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AIG's Collapse: Was It Criminal?

While I welcome criminal investigations of AIG executives I think that this will largely be a sideshow to appease an angry public. The real scandal of the credit crisis is that the wild excesses of the derivatives market were largely legal. Wall Street executives know that there is no reason to break the law when you can simply direct a compliant politician to change the law on your behalf.

Rupert Murdoch Interview: 'Economy Weak; Danger of Inflation Great'

I love how Murdoch blames the credit crisis on government backed loans (Freddie & Fannie) to poor people. Did the government force Wall Street to securitize these loans, slice them into unrecognizable tranches and resell them endlessly for never ending fees? Did government force the banks to leverage themselves 30/1 on speculation that the home prices would never stop rising? Did the government force Wall Street to invest trillions of dollars in the unregulated credit default swaps market on the bet that asset prices would always keep rising? People like Murdoch have been preaching the benefits of deregulation for years and now that the system that they engineered has collapsed they are looking for a convenient scapegoat.

Picking on Geithner

I had incorrectly assumed that the New York Fed was a regulator of Wall Street, after reading Morgenson's article, now I know better. This may be old news to you but to me it was another frightening example of Wall Street lacking any meaningful government regulation. I also think that it is absurd to suggest that Wall Streeters have been the victims of discrimination and somehow lack input in Washington. The last time I looked, virtually all the financial decision makers in Washington are Wall Streeters (including Geithner) and that is the real problem.

Pierre Bourdieu, Tim Geithner, and Cultural Capital

Great article!

Is FDIC's Sheila Bair Proposing a New RTC?

This plan sounds a lot better than anything Geithner has come up with.

My Problems with Summers' Five Points

The New York Times article on Geithner (linked above) leaves little doubt that Geithner is a Wall Street shill. Now what?

Paulson Throws Bernanke Under the Bus, Backs Ken Lewis

Seemingly, lots of bad news for financial stocks recently and yet they hold their value. I'm not sure what to make of it.

Pondering the Fate of an Oil Exporter: Squandering One's Inheritance Cheaply

Many have noted that Thatcher's conservative revival in Great Britain was only possible because the country was flush with Petro Pounds.

Banks, Policy, and Irreversible Errors

The reaction of the Obama Administration to the banking crisis is perplexing. Unlike Bush, who knew he could kick the can down the street to the next administration, Obama is a new president who must deal with this crisis. Obama's decision to simply pour endless amounts of money into the large banks and hope the economy improves is incredibly short sighted. I can only guess that he foolishly followed the advice of men like Summers and Geithner who helped to create this disastrous banking system and now can't admit that they were wrong.

Notable by Their Absence at Tuesday's Hearings

Oligarchs don't debate, they command.

Why Is Allen Stanford Being Prosecuted While Other Banks Get Bailed Out?

Agreed, that's why campaign contributions are a banker's best investment.

Financials' Better-Than-Expected Earnings: Real or Fake?

And yet the bank stocks have resumed their march higher today. I guess having Uncle Sam in your back pocket trumps a lot of bad assets.

Time for Transparency on Bailing Out the Bank Bondholders

I agree, its hard to argue with simple transparency.

Big Banks Are Buying Mortgages: A Good Thing?

The banks can do anything because they know that the Obama administration will bail them out with taxpayer money if anything goes wrong. TARP led to PPIP which will lead to PPIP II. Apparently, trickle down economics never has to end.

The Banking Time Bomb Test

Any test can be passed when the test is rigged. The government has already committed to giving these large banks billions in additional money through the PPIP plan. That is the governments sole solution to credit crisis; buy toxic assets from the banks with taxpayer money and hope that the market for theses assets recovers in a few years time.