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Garrison Keillor: Where's the Outrage!!!
They're Stealing from You and Me -- Where's the Outrage?
By Garrison Keillor, International Herald Tribune. Posted October 6, 2008.
It wasn't their money Wall Street was playing with. It was ours.
Where were the cops?
It's just human nature that some calamities register in the brain and others don't. The train engineer texting at the throttle ("HOW R U? C U L8R") and missing the red light and 25 people die in the crash -- oh God, that is way too real -- everyone has had a moment of supreme stupidity that came close to killing somebody. Even atheists say a little prayer now and then: Dear God, I am an idiot, thank you for protecting my children.
On the other hand, the America's federal bailout of the financial market (yawn) is a calamity that people accept as if it were just one more hurricane. An air of crisis, the secretary of the Treasury striding down a hall at the Capitol with minions in his wake, solemn-faced congressmen at the microphones. Something must be done, harrumph harrumph.
The Current Occupant pops out of the cuckoo clock and reads a few lines off a piece of paper, pronouncing all the words correctly. And the newscaster looks into the camera and says, "Etaoin shrdlu qwertyuiop."
Where is the outrage?
(...more @ link) They're Stealing from You and Me -- Where's the Outrage? ... more -
Wall Street Takes Big Hit on Credit Fears
NEW YORK (Oct. 6) - Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials plunging as much as 800 points — their largest one-day point drop — before recovering to close with a loss of 370. The catalyst for the selling, which also took the Dow below 10,000 for the first time in four years, was investors' growing despair that the spreading credit crisis will take a heavy toll around the world.
Investors have come to the realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets. NEW YORK (Oct. 6) - Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials pl... more -
Bailout: Capital Industry Buys Off Congress
Financial Bailout Vote: House Members Voting 'Yes' Received 54% More Money from Banks and Securities
For Immediate Release:
September 29, 2008
HOUSE MEMBERS VOTING 'YES' ON BAILOUT RECEIVED 54% MORE MONEY FROM BANKS AND SECURITIES FIRMS THAN MEMBERS VOTING 'NO'
Dems voting 'Yes' received twice as much as Dems voting 'No'
BERKELEY, CA—Members of the U.S. House of Representatives today voted against a $700 billion financial system bailout. MAPLight.org has found that, over the past five years, banks and securities firms gave an average of $231,877 in campaign contributions to each Representative voting in favor of the bailout, compared with an average of $150,982 to each Representative voting against the bailout--54 percent more money given to those who voted Yes. 205 Representatives voted Yes and 228 voted No, with 1 Not Voting.
House Democrats split their votes on this bill, 140 voting Yes and 95 voting No. Democrats voting Yes received an average of $212,700 each, about twice as much as those voting No, $107,993.
House Republicans also split their votes on this bill, 65 voting Yes and 133 voting No (and 1 not voting). Republicans voting Yes received an average of $273,181 each, 50% more than those voting No, $181,688.
“Profit-driven companies wouldn't be making campaign contributions if it didn't buy them influence or access," said Daniel Newman, MAPLight.org's executive director. “Votes in Congress align with the river of money that flows through our political system.”
FOR MORE INFO CLICK URL ABOVE Financial Bailout Vote: House Members Voting 'Yes' Received 54% More Money from Banks and Securities ... more -
Jim Cramer: Time to get out of stocks
Bullish investors should turn into shrinking violets as the stock market continues its shocking downward spiral, CNBC’s “Mad Money” host Jim Cramer told Ann Curry on TODAY Monday.
In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.
“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV.
“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”
While the animated Cramer is known for telling investors the best prospects for earning money on the stock market, he’s now saying retreat is the best position in the face of some of the worst financial news in decades. The bank lending default crisis that put financial firms around the country on the brink of collapse could bring “as much as a 20 percent decrease in the stock market,” Cramer predicted...
More at Link... Bullish investors should turn into shrinking violets as the stock market continues its shocking downward spiral, CNBC’s “Mad Money” ho... more -
Financial firms to manage bailout?
By MARTIN CRUTSINGER and JEANNINE AVERSA, AP Economics Writer
WASHINGTON - The Bush administration, pledging to move quickly and with force, has released details on how financial firms will be selected to manage the largest government bailout in history.
The Treasury on Monday put out guidelines for selecting the financial asset management firms that will run the program.
The government also released guidelines that will be used to guard against conflicts of interest in running the program. By MARTIN CRUTSINGER and JEANNINE AVERSA, AP Economics Writer ... more -
Lehman diverted millions to execs
Congress heard Monday that Lehman Brothers, days away from becoming the largest bankruptcy in U.S. history, was pleading for a federal rescue while steering millions in dollars to departing executives.
The first hearing into what caused the nation's financial markets to collapse last month, precipitating a $700 billion bailout, opened with finger-pointing and glimpses into internal company documents from Lehman's chaotic last hours.
Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, said the giant investment bank was "a company in which there was no accountability for failure." Lehman's collapse set off a panic that within days had President Bush and Treasury Secretary Henry Paulson asking Congress to pass the rescue plan for the financial sector.
Richard S. Fuld Jr., chief financial officer of Lehman Brothers, was among witnesses called to testify.
"What has happened is an absolute tragedy," Fuld said in prepared remarks. "I feel horrible about what happened."
Waxman read excerpts from Lehman documents in which a recommendation that top management should forgo bonuses was apparently brushed aside. He also cited a Sept. 11 request to Lehman's compensation board that three executives leaving the company be given $20 million in "special payments."
"In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman said.
The government let Lehman go under Sept. 15, only to bail out insurance giant American International Group the next day, in a cascading series of financial shocks and failures that put Washington on track for the multibillion-dollar rescue starting the end of that week.
Waxman described that plan as a life-support measure. "It may keep our economy from collapsing but it won't make it healthy again," he said.
That sentiment echoed on Wall Street, where the Dow Jones industrials sank below 10,000 on Monday for the first time in four years. Investors fear the crisis will weigh down the global economy and the bailout won't work quickly to loosen credit markets.
The rescue plan, now law, was so rushed that the usual congressional scrutiny is only coming now, after the fact.
Waxman said that in January, Fuld and his board were warned the company's "liquidity can disappear quite fast."
Despite that warning, he said, "Mr. Fuld depleted Lehman's capital reserves by over $10 billion through year-end bonuses, stock buybacks, and dividend payments."
Waxman quoted Fuld as saying in one document, "Don't worry" to the suggestion that executives go without bonuses.
That suggestion came from Lehman's money management subsidiary, Neuberger Berman. Waxman quoted George H. Walker, President Bush's cousin and a Lehman executive who oversaw some Neuberger Berman employees, as responding with a dismissive tone to the idea of going without bonuses.
"Sorry team," he wrote to the executive committee, according to Waxman. "I'm not sure what's in the water at 605 Third Avenue today.... I'm embarrassed and I apologize."
Fuld said in his statement that the company did everything it could to limits its risks and save itself.
"In the end, despite all our efforts, we were overwhelmed, others were overwhelmed, and still other institutions would have been overwhelmed had the government not stepped in to save them," he said. Congress heard Monday that Lehman Brothers, days away from becoming the largest bankruptcy in U.S. history, was pleading for a federal... more -
The F Word: Where Iraq and Main Street Meet
Even as Congress urges aid to Wall Street, there are many running for office around the country today pledging to cut federal budgets on things like social spending, public services, and aid to financially strapped communities.
John McCain in the first presidential debate came on strong as a spending cutter. He's for the bail out -- but he pledged that if elected he'd freeze all other government spending -- all of it -- except for spending on war and care for vets.
But you can't hurt communities and help Vets at the same time. The fact is, more than 200,000 veterans are homeless today -- they're not just affected by what goes on in Main Street America, they may be living right there. And a disproportionate number of our service men and women come from rural America - some of the most economically stressed places in the country. They joined the military, many of them, because of the absence of other opportunities in their home towns.
Military families are poor families. Of a total of 700,000 spouses across all services, the Defense Department reports that about half are married to enlisted persons making less than $20,000 a year.
Thousands of military families rely on food stamps to get through the month. That’s right: the families of our troops need food stamps to feed themselves. Writes one Vietnam veteran on the website, The Olympian: “Without food stamps, many military families would not survive.”
If deficit spending's ok to help failed bankers or finance a war of choice -- don't tell us we have to shrink budgets where Main Street America is concerned. That's where military families live. Better yet, you want to help military families? Bring the troops home.
The $10 billion we're spending now on the Occupation -- Just think what it could do. Even as Congress urges aid to Wall Street, there are many running for office around the country today pledging to cut federal budgets ... more -
Dow Falls Below 10,000
Wall Street is plunging, with the Dow Jones industrials down more than 500 points amid growing fears that the credit crisis is spreading around the world. Wall Street is plunging, with the Dow Jones industrials down more than 500 points amid growing fears that the credit crisis is spreadi... more
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Dow plunges below 10,000; lowest level since 2004
NEW YORK - Wall Street tumbled Monday, joining a selloff around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The Dow Jones industrials skidded more than 300 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.
The markets have come to the sobering realization that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks... NEW YORK - Wall Street tumbled Monday, joining a selloff around the world as fears grew that the financial crisis will cascade through... more -
Wall Street tumbles after global sell-off
Financial markets around the world had a rocky start Monday after European governments took steps to limit the damage from the growing global financial crisis. U.S. stocks dropped sharply at the opening, and the credit markets remained under strain. The Dow fell more than 200 points.
Investors are realizing the Bush administration's $700 billion rescue plan won't work quickly enough to unfreeze the credit markets, and that many banks are still having difficulties gaining access to cash.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed. Financial markets around the world had a rocky start Monday after European governments took steps to limit the damage from the growing... more -
Bank buyouts raise question of names for venues
Performance venues love blockbuster events, but not the kind that are currently affecting their naming-rights partners.
The stunning takeovers of big banks like Washington Mutual (WaMu) and Wachovia are forcing venues with long-term naming-rights deals with these institutions to grapple with unexpected branding challenges. Some even face the prospect of losing a partner at a time when replacing one lucrative naming-rights deal with another could be a difficult task at best.
The WaMu Theater at Madison Square Garden in New York, the WaMu Theater at Qwest Field in Seattle, the Wachovia Center in Philadelphia and the Wachovia Arena in Wilkes-Barre, Pennsylvania, are among the venues being forced to deal with the fallout of the U.S. financial crisis. Performance venues love blockbuster events, but not the kind that are currently affecting their naming-rights partners. ... more -
Iceland's economy on the brink of collapse
Europe shivers as credit freeze hits Iceland.
Iceland's economy is on the brink of collapse, after the krona fell 27 per cent against the dollar last week. The fall sent fresh shockwaves through the UK financial system, as Icelandic banks have invested billions in the British economy. One of the biggest, Kaupthing, is estimated to have underwritten about £3bn in debt to finance deals in this country, and just two of the banks have more than 150,000 British internet customers.
The Icelandic government is believed to be considering a bailout plan after it was revealed the three largest banks have liabilities eight times greater than the country's GDP! Europe shivers as credit freeze hits Iceland. ... more -
Last days of the American Republic?
Chalmers Johnson: USA must cut back on military spending and build green infrastructure or face ruin. Part 2
Chalmers Johnson: "Something has happened to us comparable to what happened to the former USSR after 1989 ... And that led finally to the dissolution of the USSR."
Chalmers Johnson taught from 1962 to 1992 at the Berkeley and San Diego campuses of the University of California. From 1968 until 1972 he was a consultant to the Office of National Estimates of the Central Intelligence Agency. He has written 17 books. His most recent releases are “Blowback: The Costs and Consequences of American Empire” (Metropolitan Books, 2000) and “The Sorrows of Empire: Militarism, Secrecy, and the End of the Republic” (Metropolitan, 2004) and his newest book, “Nemesis: The Last Days of the American Republic" (Metropolitan, 2007). Chalmers has been a frequent contributor to the Los Angeles Times, the London Review of Books, Harper’s Magazine, and The Nation among others, he appears in the 2005 prize-winning documentary film "Why We Fight".
See Part 1 at: http://current.com/items/89370666_massive_us_military_b... Chalmers Johnson: USA must cut back on military spending and build green infrastructure or face ruin. Part 2 ... more -
Survey: Economists Overwhelmingly Prefer Obama
s the financial crisis pushes the economy back to the top of voters' concerns, Barack Obama is starting to open up a clear lead over John McCain in the opinion polls. But among those who study economics for a living, Mr Obama's lead is much more commanding. A survey of academic economists by The Economist finds the majority--at times by overwhelming margins--believe Mr Obama has the superior economic plan, a firmer grasp of economics and will appoint better economic advisers. s the financial crisis pushes the economy back to the top of voters' concerns, Barack Obama is starting to open up a clear lead o... more
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Kucinich on the bailout bill: The Dumbest Thing I've Ever Seen
"Congressman Dennis Kucinich, who voted against today's bailout bill in the U.S. House, tells Fox News that a smarter approach would have been to directly help homeowners facing foreclosure instead of giving the Treasury Secretary the power "to pick winners and losers"." "Congressman Dennis Kucinich, who voted against today's bailout bill in the U.S. House, tells Fox News that a smarter approa... more
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Suddenly, Welcome to The World of 'Moral Hazard'
Excerpt....
"Now, with big banks dropping like flies and Wall Street vaporizing amid a mortgage meltdown, every corner bar and hair salon is filled with experts on the perils of moral hazard. Everyone gets it: Cut risk down to next to nothing and some people do crazy things.
Borrowers across America took a dive for low- or no-down-payment mortgages buoyed by the Federal Reserve's low-risk interest rates. Wall Street sliced the mortgages thinner than prosciutto ham, "spreading risk," and sold pieces all over the world, where, like magic, they seemed to fatten balance sheets. The deal was so win-win that Bear Stearns, Lehman, Merrill and the rest of the world's mega-banks engorged on their own product. It was as if foie gras geese forced corn and fat down their own throats. The risk of exploding seemed to be nil.
For behind it all sat Fannie Mae and Freddie Mac, running mortgage liquidity into the nation's neighborhoods like an open fire hydrant. Several years ago, when the Journal's editorial board met with Fannie Mae's top executives and pressed the issue of financial risks, we were told by way of ending the conversation that Fannie was merely fulfilling the "mandate of Congress" to spread home ownership across the land. Congress, of course, is a temple to moral hazard."
Congress got us here; back door dealings and stupid ideas have been presented to get us out of here....
When the solutions come from the same folks who created the problems, beware! Excerpt.... ... more -
See a pattern on Wall Street?
"Take a look at the two blurry images [above]. Can you see an object hidden in each one?
Before I give the answers, here’s another question: Do you feel a certain lack of control over events right now?
These questions are not unrelated, according to a report in the new issue of Science by Jennifer Whitson and Adam Galinsky. The researchers found that when people were primed to feel out of control, they were more likely to see patterns where none exist. They would spot an object in each of the images above, even though only the image on the right contains one (the outline of Saturn and its rings). If you thought you saw something in the image on the left, don’t be too hard on yourself — your feeling may be perfectly understandable given the chaos on Wall Street.
The researchers say that their experiments, which also tested people’s tendency to detect conspiracies and see superstitious lessons in stories, help explain why conspiracy theories and superstitions flourish when people are feeling out of control. Previous researchers have reported, for instance, that first-year business-school students are more prone to imagine conspiracies than are second-year students, and that deep-sea fishermen have more elaborate rituals and superstitions than ones who fish in more predictable conditions near shore."
More at link ... "Take a look at the two blurry images [above]. Can you see an object hidden in each one? ... more -
Bailout a "really big number"
Bailout bill no relief on foreclosures as159,000 more jobs were lost in September, markets down again.
The financial bailout package was passed by the US House of Representatives on Friday but 108 Republicans and 63 Democrats still refuse to approve the bill. Markets drop anyway with the Dow Jones losing 818 points on the week. Jobs in September slashed by 159,000 and home foreclosures at 770,000 since August 2007 expected to continue to rise. The Real News Network talks to Michael Perelman, Professor of Economics at California State University, Chico.
Michael Perelman teaches economics at California State University, Chico. He has published 19 books, including, The Confiscation of American Prosperity, Railroading Economics, Manufacturing Discontent, The Perverse Economy , and The Invention of Capitalism . He writes a blog Unsettling Economics: A Progressive Look At Economics and the Rest of the Screwed Up World at michaelperelman.wordpress.com. Bailout bill no relief on foreclosures as159,000 more jobs were lost in September, markets down again. ... more -
Bailout Passes
After a vote of 263-171 in Congress and a quick signature from the President the most significant piece of economic legislation in recent history was approved. $700 billion taxpayer dollars will be used to bailout the devastated US economy. After a vote of 263-171 in Congress and a quick signature from the President the most significant piece of economic legislation in rec... more
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