Former chief economist for the IMF, Simon Johnson, appeared recently on C-Span's Washington Journal to discuss his opus on Wall Street's ownership of the political class, 'The Quiet Coup' as published in the Atlantic. C-Span video clips after the jump.
After the jump we have the speech, the transcript, video of the Q&A, and a CNBC clip of reaction from Liesman and Santelli.
We are big fans of Chris Whalen. He has been repeatedly correct on the banks since early 2008 and he supports taxpayers vs. bondholders in the bank loss debate. Whalen just finished a short appearance on CNBC with Larry Kudlow and fellow banking analyst Dick Bove. The discussion was decent though it was tough on Whalen as the only realist facing the formidable duo of Goldy and Polly.
Watch this outstanding clip to witness a Geithner emasculation at the hands of Whalen.
CNBC Video of Whalen, Kudlow and Bove after the jump.
See also:
Whalen Statement to the Senate on Proposed Financial Market Regulation
bank bailout news, bailout, banking recovery
Former Goldman Sachs managing director Neel Kashkari has remained as administrative head of the TARP during the Obama transition, while a replacement was being located. It appears this morning that his successor has been found. Former Chairman of TIAA-CREF and more recently, fill-in CEO of Fannie Mae (since October of 2008), Herb Allison is President Obama's choice as the new bank bailout administrator for TARP.
Officially, Allison will be nominated as the assistant secretary for the Office of Financial Stability where he will report to Treasury Secretary Tim Geithner. Prior to joining TIAA-CREF, Allison was a longtime executive at Merrill Lynch where he is perhaps most famous for terminating the Merrill analyst who warned about the dangers at Enron. Ouch.
After the jump, we have a short youtube clip of an exchange between Kashkari and Congressman Brad Sherman of California. The issue was AIG bonus payments and it is a good indication of the hornet's nest into which Allison will soon be sticking his ginormous head.
Most of you have seen this clip already, but I want it as part of the bailout record so I am posting it belatedly. I took 4 days away from the site to refresh and you may now expect the content to return to normal.
Larry Summers is appropriately interrupted by CodePink demonstrators during a talk at the National Economic Club.
Give GW some credit; he got one right. Appointing a prosecutor to a regulatory oversight function is usually going to mean a lot of audits. Egggsssaaaactly. Neil Barofsky is the Treasury's Special Inspector General of TARP appointed by George W. Bush to serve several watchdog functions. Barofsky works in concert with Elizabeth Warren but operates independently of her congressionally appointed commission.
I'm still endeavoring to determine what kind of actual power Barofsky wields with his charter at Treasury. (He works in the same building as Geithner. The enemy within.) Odds say he is ultimately toothless not unlike Elizabeth Warren and the panel she chairs, but it does not preclude him from making some noise occasionally. And he did today.
“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.
Elizabeth Warren, head of the Congressional Oversight Panel for TARP, had her moment in the sun today and took the opportunity to question the Treasury's approach (PPIP) to the banking crisis. Her report recommended receivership for the failed banks and liquidation of their assets. Let's not kid; she is talking about Citigroup and Bank of America.
In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”
The official report pdf and video are after the jump.
Thought this was interesting. A glimpse into the not-too-distant future for urban mobility. Not bad for a prototype. 35 mph top speed and a 35 mile range between juice and a tag of $5,000.
Yes, we have a twitter account. We created it for the Daily Bail to broadcast our stories. Basically, I agree with NBC's Brian Williams that none of our lives are interesting enough for Twitter. And those of you who provide personal updates need to be aware that the rest of us make fun of you.
Besides, it's about Flutter now. Funny Twitter satire after the jump.
The Congressional Budget Office (CBO) released mid-year deficit figures earlier this week. The numbers are shocking but not surprising given the estimates. We are well on our way to a $2 trillion deficit for this year. I suspect it will be closer to $2.5 trillion as I wrote 6 weeks ago. Perhaps the most interesting trend discernible from the CBO release was the dramatic slowdown in tax receipts. Down 15% from a year ago is somewhat unsettling and represents the largest year-over-year drop in more than 30 years.
After the jump, we have the detailed numbers from Reuters and another debt cartoon.
See also:
Bailout The United States Treasury
Land Of The Free And Home Of The Broke: The United States Of Insolvency
As you know, virtually all of the actual funding for Tim Geithner's $1 trillion bank bailout program (PPIP) comes from Treasury debt backed by the FDIC. It's a sneaky alternative to Obama and Geithner having to request the funds formally from Congress, which is not in the bailout mood at present.
The problem for Sheila and the FDIC is that means approximately $850 billion might need to be guaranteed. (It's actually likely to be much smaller because very few firms seem to be willing to play ball considering the future political risks of profits at the expense of taxpayers.)
Turns out there is a legal impediment that prevents the FDIC from making any obligations of any sort greater than $30 billion. So how do you get around such a law. Simple in Sheila's case. Have your lawyers make the determination that your guarantees of Treasury debt are actually guarantees of contingent liabilities. Then determine that these contingent liabilities have an expected loss of (hold for effect) ZERO.
My reaction: Sheila Bair is on acid and so are her lawyers. They are apparently looking for Ken Kesey's magic bus and band of Merry Pranksters.
We have the complete story from Andrew Sorkin after the jump.
We knew this was coming so it's no surprise, but the painful reality is good for another kick in the arse to taxpayers. The information was leaked by Treasury to the WSJ tonight and will not be made official for a few days. No skinny on who gets rescued and the cost of the bailout as of yet, but we can assume it's for the usual suspects. You know, the idiots who offerred GUARANTEED variable annuities. Hey, what could go wrong with that plan.
In an explosive piece by Glenn Greenwald published at Salon, the best-selling author and investigative journalist exposes Wall Street's ownership of our federal government.
Apr 14, 2009 at 6:05 PM