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And to reiterate: I don't think anybody here is claiming that this whole austerity fiasco is an American conspiracy or that the US played an important part. It is quite clear that the responsibility for these decisions lies on this side of the Atlantic.
We know that Geithner is under attack from Wall Street as they desperately try to fend off regulation.
We do? What is this planned regulation that would so severely damage Wall Street?
Warren works for Geithner
The auto rescue and scalping of bondholders happened under Geithner
WS was forced to repay TARP and purchase back options at open market prices under Geithner.
Billions in TARP money went to small banks, including labor banks under Geithner
That's fact. The narrative that relies on speculation about what happened in conversations nobody overheard or in dark plots that have no evidentiary basis is just narrative.
I certainly do not recall Giethner leading the bail-out of GM and Chrysler. Seemed more like he was drug along kicking and screeming. Giethner did not appoint Warren and I have seen little evidence that he supports her efforts, though I would be pleased to be wrong.
The terms on which WS "repaid" TARP and bought back options were about the minimum that would not be seen as outright gifts and the revenue to make those payments came largely from WS arbitrage of the difference between the Fed cost of funds and what they could get in the market. I.E. the public gave them free money for them to lend at interest. Oh, and they understood how much and how long these funds, including QE I and QE 2 would last and were able to "invest" them in markets, such as the stock markets, which they effectively have manipulated. The whole TARP issue is only the tip of the iceberg of Fed and Treasury assistance to TBTFs, and this has been to the detriment of the "real economy", which has continued to wither.
Small banks didn't get TARP money, but mid sized regional banks, such as my bank, Bank of the Ozarks, did, at Treasury insistence, under Paulson.
"It is not necessary to have hope in order to persevere."
That's pure fiction unless you know someone in the Administration who tells you otherwise.
"The terms on which WS "repaid" TARP and bought back options were about the minimum that would not be seen as outright gifts "
More fiction - if McCain had won they would have been allowed to cancel the warrants which they were demanding strongly.
"revenue to make those payments came largely from WS arbitrage of the difference between the Fed cost of funds and what they could get in the market. I.E. the public gave them free money for them to lend at interest. "
Wrong again. By the way, the discount window was not invented by the Obama administration.
"The whole TARP issue is only the tip of the iceberg of Fed and Treasury assistance to TBTFs, and this has been to the detriment of the "real economy", which has continued to wither."
Which is why we have just had the longest period of manufacturing growth in 20 years.
"Small banks didn't get TARP money, but mid sized regional banks, such as my bank, Bank of the Ozarks, did, at Treasury insistence, under Paulson. "
And that's not even false, it's Republican PR bullshit. The records are online - look it up.
Keep reading Yves Smith and keep believing RW propaganda and calling it "left".
"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
We have Morgan Kelly arguing he was a key actor, apparently based on an account from an IMF source with knowledge of the negotiations. Morgan Kelly is an economic historian, not an insider in either IMF or Irish Government circles, and so we have to make a judgement call on how reliable his source and his account is. Based on his track record, and based on only partial denials coming out of Washington, I would tend to believe him on this occasion, mainly because the ECB have no need of a US scapegoat: they are doing exactly what they think they should eb doing, and making no apologies for it.
You are free to differ, and seem to be arguing that Geithner is a much misunderstood and maligned guy, both by Morgan Kelly and by US progressives more generally. That is an argument I am not qualified to get into, but I suspect the position people will adopt depends on their view of the Obama administrator's dealing with wall street more generally.
This is a topic which deserves a diary of its own, and does not deserve to be buried in a 250+ comment stream where only 3 or 4 people are still involved. From an Irish point of view, if we are looking for support from the US administration, it is important that we understand the internal dynamics and politics at work within that administration.
So please Rootless2, give us a diary on what you consider to be Geithner's approach to dealing with the financial crisis as it has unfolded in the US and Europe, and how it might differ from the approach of the Germans and the ECB.
Index of Frank's Diaries
Oh, and they understood how much and how long these funds, including QE I and QE 2 would last and were able to "invest" them in markets, such as the stock markets, which they effectively have manipulated.
QE1&2, as I understand it, involved US sovereign bonds. Insofar as this is the case, the only extraordinary thing about them is that they are considered extraordinary.
Friends come and go. Enemies accumulate.
red herrings to throw off the scent of regulator bloodhounds?
this whole global heist analysis is becoming like an agatha christie whodunit.
and the best de-veilers are right here!
layer by layer, the obfuscatory games are laid bare, and soon the whole world will know if the butler dunnit or not.
was it the colonel with the candelabra?
i still have dreams of paulson in the stocks outside the wall street skyscrapers, getting pelted with defunct 401Ks.
here's beppe grillo's remodded 'animal farm' take on it.
Beppe Grillo's Blog
A gentleman called PIG, is about to go bust. He's got a great idea. In order to survive, he's selling his debts. He calls them State Bonds. Many people are buying them; they only want a low rate of interest and a tiny bit of interest when the capital is returned when the loan arrangement ends. Mr PIG has found the system for living above his means. He continues to get debts and to sell them. His family accounts however get worse and to protect themselves, those who buy his bonds, are asking for a higher rate of interest. Mr PIG is obliged to increase the interest rates. Over time, the situation becomes critical. The number of people buying the debt goes down as they are afraid of the risk. The debt is no longer triple A minusminus, but a triple B plusplus. The time will come when Mr PIG is no longer able to pay the interest. The neighbours of Mr PIG who have lent him most of the money, have nothing to gain by making him go bust. If he goes bust they will lose their money. Thus they offer him a loan with lots of conditions, something they call a "bail out". Mr PIG is obliged to accept so as not to go bust. When the money from the loan dries up, Mr PIG finds he's paying more interest than before. Those who have lent him money have only gained time and now they are doubly at risk, they can lose both the State bonds and the loan that is the bail out. Mr PIG, technically a bankrupt, is thus able to raise his voice as though it were he that had lent money to the others. He threatens to restructure the debt. In other words, those who bought his bonds at 100 will see the value halved to 50 and Mr PIG will be freed of half the debt with no one being able to stop him doing so. The creditors, who are ever more worried, don't know which way to turn. In fact, the State bonds, like those of any company quoted on the Stock Exchange, can lose their value. The creditors have one thing in common with Mr PIG, the currency. Once upon a time, Mr PIG used the Drachma, now the Euro. His behaviour is putting at risk the good name of the currency of the virtuous gentlemen that have no debts or few debts. The Euro cannot be compromised. The neighbours can throw out Mr bankrupt PIG from the Euro and see part of their credit go up in smoke for ever or continue to give him finance with one "bail out" after another. Germany and France have about 250 billion dollars in Greek State bonds and because of Mr PIG, the Euro is losing value in relation to the dollar and the yuan. Mr PIG leaves the Euro and his State bonds become waste paper. I would like to find the logic and the moral of the story, but I cannot.
i don't either, unless it's 'the cunning always cheat the weak'.
'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
From the point of view of the PIGS economies, it is actually preferable if a default is "kept in the family" until some time after the fact, so the money markets don't throw a hissy fit and crash their economies. And if German politicians want to bail out German banks and then lie to their public about it, then that's a matter between the German electorate and Mrs Merkel.
Indeed I can think of a lot of excellent reasons we might prefer her to try to keep it under wraps. Not the least of which reasons would be that such a coverup would make her politically radioactive when exposed (as it inevitably must be - you can't hide a bailout on that scale). Sadly, I think she'll prove to be too politically savvy or too ideologically committed to the fiction that Germany holds some sort of moral high ground to let such a default pass unmentioned.
So I would prefer a crash NOW to entropy death later.
Yes, but a country with a structural import dependence on fuel and food and a foreign primary deficit may view things in slightly different terms. Especially if they have neo-Nazis rampaging through the streets, looking to take advantage of any "national humiliation."
I don't see why a default has to be widely publicised
I don't see how anyone other than the elites can benefit from the current situation and I find it surreal that the elected governments of the chief victims, the PIGs, have been turned into the enablers for the continuation of the torture of their own populations. Guess I just don't have the stomach for serial abomination.
"It is not necessary to have hope in order to persevere."
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