If the markets don’t respond well to the results of the G-20 meeting, there is a reason – other than a solemn promise to waste money, very little was accomplished, and the crucial work of rearchitecting the financial system was put off until later. This much is clear from almost any account of the meeting, even though headlines have blared that there was a global agreement for concerted action to meet the crisis. It is almost certain that some form of Keynesian stimulus will be on the menu, as will revenue reductions, in order to appease business opinion but beyond this, nothing has been done to look at either the reasons, or the solutions for the basic problem.
In no small part this is because the leadership of the US has gone from lame duck to dead body. As Andrew Ward and Edward Luce put it:
When Mr Obama met George W. Bush in the White House on Monday, he was careful to avoid any photo-opportunity with the out-going president, whose approval ratings are the lowest ever recorded. While Mr Obama’s decision to skip the summit and stay in Chicago can be justified on protocol grounds, it may reflect his ambivalence on European-led efforts to tie the US to tougher financial regulations.
What is obvious, or should be, is that the system was corrupt from top to bottom, from the sex used to push mortgage packaging, up through Freddie Mac fraud too large even for the nearly toothless SEC to overlook.
As fights loom this week over both the fate of the Big 3, it would be easy to lose sight of whether the nomination of Neil Barofsky will go forward. But given the people invited to speak, it’s not exactly a balanced presentation of the issues. Scheduled up are Hank Paulson, Ben Bernanke, and a gaggle of people representing those who are going to be regulated, but no one to represent those who are supposed to be protected. Mr. Barofsky was, at least, involved with mortgage and securities fraud work when he was with the Southern District of New York, at a time when the politicized Justice Department was cutting back on white collar crime enforcement to engage in vote fraud.
It should be clear that a more balanced look at the nominee is needed, he is going to be the Watchman for the single largest emergency spending spree in global history.
Fortunately, the President-elect was ahead of the curve in sponsoring mortgage fraud legislation, and while there is only one President at one time, this would be a good chance for still Senator Obama to make his views known, even if quietly, on enforcement of the very troubled TARP program.



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ZED
great write, Stirling!
Thank you,
and not entirely off topic,
The Housing Bubble BURSTS! on a speculator!!!!
I believe Obama is not “still Senator” — didn’t he resign his seat a couple of days ago?
Why would anyone think that Barofsky would be any less incompetent or dishonest that Paulson & Kashkari?
Resigned today.
the barsfsky nomination hearing will be held by the senate finance committee tomorrow (nov 17), not the house committee hearing. barofsky is the only witness listed at his nomination hearing.
the house finance committee hearing on tuesday, nov 18, (with paulson, bernanke and bair on the first panel) is going to focus, i expect, on bair’s fdic proposal for mortgage modifications. i’m looking forward to this hearing as paulson is against bair’s plan and think the chances of some fireworks are quite high.
before the bailout was ever approved, I implored barack obama to refuse the strategy
the strategy boiled down to this;
“give more of our assets to the very people who robbed us blind in the hopes that they will not rob us again”
we are morons to approve of ANYTHING that involved money with this administration and his cohorts
at the very most, the bailout should have included tops, 100 billion with a promise for the new president, whether that president was obama or mccain
it did not nor does now make any sense for the new president to be able to disown the bailout…the bailout needed to have the next president’s authorship and responsibility so they would do their level best to make it work
news flash;
the problem was turning our economy into an investment driven model over a product driven model, you do NOT feed the problem when trying to fix
money should have gone directyl to business and home finance, NOT to the frigging bankers that threw it away in the first place
those assets needed to be used rebuilding our infrastructure, investments in alternative fuel and cooling the planet
this way, even if the bailout failed we would have product and jobs to show for it
but noooOOOOOOOooooo, obama had to endorse bush’s plan so he would not be author to the failure
oops, Freddie Mac TOO large
Was this guy part of the SDNY when it brought down Spitzer?
If so, he is damaged goods and someone entirely clean should be brought in.
I also would like to hear LHP’s Take on this guy!
Thanks Stirling.
digg
btw – the bair/fdic mortgage proposal would cost less than $25 billion and bair wants it come out of the $700 billion that paulson has. but paulson, being a responsible public servant is concerned that, you know, it might not be exactly in line with how he told congress he would use the $700 billion.
My bold Obama is a Dem loose financial rules got us into this mess. I do not see business as usual coming back.
How can anyone think the norm of the Bush years will stay the norm?
LOL Paulson worried about doing Congresses will? The Guy who wanted immunity for anything he might do with the money?
The guy who can’t tell Congress what he did with some of the money?
KO is right this is why daddy went to jail.
Well let’s see. Bush still thinks “free-market” and total de-regulation is the only way to go no matter evidence to the contrary.
AIG and it’s management seem to think that the gravy train is still on the tracks.
Hedge fund operators still think they should be allowed to do whatever they wish.
So I’d say there are still massive amounts of delusional individuals and corporations in the so-called financial industry.
Should The Government Stop Dumping Money Into A Giant Hole?
Granted but Bush is leaving and Obama (thank God) is no Bush, or has AIG and the hedges been asleep this whole election?
yeah, i don’t get that – wish stirling was around to explain. also, in today’s globalized financial markets doesn’t it make sense to coordinate our regulations with the rest of the world’s?
exactly.
Oh, I’m sure they’ve been ‘awake’ but delusional people tend to maintain their delusions while awake. And this a**hats have been living in a fairlyland world for so long they don’t recognize reality even when it has slapped them in the face.
HuffPo links to an interesting article by Michael Lewis. This almost makes the the Bushies planned financial collapse understandable.
The G20 didn’t waste money so much as time. We are out-Nero-ing Nero. We don’t have one guy playing his fiddle as Rome burns. We have a whole freaking orchestra playing as the world economy crashes. There was zero chance with a dead duck like Bush in office to get anything done. It only demonstrated the impotence of the world’s leadership in the face of the financial meltdown and that they are not only economically but intellectually bankrupt.
As for Barofsky, who cares? By the time he gets around to investigating anything the money will be spent and the people gone. He will no doubt write a typical IG report saying mistakes were made but nothing can be done because those who made decisions have left government.
I have to say that one point that got my goat was the proposal at the G20 that they set up an early warning system so that crises like this one don’t sneak up on them. The housing bubble and subsequent meltdown snuck up on political and financial leaders the same way a large herd of rampaging elephants playing trumpets and drums would sneak up on you or me. It simply didn’t happen. Still it does get to what this conference was really about, not action, but CYA.
Why is the “lame duck” president allowed to make this appointment?
Nothing has changed, the Vichy whores known as Congress go along and the rubber stamping continues.
What is soooo urgent that it can’t wait for the new President to appoint someone?
Rest assured, if Bush appoints anyone, it’s not for the people’s benefit.
Guess the election merely changed the color of the whores from red to blue.
my understanding is that kashkari would, for now, keep his position as managing the tarp – but that barofsky would be the IG responsible for administration oversight.
Obama should play hard ball he can move the military budget around just like Busgh did when he moved troops away from Ossama and towards Iraq before he had Congressional approval.
I saw threaten to move all the army units in red states elsewhere and keep the bases open with a skeleton crew.
Freeze all the funding for star wars and next generation weapons. If those guys talk about contracts then point out war profiteering investigations, investigations into cost overruns, and product or the lack of working product.
Close all those projects and use the savings for whatever we want.
The GOP will break if troops do not come back to the red states and start spending.
Plus all those troops spending in higher wage blue states I’m not so sure they will want to go back! Some of their families on base might like higher pay part time jobs.
Kashkari goes when the new Administration comes in. He would have to be appointed not re-appointed seeing as he’s only interim now.
That’s my understanding too. I was merely snarking that they’re likely all birds of a dishonest incompetent feather.
And as Hugh says, anything the IG discovers would be so far after the fact that he’s irrelevent. That’s a step up versus the other two.
Well yes unless your Bush, AIG, a hedgefund etc as dakine01 @19 pointed out.
Real accounting rules could sink them.
i agree with hugh. who cares about barofsky anyway. the money has been mispent and is just gone. no one goes to jail. forget about it. wait fer bama but it’s all over. deep doodoo.
Fine I give reason has no power to convince a believer! But Reason can convince some investors:)
What is the latest on the ratings agencies I would expect a ton of lawsuits coming their way?
Lots of silence as far as I can tell. Besides how could they predict this mess when it was only their business to predict it?
iirc, naimo klein said yesterday that the purpose of the meeting was for photo-ops. nothing more.
Be fair without Bush on Board what could they do? Its our funny investments that have gotten the world in trouble. Sure they could get harsh with us but that would leave Obama no room to deal.
The meet was a Karl Rove special a Photo OP to show concern but like the Bush Katrina press conference, or mission accomplished on an aircraft carrier nothing will be done.
I agree time is being wasted I want Obama to address this right away.
agreed.
yes, they waited until they were out of office for it to tank. almost made it.
Yep they blame their mathematical models to bad they and Karl shared the same math teacher.
so what if there are lawsuits? there is no money. lawyers get all there is. maybe.
The Inspector is on the job.
http://www.youtube.com/watch?v=hBmPmUFU9k0
mods ,delete my #37-not what it should be
At what point do lies about financial stuff crosses the line? Is their any chance of AIG or the hedges getting hit with personal liability?
Personal lawsuits
the guys in this industry are unrepentant thugs. the crash will take the system down but only after the little people lose all their money. only market forces can fix it now.
ok i’m out of my element here…. but where’s the ombudsman to look out for the people’s interests?? and as for all these bailouts shouldn’t they be given only with serious oversight? otherwwise its not going to be pretty in these united states…whats needed now is something BOLD!!! of course i dont know what that’d be unfortunately….we’ve given billions to bankrupt businesses and they use it to party on! WTF!!!!!
good luck. really.
from the land of who-gives-a-shit, more good news: Pelosi and Reid Announce Three Members of Congressional Oversight Panel
http://carey2.blogspot.com/200…..-news.html
Without Bush in the WH what do you want to bet that lawsuits like this will get settled a lot quicker:)
good point. the “ombudsman” function is the congress/court/exec. hows that workin for ya?
How are the problems re Fannie Mae and Freddie Mac effecting the current bondholders, or is it stockholders that are being challenged?
Filkins up on Book-TV.
ot – filkins on cspan2
whatcha drinking?
don’t know but i bet it depends if a bond is attached/related to one of the derivatives. most of them are onleyy it is AAA/AAA/AAA first tranche.
Investors are hurting the Baby Boomers planed to retire but with the market the way it is they can’t, their homes are or are almost paid but the housing market sucks.
The biggest generation or one of the biggest,people who worked hard played by the rules can’t retire.
If something big is not done then mob action is likely.
HAH!!! not at all sad to say… we’re being hosed on all sides… there’s going to be blood in the streets soon i fear…. masses unemployed and pretty much low paying jobs – its NOT a pretty picture.. its time for another new deal and now!!
filkins: didn’t want to write an intellectual book, wanted to write an emotional book. 6 inches away not 10,000 ft up.
cuppa tea would work.
i owe you one.
apparently filkins is going to show pics (not his) instead of talk about his book?
yes, that should be but imagine the bs from the neocons if the gov’t starts to do real infrastructure work. might come to blood. hope not.
filkins, speaking about a pic: “we never did find out what was going on, which is typical.”
A travelogue in war country. Whodathunk?
Yes, but it is important to remember that bankers in the rest of the world could do the math too. Nothing about the housing bubble, CDOs, an CDSs was rocket science. Not really. No matter how much verbiage and calculus you wrap it up in, if you make loans to people who haven’t a hope of paying you back, bad things are going to happen. They all knew. None of them cared as long as the party was going strong. I heard on the NewsHour recently that the most highly leveraged banks weren’t American but European. So the funny money and scamming were not confined to this side of the Atlantic.
ok, filkins is boring me and leaves are calling to be raked….. later pups.
Under Bush and the GOP government by design does not work that is one of the reasons he lost. Either Government gets working again or else the GOP the party of mob action Sarah hate rallies, stopping the Florida recount will find the mob directed at them.
After all I may have enough money for a Starbucks now and then but I don’t have big money.
Mobs and robbers go after big money in other words the GOP.
Either the Left wins and the economy goes up or nothing is done and Anarchy happens as the GOP waits for this to blow over.
Now is not the time to do nothing, or give up hope!
True the fools invested in the later stages of a ponzai scheme which is NEVER a good idea.
that’s right. did not take a rocket scientist to do the math. they ALL rode the gravy train. this is the type of stuff that overthrew most of those old monarks.
LOL
exactly, now is the time to kick ass. can’t say if the public/congress have the spine for it though.
Thanks, I was asked about an estate holding Mae or Mac bonds, no other information. I thought the bonds would be relatively secure if held to maturity. Please correct if advised in error.
With respect to the ratings agencies, they seem to have been out to lunch. Or more likely they were paid off by the investment bankers. You decide.
the neocons have been bull-shitting ever since bushco grabbed the WH… after fucking up the country i fail to see why whatever the fuck they have to say is still being aired on my tee vee… they have no credibility!! none – nada… and the irony of the bastards is now the new TPs are its Obama’s fault!!! grrrrrrrrrrrrrrrrrr
i’m afraid the devil is in the details. if they survive AND honor all the debts then maybe okay. how does one know? better to find out exactly what type, etc and/or have good liability ins. :)
in the article someone said they could not reverse themselves once they started unless they were willing to admit an error. i believe that is correct.
Thanks again.
look at it this way. it’s the only i can stop from crushing the tv…let them keep digging the hole deeper. theye are on a roll. have fun with it.
Book Salon upstairs with Chris Hedges hosting Andrew Bacevich
This crisis is huge. A lot of people’s lives are at stake. It would have been incredibly irresponsible to not do something…fast. If you know of anything which could have been done without involving money or the Bush Executive branch then I’d be amazed.
It might be entirely possible the entire real reason for the ‘bailout’ was to just buy off blackmailers. But, on the off chance it was actually to buy up bad mortgages and only later got changed to supporting the banking system, I’d like to say it had (and I think continues to have) good reasons to exist — regardless of how badly it might be implemented.
My biggest problem with the bailout (so far), and it might be overblown since I don’t know how well they’ve really implemented it, is that they have only focused on the banking system and we’re still stuck with a lot of bad mortgages. I’d like to see as many different ways as can be thought of to rework those before Obama takes office and has to divert time and energy away from his agenda to clean up the remaining blossoms of the Bush presidency.
Fixing the banking system is good and focusing on it helps us understand better how to re-regulate it and possibly whom to punish. Fixing the core problems of bad mortgages and credit default swaps and over-leveraging are not to be disregarded or underestimated. If they’re not fixed then it won’t matter if we understand the problem since we can only support the banking system for just so long. Eventually you either fix the core problems or you’re just throwing away money.