Category Archives: Wall Street

The Bonus Situation, Revisited. So Tim Geithner Not Just a Wall Street Crony?

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<I>Trinity Church stares down Wall Street with blame in its eyes.</I>

Trinity Church stares down Wall Street with blame in its eyes.

Bonuses on Wall Street are projected to be bigger than last year, again!

Why, that must mean the recession is over! We’re on our way to national prosperity again!

Yeah, yeah. And why don’t you look up EDARS, and think about those. We’re actually creating “commonsense solutions for the homeless, portable shelters which are private and sturdy.”

Larry Summers, you p.o.s., declaring that the recession was over, last year.

Warren Buffett, you p.o.s., declaring we “will not have any double-dip recession at all.” We’re in one now.

An opinion piece in The Nation is now calling for power to be given back to people and taken away from the big corporations. The editorial strongly suggests that not only shareholders but every single employee of a corporation be given the right to sue the corporate officers for looting the corporation — and he gives a couple of nice examples of what could rightfully be considered looting:
— Granting big bonuses, or
— Giving big donations to political candidates.
While those are nice thoughts, why would anyone see the court system as a solution to the economic troubles of the country? It was the Supreme Court who decided corporations are people and should be allowed to give any amount of cash to political candidates; and just how long does he think anyone would remain an employee once he sued an officer of the corporation he works for?

Instead, can there be found ways of eliminating the bonus system entirely? Is there a way to change the present system, in which top executives work for short-term ultra-high gain of the corporation, in ways that endanger the company’s very existence, then they leave with their simply enormous golden parachutes?

Hey, we now know what the executives of corporations are capable of, remember? The last few years were a ripping off of the wool over our collective eyes. Because, when you shear sheep you naturally remove the wool from over their eyes.

So what can be done?

Ted Rall’s new book, The Anti-American Manifesto, is a desperate scream at us, the worried-but-inactive of this country. Just began reading this. The book is kind of a shocker, but perfectly normal for Rall. (A series of shocks is clearly necessary to galvanize any of us into action.) It deals with the entire loss of power by the populace in this nation, a national tragedy which encompasses war, profiteering, torture, theft by Bailout, the looting of the economy, the changes in the power structure in Washington, and the duping of the American people, who sit around in a medicated-like stupor at all of it.

One needs to read it.

*******

About a week ago, Ben Bernanke told the Financial Crisis Inquiry Commission that federal regulators should be ready to close down banks that, if beginning to fail, threaten the rest of the financial system.

Amazing. Bernanke finally taking a stand on Too-Big-to-Fail Banks, a stand that is apparently in OUR corner. It’s so weird to have him here! I picture him standing among us awkwardly in his nice suit, shuffling his feet, wondering when he can leave.

But I wonder:
Which TBTF Banks would — or could — be defined as failing, and which would be defined as a threat to the rest of the system? There’s the rub. The government, in its grand beautiful slowness, would take years deciding that a Bank should be closed. By then its damage will have been done.

Still, Bernanke’s saying this aloud “sends a message” (now there’s an abused, tortured phrase) to (our enemies) the Great Big Banks that maybe it’s time, finally, to start flying right and enact policies which don’t assume a Bailout is eternally there as a safety net. They will have to Stand Up so the federal government can Stand Down.

ISN’T it funny how our war verbiage is just like our financial verbiage?

Must be because of the class war we’re being forced to fight.

Strange also that Tim Geithner is lately making noises that sound like he wants to strengthen the economy, even at the expense of the Great Big Banks. And Nouriel Roubini uttered some praise of him. Odd, very odd. So odd that some (Ilargi, of theautomaticearth.blogspot.com, for example) think Roubini has gone sort of Hollywood and is no longer to be trusted.

The Great Big Banks’ behavior, over the last 2 years, resembles the behavior of a friend of mine, who will not take any action to solve her financial problems — why? Because she subscribes to Publisher’s Clearinghouse religiously, answering every mailing with a new subscription to something and of course a contest entry — therefore, she sort of assumes she’ll be winning someday. I mean, after all! She’s been with them for so long! It is impossible for her to imagine anything else. She never thinks the unthinkable will occur.

The unthinkable? Hah. It happens every day, there are books written about it. blackswan2

Wall Street Bone? Us.

Wall Street Bonuses are the metaphor for what’s wrong with our current society. But sometimes they’re the literal thing that’s wrong.

Bonuses for wrongdoers! Bonuses for thieves!

Bonuses for con men!

The money’s going the wrong way.

I have often thought that the difference between liberal and conservative is one of humanity. Conservative politics in these latter years are aimed at avoiding giving money to the poor or middle class.

It’s a class war, now, that we’re living in. I do wish the Tea Partiers would wake up and see it. They’re acting against their own interests, because I think the vast majority of them are not wealthy but very upset, middle-class people. They aren’t my enemy; the politicians, ultra-wealthy, lobbyists and former politicians (like Dick Armey) actively pushing this class war are.

Among Republicans running for office we have some beasts like Sharron Angle, running for Senate hoping to displace Harry Reid: Michele Rollins, running for a House seat representing Delaware; and Tom Corbett, running for governor of Pennsylvania. From OpenLeft Blog and other blogs collecting quotes I know there are many more of like mind, so what follows seems to be a Republican platform position.

Here are quotes from each about the unemployed. They are not sound bites coming out of context. Each candidate has uttered these sentiments in other words repeatedly to the media.

They don’t feel merely that unemployment benefits should be limited; they see benefits as a problem, and the unemployed as lazy and opportunistic. Corbett obviously believes the unemployed are scamming the government.

Angle: … “the unemployed are spoiled.”

Rollins: Jobless benefits make people “continue to do nothing.”

Corbett: “One of the issues, and I hear it repeatedly – one of the individuals said, ‘I can’t get workers. People don’t want to come back to work while they still have unemployment.’’ He said.  “They’re literally telling him, ‘I’ll come back to work when unemployment runs out.’ That’s becoming a problem.”
Corbett added, “The jobs are there. But if we keep extending unemployment, people are going to sit there and – I’ve literally had construction companies tell me, I can’t get people to come back to work until…they say, I’ll come back to work when unemployment runs out.”

As Freud would ask, How does this make you feel?
Are you perfectly safe in your employment? Are you well-off, or have a huge savings to fall back on?

Or are you like most of the country, just working and hoping your work does not disappear, to leave you on nothing but unemployment? After about 3 years of this financial recession mess, we have learned who is really to blame for it, and it isn’t us. It’s Wall Street and the financial wizards whose black webs extend through Wall Street and most of our banks, our mortgage companies, our pensions, our savings instruments, our what-have-you. We know this, from several years’ worth of reporting by the media, and investigation by the media and the government, and from outright admissions by mortgage companies and banks.

Meanwhile, the Republican song is all about leaving alone all these huge corporations which raped the environment and destroyed the livelihoods of the people who lived off the shoreline or fishing the waters, etc. Leave them alone. And the Wall Street thugs who ruined the economy (but not their own personal economies) then reaped riches because they shorted the right markets in time — leave them alone too. Leave Lloyd Blankfein, Hank Greenberg, Richard Fuld, little Fabrice Tourre alone. Leave them to heaven.

Because apparently what the Republican Party admires is their bald theft, gutsy self-aggrandizement, greed, gumption, aggression, egotism, and blind thrusting aside of the populace to make room for themselves. There has been no cleverness, no genius in the things created by the financial sector that have led to this recession/depression; there were only fraud, greed, and aggression. They destroyed institutions and our financial system.

And now that so many are unemployed as a result, well, that’s the unemployed person’s own stupid fault. And the taxes they paid into the system should be denied them in the form of unemployment benefits, because it would be better to save the money for, oh, maybe another bank bailout.

This is the Republican Way. What a lot we have to look forward to if they win certain of these elections.

Vaccines are now Wall Street Bonuses.

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Wall Street bonuses are now bonuses not only on Wall Street, but in many of the largest corporations. DisneyWorld and Toyota topped the list of corporations revealed to have been given the H1N1 vaccine by the CDC and permitted to distribute it without having to account to anyone how they gave it out. The CDC did not tie their hands in any way to ensure it was given first to the high-risk groups like children, the elderly and pregnant women.

Information confirming this has been released by several states.

So, as I said, our country is made up of corporations which are recognized by the government as legitimate entities which apparently will keep the public safe, and keep the public in order. I suppose next we’ll hear that Disney World and Toyota and Time Inc. all have heavily armed security forces, miniature armies. Or maybe they just use Blackwater/Xe or CACI. If food distribution ever had to take place, the megacorporations will take over that task.

A flu shot makes a nice exclusive perk that the rest of the population can’t just walk in and buy. A nice corporate bonus, which Goldman Sachs (pig!) has already given to its top execs.

The Bonus of Wall Street’s Bad Example. Ilargi, Doomsayer to the Nation. Tools and Chickens.

So sick of Wall Street and its bonuses today, sick of Goldman Sachs (pig!)goldman-sachs-pig2, sick of AIG’s yacht-loving executive, and Ted Geithner and Larry Summers and Bernanke! Very sick of them. Instead, I’m thinking about social ism today. I avoided putting it in one word so you wouldn’t choke; I know how Americans don’t like saying or hearing the word. It’s as if you all lived during the 50s.

I’m thinking, not a full system of socialism but just some good practices which are generally or vaguely socialistic. So everyone can just relax.

To segue to a discussion of them, against my first instinct I will quote Ilargi of theAutomaticEarth. Ilargi, hidden man of the financial industry, is a doomsayer. He scares me, sometimes, with his proclamations: that living in the suburbs is a trap, that everyone should buy gold, that the world’s going to end, yadda and yadda. He is a smart guy but doesn’t seem to understand the American governing method of making things palatable for the public, of preserving appearances. Utter economic destruction is unpopular, so if only for that reason the government will do things to avoid a lot of it. It won’t do it well, but it’ll do it. Therefore his Armageddon world will not really arrive. Nevertheless I find important quotes in his writings that are worth remembering and are even of use buttressing oneself against despair. This, for example:

“…the stock market is not the real economy. And neither is it representative of that economy, in fact it’s probably less so now than at any point in the recent past. And it can turn in a second and on a dime.”

I’ve said before that stocks, which rise and fall influenced largely by reports (and rumors) from the issuing companies, are not a measure of the economy the ordinary person lives in. The megacorporations have  changed their very accounting equation, faking their numbers, and their manipulation of their supposed assets and losses is being tolerated by the federal government.

If “the stock market is not the real economy” right now, we may have some power over our own economic futures after all. Obviously the financial sector is not who would read this blog, so you, sitting across the screen from me, are probably one of the middle class. That same middle class Elizabeth Warren says is caught in a vise. We — we are closer to the underpinnings of the economy than Wall Street is. We consist of the workers, the small businessmen, the professionals, and so on. If the stock market isn’t an accurate picture of anything in our lives, I wonder if we can’t start creating our own economy, distinct and separate.

It would take a lot of humanity and patience, and a lot of people. A lot of people acting cooperatively. Here are some actions we’d need to take:

1. Searching for new green industry — and more important, small greener practices — to invest in, buy, or start up. Small green spots are what I have in mind, really; individuals beginning in ones or twos to start buying a thing which is renewing… or renewable. Like using red worms and compost for your lawn instead of a chemical-based lawn service. Chemicals mean big corporation, usually; red worms mean small farmer. Go on from there, and go bigger, finding more green practices and industries.

2. Formation of tiny groups to support one another in other ways, especially when it comes to financial ventures. We need Kiva lending here! In colonial America, some religious and ethnic groups formed their own trade groups; groups which trusted their members if only because they were of the same faith or background. I used to hear, on the radio, ads for a Christian group that provided a sort of health insurance for each other just by paying one another’s medical bills. I’ve no idea how it worked out, and suspect it was a big scam but if it wasn’t it may also have tanked due to being unreasonable. However, it suggested the vast power there could be in joining a like-minded group. But today we see betrayal of that sort of grouping in the Bernie Madoffs, Ted Haggards, etc., etc. If we are subject to the social phenomenon known as the Big Sort, we can also change the way in which we sort ourselves. And it is not really a “sorting” if outsiders are welcome to join the contract. Example: food co-ops. You can buy here if you do some work here. And credit unions, that’s another example. We’ll give you a loan because you’ve kept your money here for a certain period of time, and you pay your bills on time too.

3. Patch Adams-types of solutions for health care. Greater equality among participants in every aspect of the health care system. (It is, actually, proper to call it a “system,” since it is a natural part of our lives.) The Gesundheit Institute and its friends have done mountains of work on this and other subjects.

4. Purchasing a real item of value instead of buying stock. De-sophisticating the economy.  If the banks too big to fail are getting bigger; if the financial houses are again engaging in the same risky practices that brought down the economy; if the government is not regulating the banks and financial industry enough, then all stocks are a much, much bigger gamble than they appear. It’s enough to make you want to buy not just precious metals, but timberland acreage and other things that ordinary people actually need. Trucks, tools, building material, livestock, even large appliances for heating and cooling. Since most of these things can’t be squirreled away like savings, you’d have to use them, rent them out, or sell them. Each of which involves difficulty, but at least you have control over the process. Successfully sell or rent your assets, and you’ve become a business…

Small businesses may be the best things for the (real) economy. They tend to use extra money to buy new equipment and even new people: employees. They are the big consumers and the big job creators, not Wall Street and not the government. The smaller they are, the less likely they are to be speculating on Wall Street with their cash. Small is good.

While I’m climbing Dream Mountain, I imagine masses of people moving their money out of the stock market and putting it to work themselves. Not putting their faith in big corporations (which have acted without good faith). With the exodus of lots of  investors, the stock market would shrink. Making the whole “economy” much more real, easier to participate in. Making it sturdier. Making it stronger.

Okay, I don’t have the background to analyze what the result would be to a growth-dependent economy, but the stock market lived and breathed for decades well below the frantic trading levels we see today. It could do so again.

No, I can’t replace people’s 401Ks and IRAs with anything yet, not quickly. Slow-growth investments like bonds can’t cut it yet, maybe, not by themselves. But if you do your own stock-picking for your financials, you should keep in mind what just happened in our economy and everyone seems to want to forget. The financial industry destroyed a great deal of what you’d been saving for years. They did it for themselves. And they are working themselves back to that position again, saying we need that old bonus system and huge executive compensation so they can keep the same sort of “creativity” on Wall Street. You know — “creative,” like financial derivatives are “creative” products. Oh, they’re creative all right. And magic too. They made millions of houses vanish.

No, that’s incorrect — the houses are still there. (Missing some copper wiring and pipes, though.) Their magic trick was to turn millions of homeowners into street people. Abra-Cadabra. Poof!

Rather than putting all your eggs in that same rotten basket you could set some aside, let them take their chance in the world and become chickens. Not all of us are good at raising chickens but you could try, and join a group of chicken-raisers or something. It’s a risk. It’s always a risk.

………….. Boy, I almost let that mention of Goldman Sachs (pig!)goldman-sachs-pig21 in the first paragraph go without putting the word pig beside it.

Wall Street Bonus Pigs, and the Plague. Time Magazine’s pregnant women.

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The recent Wall Street bonuses that Goldman Sachs, CIT, JPMorgan et al gave their top employees were from a syringe. They got vaccinations against the dreaded new H1N1 flu. Excuse me, but this means that now every time I write the name “Goldman Sachs” a pig will appear. Please excuse the delay while I conjure that pig up. *** goldman-sachs-pig2

Okay… And I solemnly swear that each time Goldman Sachs (oops, pig!)goldman-sachs-pig21 is mentioned by me that I will bring in the pig. This is the pig we own, the pig we are supporting.

Each of the major bailout corporations were given — by the CDC?!! — a supply of vaccine from around 200 to 1200 doses. Citigroup got the 1200.

I didn’t realize the too-big-to-fail banks’ staff consisted entirely of babies and pregnant women. Or are they all just over 80 or something?

Time Inc. and Sloan-Kettering in NYC also got the vaccine; I never knew that Time Magazine was a health care facility. Next time I get sick, maybe I should go there. And cough hard.

Are corporations a division of the community or something, that the CDC consults with to communicate with the general public, is this why they have distributed medicine to them? Are they part of the government? I have to think for a minute what I am a citizen of. Wait. Does the branching go: Nation… state….county…municipality/town…citizen — or is it: Nation…corporation…region….department…office cubicle…citizenworker?

Sorry for all the questions. I still have to learn to stop asking stuff. And I have to quit makin’ stuff up, while I’m at it.

Morgan Stanley said they were giving their whole supply (1000 doses) to area hospitals. Is there any confirmation, I wonder? You know how much we believe them these days. Believe, believe, believe.

So this is how it is now: Wall Street gets the lifesaving vaccines, gets the billions of dollars’ bailout. I read that Canada gave the vaccine to a hockey team, the Calgary Flames, AND their families, the day before local clinics had to stop giving it out to the at-risk groups because they ran out. I’m not sure how much more palatable this is. Hockey teams in Canada are the equivalent of Brad & Angelina, George Clooney, Miley Cyrus. All of whom probably already got the vaccination. Which is logical, on the government’s part because: Movie and TV celebrities are the people who keep us going to movies, watching TV, keep us buying consumer goods, all of which keeps us medicated materially and keeps us from doing other things, like changing our government dramatically.

I wonder if J.K. Rowling, the Englishwoman richer than Queen Elizabeth, has had the vaccine yet.

It’s a shame. These corporations have put us in the position of actually wishing their top staff would get sick. It’s not likely to happen; the Goldman Sachs (pig!) executives probably already received their shots, and vaccinations are pretty effective.

I never, ever thought we’d be here. Goldman (pig!)goldman-sachs-pig22, CITI, JPMorgan, AIG, and the Fannie siblings act openly giving these outrageous bonuses, unwarranted super-special health consideration the public does not get; they do everything so unabashedly! If we had the plague, all the bankers and brokers would simply leave the cities and go to their estates in green Florence, sing, and tell one hundred stories while we died! Do you realize that?

Does anyone wonder how brokers do on organ transplant lists?

We have been unable to persuade our swollen, dropsical Congress to do things like break up the banks, or add the regulation that should be there. Our president is asleep and dreaming, like Chthulhu in his house at R’lyeh. And pigs — I tell you — are flying.

Wall Street’s status quo; Bernie’s house; Unimaginable practices; Krugman and Teh Rall.

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Wall Street is doing the same old thing in the same old ways. The Big Banks too big to fail are even bigger, the whole system still depends upon big growth to survive (Expand or Die), bonuses are still the way of the world on the Street, and credit default swaps are still okay to transact, when they should have been outlawed. 

It is to weep.

Lately I’ve been thinking about Bernie’s houses. There is no public photo of his current home, but here’s a picture of his next-to-last pad. (Well, I am trying to upload it.)

How low he must feel now. It’s only when these guys are in jail that they have to live the life of shame. I think they’re inured to public shame except when it’s physical. I don’t really think the stockade should be brought back or anything, just incarceration. That’s quite good. It combines a yucky lifestyle with ostracism. And nonviolent punishment notwithstanding, It is time to raise a glass to the man who punched Richard Fuld!

***

I get a bad case of the grippe — maybe it’s swine grippe — whenever I attempt to make a list of shocking things that Wall Street, Big Banks, and the financial corporations have done. It’s too long a list, for one thing, to make, and I keep getting sidetracked by despair at each successive entry. 

But in every aspect of our lives horrible and perhaps unimaginable practices exist, and persist, and most of us don’t know about them. For instance, bear farms in Asia torture bears — keeping them for lifetime in tiny cages, milking them of bile which is used in marketed products. Some of the cages are so small the bear does not grow, but acquires  a stunted body shape. Sounds unearthly and unbelievable. Happens, however.

Dogs are crammed together in cages for market in the various countries which sell them for food; people here are crammed together in sports arenas to wait out floods without working plumbing, air conditioning, or enough food.  People wait on rooftops to be rescued days later in same flood. Presidents fly over the city from the safety of their big planes, simply watching. Other presidents declare ketchup a food which may be given to poor children in lieu of other vegetables. A presidential candidate assigns vice-pres. position to a brain-dead woman. No, it wasn’t Terry Schiavo, but may as well have been. Unimaginable practices, they abound in America.

Citigroup helped foreigners evade U.S. withholding taxes on stock market income and has to pay just $600,000 as a fine. I wonder how much tax revenue was lost by their strategy. They are undeterred by these minor penalties; this is demonstrated by the fact that in years up to and including 2006, Citi had to pay $26 million in fines for doing it. Clearly they’d rather pay the fines than follow the law. Same sh–t. Different day.

T-Mobile now charges you for sending you a telephone bill. 

Wells Fargo charges you an overdraft fee on a check if you happened to write on it a date in which you didn’t have enough to cover it — no matter when you actually submitted the check. They actually investigate each one, in case they can find this discrepency and charge you a fee.

And then there’s gold. There is something weird and smelly to this fever for gold of the past two years. I thought it would slow down soon. But now that the mall near me has a large store devoted to buying your gold scrap, with large gold letters painted on its glass declaring that it will be happy to take your old gold teeth, among other things, I guess it’s going to be that way for a while.

Arch conservatives in particular think we should be back on the gold standard. How ridiculous. As if the big banks would even want this. They’re too happy making fake profits out of thin air, screwing up the accountancy, to want to have their debits and credits measured out in anything tangible.

And gold is too important, in itself, to be completely backing national currency all over the world. It’s great with electricity. Gold is the element which enables our computers to work. It conducts magnificently and nothing else works quite like gold. There just isn’t enough of it to use industrially AND to lock away in dungeons as currency. We don’t lock away corn or wheat or steel just to keep and look at once in a while, do we? (Or do we?…)

I wish to God that the Obama administration would listen to Paul Krugman and his ilk. Even Ted Rall, that angry volcano, refers to Krugman when discussing the right ideas the government should have acted upon — for instance concerning the bailout and then the stimulus: Both say that Obama should have spent the bailout on homeowners to prevent them from going delinquent on loans, and the stimulus should have gone much farther and mirrored the Public Works Program of FDR. And by the way, I am not interested in the Rall’s past sex life and so will not be buying his latest book. Only the previous ones.

The Rall. He’s rather amazing but I wouldn’t want to meet him. Well, maybe in a large room a good distance away. I’d far rather meet Paul Krugman.

Or: Teh Rall. That name works better.

The Bonuses and the Theft at Goldman Sachs. Ultradogs.

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Bonuses on Wall Street are yet again in the headlines. And Two things just appeared in the news about Goldman Sachs:

1. They’re predicting an enormous profit this year, surpassing the last good year anyone else had, namely 2007; and the bonuses they plan to pay break records, as I’ve mentioned in an earlier post. The entire recession, it appears, was a market adjustment which cleared out the bulk of their competition. The recession was great for them. They’ve also been permitted to repay their TARP loan. I’d like to know why Obama lets Treasury permit this.

I really want to know.

2. Goldman had a break-in, and called the Justice Department about it. An employee who had just departed for a better job with another company, Sergey Aleynikov stole some ultra-secret software from Goldman Sachs that “could be used to manipulate markets.” 

So somebody with talent hates Goldman. And did something about it. He uploaded the program to an encrypted, shared server.  This immediately calls to mind the newsgroups, and all the old beta testers of Microsoft software who leaked copies of everything out to the public. Why do they do it? Because they don’t like the company. It’s their version of rebellion, and it’s the most effective kind around.

I secretly — sweatily — swarthily tip my hat to this guy. We are already convinced that Goldman has been manipulating the markets for many years, and caused incalculable harm. A recently dispossessed person, someone who’s lost his or her job or home or both — looking at this issue from a stance in the financial gutter — may feel perhaps it’s only just if the rest of the world got to use this software. But of course, now it’s been removed.

Note: Sergey Aleynikov may have accomplished the theft using an ultradog, since Russians are known for owning them. Here is a picture of Putin’s ultradog, an amazing animal.

<I>Putin's ultradog.</I>

Putin's ultradog.

Wall Street Journal Article on Prime Mortgage Defaulting.

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Diverting from Wall Street Bonuses for a moment, let’s look at that article by Stan Leibowitz from the Wall Street Journal claiming that subprime mortgages didn’t fuel the economic meltdown.

The writer claims he’s made a study and “found” that it is negative equity, not subprime loans, that led to the majority of defaults on mortgages. He’s claiming that prime loans with no money paid down are the major culprit (putting the blame back on the borrower again. Giving the public a slap in the face, with love from the Big Banks.).

Yeah. But when a loan company makes you a prime loan and you pay no money down, they will usually then arrange a second loan on top of the first to provide for that money normally given as a down payment on a house. Countrywide, for instance, made this type of arrangement. (Because somehow many lenders still paid lip service to the money-down standard, while shedding every other standard along the way.) That second mortgage might be a subprime loan and the WSJ writer has not identified it either way.

Either way, the no-money-down mortgage is a liar loan. It was improper to approve it. And furthermore: Liar Loans have a much greater impact on this WSJ writer’s “study” than he will say, because liar loans are supposed to be those in which the lender failed to ascertain the real financial status of the borrower.

That isn’t really what they are. They are more often loans for which the lender MADE UP  the financial status of the borrower — as testified to by a whistleblower former employee of Ameriquest.  See the interesting video.

So that’s two parts of his stats I don’t believe.

Borrowers can borrow only what you lend them. We know who started the meltdown and profited from it. Wasn’t borrowers…

Bonus Time at Wall Street’s Goldman Sachs. Needing Diversion. Thinking About Elves.

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Supersized Wall Street bonuses are planned by Goldman Sachs to be paid soon to their top executives and traders, bonuses exceeding last year’s and the year before. The moment I read about it, I

<I>Once again we may see stovepipe hats on Wall Street.</I>

Once again we may see stovepipe hats on Wall Street.

thought this decision was going to be undone by the provisions restricting TARP companies — since GS has not paid back the $10 billion it owes the U.S. But Goldman is NOT grouped among those handful of companies that received “extreme assistance”  on whom these restrictions lie. How handy!

 

No, they only received $10 billion, that’s all, and were laxly permitted to receive the complete value ($12.9 billion) of their credit default swaps from AIG — thus sending AIG into broke status — and special treatment at every step it has taken in recent years. GS is NOT being investigated for misrepresenting its financial status to its shareholders, although documents have emerged suggesting this very thing. Some would say those documents demonstrate it, not suggest it. 

So Goldman can go ahead and pay those bonuses, nothing much stopping them.

And now (according to Bloomberg.com) one of the biggest Wall Street trade groups, the Securities Industry and Financial Markets Association (SIFMA), is going on the road with a niceness campaign to try to convince the public in some of the big cities that Wall Street doesn’t really suck.

They hired former assistants of Henry Paulson in this campaign. Are they really hoping, let alone expecting, to change the minds of the general public?

But …we know that the security industries suck. How can we blind ourselves to the fact that they suck? Because they actually suck.

A nice parade might work, for five minutes anyway. This level of distrust is difficult to sustain and it would be a nice break. After all, I already have to divert myself from grim reality with cartoons of honest sheriffs and other righteous inventions. For instance, I went to read Wigu.com to look at Sheriff Pony.

****************************************

(Cut to: Diversion from Bleak Financial Reality.)

Sheriff Pony looks like the offspring of Quickdraw McGraw and Smurfette, when maybe Quickdraw had to go to France during the war. The Smurfs are French, in case you didn’t know.

<I>Quickdraw McGraw's Baby Mama?</I>

Quickdraw McGraw's Baby Mama?

 

 

I bet all the major elves are related.

The tribe of Smurfs, I’d guess, are foreign cousins of the Keebler elves, who everyone knows are ardent capitalists — almost as bad as the Ferengi. Both the Smurfs and the Keeblers practice magic. You know the song: “And they’re baked in magic ovens and there’s no fac-tory. Hey!”

I know what you’re about to ask…. What’s their connection with the Rice Krispie elves? Well, they’re the first cousins of the head Keebler elf, who entertains a rather low opinion of them. The Rice Krispie brothers, Snap, Crackle, and Pop, were sort of drifter artists who at last found work in the cereal industry to keep themselves from starving in the gutter. The Keeblers, by contrast, are very bourgeousie and successful. They love their magic ovens. They’re so smug.

Yeah, they’ve got work and they do not need to rub it in. 

All of a sudden I’m feeling sympathetic towards the Rice Krispie guys. And all these people lately, who are out of jobs.

The Relevance of Webcomics in a Post-Bailout World. Problems With Credit Cards.

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Giving The Hairy Eyeball to Banking and Investment!200901123

Bonuses on Wall Street aren’t addressed specifically on webcomic Wigu.com, but the storyline of the site does follow a fantasy of mine about staging a revolution against the present order. There’s a little yellow guy in a red cape named Topato, who sails into the castle and tells the princess, “We’re overthrowing your father’s offensively incorrect idea of a democratic government, my lady. The rule of Law must be allowed to change with the times.”

Right out of my own fantasy mouth! And Topato’s friend, co-leader of the revolution  Sheriff Pony, says: “Princess Dongle, by removing your father from power we will be on the path to an equal society. No longer shall a minuscule elite class prey mercilessly upon a lackadaisical, overmedicated working class.”

Then Topato says: “It’s revolution o’clock…”200901124

I consider them both holy men.

I admit I overly enjoy several internet comics. Like Goats.com. According to Goats, when you do something impossible, like invert so you’re sucked into your own personal black hole, thus entering a different universe consisting only of yourself, what is left in this universe is: a Pop Tart. Either that or a kitten, since apparently they’re equivalent. 

But in this world, as we’ve seen, the U.S. government intervenes when it feels like it. Otherwise, AIG would now exist as a Pop Tart. (Or kitten.)

And the lots of many car dealerships would be rustling and meowing with — kittens! 

When we turn on TV, we’d get back-to-back-to-back commercials for toaster pastries during Bones and 30 Rock instead of ads for Jeeps, Fords, and other pieces of doomed metal. 

When Barney Frank opens his mouth to tell us how he’s protecting us in the overseeing of the bailout money, out will fall — a kitten!

Tim Geithner, when he gets hungry during meetings, will have no worries, because his pockets will miraculously be full of Toaster Strudels. (Which will make him very sticky. If he seems reluctant to shake hands, you’ll understand why.)

Eric Cantor will open his box of Lipton teabags to hand some out to his friends but will find only crushed crumbs of strawberry-frosted toaster pastries, mixed with kitten hairs.

Persons attending grass-roots protests of tax policy will discover neither grass nor root, only Pop-Tart policy with kitten tax.

(Images above from Wigu.com and used by permission of artist.) 

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And now, shall we speak of Usury?

We are not speaking of simple moneylending, which Shylock engaged in.  I never saw any proof that Shylock charged an unreasonable interest. He just had to find some sort of career out of the usual since he was a Jew and not allowed to own land.

We are referring to interest that is above and beyond what humans should be paying, charging usurious rates of interest on money lent. The notion of creating wealth for yourself from thin air this way disgusted our forefathers. They had respect for manual work, for craftsmanship, for farming, etc. They did not care, on the other hand, for people who found ways of getting the fruit of others’ labor through capitalizing.

Dante put Usurers in the same circle of Hell as sodomites and others who engaged in “unnatural practices.” Labor was “natural,” lending was not.  The Roman Catholic Church considered it unearned income. So society was fairly prejudiced against lending to begin with; but as soon as economies began becoming more sophisticated (which happened in the Stone Age) it became a necesssary part of the whole. What was considered too high an interest to charge, then?

In past centuries, 10 percent often used to be a sort of cutoff. I don’t think it’s related to titheing. It’s just a number. For instance, British government in 1545 used to penalize lenders trying to charge more than that.

And today, ten percent seems to echo in many quarters, still, as an upper limit on consumer personal loans, but if you check laws for your state, they actually go all over the board. Some states don’t seem to even have a cap. And exceptions apply all over. Speaking of lending laws, why don’t credit cards fall under these laws completely? If the federal law states that a company may charge fees that are “legal” in the particular state the customer is in, how does it happen that I have the rates I do? Why are late payment penalties considered the same as interest and in what calculator does the penalty for a late $1 charge become $29 and still remain a legal percentage of the original charge? So a rate of 2900% is legal in my state? In any state??

Pardon. I seem to be foaming at the mouth. 

Ah, Capital One. Ah, BOA, ah Wells Fargo. If only we were free to change the terms of our contract with you at any time, as you are. We would cut our rates by 5 percentage points; forgive ourselves for, say, 2 late payments per year; eliminate monthly or yearly membership fees and replace them with a single joining fee. That seems fair. And for your past practices, we grant ourselves the right to walk up to you in the street and slap you in the face once without legal repercussions, or key your cars once, or merely harmlessly spit on you each and every time we see you.

Now, that’s what I call a contract. And it’s social!

I wouldn’t feel so strongly if we were also able to earn similar interest in your banks when you use our money, you see. Why is it okay for banks and other lenders to charge these incredible percentages but no ordinary customer can get anything like that in any sort of savings instrument? Savings accounts, money market accounts yields have fallen to one-half, one, or perhaps two percent in most cases.

I am waiting to hear what happens with the bill Chris Dodd has gotten past committee in the Senate, which at least halts the hikes in rates on credit cards “at any time, for any reason” but feel sure that the CC companies will do what they can to FIND reasons. 

Tomorrow among other things I might ponder the phone companies. The execs of those certainly get a lot of pay bonuses. And I will be annoying.

Don’t blame me; I get my orders from Sheriff Pony. 

He’s blue.