Goldman chief hits at `useless' banking

Lloyd Blankfein, chief executive of Goldman Sachs, has attacked some investment banking products as socially useless and said that the controversy over bankers' pay was both understandable and appropriate.

In a speech to the Handelsblatt banking conference in Frankfurt on Wednesday, Mr Blankfein said: "The industry let the growth and complexity in new instruments outstrip their economic and social utility as well as the operational capacity to manage them."

Try this:

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

Priceless: How The Federal Reserve Bought The Economics Profession

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."

One critical way the Fed exerts control on academic economists is through its relationships with the field's gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll -- and the rest have been in the past.

read the whole thing


In the long run, we're all dead. John Maynard Keynes

A German member of parliament has been charged with obtaining and distributing indecent images of children.

Joerg Tauss, who recently left the Social Democratic party, is accused of around 100 counts of saving images of children on his mobile phone.

Prosecutors say that in some cases he forwarded the images, and that more material was found at his home.

Mr Tauss admits possessing the images, but says he downloaded them during an investigation into child pornography.

I won't link previews here - go look at the high-res images at the link.

They're stunning.

...but don't worry, all is now well

"The future is already here -- it's just not very evenly distributed" William Gibson

I only did about two hours inside - I felt sick yesterday and today I was still feeling very fatigued. I'll probably go there again when my sister gets here next Tuesday.

The wing near the Mona Lisa was an absolute nuthouse (I can only blame myself, I mean, I went straight there  because I had to), but afterward I went up to the 2nd floor to look the collection of French paintings and it was far saner.

you are the media you consume.

Good Billions After Bad
By Donald L. Barlett and James B. Steele

As the Bush administration waned, the Treasury shoveled more than a quarter of a trillion dollars in tarp funds into the financial system--without restrictions, accountability, or even common sense. The authors reveal how much of it ended up in the wrong hands, doing the opposite of what was needed.

...once the money left the building, the government lost all track of it. The Treasury Department knew where it had sent the money, but nothing about what was done with it. Did the money aid the recovery? Was it spent for the purposes Congress intended? Did it save banks from collapse? Paulson's Treasury Department had no idea, and didn't seem to care. It never required the banks to explain what they did with this unprecedented infusion of capital.

By and large, the cash that went to the Big 9 simply became part of their capital base, and most of the big banks declined to indicate where the money actually went. Because of the sheer size of these institutions, it's simply impossible to trace...

A.I.G., the largest single tarp beneficiary, wasn't even a bank...

A.I.G. was able to pay off its counterparties 100 cents on the dollar. The largest payout--$12.9 billion--went to Goldman Sachs, the Wall Street investment house presided over by Paulson before he moved into his Treasury job.

Based on the reluctance of many banks to take the money in the first place, and the swiftness with which other banks have repaid tarp funds, the main conclusion to be drawn is that relatively few were actually endangered. Rather than targeting the weak for relief--or allowing them to fail, as the government allowed millions of ordinary Americans to fail--Paulson and Treasury pumped hundreds of billions of dollars into the financial system without prior design and without prospective accountability. What was this all about? A case of panic by Treasury and the Federal Reserve? A financial over-reaction of cosmic proportions? A smoke screen to take care of a small number of Wall Street institutions that received 100 cents on the dollar for some of the worst investments they ever made?

More than five months after the bulk of the bailout money had been distributed into bank coffers, Elizabeth Warren plaintively raised the central and as yet unanswered question: "What is the strategy that Treasury is pursuing?" And she basically threw up her hands. As far as she could see, Warren went on, Treasury's strategy was essentially "Take the money and do what you want with it."

Good to admit when you fuck up, Mr President.  But quit talking and go fix it.

Be nice to America. Or we'll bring democracy to your country.

http://www.eurotrib.com/story/2009/8/16/35315/1194

Hey, Grandma Moses started late!

XCERPTS OF THE PRESIDENT'S ADDRESS TO A JOINT SESSION OF CONGRESS TONIGHT

The plan I'm announcing tonight would meet three basic goals:

It will provide more security and stability to those who have health insurance. It will provide insurance to those who don't. And it will slow the growth of health care costs for our families, our businesses, and our government.

(...)

First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.

What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies - because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

That's what Americans who have health insurance can expect from this plan - more security and stability.

Now, if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange - a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices.

No mention of the public option in these extracts.

In the long run, we're all dead. John Maynard Keynes