Sunday
Mar222009
Bank Bailouts: Nobel Laureate Joseph Stiglitz Argues For The Creation Of New Banks (Video And Links 3-22-09)
Twice a winner of the Nobel Prize, Columbia professor Dr. Joseph Stiglitz appeared recently on CNBC's Power Lunch. I will attempt to transcribe some of his comments later but for now just watch. His thesis in this interview is that we should create new banks with taxpayer capital and NOT prop up the zombies that are full of toxic assets.
Stiglitz is a site hero for many reasons but his famous line that " The Obama Administration's bad bank proposal is Cash For Trash" explains nicely why we're very fond of his thinking.
Related:
Stiglitz Comedy Interview on The Colbert Report (video)
Stiglitz at Davos on 'Bank Management Stupidty' (video)
Stiglitz Op-ed On How To Fix The Bank Bailouts
Mar 22, 2009 at 1:49 PM
Reader Comments (12)
The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution
MATT TAIBBI
So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print
http://www.nytimes.com/2009/03/22/opinion/22rich.html?ref=opinion
The virtues of public anger and the need for more
With lightning speed and lockstep unanimity, opinion-making elites jointly embraced and are now delivering the same message about the public rage triggered this week by the AIG bonus scandal: This scandal is insignificant. It's just a distraction. And, most important of all, public anger is unhelpful and must be contained or, failing that, ignored.
This anti-anger consensus among our political elites is exactly wrong. The public rage we're finally seeing is long, long overdue, and appears to be the only force with both the ability and will to impose meaningful checks on continued kleptocratic pillaging and deep-seated corruption in virtually every branch of our establishment institutions. The worst possible thing that could happen now is for this collective rage to subside and for the public to return to its long-standing state of blissful ignorance over what the establishment is actually doing.
http://www.salon.com/opinion/greenwald/2009/03/21/anger/index.html
March 19 (Bloomberg) -- The banks demanded that the accountants give them leeway in how they report losses to investors. The accountants responded by giving away their souls.
This week, the Financial Accounting Standards Board unveiled what may be the dumbest, most bankrupt proposal in its 36-year history. If it stands, the FASB ought to change its name to the Fraudulent Accounting Standards Board. It’s that bad.
Here’s what the board is floating. Starting this quarter, U.S. companies would be allowed to report net-income figures that ignore severe, long-term price declines in securities they own. Not just debt securities, mind you, but even common stocks and other equities, too.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aGdxdLHUVGrs
http://www.nakedcapitalism.com/2009/03/investor-on-private-public-partnership.html
Despair over financial policy
The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.
The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
http://krugman.blogs.nytimes.com/2009/03/21/despair-over-financial-policy/
More on the bank plan
Why was I so quick to condemn the Geithner plan? Because it’s not new; it’s just another version of an idea that keeps coming up and keeps being refuted. It’s basically a thinly disguised version of the same plan Henry Paulson announced way back in September. To understand the issue, let me offer some background.
Start with the question: how do banks fail? A bank, broadly defined, is any institution that borrows short and lends long. Like any leveraged investor, a bank can fail if it has made bad investments — if the value of its assets falls below the value of its liabilities, bye bye bank.
http://krugman.blogs.nytimes.com/2009/03/21/more-on-the-bank-plan/
Delong should get a new career. I really, really, really, don't like Delong's bullshit and I read his crap everyday.
http://krugman.blogs.nytimes.com/2009/03/22/brad-delongs-defense-of-geithner/
http://www.eschatonblog.com/2009/03/uh-brad.html
http://delong.typepad.com/sdj/2009/03/the-geithner-plan-faq.html
These fucking assholes have a sense of entitlement that is beyond imagination.
You work for a fucked up firm that is on the taxpayer dole.
Deal with it or quit.
You will get no more money from us.
catch a bankster by the toe
when he hollers let him go!
eeny meeny miney moe