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HomeNew York Times’ Thomas Friedman: “We Have to Demand the Truth”
Posted by Larry Doyle on February 22nd, 2010 6:05 AM |
Without the truth, we are mere slaves to a corrupt system and will never control or master our destiny.
I don’t write this premise whimsically nor do I accept it as a given. The fact is, our forefathers are rolling over in their graves right now given the fatuous culture our society has not only tolerated but promoted. I continually call for the pursuit of truth, transparency and integrity while navigating the economic landscape for the very reason that without these virtues we are doomed as a nation.
High five to AL for pointing out that none other than Thomas L. Friedman of The New York Times drills this very point in writing, The Fat Lady Has Sung. Whether you agree with Friedman’s politics is immaterial. (more…)
Elizabeth Warren Calls for New Bank Stress Tests
Posted by Larry Doyle on February 11th, 2010 9:34 AM |
The initial Bank Stress Tests run by Treasury Secretary Geithner were largely a sham. I questioned as much last April in writing, “Bank Stress Tests: Major Sham?”:
As with any test, the results are only meaningful if the process and proctor have unquestioned integrity. The proctors for the Bank Stress Test are none other than Treasury Secretary Tim Geithner and Fed chair Ben Bernanke. Why is a testing authority of the magnitude of FDIC, led by Sheila Bair, not more involved in the process? Ms. Bair is the one individual in our country with the greatest level of interaction with and understanding of the student body, that being the banking industry as a whole and individual banks specifically.
What does the FDIC, led by Ms. Bair, have to say about the upcoming Bank Stress Tests? The New York Post provides a CHILLING perspective: (more…)
How Tim Geithner Screwed the American Taxpayer
Posted by Larry Doyle on January 7th, 2010 9:31 AM |
Tim Geithner, then head of the New York Fed, blinked and screwed the American taxpayer out of billions of dollars in the process. How so?
Geithner and his cronies in Washington have misrepresented–if not outright lied–about the payments to both domestic and foreign banks in settling exposures to then failing AIG. While politicians and pundits alike will reference the precarious nature of the time and heat of the moment to defend Geithner and his cronies, the simple fact is the settlement of the AIG swaps at 100 cents on the dollar was nothing short of one of the greatest heists in our country’s history.
This heist transferred multiple billions of dollars from the American taxpayer to the likes of Goldman Sachs, JP Morgan, Societe Generale, and many more domestic and foreign banks as well. (more…)
The Freddie Mac Pigsty
Posted by Larry Doyle on December 30th, 2009 7:56 AM |
Freddie Mac and Fannie Mae have served as Washington’s piggy bank for far too long. The issuance of a blank check by Uncle Sam on Christmas Eve to cover losses at Freddie and Fannie through 2012 only cements the legacy of the pigs who have fed at the Freddie and Fannie trough.
While the sty is mighty big, don’t think for a second that the pillaging and plundering of these organizations is restricted to the high and mighty politicos who pretend to know how to develop housing policy and programs. What do I mean?
Tucked away in one corner of the sty is this little gem posted by The Wall Street Journal, Freddie HR Chief’s Big Payday: (more…)
Sheila Bair Trumps Tim Geithner
Posted by Larry Doyle on October 29th, 2009 9:52 AM |
FDIC Head Sheila Bair
“Too big to fail.”
Do you think the American public is sufficiently sickened by that phrase? No doubt.
How will our ‘wizards in Washington’ handle this monstrous issue going forward? Is there any doubt that the industry itself should be held accountable to provide the necessary capital to unwind firms deemed ‘too big to fail?’ Of course not. However, the execution of that policy is where the rubber meets the road and where we learn who in Washington is truly working for the American public and who is working for the financial industry. How so? Let’s navigate. (more…)
Is the Wall St. Block Party at the Geithners and Bernankes Breaking Up?
Posted by Larry Doyle on September 23rd, 2009 12:37 PM |
Are Big Ben Bernanke and Turbo-Tim Geithner preparing to gently turn the lights up, turn the music down, put away the hard booze, and throw the coffee on? Have the partygoers on Wall Street had too much of a good time? Has the ‘liquid-ity’ flowed a little too liberally at this bash?
We will all learn more today at 2:15pm or thereabouts when the Fed releases its regular statement assessing our economy. Will a slightly more positve view of the economy actually be met with a selloff in the markets? I believe that may very well happen. Why? The Wall Street party’s ‘hosts,’ that being Bernanke and Geithner, need to prepare the partygoers to sober up, which is a very delicate undertaking. As with any sobering process, the first thing you do is make sure you have called your friends down at ‘the station’ so nobody gets picked up unnecessarily. That ‘cover’ has worked wonders for a long time, but the partygoers may want one more ‘get out of jail free’ card at this juncture. We saw as much in the token fine assessed by the SEC ‘cops’ against Bank of America just last week.
Bloomberg highlights the predicament of the party’s host in writing, Fed May Signal U.S. Economic Recovery Has Started. We do not need to be mentalists to read the tea leaves indicating the Fed’s juice is likely to slow and that it may be time to go home. Bloomberg writes:
>>”The bottom is no longer falling out, but the recovery is still at a very early stage,” said Gertler, who worked with research on the Great Depression with Bernanke before he became Fed chairman. “There is no need to expand the balance sheet now, but it is a bit too early to begin shrinking it.”
>>Central bank officials may also discuss changing the size and duration of their plan to buy as much as $1.25 trillion of mortgage-backed securities and $200 billion of agency debt by the end of this year, said former Fed governor Laurence Meyer, now vice chairman of St. Louis-based Macroeconomic Advisers LLC.
>>Three district bank presidents — Jeffrey Lacker of Richmond, James Bullard of St. Louis and Dennis Lockhart of Atlanta — raised the possibility that the Fed may not spend all the money authorized for the mortgage-backed debt.
>>Fed officials have started talks with bond dealers to use so-called reverse repurchase agreements to drain some of the cash the central bank has pumped into the economy, according to people with knowledge of the discussions.
How are the partygoers on Wall Street preparing for the slowing, if not the end, of this block party? The Treasury yield curve is flattening today. I highlighted this likelihood yesterday when I wrote, “Is the Federal Reserve Readying a Stealth Tightening of Monetary Policy?”
You do not have to listen very hard, though, to hear the crowd on Wall Street sharing their feelings. In fact, this classic tune by Southside Johnny and the Asbury Jukes is playing on Wall Street right about now. ~ LD
Related Sense on Cents Commentary:
“Bernanke Promises to Keep ‘Punch Bowl’ Filled” (July 21, 2009)
What Were Ms. Schapiro’s Hedge Fund Investments at FINRA?
Posted by Larry Doyle on May 4th, 2009 8:08 AM |
As Obama looks to send a message to the American public that he will clean up Wall Street, hedge funds are “under the microscope.” Who in Washington will be delegated to lead the charge? None other than SEC head, Mary Schapiro. Bloomberg reports, SEC Chief Schapiro Wants Authority to Make Hedge-Fund Rules.
Hedge funds have become dirty words. When Washington wants to convey excessive Wall Street greed, politicians and regulators now regularly slip “hedge funds” into their statement.
As with any industry, hedge funds run the gamut in terms of business practices and ethics. It is well documented, though, that Washington solicits and receives excessive campaign contributions from the hedge fund community.
I agree that the hedge fund industry deserves greater scrutiny. A trillion dollar industry unregulated is a breeding ground for problems.
Bloomberg reports:
“It’s probably not enough just to register hedge funds” with the SEC, Schapiro said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “It may well be necessary to put in place particular kinds of rules.”
Treasury Secretary Timothy Geithner’s plan to overhaul financial oversight in response to the worst economic crisis since the Great Depression would force hedge funds to register with the SEC, subjecting firms to new disclosure requirements and inspections by agency staff. Schapiro said the SEC’s authority should be broader, so it can impose further restrictions on funds as “situations evolve.”
President Barack Obama yesterday blamed hedge funds that had lent Chrysler LLC money for triggering the automaker’s bankruptcy. Obama said the funds were “speculators” that refused the administration’s buyout offers because they were holding out for an “unjustified taxpayer bailout.”
Schapiro said “it’s certainly possible” that the SEC would consider forcing hedge funds to publicly disclose short- sale positions, imposing restrictions on leverage and restricting what the firms can invest in.
Does anybody have an issue with increased disclosure and oversight? Transparency is critically important in making sure the playing field for all investors is kept fair and level.
Ms. Schapiro does have experience with hedge funds prior to this engagement, though. As I have highlighted, Ms. Schapiro, as head of FINRA, oversaw investments within FINRA’s internal portfolio which included hedge funds, fund of funds, and private equity.
From the 2007 FINRA Annual Report:
FINRA also has investments in hedge funds and funds of hedge funds that it accounts for under the equity method and includes in other investments in the consolidated balance sheets. As of December 31, 2007, the Company had hedge fund investments of $431.2 million.
Ms. Schapiro should be compelled to share with the investing public in which hedge funds FINRA invested.
Will those funds withstand the rigor of newly proposed SEC regulation? At the very least we may learn whether Ms. Schapiro was a good steward of FINRA funds. Beyond that, we may learn a lot more.
If the Obama administration is serious about developing new regulations for Wall Street, let’s make sure the transparency includes Ms. Schapiro’s tenure at FINRA and details of FINRA’s investment portfolio!!
LD
Trust Tim Geithner, Larry Summers, Barney Frank?
Posted by Larry Doyle on December 31st, 2009 11:34 AM |
Blank checks are the antithesis of good public policy.
America can not allow the passage of time to lessen the outrage over the Obama administration’s Christmas Eve bonus to the financial sinkholes known as Freddie Mac and Fannie Mae. Platitudes and posturing aside, the American taxpayer is being set up as never before.
A blank check may serve to cover a host of past financial and legislative failures promoted by the likes of Barney Frank, Chris Dodd, John Kerry et al, but who is monitoring and verifying the legitimate and proper use of these funds? Are we to blindly trust Treasury Secretary Geithner, White House economic adviser Larry Summers, and their respective staffs in this process? Are you kidding me? America needs to voice its outrage long and hard. In that spirit, I called yesterday to Audit Freddie and Fannie.
In the same vein, I am heartened by initiatives launched yesterday by Rep. Dennis Kucinich (D-OH), and Reps. Scott Garrett (R-NJ) and Spencer Bachus (R-AL) to pursue an investigation of this blank check.
The Wall Street Journal reports, Lawmakers Want Probe Into Treasury Aid for Fannie, Freddie: >>> (more…)
Tags: audit Freddie and fannie, Barney Frank, Chris Dodd, Dennis Kucinich, Freddie and fannie's blank check, House Financial Services Committee, House Oversight and Government Reform panel, I want to roll the dice, John Kerry, Larry Summers, Scott Garrett, Spencer Bachus, sub-prime lending comment by Barney Frank, Tim Geithner, toxic assets on Wall Street, transferring losses from Wall Street to taxpayers, trust but verify
Posted in Barney Frank, Fannie Mae, Freddie Mac, Larry Summers, Tim Geithner | 9 Comments »