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12201  Election Archive / 2008 Elections / Re: Was Obama Going To Win From The Beginning? on: November 27, 2008, 03:51:49 pm
I think a more interesting question might be would Obama have won if Hillary had taken it to the convention. I think this would have given McCain a commanding lead coming out of his own convention and he wouldn't have felt it necessary to engage in risky moves like suspending his campaign or bringing up Ayers.
12202  Election Archive / 2012 Elections / Re: How long will Dems' new structural advantage last? on: November 27, 2008, 03:34:39 am
A lot of the problems with our economy stem from conservatives gutting regulatory institutions, appointing cronies and morons, draining the budget with a pointless war, and focusing on pointless social debates (gay marriage, abortion, evolution) while Rome burns. Its not a question of pure ideology, its a question of competence. Conservatism might recover, but until a Republican runs the government well, it will be stained for the interim.

I agree with you that the Republicans took a beating these last two elections because they were incompetent.  And a lot of the examples you've laid out are true.  But I don't think you can blame them for the current state of the economy.  It was Chuck Hagel and a group of Republicans who foresaw insolvency in Fannie and Freddie due to the subprime industry, but it was Barney Frank and the Democrats who fought them on it, saying there would be no problem.  With that said, the Community Reinvestment Act was enrolled under Carter and strengthened under Clinton, but the Republicans had 12 years to do something about it, and they never did until it was too late.  So I think blaming Republicans for the economic mess is way off the mark.  There's enough blame to go around to plenty of people. 


I Respect you as a republican, but you are just spewing the foxnewish talking points.


What did he say that was incorrect?  Don't be afraid to be specific.

The incorrectness lies in focusing entirely on the GSE's and CRA, while ignoring the entire private sector, the entire financial sector, the entire subject of monetary policy, and of course macroeconomic imbalances. Here is some basic reading w.r.t. the GSE's and CRA:

http://www.wordyard.com/2008/10/15/meltdown-blame-game/

http://www.econbrowser.com/archives/2008/10/cra_fannie_and.html#more

http://economistsview.typepad.com/economistsview/2008/04/yet-again-it-wa.html
12203  Election Archive / 2008 U.S. Presidential General Election Polls / Re: Non-Gallup/Rasmussen tracking polls thread on: November 27, 2008, 01:43:32 am
Poor Tom Bradley! The first African- American mayor of Los Angeles, one of the city's longest-serving mayors, and who presided over its period of greatest growth. But instead of being known for that he is known for being the victim of some amorphous effect which may not even exist.
12204  Forum Community / Forum Community / Re: What are you listening to right now? on: November 27, 2008, 01:29:58 am
Blue highway- danville pike
12205  Election Archive / 2008 U.S. Presidential General Election Polls / Re: Non-Gallup/Rasmussen tracking polls thread on: November 27, 2008, 12:56:03 am
The real question here is, are 950 heads out of 1000 is statistically significant?
12206  General Politics / U.S. General Discussion / Re: Just when you thought things couldn't get more ridiculous ... on: November 27, 2008, 12:52:22 am
Yeah, let's try and keep those black kids from having responsible role models.

Who needs Harvard or achievement when you have Fif'ty?



Learn how to spell. It's fiddy. F**k. Smiley
12207  Election Archive / 2008 Elections / Re: Rasmussen: Obama's Cabinet - Favorable Ratings on: November 26, 2008, 01:37:34 pm
57% approvals for Hillary Clinton? That must be a record high for her.

Notice: Approval Ratings are only for Obama. Favorable Ratings are for everybody else. There can be slight differences here. People can like someone personally, but maybe they don't approve of the job he/she is doing.

Secretaries of State have generally very high favorable/job approval numbers, not only in the US.
I think people here do underestimate Clinton's popularity.

^^^^

She is very popular in the Democratic party but also does better than you would think among independents and some Republicans. One poll had more than 20% of Republicans thinking Obama should make her SoS. Would have won the primary (quite easily) if it were not for Obama's race... It would have been another Mondale/Hart replay. And one of the main reasons I was looking forward to her winning was seeing people like Andrew Sullivan, Frank Rich, Maureen Dowd, Chris Matthews, Keith Olbermann, and most of the online commentariat's heads explode. Not a particularly good reason, true, but there you go.

I think that's an abberation caused by the McCain-Palin campaign spending three months praising her through the roof in an effort to peel off her supporters.

She has always been popular. Look at this poll before the three months you spoke of:

12208  Election Archive / 2008 Elections / Re: Rasmussen: Obama's Cabinet - Favorable Ratings on: November 26, 2008, 09:22:16 am
57% approvals for Hillary Clinton? That must be a record high for her.

Notice: Approval Ratings are only for Obama. Favorable Ratings are for everybody else. There can be slight differences here. People can like someone personally, but maybe they don't approve of the job he/she is doing.

Secretaries of State have generally very high favorable/job approval numbers, not only in the US.
I think people here do underestimate Clinton's popularity.

^^^^

She is very popular in the Democratic party but also does better than you would think among independents and some Republicans. One poll had more than 20% of Republicans thinking Obama should make her SoS. Would have won the primary (quite easily) if it were not for Obama's race... It would have been another Mondale/Hart replay. And one of the main reasons I was looking forward to her winning was seeing people like Andrew Sullivan, Frank Rich, Maureen Dowd, Chris Matthews, Keith Olbermann, and most of the online commentariat's heads explode. Not a particularly good reason, true, but there you go.
12209  Election Archive / 2008 Elections / Re: McCain Ignoring Wright: Stupid, Self-Interest, or Noble on: November 26, 2008, 09:10:02 am
Both 1 & 3, but 3 I guess. Interestingly enough, in The Audacity of Hope, Obama mentions how Blair Hull never ran any negative ads against him and suggests it was a mistake on Hull's part ("I was lucky"). He also suggests that the media was biased in favor of him because of his exotic background and his halting speaking style, which "appealed to the literary class." Pretty telling. It's very risky to go hard negative on a candidate that the media likes, because if it doesn't work you come off looking almost as bad as the other guy would have if it had worked. The lesson from 2008 seems to be that if you're going to do it, you should go all the way.
12210  Election Archive / 2008 Elections / Re: The Anti-Obama Ad Campaign That Never Happened on: November 26, 2008, 09:05:22 am
And even despite that, the McCain campaign still ran the more interesting ad of the cycle (Hilton/Spears/Berlin ad). That one will go down as 'the ad' of 2008, much like the Kerry windsurfing ad. Runner up is probably the Dem primary '3 a.m.' ad.
12211  Other Elections - Analysis and Discussion / Congressional Elections / Re: Country Music Star Hank Williams Jr. (R-TN-lol) declares candidacy for Senat on: November 25, 2008, 10:38:47 pm
Sad

I still like his music.
12212  General Politics / Economics / Re: Citi Death Watch Thread on: November 25, 2008, 06:15:46 pm
the only way i could support a bailout of any of these companies is if there were no golden parachutes and the payscale of the company was set so the top executives only got 90k a year

but since that is not happening, what are you going to do, stand in a soup line wearing a Tshirt listing your principles?

here is great and sobering interview:

http://www.cnbc.com/id/15840232?video=937772691&play=1

My uncle is a medical doctor (a specialist).  If a patient he treated suffered extreme adverse consequences as a result of his treatment, he would be sued, or worse.

My father in law is a civil engineer, and if a building he designed collapsed, as Citibank has (except for repeatedly being propped up by the feds), he'd be sued, and probably lose his license.

So, why haven't the execs at Citi, and the other financial institutions lost their jobs?

Ever hear of of "moral hazard"? 

It should apply to executives as well as shareholders.

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

The janitors didn't cause this crisis.
12213  General Politics / U.S. General Discussion / Re: Ann Coulter's Jaw is wired shut on: November 25, 2008, 06:01:37 pm
hmm, never would've thought of Bush as the "big dick" type.

More like mammon.
12214  General Discussion / Religion & Philosophy / Re: risking your life on: November 25, 2008, 05:17:49 pm
I agree with Lewis but it's also probably easier to do if others are not dependent on you.
12215  Forum Community / Forum Community / Re: The good ole' days...were they sexist or not? on: November 25, 2008, 04:52:21 pm
Sexism is by no means banished from the present. Just look at the unhealthy obsession over both Hillary Clinton and Sarah Palin. Some things were thought/said/done about their candidacies that never would have for a man. It is women above all who are affected by culture war symbolism, metaphorically fought over.

But aside from that, there is casual sexism that often goes entirely unnoticed. I had a friend of mine say a couple months ago- a radio discussion about some women who were going to sue a PDA maker because the touch screens did not respond to long nails, he said they were saying on the radio well anyone who has long nails is a whore anyway or some such, and my friend thought that was terribly funny. I know this kid is not a sexist, and is in fact more decent than your average person, but it was a very sexist comment and he did not realize it.
12216  General Discussion / Constitution and Law / Re: Should "judicial review" be abolished? on: November 25, 2008, 03:35:47 pm
Who would perform the function of determining whether legislation is constitutional?

Who determines it in the first instance (and often the final instance) now?

Lower level federal and state courts have final say in most case volume.

Quote
More to the point, what is the record of the courts in enforcing the Constitution? The document's clearest commands pertain to its structural features, and all of them have been gutted. It is only the Constitution's hopelessly-vague provisions—particularly those of the Bill of Rights, and of Section 1 of the Fourteenth Amendment—that judges have shown any great interest in. Notably, those guarantees have been used not in any principled manner, but to veto state laws that conflict with judge-specific notions of good policy.

Consider, moreover, the Supreme Court's decisions in Bowling v. Sharpe, 347 U.S. 497 (1954), and Reynolds v. Sims, 377 U.S. 533 (1964), each of which required it to completely ignore the obvious import of related clauses! If we have a least lawless branch, it is not the judiciary, but the legislature. (The executive will always be the most lawless.)

But ultimately, the most distressing fact is this: Judicial review allows a governing majority to push an agenda of radical reform, while simultaneously posing as moderates. Barack Obama can consistently proclaim his support for the death penalty, even as he appoints judges who will do everything in their power to secure its eventual abolition—by judicial fiat, of course (at least if need be). Whatever else may be said about such a system, it is neither democracy nor constitutionalism.

Well good thing it is not democracy, for we already have two democratic branches, and we need at least one branch that is separated by at least one degree from the whims of the majority.

Now, in a strictly "positive" sense it is true that since the Court is not particularly democratic so therefore purely from the point of its own self-interest as an institution, must be careful when wielding its power in a way that has significant policy consequences, particularly when it comes to policies that are politically explosive. For this reason I doubt the Court would move toward something like abolishing the death penalty, particularly if crime rates are as high as they have been for the last 30 years and the death penalty remains popular. There are no death penalty abolitionists on the Court today, unlike 20 years ago, and there are at least 4 strong conservative votes young enough to outlast 8 years of Obama. The Court is still more inclined to shift Right than Left, but if it is smart it will stay 'conservative', at least where hot-button political issues are concerned.

As for constitutionalism, that is potentially different. Note that a radical constitutional decision, one that say... departs significantly from previous legal doctrine to reach into relatively new and untraveled areas, and which has significant implications for a large number of future cases, does not necessarily have to have significant policy implications. On the other hand, a decision which merely applies a long-held legal principle to a new case could have earth-shattering policy implications. Generally it is the latter that will receive attention outside of academia, not the former, even though the former is "constitutionally" more radical.

And also it is true that our legal system is a social institution and like all social institutions it has evolved over time. And that the Constitution is not nearly long enough nor comprehensive nor sufficiently amendable as to embody the needs of fully describing a complex legal system for a modern, legalistic society of 300 million people. So the body interpreting it has developed a lengthy body of tradition and scholarship that at times bears little resemblance to the original document, if one was to attempt to jump straight from point A to point B.

But what would you replace the current system with? What alternative system can be guaranteed free of human error and subjectivity?
12217  Presidential Elections - Analysis and Discussion / 2000 U.S. Presidential Election Results / Re: Please don't get mad at me, but why did Gore lose Tennessee? on: November 25, 2008, 02:14:12 pm
From DC Not Tennessee!!!!!!!
^^^^^^

This. Gore had been in D.C. for 8 years, and he wasn't really associated with Tennessee anymore. Even when he was a "Tennessee guy", that was the pre-1994 Tennessee as you note, and the politics of the state changed completely right after he left. Had he remained a Senator there it's not even certain he would have been re-elected. But by 2000 he was certainly a D.C. guy. Early in the season his campaign HQ was based on D.C., and he then moved it to Tennessee in what was widely praised as the correct decision but also seen as a crass political move.
12218  General Discussion / Constitution and Law / Re: Should "judicial review" be abolished? on: November 25, 2008, 12:36:06 pm
Who would perform the function of determining whether legislation is constitutional?
12219  Election Archive / 2008 Elections / Re: Did the 2008 Presidential election impact your opinion of Indiana? on: November 24, 2008, 07:14:57 pm
It's important to note that Indiana is the youngest state in the Midwest (including the upper Midwest and Rustbelt) outside of Illinois.
^^^^

65+ (12%, 13% of electorate in IN-- 16%, 16% nationwide)
2004: Bush 63-37
2008: McCain 61-37 (Obama +2)

30-44 (33%, 31% of electorate in IN-- 29%, 29% nationwide)
2004: Bush 66-33
2008: McCain 52-47 (Obama +28)

18-29 (14%, 19% of electorate in IN-- 17%, 18% nationwide)
2004: Bush 52-47
2008: Obama 63-35 (Obama +33)

Clear 'youth' surge for Obama that made the difference. And this is not just generational replacement but some sort of 'instrumental' variable of responsiveness to Obama's message. It's like all the old folks were wearing tin foils.
12220  Presidential Elections - Analysis and Discussion / 2008 U.S. Presidential Election Results / Re: The two states where raw turnout was lower... on: November 24, 2008, 03:26:47 pm
The county level results for turnout delta in WV were quite interesting as well. It seems that a lot of Democrats basically stayed home. Turnout was particularly down in the areas where McCain overperformed compared to 2004, but was up where Obama overperformed.
12221  Election Archive / 2008 Elections / Re: who is Barack Obama ideologically closer to? on: November 23, 2008, 03:14:40 pm
Obama 1996: Lenin

Obama 2008: Mussolini
12222  General Politics / U.S. General Discussion / Re: Former Regulator: Clear Fraud in Financial Crisis -- Why Isn't Anyone in Jai on: November 22, 2008, 11:50:32 am
The first part of your post is a bit odd. The one concrete case you point to is obviously not of much worth;

Why not? This is a specific instance of a specific mortgage crime. Whether it is of much worth depends on why you wanted the information in the first place.

Quote
I wanted to know who you wished to see prosecuted, and for what actions.

I'd like to see the following people prosecuted:

Angelo Mozilo, who realized $471 million during the five-year period as he piloted Countrywide Financial Corp. into a leading subprime lender. Amid huge losses, Countrywide was sold earlier this year to Bank of America Corp. Mr. Mozilo defended his pay before Congress earlier this year, saying his compensation was tied to performance and he had built up equity over decades as a founder. Possible crime(s): Securities fraud.

R. Chad Dreier, 61, chairman and chief executive of Ryland Group Inc., a Calabasas, Calif., home builder, made $181 million over the five-year period. Specializing in mid-range homes, Ryland did well in the boom, entering into hot markets, such as Las Vegas and Ft. Myers, Fla. Most of its buyers financed homes through Ryland's in-house mortgage unit, some through controversial interest-only mortgages.

Mr. Dreier's bonuses, many tied to short-term profits, totaled $31.2 million in 2005 and 2006 alone. Ryland paid him another $20.5 million over the five years to cover some of his tax bills. He made another $85 million from stock sales, most of them regularly scheduled. Possible crime(s): Conspiracy, mortgage fraud

Daniel Meyers, First Marblehead

Wall Street once had a voracious appetite for student-loan debt. Ten insiders at First Marblehead Corp. seized the opening, receiving a total of about $660 million, mostly through stock sales over five years.

Based in Boston, First Marblehead specializes in "private student loans." Students take out the loans if they've exhausted the cheaper government-backed variety. As with subprime mortgages, those with poor credit histories must pay higher interest rates.

First Marblehead helped big banks, such as Bank of America and J.P. Morgan Chase & Co., put together student-loan programs. First Marblehead earned rich fees assembling and servicing packages of the debt sold to investors.

Chief Executive Daniel Meyers, a 46-year-old former arbitrage and derivatives trader, received almost $96 million in cash compensation and proceeds from stock sales over five years. Lee Jacobson, a First Marblehead spokesman, notes that Mr. Meyers co-founded the company in 1991 and didn't sell any shares until First Marblehead's October 2003 initial public offering. Possible crime(s): conspiracy to abet false statements to financial institutions

Leslie Alexander, the 65-year-old owner of the Houston Rockets and until recently a First Marblehead director, cashed out $288 million in stock over the five-year period. Possible crime: conspiracy to abet false statements to financial institutions

Robert K. Cole, Edward Gotschall and Brad Morrice, three mortgage industry veterans, founded New Century Financial Corp. in 1995. By the peak of the boom, it was the nation's second-largest subprime lender.

The Irvine, Calif.-based company promoted mortgages that customers could apply for by merely stating their income with no documentation.

Over four years, the three executives received cash compensation and stock proceeds totaling $74 million, including estimates of their 2006 pay cited in a report by a court-appointed investigator after the company filed for bankruptcy protection. Mr. Cole, who was CEO for some of the period, lives in a 9,200-square-foot oceanfront home in Laguna Beach, Calif., that has a tax value of $30 million.

New Century Financial executives have been known as generous philanthropists in California. Mr. Gotschall's foundation gave $3 million in 2005 to a local hospital, which is naming a trauma center after his family.

In 2007, New Century filed for bankruptcy protection. New Century has said its accounting is under investigation by the Securities and Exchange Commission and the Justice Department. Possible crimes: Securities fraud, mortgage fraud, improper accounting

Michael Gooch made a fortune from the booming trade in credit-default swaps and other complex financial instruments now being blamed for fueling the financial crisis.

Mr. Gooch, 50, is chief executive of GFI Group Inc., a leading broker of credit-default swaps. An immigrant from England, Mr. Gooch founded New York-based GFI two decades ago. It went public in 2005, and its stock nearly quintupled by late 2007.

Credit-default swaps are private contracts, similar to insurance, that pay investors when a bond or company defaults. While boosters say swaps are a valuable hedging tool, critics call them a toxic invention that fanned the flames of the mortgage meltdown. With the swaps market contracting and Congress calling for regulation, GFI's stock price has tumbled, recently closing nearly 90% below its high of last November.

Mr. Gooch, through a holding company, sold about $77 million in stock, most of it in May 2006. He says the aim was to diversify his personal investments. "In May 2006, nobody could have predicted the credit bust," he says. He also notes that his holding company still owns 43% of GFI's stock, and that trading credit derivatives is only a part of GFI's business. Possible crimes: conspiracy, securities fraud

Quote
I took it that you thought something "big" was at play

I think there's no question something big is at play. Very big.

Quote
That said, I appreciate your elaboration on the rest. Of course, I still don't see any real evidence of wrongdoing; that would require actual evidence of people's cognitive states.

Which is why there needs to be investigations. Of course you're not going to find anything if you don't look. There certainly is the appearance of impropriety across the industry.

Quote
The slippery slope.

I don't think they want to make the situation any worse yet.

Trillions of dollars have been basically stolen from the taxpayer. That's money out of our pockets and into the bankers'. How do you expect any democracy to work if a small minority of individuals can gamble, effectively, a huge chunk of the nation's GDP and then hold its purse hostage in lieu of systemic economic collapse when their pyramid scheme inevitably collapses?
12223  General Politics / U.S. General Discussion / Re: Former Regulator: Clear Fraud in Financial Crisis -- Why Isn't Anyone in Jai on: November 21, 2008, 07:54:02 pm
I was looking for specific practices,

A specific practice:

Occupancy fraud: This occurs where the borrower wishes to obtain a mortgage to acquire an investment property, but states on the loan application that the borrower will occupy the property as the primary residence or as a second home. If undetected, the borrower typically obtains a lower interest rate than was warranted. Because lenders typically charge a higher interest rate for non-owner-occupied properties, which historically have higher delinqency rates, the lender receives insufficient return on capital and is over-exposed to loss relative to what was expected in the transaction. It is considered fraud because the borrower has materially misprepresented the risk to the lender in order to obtain more favorable loan terms.

A specific instance of this practice:

Scott William Hilgers, 34, and Todd Jeremy Rice, 34, both of Helena, Montana, were sentenced in connection with their guilty pleas to conspiracy to scheme to defraud mortgage companies/wire fraud.  Hilgers was sentenced to a term of 60 months in prison, a special assessment of $100, restitution in the amount of $1,539, and 5 years supervised release.  Rice was sentenced to a term of 12 months in prison, a special assessment of $100, restitution in the amount of $1,539, a $15,000 fine, and 5 years supervised release...

A borrower who is going to use the purchased property for his own personal residence can, under certain circumstances, qualify for 100% financing.  For the purchase of the four aforementioned properties, Rice represented on Fannie Mae Forms 1003, Occupancy Statements and Loan Applications, that each residence would be his primary home. ...

http://www.mortgagefraudblog.com/index.php/weblog/comments/3412/

Quote
and for the laws that made them illegal.

This is covered under Title 18, United States Code, Section 1014:

"The violation of making a false statement to a financial institution is also a commonly used criminal law used to prosecute people for making misrepresentations to fact to a bank. The crime of making a false statement is often utilized when federal prosecutors are investigating a person for bank fraud or violations concerning a financial institution.  Under Title 18, United States Code, Section 1014, it is a federal crime to make a false statement to a financial institution. 18 U.S. C. §1014 reads as follows (in summary):


False Statements to a Financial Institution –

Whoever knowingly

1) Makes a false statement, or overvalues any property

2) For the purpose of influencing an anyway

3) The action of a financial institution

shall be fined not more than $1,000,000 or imprisoned for more than 30 years, or both.

 The link is just a general discussion of mortgage fraud."

http://www.teakelllaw.com/CM/Custom/bank-fraud-false-financial-statements.html

http://www.law.cornell.edu/uscode/uscode18/usc_sec_18_00001014----000-.html

Quote
I don't know what being an "executive[] who sold off at the top and made millions" has to do with fraud.

Obviously, executives have inside information. They could have misrepresented the status of their companies to outsiders, instead of attempting to run the company for long term success, in hopes of driving up the price of the stock, so that they could then cash out before the inevitable decline came. They could also have been the decline coming but chose not to prepare their company adequately; but instead chose to sell the company to another institution while misrepresenting its value.

Quote
Perhaps there's an odd statutory definition?

Here is some information on laws regarding securities fraud
http://www.endfraud.com/whatisfraud.html

Here is an example of an indictment for securities fraud, among others-
http://www.usdoj.gov/usao/nye/pr/2008/2008jun19.html

Quote
The last two sound like they might be getting at something, but on their face don't mean a whole lot.

Credit rating agencies played a huge role in the financial crisis. Had they adequately evaluated the risk or said honestly "we can't rate this", a lot of the failed CDO market would not have occurred. Equally, one would have to be naive to believe that those that were actually structuring the CDOs themselves have no idea of the risks they were taking on behalf of others.

Quote
“Is this simply a case that they got the assumptions wrong?” Rep. Tom Davis (R-Va.) asked a panel of experts on credit-rating agencies at a House Oversight and Government Reform Committee hearing. “Or is there more to the story they’re not sharing with us?”

The panel, and most lawmakers on the committee, seem to agree that the failures of the big three credit-rating agencies — Moody’s, Standard & Poor and Fitch– is about more than just “gross incompetency,” as Rep. Mark Souder (R-Ind.) put it.

Frank Raiter, managing director and head, from 1995-2005, of the Standard and Poor unit that rated residential mortgage-backed securities, said that the credit agency didn’t understand credit default swaps when he was there. “Intuitively, if you can’t explain what these things are to us [people whose job is to evaluate mortgage securities], it was real curious why the product was enjoying financial success.”

Yet S&P, which controls 40 percent of the credit-rating market, routinely gave the swaps AAA ratings. Internal S&P and Moody documents reveal that the companies knew their rating systems were broken but their continued business depended on rating these swaps. One Moody’s memo says that, ideally, investors would come to Moody’s based on “ratings quality” and “service.” But they were actually looking for a AAA rating. And if Moody’s couldn’t deliver, the investor would go to S&P or Fitch.

Sean Egan, managing director of Egan Jones Rating Co., said CRA executives felt compelled to capitalize on the brave new world of swaps. “It’s not incompetence,” he told the committee. “If you are the manager of this public company, it’s your job to increase revenues and profitability.”
12224  General Politics / U.S. General Discussion / Re: Former Regulator: Clear Fraud in Financial Crisis -- Why Isn't Anyone in Jai on: November 21, 2008, 06:38:35 pm
What does the alleged "fraud" consist of, and what provisions of federal law are at issue?

Starting with the originator side only...
http://en.wikipedia.org/wiki/Mortgage_fraud
That is just the tip of the iceberg. The bigger fish are executives who sold off at the top and made millions, credit rating agencies who changed their standards to attract business, and CDO packagers who misrepresented the risk to investors.
12225  Election Archive / 2008 Elections / Re: Treasury Secretary: Tim Geithner on: November 21, 2008, 05:39:18 pm
Pretty much expected. Clever timing on the announcement though. Now the endangered banks have 60-70 hours to figure out a game plan for next week.

huh?

As president of the New York Federal Reserve Bank since Oct 2003, it was Tim Geithner's job to regulate the banks, and we can see how that went.  Then, in mid Sept 2008, it was HIS decision to let Lehman fail even though it was too big to fail without bringing down the whole banking system.

And now this guy is going to be Treasury Secretary?!

While Lehman Brothers was the first bank to fail, it was not a catalyst for other banks to fail. And, in retrospect, letting it fail was the correct decision.

Letting Lehman fail over the weekend of Sep13-14th was the single biggest mistake of this whole sad affair.  There were trillions of dollars of credit default swaps exposure tied to Lehman that were held by other institutions, and Lehman's failure guaranteed a lot of other firms would go belly up.

Tim Geithner's decision over that weekend literally cost us Trillions of dollars.

How you call that "the right decision" is beyond me.  This guy is incompetent and is the very last member of the current Bush/Fed group that you would want as Treasury Secretary.  In fact, Obama should NOT appoint any current member of the Bush/Fed band of incompetents to any capacity within the new administration.

Correct. There are different cases to be made about whether Lehman's failure was good or bad in the long run. The "good" side generally relies on the notion that the asset deflation underlying our problems was so bad that it was better for the pain to come earlier, so that policymakers could realize how serious the problem was-- if it had not failed all at once, the pain would have come slowly and gradually. In this line a dramatic failure "woke up" the government and the public to take drastic action.

However, I tend to agree with this analysis:
Quote
While there’s obviously something appealing about the logic of tearing the Band-Aid off in one fell swoop rather than slowly peeling it back, in analyzing the operation of financial markets it’s foolish to deny the reality of panic and the bad decisions that result from it. I don’t mean simply that people sometimes act irrationally. I mean that creating environments in which panic flourishes—like the environment that followed the collapse of Lehman—and trust vanishes leads to decisions and choices that are different, and significantly worse, than those that would have been made in calmer times, even if those times turned out to be bad ones. Markets are great at incorporating information quickly. But they are not great at doing that in the absence of trust and in the presence of tremendous fear.

And this:
Quote
“For the equilibrium of the world financial system, this was a genuine error,” Christine Lagarde, France’s finance minister, said recently. Frederic Oudea, chief executive of Société Générale, one of France’s biggest banks, called the failure of Lehman “a trigger” for events leading to the global crash. Willem Sels, a credit strategist with Dresdner Kleinwort, said that “it is the clear that when Lehman defaulted, that is the date your money markets freaked out. It is difficult to not find a causal relationship.”

To the extent that Geithner was involved in the decision to allow Lehman to fail, the subsequent attempts to take the blame off the Treasury by claiming that (1) they tried to save Lehman, but couldn't get a private buyer even with government support (2) they would have saved Lehman, but it was illegal, and the poorly thought out original TARP proposal to buy banks' bad assets instead of direct capital infusions into banks, he was involved in a large number of mistakes.

Sometimes to fix something you need to  bring in someone with an outside perspective. So why Geithner? One reason may be that Obama is in way over his head, and has no choice but to listen to the "smart people" e.g. Summers, Paulson, Bernake, etc. who are all telling him Geithner. If you don't know what you're doing, go with the safe choice.
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