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Yves Smith

About Me:
A recovering investment banker, now management consultant with nearly thirty years of experience in and around the financial services industry. Blogs at Naked Capitalism, with a book ECONNED: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism coming out in March.
 
Website:
http://www.nakedcapitalism.com
About Me:
A recovering investment banker, now management consultant with nearly thirty years of experience in and around the financial services industry. Blogs at Naked Capitalism, with a book ECONNED: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism coming out in March.

FDL Book Salon Welcomes Gretchen Morgenson and Joshua Rosner, Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon

By: Saturday August 20, 2011 1:59 pm

Reckless Endangerment describes the players that helped create the housing bubble and bust that were at the heart of the financial crisis. Gretchen Morgenson and Josh Rosner focus on how regulators and other officials were complicit by promoting liberalized housing finance as a way to increase homeownership. Their account chronicles how a naïve vision of the American Dream, that of homeownership as the foundation of upward mobility and stable communities, turned into a nightmare in the hands of a growth driven and increasingly predatory mortgage complex.

On Fauxgressive Rationalizations of Selling Out to Powerful, Moneyed Backers

By: Sunday June 5, 2011 6:00 am

I’m surprised that my post, “Bribes Work: How Peterson, the Enemy of Social Security, Bought the Roosevelt Name” has created a bit of a firestorm within what passes for the left wing political blogosphere. It has elicited responses from Andy Rich of the Roosevelt Institute, Roosevelt Institute fellow Mike Konczal, as well as two groups only mentioned in passing in the piece, the Economic Policy Institute and the Center on Budget and Policy Priorities.

How the Roosevelt Institute Sold FDR’s Legacy to Pete Peterson

By: Friday June 3, 2011 10:00 am

Why, after spending considerable resources, such as a website called New Deal 2.0, with virtually daily posts by Roosevelt fellows debunking deficit terrorism, and more formal work, such as a well-researched and argued paper by Tom Ferguson and Rob Johnson debunking deficit cutting in general and assaults on entitlements in particular, has the Roosevelt Institute cast its lot with a sworn enemy? Make no mistake, not only did the Institute undermine its raison d’etre by attaching its name to the Peterson anti-entitlements campaign, but as we’ll discuss later, the end product, as would be expected, bolstered particular initiatives that are contrary to FDR’s legacy, the Institute’s more general “progressive” objectives, and sound economics.

FDL Book Salon Welcomes Nicholas Shaxson, Treasure Islands: Tax Havens and the Men who Stole the World

By: Saturday April 30, 2011 1:59 pm

Treasure Islands tells us that tax havens are much larger and much more destructive than most might realize, yet at the same time enjoy much more unofficial and formal support from governments in advanced economies than many of us want to believe.

NY Fed Under Geithner Implicated in Lehman Accounting Fraud Allegation

By: Friday March 12, 2010 12:28 pm

Quite a few observers, including this blogger, have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. Despite the bankruptcy administrator’s effort to blame the gaping hole in Lehman’s balance sheet on its disorderly collapse, the idea that the firm, which was by its own accounts solvent, would suddenly spring a roughly $130+ billion hole in its $660 balance sheet, is simply implausible on its face. Indeed, it was such common knowledge in the Lehman flailing about period that Lehman’s accounts were sus that Hank Paulson’s recent book mentions repeatedly that Lehman’s valuations were phony as if it were no big deal.

Well, it is folks, as a [pdf] newly-released examiner’s report by Anton Valukas in connection with the Lehman bankruptcy makes clear. The unraveling isn’t merely implicating Fuld and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations.

Spitzer, Partnoy, Black Call for AIG Open Source Investigation (and Goldman Implications)

By: Sunday December 20, 2009 4:00 pm

An op-ed in the Sunday New York Times by former investigators and prosecutors Eliot Spitzer, Frank Parnoy, and William Black calls for AIG to put non-privileged e-mails, accounting documents, and financial models on line to allow for an “open source” investigation. The questions they want to examine include:

As fraud investigators, we would like to examine the trading patterns of A.I.G.’s financial products division, and its communications with Goldman Sachs and other bank counterparties who benefited from the bailout. We would like to understand whether the leaders of A.I.G. understood that they were approaching a financial Armageddon, and whether they alerted their counterparties, regulators and shareholders to the impending calamity.

Bernanke Tries to Defend the Fed

By: Sunday November 29, 2009 4:00 pm

The worst is the folks at the Fed clearly believe the bogus stress tests were a meaningful exercise. That alone should disqualify them from getting a bigger role in bank supervision. And if you read their pronouncements, they plan to continue to use them, and have the process run by….a monetary economist! Help me! Bernanke also conveniently ignores the fact that the rally might also have a wee bit to do with the fact that he threw a bit over $1 trillion at the markets, as announced in mid-March.

I could go on, but you get the picture. The Fed seems to believe its own PR.

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