The Economic Populist
Speak Your Mind 2 Cents at a Time
Most Popular
It's time to live within our means once again
- 49900 reads
The war on the middle class
- 315451 reads
US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
- 184754 reads
Wow! 243,000 New Jobs Created in January
- 50495 reads
Jobs For U.S. Workers Stripped Out of Stimulus Bill Behind Closed Doors - Update It Lives!
- 26048 reads
The states budget crisis about to get much worse
- 23417 reads
User login
Recent comments
Poll
It's time to live within our means once again
- 49900 reads
The war on the middle class
- 315451 reads
US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
- 184754 reads
Wow! 243,000 New Jobs Created in January
- 50495 reads
Jobs For U.S. Workers Stripped Out of Stimulus Bill Behind Closed Doors - Update It Lives!
- 26048 reads
The states budget crisis about to get much worse
- 23417 reads
The Golden Rule
- 1826208 reads
Will the NY Attorney General Bring Doomsday Charges Against Wall Street? If So, How Long Will He Survive?
- 1216139 reads
New York Post Claims Census Falsifies Unemployment Figures
- 949909 reads
How Many Jobs Are Needed to Keep Up with Population Growth?
- 361836 reads
VAT or Value Added Tax is Getting a Look in D.C.
- 345336 reads
U3 and U6 Unemployment during the Great Depression
- 321038 reads
The war on the middle class
- 315201 reads
House discusses 401k/IRA confiscation
- 314243 reads
Tax Cuts for the Rich Do Not Generate Jobs
- 279665 reads
.
I found the same clause in the House financial reform legislation and I need to look at it again (god, it's a task like washing toilets to read that bill), but I wish the Bloomberg reporter would foot note page and clauses in his claim on the $4 trillion.
I can verify it is in the bill, but I might have gotten hoodwinked on the safeguards and the supposedly claim the banks were going to fund their own bail out money...
I hope we see more analysis but one thing certain, the House bill on derivatives is swiss cheese.
I want to get more focus on Fannie/Freddie too, I mean unlimited, $400B, we're talking much greater actual losses than anything else, more money than TARP...and it's barely getting a mention in the MSM!
Fannie/Freddie purchases these loans at PAR value not market value - just another gift to financial oligarchy.
So this how the Obama Administration intends to avoid a "Lost Decade" by removing bad debts from financial sector to government/taxpayers. There better be some mortgage debt forgiveness.
RebelCapitalist.com - Financial Information for the Rest of Us.
Preserving the status quo - high leverage and financial oligarchy is the name of the game.
I hope that Treasury is going to use Fannie/Freddie to start doing some serious mortgage principal reductions/debt forgiveness but I won't hold my breath. A more likely scenario will be that Fannie/Freddie will be used to prop up the mortgage and MBS markets. It will be used to provide artificial support. We probably won't address the huge overhang of bad debt out there and a result US will be just another Japan limping along with 2% economic growth but we will have high unemployment.
Happy New Year!
RebelCapitalist.com - Financial Information for the Rest of Us.
Like many of us who have known the numbers haven't added up for quite some time, and those shadowstats (a la John Williams) are forever in the shadows.
You have nicely pulled together all the data to demonstrate those trillions pumped out by the Fed probably went to a variety of central banks (and Fed or gov't-owned offshore entities probably posing as hedge funds) to purchase those Treasuries --- which is why the Fed wants to continue a policy of zero transparency on the matter of those mysterious trillions.
This is a unique point in humanity's economic history, one which makes all predictions highly impractical --- given the extreme number of variables in play.
The one constant we can be sure of: those numbers we hear about -- on a daily, weekly and quarterly basis -- are so terribly skewed such that one must doubt every single indicator and look towards the individual data and note all the variances and discrepancies, be they between real unemployment and fantasy government stats; real agriculture reports from the states, and those fantasy USDA reports, etc., etc., etc.
Again, we should all note that the extremely high number of billionaires of American origin are primarly debt-financed billionaires, they peddled debt for money --- unfortunately saddling the rest of us with that debt.
One giant Ponzi-Tontine-Pump-and-Dump Scheme!
Happy New Year, all!
There are a host of so called "think tanks" where the reports, which of course few bother to read, have deeply flawed and biased analysis. AEI is one of those think tanks in that category.
But on the other hand, this massive, unlimited bail out probably is going to cost much more than TARP!
It goes flying under the radar, released on Christmas Eve. and thus isn't getting a lot of Media scrutiny, such as it is.
In this case, I believe a $400B loss is probably on target.
But yeah, I should do a post on "biased research" as a topic by itself because there is a lot of it.
It's usually used as "snow" on Congressional staffers, to justify some lobbyist agenda.
I am too tired today to verify my memory, but I believe it is AEI that is financed and chaired by the world's largest hedge fund owner, so there may conceivably be an ulterior motive here.
That said (to employ the crude vernacular), I have no doubt it is true, but as the Fed basically owns 100% of the mortgage loans over the last 12 months, and the dollar is effectively based upon mortgage loans, the hidden agenda is probably to bolster the required support to keep those morgage loans flowing.....
this. Turning back the clock isn't an option, and if you look at the history of the European union, it is during these periods of crisis that the organization moves forward the most. That's because it gives Brussels something to respond to that national governments often can not. The number 1 problem with the EU right now is the absence of an adequate social charter that provides protections for workers and the environment at the supra-national level. Increased action at the supra-national level is what's going to get everyone out of this crisis. If a pan European Left/Labor movement ever get their act together, the EU could be turned into a powerful agent for social protection.
Yesterday, I spoke with the bank (Wells Fargo) where I keep about $150K on deposit at an interest rate of about 2%. Inquiring about a mortgage to refinance my condo, they saw my FICO was excellent and quoted me 4.625 for a 5 year ARM. I asked what their rate was based on -- what cost of funds index -- and was told that "It's determined by the market." I repeated my question -- clearly the 5 year Treasury would be a safe index for a 5 year ARM. Again, I was told "It's the market -- our investors want that rate."
Of course these mortgages are funded by Fannie and Freddie, but the banksters don't want to explain the mechanics of rate setting. It's all "It depends on the market."
So much for transparency -- I'm pulling my savings OUT of these TBTF MFs and moving it to where they don't insult your intelligence by paying you 2 percent and charging you 5 percent on secured debt.
Yes, Arainna, there is a Santa Claus -- and his name is Ben. Unfortunately, he only stops at the TBTF, and the rest of us gets lumps of coal. Take away his checkbook? If only the senate had more spine!
A Bloomberg reporter read the entire bill and of course just finished and says:
He's probably right, the safeguards on not giving the financial sector a blank check are pretty weak.
His report deserves to be read. Anybody who could make it through the entire bill and digest it deserves a large year end bonus.
That burying the unlimited bail out of Fannie/Freddie, someone tried to claim oh, they were not hiding that...they were closed for the Holidays...
well, since they were busy doing yet another bail out...
obviously not.
This is really a nice read, not just the article itself but the responses posted by your followers. I learn something today that I wasn't aware of until I read your blog.
at the expense of the rest of country. "Toxic assets" are still out there and financial conglomerates are not lending but TARP and the alphabet programs did help executives, shareholders and bondholders.
RebelCapitalist.com - Financial Information for the Rest of Us.
One thought I had was Europe is continually under attack for strong social safety nets and workers rights, so I'm wondering how bad this really is vs. the never ending attack to get at that money.
Similar to how the SS system has been "deemed" to be in "crisis" so we must "privatize" it mantra...
when the real issue is the for profit health sector, waste, medical costs.
Does Japan require all funds stay in their domestic economy?
The U.S. sure follow Japan on bail outs, meanwhile Sweden is peddling along.
Of course anything historically that gave good results was promptly ignored by both administrations.
and secondly I question the favored status this brings in terms of being able to set their own tariff schedules and other measures other nations do not have. It gives a EE enormous advantage in trade.
You won't see my argue against withdrawal from the WTO, but it seems so unlikely, due to politics, then this giving EEs such favored status so they can manipulate trade should stop.
I do think they need to change the criteria for EE, it seems to be "oh, global investors, put your money here" they will have an enormous trade advantage vs. to nations, say some African nations, who could really use some trade protections and foreign investment.
Or simply change what EEs are allowed to do, such as tariff schedules.
There are still a host of actions to take against China, including currency manipulation, EE status as far as I know allows them to use tariffs "legally" via the WTO, but dumping and currency manipulation I don't believe is part of that.
"The question is what happens when the future fails to live up to people's perceptions? What sort of backlash are we looking at when the future turns into the present?"
This is one of the most interesting questions in the history of political economy.
According to the latest Census Department survey data (American Community Survey- 2006-2008) only 6 % of the American population is 75 years or older. Accordingly, 94% of the American population has never in their lifetime known anything but a positive economic future. There have been some up and downs but the growth and prosperity have been the most significant economic condition that they have known.
This is unprecedented in the history of the nation and probably world history. Thus, from a social psychological point of view it is perfectly logical that they will feel positive about the future. The past is a guide to the future and the past has always been a positive trend line.
This may be the subconscious factor in ‘green shoot’ analysis. They keep looking at the correlates of past recessions and extrapolating them into the current situation. What non-green shooters seem to be saying is that there has been a paradigm shift. Old variables are not relevant (e.g. auto industry, consumer credit) and new variables (e.g. China and India) are now in play. To my mind green shoot analysis is analogous to 1950ish economist who were making projections about the US economy based on 1920s and 30’s correlates.
In short, green shooters and the population as a whole are assuming that the past is a guide to the future. But, there is ample evidence as bloggers on this site have demonstrated, that we are moving into a ‘brave new world.’ While I fear that many people are going to suffer in the new world, for social scientist, it is a very exciting time to live. Seldom does social change of great magnitude occur in real time.
Just a thought
Seems like we should be able to minimize the pain in getting from here to there, except for the fact that our government is too corrupt to enact the smart policies to accomplish that. I can think of a few: higher taxes for the super rich, carbon tax, increased social safety net, fix our inefficient healthcare system, massive spending on infrastructure and green energy technology, print money instead of continuing to borrow it. Oh, yeah... and cut our military budget in half.
The difference between people's perception of the future, and their condition now, has never been greater.
The question is what happens when the future fails to live up to people's perceptions? What sort of backlash are we looking at when the future turns into the present?
You are right, but with one HUGE omission - the intervening years.
It's the part where all the pension funds go broke. Where the savings of people get wiped out. Where the standard of living in America gets knocked down. Where our democracy comes under assault.
We default. Dollar loses value. American goods become cheaper. We rebuild our manufacturing base. We get good jobs again and real prosperity.
I don't doubt I'm missing something. Feel free to correct any of my misconceptions.
Pages