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EJ
02-15-09, 11:31 AM
http://www.itulip.com/images/moyers1.jpgBill Moyers Journal reveals to the world the true root of the US banking crisis: FIRE Economy Oligarchs

We have posted on iTulip.com PBS's Bill Moyers' superb coverage (http://www.youtube.com/watch?v=c-4tMkDrYnQ&eurl=http://www.itulip.com/forums/showthread.php?p=13240&feature=player_embedded) of the economic crisis for several years. Friday's Journal (http://www.pbs.org/moyers/journal/02132009/watch.html) takes the discussion to a new level. Below is a excerpt from the interview with Simon Johnson, former chief economist at the International Monetary Fund. In it, he gets right to the heart of the problem, the reason why the US has not done as it did during the Savings & Loan crisis in the 1980s and as we have recommended here and directly to members of Congress who have contacted us: FIRE Economy interests are preventing the orderly clearing of markets that needs to occur in order to re-start the US banking system. The longer this goes on, the deeper the depression will be. Here it is from the most credible source to date.
BILL MOYERS: Welcome to the Journal.

The battle is joined as they say — and here's the headline that framed it: "High Noon: Geithner v. The American Oligarchs." The headline is in one of the most informative new sites in the blogosphere called:

baselinescenario.com. Here's the quote that grabbed me:
"There comes a time in every economic crisis, or more specifically, in every struggle to recover from a crisis, when someone steps up to the podium to promise the policies that — they say — will deliver you back to growth. The person has political support, a strong track record, and every incentive to enter the history books. But one nagging question remains. Can this person, your new economic strategist, really break with the vested elites that got you into this much trouble?"
And here's the man who asked that question. Simon Johnson is former chief economist at the International Monetary Fund. He now teaches global economics and management at MIT's Sloan School of Management and is a senior fellow of the Peterson Institute. He is co-founder of that website I quoted — baselinescenario.com — where he analyzes the global economic and financial crisis.

Welcome, Simon Johnson to the Journal.

SIMON JOHNSON: Nice to be here.

BILL MOYERS: What are you signaling with that headline, "Geithner vs. the American Oligarchs"?

SIMON JOHNSON: I think I'm signaling something a little bit shocking to Americans, and to myself, actually. Which is the situation we find ourselves in at this moment, this week, is very strongly reminiscent of the situations we've seen many times in other places.

But they're places we don't like to think of ourselves as being similar to. They're emerging markets. It's Russia or Indonesia or a Thailand type situation, or Korea. That's not comfortable. America is different. America is special. America is rich. And, yet, we've somehow find ourselves in the grip of the same sort of crisis and the same sort of oligarchs.

BILL MOYERS: Oligarchy is an un-American term, as you know. It means a government by a small number of people. We don't like to think of ourselves that way.

SIMON JOHNSON: It's a way of governing. As you said. It comes from, you know, a system they tried out in Greece and Athens from time to time. And it was actually an antithesis to democracy in that context.

But, exactly what you said, it's a small group with a lot of power. A lot of wealth. They don't necessarily - they're not necessarily always the names, the household names that spring to mind, in this kind of context. But they are the people who could pull the strings. Who have the influence. Who call the shots. more... (http://www.pbs.org/moyers/journal/02132009/watch.html)


Part 1: 11 minutes
<object height="344" width="425">


<embed src="http://www.youtube.com/v/YEvwhqoUjMI&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" height="344" width="425"></object>

Part 2: 11 minutes
<object height="344" width="425">


<embed src="http://www.youtube.com/v/9B_wIISpZ-Q&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" height="344" width="425"></object>
(Hat tip to member Rajiv)

See also:

FRONTLINE: Inside the Meltdown, Tuesday, February 17, 2009, at 9 P.M. ET on PBS


<script type="text/javascript" src="http://www.pbs.org/wgbh/pages/frontline/js/pap/embed.js?frol02s1e30q709"></script>


iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032): The Investment Thesis for the Next Cycle™
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Mega
02-15-09, 12:31 PM
Ej
You do know China is not coming to rescue don't you?

You must now see that she is quite happy sitting on the side line watching it all implode?

How will the West react when they suss this do you think?
Mike

don
02-15-09, 12:47 PM
The IMF and the World Bank have been the cat's paw of US neo-liberal policies for decades. Recently they've lost a bit of effectiveness with the abject failure of their austerity programs across the globe.

The question is, what's goin' on.... As the depression deepens, is more revealed in an attempt at more effective damage control? Obfuscation has been a great strength in domestic political control in the US. We all know there's no censorship in America. Just a bottomless memory hole ;)

BadJuju
02-15-09, 01:10 PM
Ej
You do know China is not coming to rescue don't you?

You must now see that she is quite happy sitting on the side line watching it all implode?

How will the West react when they suss this do you think?
Mike

I fail to see why China would be happy sitting on the side line knowing that all of the countries that they depend upon for exports are going belly up.

EJ
02-15-09, 01:53 PM
Ej
You do know China is not coming to rescue don't you?

You must now see that she is quite happy sitting on the side line watching it all implode?

How will the West react when they suss this do you think?
Mike

Re-read:

China versus U.S.A. (http://www.itulip.com/economicMAD.htm)

Economic equivalent of M.A.D. may end with a bang

When I said, "China and the U.S. are running inter-dependent bubble economies, relying on the economic equivalent of Mutually Assured Destruction (M.A.D.) to keep one from blowing up the other’s economy. Whether by intent or accident, sooner or later market forces will assert themselves and both economies will go through tough transitions," that is exactly what I meant.

The credit system that allowed the Economic M.A.D. to function has broken down. The US and China will through a series of crises this year disengage economically and fall back on core institutional supports to cope with internal political stresses that are already arising as a result of economic distress. Both will re-prioritize to focus on critical and immediate needs: feeding their respective populations and maintaining order.

metalman
02-15-09, 02:00 PM
Re-read:

China versus U.S.A. (http://www.itulip.com/economicMAD.htm)

Economic equivalent of M.A.D. may end with a bang

When I said, "China and the U.S. are running inter-dependent bubble economies, relying on the economic equivalent of Mutually Assured Destruction (M.A.D.) to keep one from blowing up the other’s economy. Whether by intent or accident, sooner or later market forces will assert themselves and both economies will go through tough transitions," that is exactly what I meant.

The credit system that allowed the Economic M.A.D. to function has broken down. The US and China will through a series of crises this year disengage economically and fall back on core institutional supports to cope with internal political stresses that are already arising as a result of economic distress. Both will re-prioritize to focus on critical and immediate needs: feeding their respective populations and maintaining order.

for newbies, that was published April 19, 2006.

cjppjc
02-15-09, 02:03 PM
I saw the clip from Frontline. Love that guys voice.

How can anyone doing any serious journalism interview Chris Dodd. That hack. That moron. That enabler. The man who said Fannie and Freddie were in great financial shape. That the stock meltdown was the result of shorts. The man who was overseeing the banking industry and was getting preferential treatment from Countrywide.

And don't get me started on Barny Frank. That hack. That moron. That enabler. Who was dating someone he was regulating.

I think any piece that includes the enablers/regulators cannot be taken seriously.

They should be intervieing Ron Paul. Who warned Americans for years. Oh I forgot he's a lunitic. An isolationist. You think he's an insolationist. Wait, you aint seen nothing yet.

magicvent
02-15-09, 02:22 PM
Would appreciate your comments on the following article:

http://www.marketskeptics.com/2009/01/hyperinflation-will-begin-in-china-and.html

metalman
02-15-09, 02:37 PM
Would appreciate your comments on the following article:

http://www.marketskeptics.com/2009/01/hyperinflation-will-begin-in-china-and.html

a crazy mess of ideas.

name one example in history when a hyperinflation in a non-reserve currency country caused the 'destruction' of the world's reserve currency?

the opposite... the rush to dollars will intensify.

besides, even by the author's own logic if china stops buying treasuries it stops printing yuan.

the most nutty analysis i've seen in some time.

cjppjc
02-15-09, 02:46 PM
a crazy mess of ideas.

name one example in history when a hyperinflation in a non-reserve currency country caused the 'destruction' of the world's reserve currency?

the opposite... the rush to dollars will intensify.

besides, even by the author's own logic if china stops buying treasuries it stops printing yuan.

the most nutty analysis i've seen in some time.


I'm glad you said that. I thought it was just me.

cobben
02-15-09, 03:49 PM
Great cartoon explaining all essential parts of the too-big-to-fail banking scam.

"Give us your money or we'll crash ya"

2008-10-05: Damn It Feels Good To Be a Banksta

http://www.sinfest.net/archive_page.php?comicID=2952

icm63
02-15-09, 03:50 PM
I fail to see why China would be happy sitting on the side line knowing that all of the countries that they depend upon for exports are going belly up.

Its called 'critical mass', when China gets to a point that they realise that not one more dollar of china taxpayers wealth can make an ounce of difference to whats coming...

They will save the last stimulus bullet for themselves...

I do see $USD hitting $100 before $75...the Gold rally is way too early, see profit taking soon in that asset class.

BadJuju
02-15-09, 04:11 PM
Its called 'critical mass', when China gets to a point that they realise that not one more dollar of china taxpayers wealth can make an ounce of difference to whats coming...

They will save the last stimulus bullet for themselves...

I do see $USD hitting $100 before $75...the Gold rally is way too early, see profit taking soon in that asset class.

But the fact remains that they are not going to be happy sitting by on the side lines watching as the economies they most depend upon for exports implode.

icm63
02-15-09, 04:26 PM
But the fact remains that they are not going to be happy sitting by on the side lines watching as the economies they most depend upon for exports implode.

You just dont get it, CHINA does not have enough wealth to stop it. (note: nor does USA, Europe, Fiji, no one $%#*^&#%)

- 560 trillion of derivatives of this 55 trillion credit default swaps
- ALT A and Jumbo mortgages from 2005/2006 are about to rollover with a low chance of refiance at terms they got the original mortgage at..

There is waves and waves of sh*t to come..

China.... is not that wealthy....

BadJuju
02-15-09, 05:08 PM
- 560 trillion of derivatives of this 55 trillion credit default swaps
- ALT A and Jumbo mortgages from 2005/2006 are about to rollover with a low chance of refiance at terms they got the original mortgage at..

There is waves and waves of sh*t to come..

China.... is not that wealthy....

Yet again, I am not speaking about them being able to stop it. I am making a point that they would NOT be happy to see the main countries they export to go belly up.

open4
02-15-09, 05:42 PM
Simon Johnson’s analysis is money centric and assumes good finance to be almost an end in its self , going no further than seeking to ensure that credit is only extended when repayment can be made, <O:p</O:p

Money should be no more than a simple and inert tool and needs putting in its place, <O:p</O:p

What is important is the health of society at large and it is the misuse of credit that is the main problem, for example simply ensuring that credit is only extended to those likely to repay it would not ensure that totally destructive but otherwise profitable organizations do not prevail, <O:p</O:p

Stress testing banks and reorganizing those that fail may appear to be an answer to some economists but will not resolve deep underling problems of the real world, <O:p</O:p

Unhealthy distortion of markets by credit and invisible taxation through government fiat can probably only be controlled by a return to the intrinsic disciplines of the gold standard, <O:p</O:p

Quite simply we would have arrived at this same financial halt if all people had issued their own unrestricted credit and bankers had not existed,<O:p</O:p
<O:p</O:p
<!-- / message -->

Mega
02-15-09, 06:35 PM
I disagree

China can change tack, she has the production means, she has the labour force. As Schiff sez all she needs do is de-couple & her own 1.3 billion consumers will pull her & the World out of this mess.

China will NOT want short term quick fix.

Mike

Charles Mackay
02-15-09, 07:02 PM
I'm shocked! The fact that this is creeping into the MSM is a very positive sign. I'm less bearish after viewing this!

But, not by much, .... ;)

icm63
02-15-09, 07:07 PM
China can change tack, she has the production means, she has the labour force. As Schiff sez all she needs do is de-couple & her own 1.3 billion consumers will pull her & the World out of this mess.

When Peter Schiff said that China will do better when USA is down, he stated that China middle class will be able to buy the toasters that they sold in the USA for $11 USD themselves, thus creating a strong domestic economy of internal consumption, as China will be able to consume what the previously exported. This may be when the price of tin and copper fall so low that China can make the toaster for $1.50 and sell it for $2 to the local chinese man earning $1 a day. If it does happen it will only be a after a period of ecomonic adjustment that wont be pretty. That adjustment has been called deflation in the past.

Gary Shilling went to China and found that China's middle class wealth is only 5% of the population (100 mill persons or so, same size as Japan) hardly enough to support the massive work force that used to reside in the factories of China making stuff for Walmart etc

So China is not able to help the rest of the world, if you state that they are NOT happy about exports falling, well thats an easy group to join, every exporting country is NOT HAPPY.

China, via Jim Rogers, is better aligned to a quicker recovery as they having savings and little personal debt, hence he says buy the yaun.


China will say, the Toaster we sold to USA for $11, cant be done for profit no more, make toaster and selling it for $2 to China man in Peking, this means factory job goes form $1 a day to $0.10 a day, do you want the job or not !!! Deflation...economic adjustment...that what will happen, and that will spark there growth faster that western economies.

Slimprofits
02-16-09, 02:28 AM
CNBC came out last Thursday with their own take: House of Cards (http://www.cnbc.com/id/28993790)

House of Cards - Origins of the Financial Crisis ''Then and Now''
"Let's hope we are all wealthy and retired by the time this house of cards falters."
--Internal email, Wall Street, 12/15/06

Prophetic words that predicted the greatest financial collapse since the Great Depression. The current global economic collapse has its roots in the sub-prime mortgage crisis.

"House of Cards" premieres Thursday, February 12 at 8p | 12a ET.

Chris Coles
02-16-09, 07:25 AM
We are missing the point if we focus on China. The focus should return to the subject of this thread which is that there is a feeling that Timothy Geitner

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/3501185/Timothy-Geitner-the-man-who-will-run-Obamas-ecomomic-team-is-a-basketball-playing-pressure-junkie.html

does not have, for want of another word, the cojones for the job in hand. That he has not started out in the manner anyone with knowledge of such matters of leadership expected.

open4
02-16-09, 04:13 PM
Dear Mr Johnson,

You are wrestling with the problems of credit only because you have failed to accept its true nature,

Credit is fraudulent money, and is always to some degree damaging,The question is to what extent this fraud should be tolerated, if any,

Finance must be linked to a gold standard, fractional Fiat and credit fraud must never break free of this discipline,

The conceit and security of the bankers rides on the back of much of the public who also gained money for nothing and know they are complicit in this fraud,

The power of the bankers will collapse only when the public realise they have lost their ill gotten gains,

labasta
02-16-09, 04:57 PM
I should have posted this on this thread:


I'm hearing so many cases of fraud worldwide at the moment. Has anyone picked up on the 1.3 billion dollar fraud in Iraq by the US military? I mean skimming form the top is all well and good, but plain out stealing the whole lot.. well...

Regarding Ireland.

I'm really pissed at the whole thing with the banks at the moment.

The directors of AngloIrish gave themselves non-recourse loans based on collateral of their own AngloIrish shares. One of these loans was for 87 million Euro. We are talking hundres of millions here. Fine right? Well when the bank goes bankrupt, the shares are worth nothing. They don't have to pay back the bank as the loans are non-recourse. In effect, they just stole the money for themselves.

Now, the ruling party (FF) use the bank for their own funds (apparently) and the finance minister took advice from the directors of the bank. He saves angloIrish bank by raiding the civil servants pension fund to the tune of 7 billion. This has been estimated to be nowhere near enough. Who tops up the missing 7 billion? Is it the directors? Noooo, of course not. The civil servants have to pay an extra pension levy of around (after tax) between 3.5 and 9% of gross income. This is at a time when pivate AND (although much less) public sector workers are losing their jobs and having their wages decreased. The ones with massive mortgages are taking a bigger hit. If mortgages can't be paid, the banks take the hit and so on.


Basically, what I am saying is that the ones who stole, frauded, created the mess are not paying for it but making off like bandits and leaving the rest of us to pay and become poorer.

It would have been the same if a few years ago during the bubble years the government had created an AngloIrish monthly tax levy of around 5% to be paid to the directors of AngloIrish bank directly.

I mean Germany has compulsory medical insurance (also known as a tax) to keep its med industry in lolly, why not the banks too. Let's have politically in their pocket industry taxes!

30% for the banks
20% for the med industries
5% for petroleum companies
10% other energy taxes
2% for the church of your choice

Can we think of any other industries which like to kept in the manner they are accustomed to?

Now, if only I could set up a company to pay off a load of politicians and create my own tax on the people.

Roughneck
02-16-09, 11:20 PM
Perhaps geitner did not state the specifics of the plan because he did not want to tell poeple the truth,just yet. Perhaps he didn't want to say that it will take another 3 trillion dollars to stabilize the big banks until after the "stimulus bill" was passed.Or maybe he's just a dumbass government technocrat who really doesn't have a clue.Either option is not that comforting.

metalman
02-17-09, 12:20 AM
Perhaps geitner did not state the specifics of the plan because he did not want to tell poeple the truth,just yet. Perhaps he didn't want to say that it will take another 3 trillion dollars to stabilize the big banks until after the "stimulus bill" was passed.Or maybe he's just a dumbass government technocrat who really doesn't have a clue.Either option is not that comforting.

meanwhile, back in california...

With no budget, California to cut 20000 state jobs (http://www.reuters.com/article/politicsNews/idUSTRE51G0J420090217)
Reuters - <nobr>39 minutes ago</nobr>
The announcement came a day after California lawmakers narrowly failed to pass a $40 billion budget that would have plugged the state's deficit with a mix ...

massive state layoffs... that'll fix up the econ in a hurry, so say the libertarians. fewer state employees = less taxes = more money to spend on crap made in china. and the ex-state employees won't go on unemployment, they'll invent the next internet, start companies, and we'll all live happy ever after. the logic is inescapable.

grapejelly
02-17-09, 01:33 AM
The bill that fell one Republican short would have practically double car tax, increased sales tax to 8.25% (before local taxes which could raise it to near 10% in places like Los Angeles County) and other fees...

What they should do is massively cut the government payroll by 1) pay cuts and 2) permanent layoffs.

Tax increases will make the business climate, already abysmal, even worse. It will drive more businesses out of California.

I would never, never never locate a business in California ever again, barring something unforeseen.

The National Enquirer carried an article about a man who rides around in a wheelchair and sued 150 small businesses over the past year and a half an earned a cool $100,000 for violations as minor as having a mirror or counter 1/2 inch too high for the disabilities statutes.

This neatly encapsulates everything wrong in the Socialist State of California...

qwerty
02-17-09, 01:33 AM
I'm shocked! The fact that this is creeping into the MSM is a very positive sign. I'm less bearish after viewing this!

But, not by much, .... ;)

I thought it was in the Steve Keen interview(*) that I read the idea that Obama knows he can't take over the banks just yet, he needs to wait until JPM and Goldman sink more before he can summon the required political will. (* But it must have been somewhere else)

But talking of the politcal will to change things, we may not need to wait on the main stream media in our world of Web 2.0.

iTulip.com is a place of debate, and I guess, not the place for helping direct collective action.

Anyone running a website out there selling Break The Banksters bumper stickers? Maybe stickers you can have delivered to your congressman?

D-Mack
02-17-09, 08:02 AM
Perhaps geitner did not state the specifics of the plan because he did not want to tell poeple the truth,just yet. Perhaps he didn't want to say that it will take another 3 trillion dollars to stabilize the big banks until after the "stimulus bill" was passed.Or maybe he's just a dumbass government technocrat who really doesn't have a clue.Either option is not that comforting.

He was the head of the NY Fed, that should say it all.





Geithner's Debut: "Not Ready for Prime Time"

by Mike Whitney

...

GEITHNER"S SPEECH

Geithner knew exactly what he had to say on Tuesday, but hemmed and hawed and avoided the central issues like the plague. He provided no new details on how the government planned to remove the illiquid assets that are fouling the banks' balance sheets nor did he explain how he would determine the value of these assets. It is shocking to realize that the financial crisis started 19 months ago (when two Bear Stearns hedge funds defaulted) and still, no one has any idea of what these assets are really worth. Price discovery is basic to any functioning market but, in this case, fear has carried the day. Everyone involved is terrified that trillions of dollars of assets will turn out to be worthless.


Geithner employed the same obfuscating techniques as Alan Greenspan. He tried to affect the look of a man who was deeply concerned while rattling off well-rehearsed statements that revealed absolutely nothing about his real intentions.

“I completely understand the desire for details and commitments," Geithner opined with heartfelt sincerity, "but we’re going to do this carefully so we don’t put ourselves in the position again....This is the beginning of the process of consultation." The there was this gem worthy of Maestro himself, "We are exploring a range of different structures" to deal with precisely that issue.

Right.

Most of the critics believe that Geithner is in over his head, but that's probably not the case. More likely, he has a plan but wants to keep the public in the dark. After all, there's no graceful way to tell people that they are about to get shafted for another $2 trillion to keep the larder on Wall Street full of Dom Perignon and chocolate truffles.

One thing Geithner will insist on is that the Treasury and the Fed remain the final arbiters of "who is solvent and who is not" as regards the big banks. That should be Sheila Bair's job. As the head of the FDIC, Bair is the regulator who should be in charge of checking capital reserves and closing underwater banks. But, apparently, Bair has been crowded out for political reasons. Geithner and his insider friends are calling the shots.

Geithner announced that Treasury would be putting together a new "public-private investment fund" to try to attract private capital to assist the government in purchasing some of the higher-rated assets the banks are trying to unload. The details are still sketchy, but it sounds a lot like Henry Paulson's Super SIV (structured investment vehicle) which provided a spot for the banks to dump their off-balance sheets garbage in one "government approved" SIV. Of course, the idea failed because, by then, investors were already skittish about buying complex, structured investments. Even so, Paulson's credibility took a real beating. He was seen as using his office to peddle dodgy bonds for his friends. Geithner won't make the same mistake. He'll take the high-road and entice the banks and hedge funds into buying the distressed MBS by providing government guarantees and subsidies similar to the perks in the Merrill Lynch-Lone Star transaction. In that deal, Merrill offloaded $31 billion in toxic CDOs for $.22 on the dollar and provided 75 percent of the financing. It was a sweetheart deal from the get-go and Geithner will undoubtedly duplicate it to get rid of the junk at no risk to the buyer. That will help fatten the bottom line of the teetering banking fraternity.

Geithner's financial rescue plan includes $500 billion to $1 trillion for the Fed's Term Asset-Backed Securities Loan Facility (TALF). This will provide additional funds for institutions that finance pools of car loans, student loans, credit card debt etc. The securitization of consumer debt, which broke down 19 months ago when the crisis began, has resulted in an unprecedented slump that's put the world economy in a tailspin. Securitization has been Wall Street's golden goose. It's a reliable way to maximize leverage on smaller and smaller slices of capital. As borrowing increases, asset prices rise, making the system more and more unstable. When the bubble finally bursts; the tremors ripple through the real economy sending asset values crashing, equities markets plunging, and unemployment skyrocketing.

In his speech Geithner admitted that, "In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them. Because this vital source of lending has frozen up, no plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses -- large and small.”

40 percent! Think about that. Nearly half the credit pumped into the economy comes from securitization.

...

http://www.globalresearch.ca/index.php?context=va&aid=12301

rj1
02-17-09, 08:18 PM
Interesting bit today as far as the crisis and removing people from power, as influence is power.

http://www.cnbc.com/id/15840232?video=1037776243&play=1

zoog
02-18-09, 01:15 AM
See also:FRONTLINE: Inside the Meltdown, Tuesday, February 17, 2009, at 9 P.M. ET on PBS

Just finished watching this on TV. It covers Bear Sterns, Lehman, AIG, Fannie & Freddie, the attempted rush congressional bailout bill, and a little beyond that. A couple things I didn't know, like when Paulson called the heads of the nine largest banks to his office and basically said "we're going to give you money in exchange for some control, here's a one-page explanation of the terms and conditions, sign it". The program portrayed Paulson as truly being concerned about moral hazard and reluctant to take any actions which might call that into question... but ultimately resigned to bailouts and capital injections fearing the entire system would otherwise collapse. I guess my angry west coast yokel view has always been "oh there's Paulson bailing out his Wall Street buddies again" but I could be wrong. Anyway all in all I thought it was a reasonable account of what happened.

edit add: Saw something on PBS website indicating this is the first of a three-part series on the economic crisis. Don't know when the next two parts will air.

Rajiv
02-18-09, 06:25 AM
Inside the crash embedded (56 min)




<script type="text/javascript" src="http://www.pbs.org/wgbh/pages/frontline/js/pap/embed.js?frol02c1f60q74f"></script>

Shakespear
02-18-09, 08:25 AM
Bear was the little player on Wall Street, so letting it sink was palatable for Paulson (Mr. GS). Thus watching this doc I wonder what isn't being told in this Frontline documentary.

Lets not forget that the Bush administration changed the "character" of PBS substantially to its liking !!! Wasn't Bill Moyers a casualty of this change?

we_are_toast
02-18-09, 09:31 AM
Lets not forget that the Bush administration changed the "character" of PBS substantially to its liking !!! Wasn't Bill Moyers a casualty of this change?

Bush tried to politicize PBS with one of his cronies, but there was such an uproar, Ken Tomlinson was forced to resign in Jan 2007. They went after Bill Moyers and his show NOW, but while they tried to censor the show, Bill Moyers handed the show over to David Brancaccio and restarted "Bill Moyers Journal". So now there are 2 exceptional programs on PBS instead of 1.

Bill Moyers does the most thoughtful interviews I've ever seen on TV. I would very much love to see him do an in-depth interview with EJ. Maybe if enough people emailed the suggestion to the show's producer...

Chris Coles
02-18-09, 12:02 PM
Bill Moyers does the most thoughtful interviews I've ever seen on TV. I would very much love to see him do an in-depth interview with EJ. Maybe if enough people emailed the suggestion to the show's producer...

As thoughtful and informative expose as anyone could wish for. Thank you Rajiv.

c1ue
02-18-09, 12:39 PM
The PBS show is a very nice CYA piece by Paulson.

Several notes:

1) Every quote concerning the government side of the action is from Paulson with these 3 exceptions:

a) One indirect Bernanke spot - channeled via Paulson quote to one of the talking heads
b) 2 brief appearances by Sheila Bair at the very end

Why is this suspicious? Bair was dead center in the who JPM affair. Secondly Wamu and Wachovia are not mentioned at all. Thirdly the massive bank injections by the Fed prior to TARP are also not mentioned at all. How can Bair only speak to the very last TARP capital injection infusion when the FDIC was intimately involved in this entire crisis?

2) TARP contained a provision concerning capital injections. This is not a standard thing - why was it put in if truly events were 'unanticipated' as is the common theme throughout this PBS piece?

3) Bear Stearns collapsed ostensibly due to CDS's and mortgage backed securities. If the government and Fed were so on the ball after getting first hand glimpses into Bear's operations, why then was ZERO action taken to ensure other companies were not doing the same things as Bear?

Why then were Lehman's problems a 'surprise'? And Lehman's failures rippling across the system a 'surprise'?

Why then was AIG a complete 'surprise'?

4) Why is TARP II becoming necessary when the government gave all the 'big 9' money and presumably also either had the opportunity to understand MBS/CDS risk in these same institutions or the opportunity to instruct said institutions to clean up their act?

Nice color commentary, but ultimately not credible.

For entertainment purposes only.

World Traveler
02-18-09, 12:50 PM
I totally agree, Clue. I was wondering if Paulson wrote the script.

No where do they mention that, as Goldman-Sachs CEO, he was a BIG part of the problem, especially when he pushed for the change allowing 30:1 leverage for investment banks. And that he was Goldman's CEO during the period when the worst of this mess was created.

herbkarajan
02-19-09, 12:02 AM
how can you drink this cool-aid, look at what he says

"And something for Treasury officials to really understand, and to really understand the alternatives - they're not, I mean, with all due respect to them, they're not the ultimate authority. I don't think they're the right people.
The correct people you should be asking this question to are people at the IMF"

The IMF whose austerity programs ruined and pillaged economy after economy. IMF who's programs are specifically designed to get the most for the creditors/foreign bond holders at the expense of the national economies. Come what may, but the suggestion to surrender American sovereignty to a supranational bank exposes Johnson as either deeply naive or worse

FRED
02-19-09, 12:10 AM
how can you drink this cool-aid, look at what he says

"And something for Treasury officials to really understand, and to really understand the alternatives - they're not, I mean, with all due respect to them, they're not the ultimate authority. I don't think they're the right people.
The correct people you should be asking this question to are people at the IMF"

The IMF whose austerity programs ruined and pillaged economy after economy. IMF who's programs are specifically designed to get the most for the creditors/foreign bond holders at the expense of the national economies. Come what may, but the suggestion to surrender American sovereignty to a supranational bank exposes Johnson as either deeply naive or worse

We endorse his observation, that the reason the crisis occurred and has been bungled is due to the influence of interested insiders on the process. We do not endorse his view that the IMF represents a solution.

Crazyfingers
02-19-09, 12:39 AM
The Shrinking Influence of the US Federal Reserve (http://www.spiegel.de/international/world/0,1518,562291,00.html)
By Gabor Steingart in Washington (http://www.spiegel.de/international/world/0,1518,562291,00.html)

Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.
As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar
Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members -- but never the United States -- have already endured this painful procedure.

For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.
When the final report on the risks of the US financial system is released in 2010 -- and it is likely to cause a stir internationally -- only one of the people in positions of responsiblity today will still be in office: Ben Bernanke.

Rajiv
02-19-09, 01:17 AM
That was June 2008 -- any updates to this?

Chris Coles
02-19-09, 02:48 AM
That was June 2008 -- any updates to this?

Try BBC Newsnight. Program was on last night.

http://www.bbc.co.uk/iplayer/episode/b00htj9r/Newsnight_18_02_2009/

Rajiv
02-19-09, 03:24 AM
Can't get it outside the UK -- any transcript?

Chris Coles
02-19-09, 04:46 AM
Can't get it outside the UK -- any transcript?

You should be able to get to it via logging onto www.bbc.co.uk (http://www.bbc.co.uk) and then searching for Newsnight www.bbc.co.uk/programmes/b006mk25/microsite (http://www.bbc.co.uk/programmes/b006mk25/microsite)

http://news.bbc.co.uk/1/hi/programmes/newsnight/default.stm

On the right hand side you will see this link to BBC iPlayer

http://newsimg.bbc.co.uk/media/images/45199000/jpg/_45199858_blank.jpg
<!-- Get the minutes and seconds for weighted puffs --><!-- Get the hour and minute of the day --><!-- Get the day of week plus time--><!-- S BO --><!-- S IIMA -->http://newsimg.bbc.co.uk/media/images/44786000/jpg/_44786212_nn_console_new08iplayer.jpg
<!-- E IIMA --> (javascript: void window.open('http://www.bbc.co.uk/iplayer/search/?q=newsnight&go=Find+Programmes'))<!-- E BO -->http://newsimg.bbc.co.uk/media/images/45206000/jpg/_45206441_white203x5.jpg
<!-- Get the minutes and seconds for weighted puffs --><!-- Get the hour and minute of the day --><!-- Get the day of week plus time-->http://newsimg.bbc.co.uk/nol/shared/img/v3/icons/video_text.gif Newsnight:Windows/Real (http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_4670000/newsid_4679900?redirect=4679986.stm&news=1&bbram=1&nbram=1&bbwm=1&nbwm=1)



Try that and let me know how you get on.