Lex Luz

Tim Geithner vs. The American Banking Elite

Just to dip back into it, I'll say this: it's utterly true that we are all responsible for the current mess - even those of us who managed our finances well have participated in the ways that we have. Did some people have their hands on longer levers, and push us deeper into the hole? No question that they did. Also, no longer relevant.

Others have said it and it is true: all that matters now is cleaning up the mess.

Cleaning up the mess means FORCING transparency, accuracy, and trust. That means that things will absolutely get worse before they get better, because many banks that are "too big to fail" will have to fail. The pain that comes from this will be agonizing.

As we all know, it isn't going to happen. The reason is that the people who would most feel the pain of the real and sustainable solution coming to pass are the people who are in power in government, banking, and industry. I don't care if you are a Democrat or a Republican; if you are in Congress or in other Elected or senior-most appointed office, you are part of a criminal enterprise that depends entirely on continuing to transfer wealth from future generations to a tiny number of elite individuals and institutions.

The solution BEGINS with the American people rising up to destroy the criminal enterprise. We can do that through the ballot box, though it certainly has become difficult. Eventually, the current system will fail, and the result of that will be violence. Throughout history economic collapses of this magnitude have always ended in war, and this one will too... UNLESS we reclaim the power of representative government and throw the criminals out of office.

First, though, we have to WAKE UP.

Tim Geithner vs. The American Banking Elite

While there is no question that millions of people took on far too much debt and thus bear their share of responsibility for the crisis we face, the majority of those people are not getting bailed out. Thousands of companies ranging from banks to automakers and more, all of whose executives drove execrable decision-making, ARE getting bailed out. That's why the whining from the political right-wing about blaming individuals for the crisis has lost traction.

It's a ridiculous argument and one that forwards nothing, anyway. It matters not one bit who is responsible for what. What matters now is that our banking system has shown itself to be managed by at best a cadre of hopelessly irresponsible greedheads, and more likely simply by thieves.

The same goes for our government - every institution that was once chartered to protect the public interest now exclusively serves the corporate interest. The political right has triumphed this by claiming it's in the service of "free markets," but people are beginning to understand clearly that truly free markets depend entirely on transparency and accuracy in reporting between all actors in a transaction or in the system. As long as the FDA protects the interest of Monsanto, ADM, Pfizer, Merck, and others, while subverting the interests of consumers if its corporate masters so direct it, we will not have free markets at all. As long as villains like Geithner sit in the big office at Treasury, we will not have a banking system founded on transparency, accuracy, and trust.

Remember this: the last thing tyrants do before abandoning their country to the waste-bin of history is loot the treasury.

The only thing that will stop this madness is revolution. It will come, sooner or later. Unfortunately, it's probably going to come in the form of a fascist dictatorship, because that seems to be exactly what joe buckethead wants most.

John Thain, R.I.P.

I have resisted just blasting out hate-filled messages about people like this, but Thain is really too much. It has been obvious for at least a decade that bankers at this level are all entirely dishonest and so chock-full of gall that they'll do anything at any time to any one without a care in the world how it impacts institutional risks or the stakeholders in those institutions. This guy is so far over the top that it quite literally defies description.

All of these people should be publicly tortured and killed. We need a serious, national catharsis, and we need to rid ourselves of these scoundrels once and for all. Thain ought to be first in line to be tarred and feathered, and then drawn and quartered. And it all ought to happen on the National Mall and on national television. After we're done with Thain, we ought to go get every single C-level officer at every bank and other institution that's taken TARP funds, and treat 'em to the same. When they're all piled up like cordwood, we can start the national renewal at long last.

If Mary Schapiro's the Answer...

Meant also to say that the charter is to protect publicly-traded corporations and their officers, as well as securities dealers, from investors... of course.


On Dec 18 10:57 AM Lex Luz wrote:

> I think as long as you understand that the SEC's charter is to protect
> securities dealers from the prying eyes of individual investors,
> then the sensibility of this appointment is clear. In fact, the charter
> of all government institutions now is to protect the state and its
> closest stakeholders from the people. History is rhyming indeed.
>
>
> Right-wing nutjobs terrified of the wickedness threatened by the
> Obamanation can rest easy. Obama is a fascist's dream: he makes people
> feel just GREAT about being enslaved to the state and its corporate
> masters.
>
> Change? Riiiiiiight.

If Mary Schapiro's the Answer...

I think as long as you understand that the SEC's charter is to protect securities dealers from the prying eyes of individual investors, then the sensibility of this appointment is clear. In fact, the charter of all government institutions now is to protect the state and its closest stakeholders from the people. History is rhyming indeed.

Right-wing nutjobs terrified of the wickedness threatened by the Obamanation can rest easy. Obama is a fascist's dream: he makes people feel just GREAT about being enslaved to the state and its corporate masters.

Change? Riiiiiiight.

Banks Are Yet Again Under Pressure

Seems to me that before we direct more blame and ire at the UAW, their contracts, and the workers they represent, we ought to consider the possibility that the executives and managers across these failed instituions MAY have had slightly more influence in setting "strategy" (in quotes for a reason) than did the swing shift frame assembly team at plant 413 or whatever.

The fact is that all three of these companies have been failing for 35 years; their failure to anticipate and understand the first Honda Civic put the big three out of business as surely as did last year's gas-price bubble and the ongoing credit unwind.

Of course the union contracts are a burden that can no longer be borne. No question that the UAW and its leadership have had a hand in driving this industry into the turf. The final responsibility, though, belongs with executives and management whose hubris through four decades of mind-bending decline now extends to going begging to Congress for a massive handout. The fact that they can't even be bothered to figure out how they would use that money realistically to transform their businesses is a clear indication of their incompetence first, and their arrogance more importantly.

The unions are nothing more than a rat feasting on the hindquarters of this dead, rotting elephant.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

As in commentary around the financial crisis, people who attempt to pin "blame" on one segment - in the case of Perry and some commenters above, on the unions - merely have a political axe to grind and really don't forward the debate. To wit, I certainly don't recall the UAW being chief among the groups setting product or distribution strategy for the Big Three. Do unions have a hand in inefficiency, poor manufacturing quality, and ill-will toward domestic vehicles? Sure they do. Are they the sole cause of the demise of the US-based auto industry? Of course not. Attempting to paint them as such reveals nothing more than a political agenda that will never help us to figure out how to get through the crisis and emerge stronger on the other side.

Let's start working together, rather than driving ourselves closer to civil war.

Kill Sarbanes-Oxley - Gingrich

It is imperative in my view that we create a new framework for corporate regulation and good governance. Total deregulation is nonsensical and wrong-headed. Onerous regulation like Sarbanes is equally nonsensical and wrongheaded. There should be one criterion above all others: the promotion of transparency. The next should be simplicity.

Only through the full transparency of all actors can confidence in markets be restored. Only through simplicity will enough parties come to the table to make the framework workable.

Will the U.S. Make Money on the Bailout?

Not only will the $700 Billion be flushed down the toilet, but the next $700 Billion and the $700 Billion after that, followed by untold trillions more will also be flushed down the toilet.

Paulson and CashCarry will make billionaires of a few more of their friends and everyone else in the US will eat sh*t. This is the swindle to end all swindles.

Financials: Is Fiscal Prudence Too Much to Ask For?

"Secrecy and creative accounting" should be called what they really are: fraud. Unfortunately no one seems to regard fraud as a negative any longer, let alone a crime. GAAP were at one time used to guide organizations toward transparency in the spirit of compliance with law, whereas now they are used to guide organizations toward secrecy and the compliance with the letter of the law while totally violating its spirit.

Today the core curriculum at the nation's business and law schools can fairly be summarized as "lie, cheat, and steal, and when you are caught, claim ignorance and feign indignance." Until we stop grinding ethics out of people, and start leading by example with ethical behavior and standards that reinforce it (and punish its violators), we are never going to recover lost trust.

Crude Prices Plunge - UltraShort ETF Positioned for Profits

This strikes me as a less-than-thoughtful analysis. Clearly the momentum at present favors continued declines in oil prices, but what happens when the impacts of the global inflation regime created by the trillions of dollars in newly-issued central bank scrip begin to be felt? What would be the impact of oil being priced in a currency other than the dollar (though what that would be now seems a challenging question to answer).

It seems imperative also to consider global instability and "wild-card" factors in making these decisions, too. What happens to the price of oil if Israel attacks Iran and Iran blocks the straits of Hormuz?

The article isn't investment advice, it's a gambling tip. You may have the best of it for the next hand or two and maybe the DUG is a good gamble if all current trends hold and if no wild-card scenarios arise.

State Capitalism: Ideology Now Bonds Russia, U.S.

Eagle, I'd argue that it's not socialism and it's emphatically not Marxism (have you read Marx?). Benito Mussolini said it best (and I'm paraphrasing) - fascism should really be called "corporatism" because it is the combination of state and corporate power.

The only reason to indulge in this kind of quibble is this: Norway is a Socialist state; Sweden is a Socialist state. They've traded some possible economic growth for a societal model in which people's needs (as defined in those countries) come first. Under the United States' model of fascism, we put corporate power first on the assumption that supporting economic growth will allow more people sufficient wealth to meet their needs and their comforts.

Say what you will about these tradeoffs, but to call the new politico-economic regime in the United States "Socialism" is a distortion. We live under a fascist regime and we will very soon see its other, uglier manifestations - for example, arresting and holding people without charge. Oh, wait...

First Thoughts on the Fed Plan

While you are correct in my view to say, "The last thing we need is for bad assets to be inexorably hitting the market, much the way they did in Japan," it certainly appears that this is in fact the plan. By my reading the efforts thus far appear fully designed to block transparency at every turn.

The only way to restore confidence in market participants is to force complete transparency. This would require such a comprehensive transformation of banking culture AND of government culture that it is all but guaranteed not to happen. Therefore, the pain will be long and deep, and in all likelihood we will reach a point where the very future of the nation is in grave doubt.

The crisis could be swiftly resolved with courage and honesty. Unfortunately, these traits are drilled out of students at the nation's top business and law schools as the first order of business.

In Case a $700B Addition to the Debt Isn't Enough

"These lawmakers are all bigger lowlifes than common criminals. They steal our future so that they can get elected today and stay in office to line their pockets with legal bribes. "

QUOTED FOR TRUTH.

I will be voting against ALL incumbents this year and ask all people who believe in the promise of America to do the same. Whether you are a Republican or a Democrat or like me, Something Else Entirely, PLEASE, PLEASE, PLEASE vote to kick them ALL out this year.

No incumbents, no mercy - KICK THEM ALL OUT.

Four Myths About the Free Market and Its 'Demise'

Marc, yours are the most intelligent comments I've read here in ages. Rigid adherence to dogma IS a prescription for disaster.

I generally believe that the best solutions are those that will arise through the mechanisms of markets left alone to function as they will. That said, I'm keenly aware that the orderly functionining of free markets depends on both buyer and seller having access to the same information - i.e., transparency and accuracy in reporting.

It is incredibly easy to see that at least some of the foundation of today's challenges stem from a lack of transparency in credit markets in particular.

Regulations aren't the boogeyman here; lack of transparency is. Typically, the best (not the only, mind you, but the best) intentioned regulations work to promote and enforce transparency and fair reporting in markets so that buyers and sellers can more reasonably establish fair prices and so that trust, over time, is bulwarked.

There will never be a perfect balance of information between buyers and sellers, nor will their be a market perfectly free of government intrusion at some level, and I for one don't believe there should be. We should err on the side of less intrusion than more in my belief, and all of our efforts ought to be aimed at increasing transparency while limiting burdensome rules. That's the genesis of SANE regulation, which is what has been missing for some time now.