tagged w/ Banking Crisis
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In an interview with Jon Stewart on Comedy Central's The Daily Show Tuesday evening, Vice President Joe Biden acknowledged the anger and frustration many taxpayers feel over the way financial institutions seem to have favored status in Washington D.C.
Pointing to the hundreds of billions of government dollars that have been spent to keep banks from failing, he recalled a "great expression" of his grandfather, Ambrose Finnegan: "It's socialism for the rich and capitalism for the poor," Biden said.
But he defended his administration's decisions to rescue Wall Street institutions from the brink of failure. "Because if we did not bail them out, we would have been in a position where there was a literal depression, not a recession."
http://www.huffingtonpost.com/2009/11/18/biden-on-the-bailout-soci_n_361900.htmlIn an interview with Jon Stewart on Comedy Central's The Daily Show Tuesday... more
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Via National People's Action, here is some footage from the protesters at the ABA conference. From the footage, it's clear there are some strong emotions from the protesters.
At one point a protester grabs a megaphone and says:
"The American Bankers Association has helped loosen the rules that protect us, allowing the unfettered greed that has brought us to the brink of a recession. And for those bankers who are members and support the ABA's war against the working and middle class, shame on you!"
The crowd soon begins chanting "Shame On You!" in unison.
Via Progress Illinois' Twitter feed, here's more video of Sen. Durbin's speech. In this section, he calls for a "showdown" with Wall Street.
According to the Twitter feeds of National People's Action and the SEIU, the protesters are headed to the ABA's "Roaring '20s"-themed cocktail party. (Perhaps the ABA is not aware of the irony of having such an event.)
Sen. Dick Durbin spoke in front of the protesters earlier today. Here's a clip from the video, in which Durbin tells the story of homeowner who was struggling to stay in her home -- and was apparently talked into agreeing to a seemingly atrocious mortgage. The woman's mortgage was riddled with hidden fees and by, "the types of things even a Wall Street lawyer couldn't explain to anyone," Durbin said.
The American Bankers Association's annual convention in Chicago has become the scene for a series of major protests, which are set to continue through Tuesday. Dubbed "the Showdown in Chicago." (http://www.showdowninchicago.org/index.html) (Check back here frequently for updates on the protests.)
Groups like the National People's Action, the Service Employees International Union, Americans For Financial Reform and the AFL-CIO are expected to turn out with thousands of protesters. Sen. Richard Durbin (D - Illinois) is scheduled to address the protesters Sunday evening. Conference speakers include Newt Gingrich, conservative columnist George Will and FDIC chairman Sheila Bair.
Check out these photographs of the "Showdown in Chicago," taken by organizers of the protest.
http://www.huffingtonpost.com/2009/10/25/showdown-in-chicago-prote_n_333245.htmlVia National People's Action, here is some footage from the protesters at the ABA... more
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Citigroup has hired banking industry lobbyist Richard F. Hohlt, the man who blocked banking regulation in the 1980s and "played a pivotal role helping to prolong dubious industry practices that cost taxpayers $150 bilion to clean up." He was also instrumental in helping the Bush administration "out "Valerie Wilson as a CIA agent.
After taking $45 billion in TARP assistance, Citigroup has struck a "loss sharing deal" with the government, which makes us (taxpayers) on the hook for an additional future loss $214 billion dollars!
As if they hadn't plundered enough, now they've hired Hohlt to fight any future regulations.
What an obscene example of hubris.Citigroup has hired banking industry lobbyist Richard F. Hohlt, the man who blocked... more
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WASHINGTON — Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.
Federal Deposit Insurance Corporation Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.
A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.
“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”WASHINGTON — Tired of the government bailing out banks? Get ready for this:... more
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The US government has announced a major reform of banking regulation to prevent future financial crises.
The overhaul will require big banks to put more money aside against future losses to curb excessive risk taking.
Consumers will get a special agency to protect their interests and regulate mortgages and credit cards.
In outlining the reforms, President Barack Obama described them as the biggest shake-up of the US system of financial regulation since the 1930s.
The US central bank, the Federal Reserve, will be given the authority to monitor major financial institutions.
The US President said the lack of oversight among finance firms prompted systemic abuse causing risks for both companies and individuals.
"We are working hard to build a new foundation for sustained economic growth. This will not be easy" he said.
"We know that this recession is not a result of one failure but of many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over a course of decades."
New Rules
The aim is to deal with the weaknesses that the sub-prime crisis and the financial meltdown revealed in the fragmented US regulatory system.
"With their proposals today, the administration has moved this critical debate from broad discussion to specific action - this is an important step forward," said Timothy Ryan, chief executive of the Securities Industry and Financial Markets Association.
He said it was a "once-in-a-generation opportunity to rebuild our regulatory structure so that our financial system is more stable, more resilient and better underpins a dynamic US economy".
But not everyone was so positive.
Peter Morici of the Smith School of Business at the University of Maryland described the changes as "a huge bureaucratic overreach that will prove ineffective and too costly".
Page last updated at 18:49 GMT, Wednesday, 17 June 2009 19:49 UK
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US unveils banking reform plans
President Obama: "We should not accept a system that consistently puts us in danger"
The US government has announced a major reform of banking regulation to prevent future financial crises.
The overhaul will require big banks to put more money aside against future losses to curb excessive risk taking.
Consumers will get a special agency to protect their interests and regulate mortgages and credit cards.
In outlining the reforms, President Barack Obama described them as the biggest shake-up of the US system of financial regulation since the 1930s.
The US central bank, the Federal Reserve, will be given the authority to monitor major financial institutions.
The US President said the lack of oversight among finance firms prompted systemic abuse causing risks for both companies and individuals.
"We are working hard to build a new foundation for sustained economic growth. This will not be easy" he said.
"We know that this recession is not a result of one failure but of many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over a course of decades."
New rules
The aim is to deal with the weaknesses that the sub-prime crisis and the financial meltdown revealed in the fragmented US regulatory system.
"With their proposals today, the administration has moved this critical debate from broad discussion to specific action - this is an important step forward," said Timothy Ryan, chief executive of the Securities Industry and Financial Markets Association.
He said it was a "once-in-a-generation opportunity to rebuild our regulatory structure so that our financial system is more stable, more resilient and better underpins a dynamic US economy".
But not everyone was so positive.
Peter Morici of the Smith School of Business at the University of Maryland described the changes as "a huge bureaucratic overreach that will prove ineffective and too costly".The US government has announced a major reform of banking regulation to prevent future... more
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It's a terrible mistake to confuse the momentary solvency of the financial sector and the long-term health of our economy.
While we have addressed the credit collapse, we have not begun to tackle the far more daunting, and more significant, structural problems in the economy. Instead of focusing on the green shoots, let's examine the macro data that will determine our national prosperity in the next generation. These data are terrifying.
Start with the job front. Long term, nothing is more fundamental than good jobs to creating the middle-class wealth that must drive the economy. The creation of true middle-class jobs was the great success of our economy from 1950s through the mid-1990s. Consider the job data, in aggregate and by sector, from the past decade. (All data are from the U.S. Department of Labor, Bureau of Labor Statistics.)It's a terrible mistake to confuse the momentary solvency of the financial sector... more
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The Royal Bank of Scotland are reportedly pursuing the protester who hurled a computer through the their office window during the G20 summit earlier this month, for forty thousand pounds in damages.
The protester in their sights is an unemployed 17 year old from Brighton so it's unlikely they'll have the cash knocking about. But the part-nationalised bank wants them to cover the damage expenses in full. Ouch.
The photograph of the computer hurtling through the city branch of RBS was one of the iconic images to emerge from the day of protests.The Royal Bank of Scotland are reportedly pursuing the protester who hurled a computer... more
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Over the last century, any time you had a multi-term GOP president (in other words, long enough to do real damage) you had a pretty substantial collapse in the banking industry (i.e., near fundamental economic collapse). Just putting down a list of presidents over the last century and then mapping the major bank panics over the same time period reveals some interesting stuff.Over the last century, any time you had a multi-term GOP president (in other words,... more
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NEW HAVEN, Conn. — The attorney general of Connecticut said Saturday that he is asking American International Group Inc. why documents appear to show the company paid $53 million more in bonuses to its financial products division than previously reported.
Documents turned over late Friday show AIG paid $218 million in bonuses last weekend, higher than the $165 million that was previously disclosed, said the office of Attorney General Richard Blumenthal, who had issued a subpoena.
Bonuses were “showered like confetti” on AIG employees, Blumenthal said.NEW HAVEN, Conn. — The attorney general of Connecticut said Saturday that he is... more
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Washington Mutual, the bankrupt, seized and "under investigation" financial institution which saw some operations forcibly sold off to JPMorgan Chase in 2008, is suing the agency that guarantees Americans' deposits, and that agency is running low on funds.
Washington Mutual (WaMu), formerly one of the nation's most prestigious banks and alleged holder of over $307 billion in assets, is suing the Federal Deposit Insurance Corporation for more than $13 billion over the roll-up of its banking division into JPMorgan Chase & Co.
Washington Mutual was seized by federal regulators in Sept. 2008; the company filed for bankruptcy immediately thereafter. The ensuing investigation "one of the largest and most complex federal investigations ever undertaken in Western Washington," a US Attorney told the Seattle Times
"In a complaint filed with the U.S. District Court for the District of Columbia, the thrift's former parent accused the FDIC of having on January 23 made a 'cryptic disallowance' of its claims, prompting the lawsuit," reported Reuters.Washington Mutual, the bankrupt, seized and "under investigation" financial... more
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Following calls for the Prime Minister to say sorry for the banking crisis, and David Cameron's wily apology on Friday for his party's failure to flag up the danger of bank and corporate debt ahead of the recession, Gordon Brown has said he "accepts 'full responsibility' for his role in the banking failures that led to the global recession.
He does, however, rule out making an actual apology and told The Guardian he thinks it "is essential for the sake of the country" that Labour wins a fourth term at the next general election as "only progressive, centre-left governments can address the problems of the global change".
Cameron, meanwhile, now has a double-digit lead in the polls.Following calls for the Prime Minister to say sorry for the banking crisis, and David... more
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A few years ago, credit card companies were throwing money at people to get them to sign up. Now, as they struggle to contend with a wave of defaults, they may pay you to leave.
At least that’s the case with American Express, which is offering some card members $300 to pay off their remaining balance and close their accounts.
Selected members — the company won’t say how many — received letters with the voluntary offer a couple weeks ago, according to Molly Faust, an American Express spokesperson. Each letter came with an RSVP code that, when submitted online, immediately cancels that member’s card. Members have until the end of April to pay off their balance, after which they will receive a $300 Amex prepaid gift card. If they do not pay off their balance in time, they do not get the gift card and their accounts will still be closed, Ms. Faust said.
Is this a way for peopel to pay back their debt or a way for American Express to make money/suffer less losses?A few years ago, credit card companies were throwing money at people to get them to... more
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Whenever you try to solve a problem you should look at what caused the problem in the first place. In early 2009, the banking system is wrestling with hundreds of billions (if not trillions) of dollars of bad assets, known as subprime loans, marginal loans, or other vague descriptors.
Based on my years of experience as a Chief Financial Officer (CFO) in banking, I can say with confidence, "Bankers are more intelligent and business savvy than government bureaucrats."
That statement is invariably followed by the question: "So, why did intelligent bankers make so many bad loans?" The answer is government intervention and coercion.
Read and Discuss...Whenever you try to solve a problem you should look at what caused the problem in the... more
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The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan -- whatever its details -- can't possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments.
So far the industry hasn't shown that kind of foresight. One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt. Lobbyists say they will fight to restrict the types of loans the bankruptcy proposal covers and new powers granted to judges.
Read and Discuss...The Obama Administration is expected within the next few weeks to announce an... more
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New Mexico Governor, Bill Richardson, is under investigation which has prompted him to back away from being offered Secretary of Commerce position under the upcomming Obama administration. However, there is more to Richardson's story than is being told in the media. BBC investigative journalist, Greg Palast, sheds some light on Richardson's shady past.
Check out the following link:
http://www.gregpalast.com/bill-richardson-kissinger-american/#more-2176New Mexico Governor, Bill Richardson, is under investigation which has prompted him to... more
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Voted in Oct. 3, 2008, The Emergency Economic Stabilization Act. H. R. 1424, the bailout bill is 169 pages long. covering such subjects like FDIC authority, Cooperation with the FBI and Extension of exclusion of income from discharge of qualified principal residence
indebtedness.
Each Federal property manager
shall, 60 days after the date of enactment of this Act
and every 30 days thereafter, report to Congress (*)
in first 2 days of December, http://www.currentforeclosures.com/Stats/ is reporting 17,225 new foreclosures.
the 60 days is up, Action Is due
*An excerpt from SEC. 110. ASSISTANCE TO HOMEOWNERS on page eleven.
(4) TIMING.—Each Federal property manager shall develop
and begin implementation of the plan required by this subsection
not later than 60 days after the date of enactment
of this Act.
(5) REPORTS TO CONGRESS.—Each Federal property manager
shall, 60 days after the date of enactment of this Act
and every 30 days thereafter, report to Congress specific
information on the number and types of loan modifications
made and the number of actual foreclosures occurring during
the reporting period in accordance with this section.Voted in Oct. 3, 2008, The Emergency Economic Stabilization Act. H. R. 1424, the... more
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Banks are reportedly using their bailout money to buy up smaller banks instead of helping homeowners.Banks are reportedly using their bailout money to buy up smaller banks instead of... more
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G-20 leaders have a nice dinner but do not deal with how to make financial institutions serve the public.
Following the wrap of the G-20 summit, The Real News Network spoke to Prof. Leo Panitch, and economist, Doug Henwood about what was proposed at the meeting and what was accomplished. Henwood says its very difficult to imagine these varied countries coming together and ceding sovereignty to an international economic body. Panitch says it's time to democratize the financial system while they're on their back heels.
Leo Panitch is the Canada Research Chair in Comparative Political Economy and a Distinguished Research Professor of Political Science at York University in Toronto. Panitch is also the author of "Global Capitalism and American Empire" and his most recent release "American Empire and the Political Economy of International Finance".
Doug Henwood is the founder and editor of the Left Business Observer. Henwood is also a contributing editor of The Nation and does a weekly program on WBAI radio, New York's Pacifica outlet. His book, "The State of the USA Atlas" was published by Simon & Schuster in 1994; "Wall Street" was published by Verso in 1997 (paperback, 1998) to great acclaim.
Related Stories:
http://current.com/items/89534503/europe_imf_take_center_stage_at_g_20.htm
http://current.com/items/89534104/the_lame_duck_economic_summit.htmG-20 leaders have a nice dinner but do not deal with how to make financial... more
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After a long battle to secure democracy in the United States, it somehow became fashionable among the Founding Fathers in the early days of the republic to exclude all "dangerous factions" from the narrow field of political players.
John Madison warned in "Federalist Papers No. 10" against the prospects of "a number of citizens... who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community." In other words, democratic institutions must be professionally tailored to fit the body politic in order to protect the lavish lifestyles and inordinate interests of the governing classes.
The greatest fear of America's Founding Fathers was "the mob," or rather those men who might be tempted, over time, to take exception with the rigid stratification of the social hierarchy. Many ingenious political technologies were thus forced on the people, such as the Electoral College, an anachronistic institution originally designed to prevent the undesirables from winning at the ballot box; the system is still in use today, together with a faulty voting apparatus that even "authoritarian" Venezuela has managed to fix.
Over time, the "problem" with factions was resolved: Since 1789, the United States - a land of 500 different cereal brands, 200 kooky colas, and 1,500 car models - is far less generous when it comes to providing choice in the political marketplace: Year after dismal year, U.S. voters get exactly two political choices: Democratic or Republican, take your pick. Not even the richest men in America (Ross Perot, for example) can smash through this Plexiglas ceiling. Yes, the spectacle of conventions, campaigns and champagne, not to mention the occasional articulate black man or fearless first female, are all quite fun to watch, but then what would a sham be without a whole lot of colorful distractions?
A curious thing about this two-party grip on power is that the theory of a ‘lame duck' president has lost all force; the U.S. president enjoys all the powers of a Mussolini, and then some. In fact, King George II has never enjoyed greater presidential powers than he does right now, in the twilight of his 8-year-old ham-fisted rule.
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So how did the Democrats respond to Bush's request to socialize American capitalism through a taxpayer infusion of $700 billion? Hold on to your chair, dear reader, this is harsh.
And I quote DEMOCRATIC House Squeaker Nancy Pelosi: "We sent a message to Wall Street - the party is over... People have to know that this isn't a bailout of Wall Street. It's a buy-in so we can turn our economy around."
Um, Nancy, where I come from, when one group of people hands another group of people $700 billion dollars due to the latter's lack of common sense, this does not signal the "end of the party." Indeed, it portends the beginning of yet another bout of stupid behavior.
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This sums up the unacceptable thing about American politics, which is the asinine belief that the two parties must always play nice, and not display too much "bipartisan politics," especially before dinner. Says who?
Even the word "bipartisan" is an affront, suggesting that we should be content with no more than two choices.
It is my humble prediction that without a third or fourth voice in the dense field of U.S. politics, the present power monopoly will crash, dragging capitalism to the historical depths with it. Exactly as Karl Marx predicted it would. After a long battle to secure democracy in the United States, it somehow became... more
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MOSCOW, October 27 (RIA Novosti) - Russian President Dmitry Medvedev has signed into law an array of measures aimed at ensuring stability in the banking system through December 31, 2011, the Kremlin press service said on Monday.
Russian banks have been hit hard by the ongoing global financial squeeze sparked by the mortgage crisis in the United States. The Russian government has recently taken unprecedented measures to pump billions of U.S. dollars into the domestic banking system to shore up its liquidity.
The bill was approved by the lower house of parliament on October 23 and by the upper house four days later.
The law establishes a legal framework for prompt and effective measures to stave off bankruptcy in the banking sector.
It empowers the Central Bank to intervene to help ailing banks, in particular, to provide additional funding to bail them out, put them into receivership, forcibly reduce their equity capital, and a host of other measures designed primarily to protect depositors.
Russian President Dmitry Medvedev recently signed a bank deposit insurance law, increasing the amount guaranteed to 700,000 rubles ($26,800) from 200,000 rubles.
The Central Bank previously granted $50 billion in subordinated loans to Russian companies and banks through the country's national development vehicle, Vnesheconombank, to help them refinance their foreign loans.
Starting from October 20, the Central Bank has been holding unsecured loan auctions for a large group of Russian banks to help the domestic banking system handle a cash shortage.
MOSCOW, October 27 (RIA Novosti) - Russian President Dmitry Medvedev has signed into... more
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