers to prevent a run on the banks (later scaled back) and the government taking over Nordbanken and Gotabanken (later merged to Nordea and sold of). The banks cost quite some as the debts exceed the assets, though I think it was a bit different to what is happening now in the US.
Citing Grave Financial Threats, Officials Ready Massive Rescue
The plan involves using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems, according to two sources familiar with what was said at the meeting.
The main difference would be that the swedish government took over assets and debts (stockholders got nothing, as the alternative would have been bankrupcy), while the US is proposing to take only the bad and leave the good.
Though I have to admit that my memory of the events are kind of sketchy, and I fail to find a good link to back up my memory. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
The other banks just managed to avoid that fate, even if it was a close shave for SEB.
Solving the crisis in this way would very likely have been against EU regulations, but thankfully Sweden was not part of the EU then.
The subprime mortage crisis is almost a blue copy of what happened here in 1991-1994. Google "Securum". The Swedish approach to the problem of tidying up after the banking crisis by transferring troubled debt to specialized asset management companies is often held up as an example for other countries to follow. The most unusual aspect of Securum was the great degree of independence given to the company, combined with the rather broad terms in which its assignment was formulated. The Swedish state, as owner, announced that the winding-up would be permitted to take considerable time and that it should proceed keeping the best interests of taxpayers in view. In all other respects, Securum's board and management were given a great deal of freedom in shaping the company's policies. Moreover, the board was dominated by experts, with representatives of the ministry and the political domain being a limited element. Furthermore, the legal structure chosen was such that Securum's operations were not subject to the laws applying to financial institutions, particularly not the constraints imposed by the regulatory framework of banking legislation. The company was also allocated sufficiently substantial equity that the risk of the management needing to return to the owner and ask for more funds was virtually non-existent. Consequently, the material prospects of independence were good. In a happy twist of fate, the guy who was put in charge of the swiftly created authourity "The Bank Support Committee" (generally called the "Bank ER") is now the the chairman of the Bank of Sweden, and another key person, Bo Lundgren, then minister of taxation (and later chairman of the liberal-conservative party) is now the head of the Swedish Debt Office. So for once we have smart expereinced people in exactly the right place to deal with this crisis
The Swedish approach to the problem of tidying up after the banking crisis by transferring troubled debt to specialized asset management companies is often held up as an example for other countries to follow. The most unusual aspect of Securum was the great degree of independence given to the company, combined with the rather broad terms in which its assignment was formulated. The Swedish state, as owner, announced that the winding-up would be permitted to take considerable time and that it should proceed keeping the best interests of taxpayers in view. In all other respects, Securum's board and management were given a great deal of freedom in shaping the company's policies. Moreover, the board was dominated by experts, with representatives of the ministry and the political domain being a limited element. Furthermore, the legal structure chosen was such that Securum's operations were not subject to the laws applying to financial institutions, particularly not the constraints imposed by the regulatory framework of banking legislation. The company was also allocated sufficiently substantial equity that the risk of the management needing to return to the owner and ask for more funds was virtually non-existent. Consequently, the material prospects of independence were good.
Furthermore, the legal structure chosen was such that Securum's operations were not subject to the laws applying to financial institutions, particularly not the constraints imposed by the regulatory framework of banking legislation. The company was also allocated sufficiently substantial equity that the risk of the management needing to return to the owner and ask for more funds was virtually non-existent. Consequently, the material prospects of independence were good.
In a happy twist of fate, the guy who was put in charge of the swiftly created authourity "The Bank Support Committee" (generally called the "Bank ER") is now the the chairman of the Bank of Sweden, and another key person, Bo Lundgren, then minister of taxation (and later chairman of the liberal-conservative party) is now the head of the Swedish Debt Office.
So for once we have smart expereinced people in exactly the right place to deal with this crisis
How long before we see the FT, the Econo, and random EUreaucrats touting the bailouts as proof of the robustness of free market fundamentalism?
Congressional Leaders Were Stunned by Warnings By DAVID M. HERSZENHORN Published: September 19, 2008 NYT WASHINGTON -- It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first. Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi. "When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York. As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program "Good Morning America," the congressional leaders were told "that we're literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally." Mr. Schumer added, "History was sort of hanging over it, like this was a moment." When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this." "What you heard last evening," he added, "is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly." Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day. "You have the credit lines in America, which are the lifeblood of the economy, frozen." Mr. Schumer said. "That hasn't happened before. It's a brave new world. You are in uncharted territory, but the one thing you do know is you can't leave them frozen or the economy will just head south at a rapid rate." As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. "You know we'd be lucky ..." he said as his voice trailed off. "Well, I'll leave it at that." As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week. -Skip- But it was clear they continued to examine ways to make clear (Make it appear?) that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit. In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.
By DAVID M. HERSZENHORN Published: September 19, 2008 NYT
WASHINGTON -- It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
"When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program "Good Morning America," the congressional leaders were told "that we're literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally."
Mr. Schumer added, "History was sort of hanging over it, like this was a moment."
When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this."
"What you heard last evening," he added, "is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly."
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
"You have the credit lines in America, which are the lifeblood of the economy, frozen." Mr. Schumer said. "That hasn't happened before. It's a brave new world. You are in uncharted territory, but the one thing you do know is you can't leave them frozen or the economy will just head south at a rapid rate."
As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. "You know we'd be lucky ..." he said as his voice trailed off. "Well, I'll leave it at that."
As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.
-Skip-
But it was clear they continued to examine ways to make clear (Make it appear?) that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.
In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.
America, the STUPID! In the end, might makes right. Nothing has changed since the caveman.
Americans fall for the same old line, all the time.
What's your TRUTH? In the end, might makes right. Nothing has changed since the caveman.
That's because it was true that one time
Not sure what "that one time" refers to. Viet Nam?
Systemic rik has been discussed here on ET - on the basis of newspaper reports - for the past 3+ years.
So - how stupid do they think we are?? In the long run, we're all dead. John Maynard Keynes
So - how stupid do they think we are??
the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings
Comedy gold.
Stock markets around the world are "soaring" according to Sat. A.M. news reports, meaning ?
a. US taxpayers are becoming debt slaves
b. The end of the US Empire
c. The vultures are circling the half-dead corpse
d. Give your own interpretation. In the end, might makes right. Nothing has changed since the caveman.
My answer: Of course. If the Repubs/McCain ACTUALLY want to win this election (I'm not convinced they do), just let (ANOTHER) 9/11 happen in the US, a nuclear one would be sweet. Then watch all of the US pussies fall in line. Bye-bye Obama. In the end, might makes right. Nothing has changed since the caveman.
So SHUT UP AMERICAN AND BEND OVER!!! In the end, might makes right. Nothing has changed since the caveman.
Consequences (of even saying it)? In the end, might makes right. Nothing has changed since the caveman.
Arianna Huffington's great line Watching John McCain thundering against Wall Street greed is like tuning into to the old Lawrence Welk show to find him doing a polka version of a hard-core rap song ("A-one and a-two, motherfucker!").
On March 20, 2008, a judge declared unconstitutional the practice of the National Park Service of exempting the Presidential Inaugural Committee from the ordinary permit process in order to give that private political advocacy organization exclusive rights to exclude the public from along the Inaugural Parade route. This meant that the public would actually be allowed to protest at the next inauguration. The horror! To prevent this affront to democracy plutocracy, the National Park Service has re-written its regulations to set aside prime swaths of the Inaugural Parade route for the exclusive use of the corporate donor friends of the incoming administration. The period for public comment closes in a few days, September 22, and the more of us that protest this outrage, the better. To do so, go here here here (where you can also read more details) and scroll to the bottom where it says "Here is how you can send your comment" (ignore the link further up the page, which doesn't work). You actually have to type your own comment, but it's the sentiment that's important, not exactly what you say. Just say "no" to the regulations, "yes" to leaving the streets and sidewalks for the people, not big donors. Never underestimate their intelligence, always underestimate their knowledge.
