Phil Angelides, a former California state treasurer, warned Blankfein that he’d be “brutally honest” in his questioning

And at the end of the hearings, Angelides will send Blankfein a sternly worded letter.

That’s about the substance of it. The commish are basically so worthless, that the rare pointed Q jumps out. Georgiou asked one today, forgotten what it was. A few testifiers have made good points, like the former Bear Stearns analyst who pointed out to Bear that they were too highly leveraged and go under even if home prices flattened (forget going down) and made the same presentation to the FRB, both deciding he had a screw loose.

Otherwise it’s a gigantic waste of time, according to what I’ve seen so far.

This is big stuff, people. It’s admissions like this that set up a climate for regulatory reform. I cannot even begin to guess how much backroom work it took to force Goldman into the corner where they were forced to admit this.

You must be happy with crumbs 3 meals a day. I thought Blankfein walked all over the commish by describing GS actions as normal & prudent hedging on both sides of the market. The commish never laid a finger on Blankfein or the other banksters. They never disputed Blanfein on that point nor any of the other banksters on some other outrageous points.

It was all predictable after they pulled Glass-Stegall Act away and let the boys gamble away. I can distinctly remember the sinking feeling I had the day I heard that it had been rescinded and by whom. Now these people own DC so nothing will change except now they’ll pick our pockets when ever they feel like it.

Thank you, Cynthia.

Get something akin to the truth? Reform? We’ll see.

Michael Mayo

His office was a couple of doors down from mine at CS First Boston. No bigger self-promoter, and that’s saying something by Wall St. analyst standards. He knows what to say and when to say it to get himself ahead. Every word out of his mouth should be scrutinized from that POV. Doesn’t mean everything he sez is false, but it does mean that everything he sez is to advance Mike Mayo, so if the truth works, fine, but if the opposite, equally fine.

The guy from Bear was the only one who made sense yesterday. It’s all leverage.

That’s not exactly what he said but it’s what he emphasized. And indeed, if you look at the 1929 crash, you could sum it up that way too.

Attys general from TX and IL today were also quite good. Really rammed inside the beltway for taking regulatory power away from them, and then not doing the job themselves. The TX one said something like: It’s much more efficient to prevent the abuse from occurring in the first place than to prosecute it after the fact. Both those women had an excellect command of the obvious and were not afraid to outloud it.

Too bad Cynthia is not here. She & I clearly came away with diametrically opposed impressions of what’s going on in the hearings, and I’d like to see her responses to mine.

Interesting analysis, Cynthia. I was floored when Blankfein had his little appointment with his wee smidgen of candor.

But because there is no flash, no gritty combat, no zingers (other than Andelides’s understated one about pension fund managers), Newsweek is already pronouncing it a whitewash.

That clues me in that the Village considers it too hot to handle and is waving folks away with a “nothing to see here” article.

And their work is not over.

It really is going to depend on how well prepared and aggressive the commission staff is. Opening days in Congress are generally for grandstanding, and that opening lived up to the tradition. What matters is when things start getting down into the weeds more than the polite brunch at the opening. When the documentary evidence starts getting before the commissioner, things might start to get very interesting. The more so if the contradict those fine “opening statements” of the CEOs.

I thought that whole afternoon panel of 4 state enforcement officials was very good; there should be a lot of information in their prepared statements.

Their common point was the interference they got from Washington regulators (not the regional branches, at least one was at pain to point out), through a probable misapplication of the “pre-emption” doctrine. And their common resistance to the half-baked condescension of certain gop commissioners was exemplary.

The only ones grandstanding on opening day were the banksters. The commish were about as meek as you could imagine.

People want to believe the financial crisis is over. Wall Sleezers convey the impression that they still run the game and what’s past is past. All this looking forward to the return of prosperity is supposed to make the future bright and bring the tide back in. A rising tide floats all boats, so to speak.

The problem is two-fold. One would have to endure a protracted depression in order to win political cover for post-depression reforms. The Great Recession is just shy of convincing enough to elicit the visceral intensity of a Glass-Steagall response. So I guess the bottom line is that we’re not there yet.

Second, those people who want to alter the status quo and enact real reform as a preventative measure would need to offer convincing evidence that the system really will fail without such reform. It isn’t easy being Chicken Little even if you’re right. It really sucks always telling people the worst has yet to come. First of all, they don’t believe you. Second of all you have to be exactly right all the time. And worst of all, good money management is better than a crystal ball, so ultimately folks don’t care if you’re prescient.

So in reality, the only way to fix the system is to utterly break it. Not that it isn’t utterly broken now, but who wants to see it fall in a cloud of dust? The Republicans?

Yep.

So all we have to do is wait a little longer and the thing will come apart on its own. A little obstruction here, a little corruption there, pretty soon you’re talking real meltdown. This is… to paraphrase Gadamer…

“what happens to us over and above our wanting and doing.”

Then we’ll be ripe for change.

Again,
The Administration, The Fed, The Treasury and many in the media continue to tout the 700 billion dollar TARP figure as the amount of the bailout. It has also been often repeated that the big banks have largely paid back their TARP loans. However this is incredibly misleading as the true amount of the ongoing bailouts of the financial system is closer to 23.7 Trillion. This is according to Special Inspector of TARP, Neil Barofsky. The amount paid back by the banks thus far represents only approximately 2% of the overall total.
ThomastonPaine

Outstanding work has been done by Dylan Ratigan on MSNBC on the subject:
“The TARP Lie” Guest: ELizabeth Warren
http://www.msnbc.msn.com/id/31510813/ns/msnbc_tv-the_dylan_ratigan_show#3486651

U.S. Rescue May Reach $23.7 Trillion, Barofsky Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM

Colbert had a great mock of the banksters testimony tonight.

To be effective, you need a professional counsel well acquainted with the matters at stake, and this person should be allowed to question witnesses one at a time, no panels. He or she can then conduct sustained and detailed lines of inquiry, establish a definitve record, and lay the groundwork for perjury prosecutions, and for other wrongdoing.

Needless to say, this counsel should be subpoena-ing relevant information both before and after a witness testifies, and witnesses should expect to make more than one appearance.

Editorial note: Second sentence of the post spells Blankfein’s name Blankenfein.

Mayo said. “There seems an unwritten premise that Wall Street, exactly how it exists today, is necessary for the economy to work.

I wouldn’t say that is true at all. I think Congress and the administration have simply been focused on other things and that this investigative commission and other Congressional hearings have been needed to even begin to spit out a series of reform bills.

“10 simple ideas” … if only that were all it would take. But, it’s great to see that kind of input at the start of this.

thanks mark — fixing now

Be fair, some of the huge amounts mentioned (in the trillions) is not actual cash going out the door, but loan guarantees. There’s a big difference. If actual cash in those quantities went out the door the inflation rate would be stupendously huge.

If you throw in the naked short selling with the swaps, it’s more like taking out a large insurance policy on a piece of property then torching it. Behavior will change when a few inside players like the people testifying take the perp walk. Till then, it’s just public relations.

Ok, 10 trillion then. There is no inflation if the banks sit on the cash or throw it into their asset holes to soak up the toxic stuff. Everyone else’s wealth and eventual dollar purchasing power is diluted by half in effect. Just a different way of taxing people to pay for the real bailout.

Hey, getting some truth is a pre cursor to getting reform.

If this commission was just allowing MOTU to shill, there would be no chance at all.

IF there is some actual factfinding AND the information doesn’t get drowned out by news of natural disasters, MAYBE a climate for reform will take hold.

If this phase goes well, I’m glad of that. ANd you have to understand that MOTU do not get in from of camers and reverse position and make an admission against their own interst UNLESS, somebody’s got the goods on them and can prove it up.

SO the Admission from G/S also indicates interesting things about what the investigation oF GS will yield.

You have look beyond just what happened in the hearing and think about why and how it happened and what that implicates going forward.

Sorry, I don’t always get told in advance when the post will go up and I was already heading to bed by 9:30 EST. I was up really early for a Breakfast meeting and didn’t last to far into the evening.

The pre-emption bullsh** really came up in the context of what Elliot SPitzer was doing when he was NYS AG. NYS has some excellent banking and insurance regualtiosn and Spitzer was exploiting them to full extent of their language , which in the case of the MArtin Act, had apparently never been done before.
\So the banksters go whining about the big bad AG picking on them and the US Comptrolle rof Currency suddenly comes out of the woodwork and starts claiming pre-emption.

If Spitzer hadn’t been all pre-occupied with running for Governor and had stayed an extra term as AG,

I think we would all be living inn a very different, better, economic world. But, he wanted to be governor, so c’est la vie.

The problem is two-fold. One would have to endure a protracted depression in order to win political cover for post-depression reforms. The Great Recession is just shy of convincing enough to elicit the visceral intensity of a Glass-Steagall response. So I guess the bottom line is that we’re not there yet.

Second, those people who want to alter the status quo and enact real reform as a preventative measure would need to offer convincing evidence that the system really will fail without such reform. It isn’t easy being Chicken Little even if you’re right. It really sucks always telling people the worst has yet to come. First of all, they don’t believe you.

Decemebre’s retails were much lower than expected, which will transltate to salesforce layoffs and store closings. nother wave of job losses any second.

Remeber the fear of double dib recession? The jobless rate could fuel that second dip.

To be effective, you need a professional counsel well acquainted with the matters at stake, and this person should be allowed to question witnesses one at a time, no panels. He or she can then conduct sustained and detailed lines of inquiry, establish a definitve record, and lay the groundwork for perjury prosecutions, and for other wrongdoing.

Needless to say, this counsel should be subpoena-ing relevant information both before and after a witness testifies, and witnesses should expect to make more than one appearance

I agree wholeheartedly and said as much in private letter to Angelides. Part of the problem is the time constraint on the Commissio. It does not have a very long life.Now that may have meant to light a fire under them and get answers sooner rather than later, but iti also distorts the output and truncates the sope of work

Cynthia and anyone else who may come around — I found a good interactive at Financial Times for anyone who wants a quick overview and comparison of the ratios between TARP money paid to a bank, and the amount of bonuses they paid out.

I *highly* recommend anyone interested hit the link because it synthesizes a lot of information and gives a grim overview.

For instance: bonuses amounted to almost half of the amount that Morgan Stanley received from TARP. And Goldman Sachs bonuses amount to 48.2% of the amount that Goldman received from TARP (and who knows what they received through other, less publicly covered, financial bailout programs from the Fed).

Bonuses are in some respects a ‘bright, shiny object’; as Dylan Ratigan pointed out in his segment with Elizabeth Warren yesterday (on the Dylan Ratigan Show at MSNBC), actually TARP is only about 2% of the money paid out by the US government under ‘a series of financial acronyms’.

However, it’s an easy way for people to see the absurd inequities and the crony capitalism that some of these idiots are so desperately trying to keep in place. Too bad this graph wasn’t right up behind the panel as they spoke ;-))

Krugman saw a committee looking for wisdom and good advice from Wall Street and Bankers – and says there was no good advice and no wisom to be had (paraphrased of course).

I am not as optimistic as the writer of this article – Barney is held back by Obama getting Nancy to expand his committee to include all those new, corporate fearing, Democrats. Hard to see much change coming – I suspect it will end up like the Health bill – as in it will be whatever the corporations want including more welfare checks going to the corporations (like the $600 billion going to the insurance companies).

Thanks for your response. And — Thank you very much for covering the issue so closely — it makes FDL the site to behold from my point of view.

I am expecting the second dip to begin this year. I got a bit carried away talking about it with bmaz and the gang. Many of you were there… Like any forward looking statements — they are entirely my own opinion. I harbor doubts — both for and against the recovery phase we appear to be in at the moment.

I hope things turn out for the better under this administration, but it will take more than lip service to un-bake this cake. Your words:

The SEC has to be re-invigorated and put on steriods

And Mary’s words:

Yeah, but remember – they did get Martha Stewart and put her away.

Which tells us about all we need to know about DOJ/SEC.

were from that discussion.

I agree with CAHNomics’ post of Jan 14th.
FCIC is a gigantic waste of time.
Until Angelides calls Dodd, Frank and all the other Guilty Parties who dismantled the New Deal’s regulatory regime instead of updating it, all we’re going to get from the so-called Financial Crisis Inquiry Commission is crocodile tears and free (taxpayers’ funded) luncheon.
Here’s a clue: the FCIC’s report is due in DEC 2010, NOT OCT 2010. Anybody who missed that gigantic pointer ain’t payin’ attention.
Thank you.
LJM3