The New York Times invited financial experts to submit questions that should be asked in the Financial Crisis Inquiry Commission hearings, beginning today. Officials from Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Bank of America will be grilled.
James Grant suggests the following question: Bankers are dealers in money. The Federal Reserve is a creator of money — since the crisis began in August 2007, it has conjured up $1.1 trillion. Given the ease with which these dollars are materialized on a computer screen, how can they be worth anything?
Financial blogger and former IMF official Simon Johnson asks some of the meanest questions:
1. Describe in detail the three worst investments your bank made in 2007 and 2008 — that is, those transactions on which you lost the most money. How much did the bank lose in each case?
2. What was the total compensation of each manager or executive supervising those three transactions — including yourself — in 2007 and 2008?
3. Are those executives still with your bank?
Yes, I think these are questions we would like to know the answers to. More here.
Wednesday, January 13, 2010
Friday, January 1, 2010
How bad is unemployment, really?
A little investigative work by Zero Hedge, using Treasury Department figures, reveals some interesting anomalies.
In December, the amount of Unemployment Insurance payments disbursed by the US Treasury totalled $14.7 billion, a 24% increase over the $11.8 billion paid out in November. (For purposes of comparison, the government paid out $14 billion to federal employees last month, meaning that Uncle Sam is paying more in unemployment benefits than it is paying in salaries to its own workers.)
But what is really odd -- click the link above to look at the charts and graphs -- is that the amount of unemployment benefits paid by the Treasury used to very closely track with the official number of "total insured unemployed." Yet in the last year there has been a huge divergence. Unemployment payments outgoing are far above what one would expect from the number of unemployed officiall reported. This indicates that the total number of unemployed may be as much as 32% higher than officially reported.
Look at the charts. Draw your own conclusion. It looks like the goverment has found a way to hide a large part of the unemployed from the official statistics. What they can't hide is the amount of money flowing out to those insured unemployed former workers.
[UPDATE: Zero Hedge has subsequently raised the possibility that instead of an increase in unemployment that is not reflected in the Bureau of Labor statistics, perhaps the Treasury is now helping out state governments burdened with their own share of unemployment outlays. The truth is, they don't know. Further investigation will be necessary to reveal the jump in the Treasury's outlays for unemployment insurance, and why it is so out-of-whack with the BLS official unemployment numbers.]
In December, the amount of Unemployment Insurance payments disbursed by the US Treasury totalled $14.7 billion, a 24% increase over the $11.8 billion paid out in November. (For purposes of comparison, the government paid out $14 billion to federal employees last month, meaning that Uncle Sam is paying more in unemployment benefits than it is paying in salaries to its own workers.)
But what is really odd -- click the link above to look at the charts and graphs -- is that the amount of unemployment benefits paid by the Treasury used to very closely track with the official number of "total insured unemployed." Yet in the last year there has been a huge divergence. Unemployment payments outgoing are far above what one would expect from the number of unemployed officiall reported. This indicates that the total number of unemployed may be as much as 32% higher than officially reported.
Look at the charts. Draw your own conclusion. It looks like the goverment has found a way to hide a large part of the unemployed from the official statistics. What they can't hide is the amount of money flowing out to those insured unemployed former workers.
[UPDATE: Zero Hedge has subsequently raised the possibility that instead of an increase in unemployment that is not reflected in the Bureau of Labor statistics, perhaps the Treasury is now helping out state governments burdened with their own share of unemployment outlays. The truth is, they don't know. Further investigation will be necessary to reveal the jump in the Treasury's outlays for unemployment insurance, and why it is so out-of-whack with the BLS official unemployment numbers.]
Thursday, December 31, 2009
Jobs created or saved that may cause you to burst a blood vessel
From http://www.verumserum.com/?p=11141 comes a list of the most ridiculous uses of stimulus funds.
Such genius job-creating/saving projects include:
Well, I guess any replacement for David Letterman would be an improvement. Actually, this is a redundant project. Machine generated humor was invented a long time ago, though. See for yourself.
Such genius job-creating/saving projects include:
- $9.3 million to fund design and construction of robotic bees.
- $427,000 to design better computer games for the elderly.
- $712,000 grant to develop "machine generated humor."
Well, I guess any replacement for David Letterman would be an improvement. Actually, this is a redundant project. Machine generated humor was invented a long time ago, though. See for yourself.
Wednesday, December 30, 2009
Those released from Guantanamo return to terrorism
This graphic nicked from the John Batchelor show website. Click for larger view. About 10% of those released from Guantanamo are suspected to have returned to terrorist activities. About 5% of those released have actually committed terrorist acts. Is this acceptable?
John Batchelor offered this commentary:
One or two of the GITMO detainees who were released to Saudi Arabia in 2007 are now reported to have assumed command authority of Al Qaeda in the Arabian Peninsula that likely launched the Abdulmutallab plot. Also, news arrives and looks to be confirmed that some agents of the CIA discussed Abdulmutallab with his father, the Nigerian banker and former minister of state, on November 19, 2009. The details are spare. POTUS seems to have hurried out a statement from his Hawaiian vacation address that the Obama administration believes there has been a "catastrophic failure" by intelligence organizations. We do not yet know if the CIA ascertained information was passed on to the NCTC (National Counter Terrorism Center, commanded by Dennis Blair); nor do we know if the NTCT connected this CIA report to the Visa office at State or to the NAtional Security Council (the White House). It looks as if the information stayed at the NCTC until after the December 25 attack. We also do not know how the fact that Abdulmutullab was on the TIDE list of 550,000 names connected to the fact that he had been denied a UK Visa in May, 2009. The summary from my professionals this news cycle is that what we do not know of this case far outweighs what we do know. Late news is that Abdulmuttalab is a past president of the Islamic Society of the University College London (right, a lecture series organized by Abdulmutallab in January 2007). Three previous presidents are associated with terrorism. One is awaiting retrial on charges of trying to blow up airliners in 2006. Two others have been convicted of terrorism. More and more new coming. The little rich kid has been busy, and now he is the biggest problem the Obama administration can imagine for the New Year.
Monday, December 28, 2009
Lack of warming in USA demonstrated by sixth-grader
This is an example of citizen reporting that outdoes mainstream media reporting. You see, the little boy in this video is not afraid of losing access to government officials who might be offended by his digging into the official temperature data, and asking uncomfortable questions. Questions like: apart from the warming that occurs in the vicinity of urban areas, is the United States really showing the evidence of a general climate warming?
See for yourself:
http://www.youtube.com/watch?v=F_G_-SdAN04&feature=player_embedded
See for yourself:
http://www.youtube.com/watch?v=F_G_-SdAN04&feature=player_embedded
Saturday, December 26, 2009
Obama now a Patriot Act fan (but keep your voice down)
http://joshfulton.blogspot.com/2009/12/under-radar-obama-pushes-for-patriot.html
Patriot Act provisions expiring on 12/31:
1. Secret court permits roving wiretaps without identification of who is being targeted...
2. Secret court can order production of any item relevant to a FISA investigation (i.e. papers, records, documents...)
3. US may surveil non-US persons not connected to foreign government or organization if suspected of terrorism or intent.
Whether these are good laws or not, clearly Obama expressed some reticence about them before he became a candidate for President. Now, he is quietly seeking extension of these provisions. Also, Obama angered progressives earlier this year when he supported immunity for telecom companies who participated in the warrantless wiretapping program (thus quashing several lawsuits).
Meet the new boss, same as the old boss.
UPDATED 12/28: The original link seems to have been removed. However, there is an article on TheHill.com covering the same issue. Read it here: Obama Stares Down Patriot Act Criticism
Patriot Act provisions expiring on 12/31:
1. Secret court permits roving wiretaps without identification of who is being targeted...
2. Secret court can order production of any item relevant to a FISA investigation (i.e. papers, records, documents...)
3. US may surveil non-US persons not connected to foreign government or organization if suspected of terrorism or intent.
Whether these are good laws or not, clearly Obama expressed some reticence about them before he became a candidate for President. Now, he is quietly seeking extension of these provisions. Also, Obama angered progressives earlier this year when he supported immunity for telecom companies who participated in the warrantless wiretapping program (thus quashing several lawsuits).
Meet the new boss, same as the old boss.
UPDATED 12/28: The original link seems to have been removed. However, there is an article on TheHill.com covering the same issue. Read it here: Obama Stares Down Patriot Act Criticism
Friday, December 25, 2009
On the confirmation of Ben Bernanke as Fed head
A letter to my senators, which could be regarded as an open letter to all senators, who are now faced with a vote to confirm the chairmanship of the Federal Reserve nominee, Ben Bernanke.
====
Dear Senator,
I want to follow up on my previous phone call to your office about the reconfirmation of Ben Bernanke as Federal Reserve Chairman. I urge you to vote against another term for him.
Bernanke is one of the architects of our financial collapse. Any vote to reconfirm Bernanke in his post is a vote for a blind and stupid monetary policy, failure to see and warn the public of problems with our financial foundations, and more favors to the "too big to fail" institutions who have fraudulently loaned money, traded those loans for profit, and charged the taxpayer for their criminality and wild risk-taking.
Let me briefly quote from Dean Baker in Counterpunch (http://www.counterpunch.org/baker12232009.html), who says it more effectively than I could:
"If Bernanke knew what he was doing, he should have been able to see as early as 2002 that there was a housing bubble and that its collapse would throw the economy into a recession. It was also entirely predictable that the collapse could lead to a financial crisis of the type we saw, since housing was always a highly leveraged asset... as the bubble expanded, and the financial sector became ever more highly leveraged, the risks to the economy increased enormously.
"Through this all, Bernanke just looked the other way. The whole time he insisted that everything was just fine.
"To be clear, there was plenty that the Fed could have done to deflate the bubble before it grew to such dangerous proportions. First and foremost the Fed could have used its extensive research capabilities to carefully document the evidence for a housing bubble and the risks that its collapse would pose to the economy.
"It then should have used the enormous megaphone of the Fed chairman and the platform of the institution to publicize this research widely... It’s hard to believe that such warnings would have had no impact on the bubble, but it’s near criminal that the Fed never tried this route.
"The second tool that the Fed could have pursued was to crack down on the fraudulent loans that were being issued in massive numbers at the peak of the bubble... If Bernanke and his Fed colleagues did not know about these widespread abuses, it is because they deliberately avoided knowing.
"Finally, the Fed could have had a policy of interest rate hikes explicitly targeted to burst the bubble.
"This is what a responsible Fed policy would have looked like. But Ben Bernanke did not pursue a responsible Fed policy. He insisted that everything was just fine until he had to run to Congress last September, saying that if it didn’t immediately give $700 billion to the banks through the TARP program then the economy would collapse."
Bernanke, following in Allan Greenspan's footsteps, has been a disaster for the average American. He's been great for Wall Street bankers. Please find someone for Fed Chairman who saw these problems coming and might therefore be a more credible engineer of policies leading back toward an honest and stable system.
Sincerely,
the vitamin kid
====
Dear Senator,
I want to follow up on my previous phone call to your office about the reconfirmation of Ben Bernanke as Federal Reserve Chairman. I urge you to vote against another term for him.
Bernanke is one of the architects of our financial collapse. Any vote to reconfirm Bernanke in his post is a vote for a blind and stupid monetary policy, failure to see and warn the public of problems with our financial foundations, and more favors to the "too big to fail" institutions who have fraudulently loaned money, traded those loans for profit, and charged the taxpayer for their criminality and wild risk-taking.
Let me briefly quote from Dean Baker in Counterpunch (http://www.counterpunch.org/baker12232009.html), who says it more effectively than I could:
"If Bernanke knew what he was doing, he should have been able to see as early as 2002 that there was a housing bubble and that its collapse would throw the economy into a recession. It was also entirely predictable that the collapse could lead to a financial crisis of the type we saw, since housing was always a highly leveraged asset... as the bubble expanded, and the financial sector became ever more highly leveraged, the risks to the economy increased enormously.
"Through this all, Bernanke just looked the other way. The whole time he insisted that everything was just fine.
"To be clear, there was plenty that the Fed could have done to deflate the bubble before it grew to such dangerous proportions. First and foremost the Fed could have used its extensive research capabilities to carefully document the evidence for a housing bubble and the risks that its collapse would pose to the economy.
"It then should have used the enormous megaphone of the Fed chairman and the platform of the institution to publicize this research widely... It’s hard to believe that such warnings would have had no impact on the bubble, but it’s near criminal that the Fed never tried this route.
"The second tool that the Fed could have pursued was to crack down on the fraudulent loans that were being issued in massive numbers at the peak of the bubble... If Bernanke and his Fed colleagues did not know about these widespread abuses, it is because they deliberately avoided knowing.
"Finally, the Fed could have had a policy of interest rate hikes explicitly targeted to burst the bubble.
"This is what a responsible Fed policy would have looked like. But Ben Bernanke did not pursue a responsible Fed policy. He insisted that everything was just fine until he had to run to Congress last September, saying that if it didn’t immediately give $700 billion to the banks through the TARP program then the economy would collapse."
Bernanke, following in Allan Greenspan's footsteps, has been a disaster for the average American. He's been great for Wall Street bankers. Please find someone for Fed Chairman who saw these problems coming and might therefore be a more credible engineer of policies leading back toward an honest and stable system.
Sincerely,
the vitamin kid
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