Showing posts with label bailout. Show all posts

Sunday, April 12, 2009

The Peril Of Financial Linguistics

by Janet Crain
This reminds me of when Nancy Pelosi said "Don't think of it as a bailout, think of it as an opportunity to buy in". That is when I knew she had lost all sense of reality.

Tell you what, go to the bank and try to get a loan with legacy securities as collateral.

THE MONEY CULTURE

Apparently, 'legacy' derives from an ancient root meaning 'it wasn't my fault and I should still get a bonus this year.'

By Daniel Gross | NEWSWEEK

Published Mar 28, 2009

From the magazine issue dated Apr 6, 2009

In his timeless 1946 essay " And the English Language," condemned political rhetoric as a tool used "to make lies sound truthful" and "to give an appearance of solidity to pure wind." Were he alive today, Orwell might well be moved to pen a companion piece on the use of financial lingo. Remember those toxic assets? The poorly performing mortgages and collateralized debt obligations festering on the books of banks that made truly execrable lending decisions? In the latest federal bank-rescue plan, they've been transformed into "legacy loans" and "legacy securities" —safe for professional investors to purchase, provided, of course, they get lots of cheap government credit. It's as if some thoughtful person had amassed, through decades of careful husbandry, a valuable collection that's now being left as a blessing for posterity.

The legacy gambit is necessary, in part, because the prior nomenclature used to describe the stuff in question was so corrosive. " 'Toxic' is one of those words that is so negative that it's just hyperbole," says Jesse Sheidlower, editor-at-large of the Oxford English Dictionary. The phrase "toxic assets," used widely in 2008, was either a sign of admirable reality, or an attempt to scare people into action. A middle ground of sorts was reached last fall when then– rolled out the Troubled Asset Relief Program (TARP). Of course, calling some of those mortgage assets troubled was a little like calling Charles Manson a troubled person.

In this new paradigm, a legacy, usually a gift, is a burden. A potential loss is spun as a potential gain. War is peace. See what I mean by Orwellian?

http://www.newsweek.com/id/191397

Sunday, April 5, 2009

SNL Parody Hits Close to the Truth.....

Monday, March 30, 2009

Why GE???

by David Sirota

So here's the question: Can anyone explain the differing treatment of auto companies and Wall Street firms? Is it just that there are far more Wall Street worshipers like Tim Geithner and Larry Summers in the Obama administration than auto industry representatives? Or is it something else?

The Associated Press reports that "General Motors Corp. Chairman and CEO Rick Wagoner will step down immediately at the request of the White House, U.S. administration officials said Sunday." I'm not sure that's a good or bad thing, but I am curious about why the White House would make such a bold demand of a car company the federal government is lending to, but not a similar demand of the banks the federal government partially owns?

What I mean is - how is it that the White House is requesting the resignation of GM's CEO while not doing the same of, say, Bank of America's CEO? In fact, not only is the president not demanding the resignation of bank CEOs, he's actually hosting them for photo ops at the White House. Sure, I know some bank CEOs resigned a few months ago under shareholder pressure, but the Obama administration has never publicly demanded such resignations of the current management that is making the problems worse, nor the resignation of management at the biggest firms (Goldman Sachs, BofA, etc.) that are still in place.

http://open.salon.com/blog/david_sirota/2009/03/30/why_not_bank_ceos

Working Class Democrat comments:

I'm beginning to concede that Obama is worrisome. While it is too early to judge him on his actions, it is not too early to begin to see a pattern. There is a part of me that fears a Manchurian Candidate. There has been precious little for the working man up to this point and Obama may be looking to Kent Conrad to get him out of his campaign promise to bring us a National Health Care program. It's worrisome.

Obama doesn't care anything about working class Americans. Remember how he and Biden turned up their noses and snarled through clenched teeth; "He's a plumber". As if there were nothing worse than plumbers. When in truth, any honest work is to be admired. I daresay none of the elites in DC can fix a toilet or anything else, these days. Janet Crain

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Sunday, February 22, 2009

Unprecedented Attack on Free Speech

Hat Tip: Can I Just Finish My Waffle?

Thursday, December 4, 2008

Big Three Not So Big Now

Big Three Fight for Their Lives

By Daniel Politi
Posted Wednesday, Dec. 3, 2008, at 6:31 AM ET

The New York Times, Washington Post, Los Angeles Times, and Wall Street Journal lead with the restructuring plans that Detroit's Big Three presented to lawmakers yesterday in hopes that they will help garner support for billions of dollars in government assistance. On the same day as new industry-wide figures revealed that November was the worst sales month in 26 years, two of Detroit's giants made it clear they're hanging on by a string. General Motors could collapse by the end of the year and said it needs an immediate injection of $4 billion and will need as much as $18 billion in loans over the next year. Chrysler could suffer a similar fate and asked for a $7 billion loan before the end of the year, and Ford asked for a $9 billion line of credit but took pains to emphasize that it might not need it. The automakers will make their case to lawmakers this week, and Democratic leaders said they hope to have a bill ready by next Friday.

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Monday, December 1, 2008

Bonfire of the Vanities

Comment

By William Greider

This article appeared in the December 15, 2008 edition of The Nation.

November 25, 2008

A monstrous crisis is bearing down on the president-elect, but it is not just about the sinking economy and Barack Obama's plans to launch a massive economic stimulus. The house that's on fire is the financial system and the government's failing efforts to save Wall Street's largest banks. Bloomberg News reports this explosive fact: the Fed and Treasury have so far obligated taxpayers to cover a staggering $7.7 trillion in potential losses. That is roughly equal to half the nation's annual economic activity, yet Washington officials continue to treat those bankers like their privileged clients.

Some of the Fed's efforts are no doubt worthy, but the largest deals to rescue Wall Street firms, like the monster bailout for Citigroup, have already taken on a stench of self-dealing--protecting club members from their self-inflicted wounds and demanding little in return for the public. Bloomberg and others have sued the Fed, demanding that it identify the recipients of its lending and the rotten assets the Fed has taken on its balance sheet as collateral. Fed chair Ben Bernanke imperiously replied that such transparency would be "counterproductive."

He's right to worry. Public wrath will swell when people learn the particulars of the extremely generous deal-making with Wall Street. If he's not careful, Obama will be on the receiving end of the blame. He should seriously consider withdrawing his nomination of Timothy Geithner, president of the New York Federal Reserve Bank, to be Treasury secretary. Geithner is the badly soiled negotiator who worked out some of the most dubious deals. His easy terms protected shareholders and executives but demanded almost nothing from the failing banks for the public. Worst of all, the deals did not work. They have failed to stabilize much of anything and are still putting Wall Street preservation ahead of the national interest. Where is the evidence that we can expect a different approach if Geithner is in charge? Or even that he understands the true dimensions of this crisis? Obama had better get answers up front, or else he might wind up as history's fall guy.

http://www.thenation.com/doc/20081215/greider

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