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Did the U.S. 2005 Bankruptcy Reform cause the world financial collapse?

by NBBooks Tue Dec 2nd, 2008 at 02:29:16 AM EST

Did the 2005 Bankruptcy "Reform" cause the world financial collapse?

Federal Reserve Bank of New York Staff Report No. 358 - Seismic Effects of the Bankruptcy Reform.

Remember the Bankruptcy Abuse [sic] Reform act of 2005? Yeah, the one that the credit card companies and banks got passed by buying the very best Congress money can buy. Turns out, according to the New York Fed's research, that since people going bankrupt after the BAR found it more difficult to stop paying their unsecured debts - i.e. credit cards - they were forced to stop paying their mortgages instead. Over 120,000 of them a year, according to the NY Fed researchers.

Read more... (8 comments, 528 words in story)

The crucial test - who Obama picks for Treasury Secretary

by NBBooks Thu Nov 6th, 2008 at 12:49:09 PM EST

Who Obama picks as a Treasury Secretary is going to tell us just about all we need to know about how far Obama is willing to break with the unfortunately named "neo-liberal" economic policies of free markets and free trade that have dominated U.S. economic policy since Ronald Reagan - even under Bill Clinton. At this moment, there is a diary on the recommended list on DailyKos, Summers' call for poisoning Developing World?, that quickly turned into a discussion of who might be an acceptable Treasury Secretary. Unfortunately, scanning through the DailyKos thread, it appears not too many people understand that the most important fight Obama can undertake -- with the financial system in ruins and the real economy sinking into depression (shadowstats.com reportedly now calculates the real U.S. unemployment to be approaching fifteen percent, with GDP shrinking at over two percent on an annual basis) - is to replace the reigning paradigm of "neo-liberal" economic policies with something more akin to Europe's social democratic policies.

Read more... (29 comments, 1161 words in story)

Pissing away $700 billion

by NBBooks Thu Oct 30th, 2008 at 01:29:48 PM EST

Also posted at DailyKos

Half of the bank bailout is being paid out as dividends ! These bastards are shameless!

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

And in case you missed it two weeks ago: one of every ten dollars of the "bailout" is being used to pay bonuses! That's right - the bastards are getting $70 billion in bonuses for destroying the financial system and wrecking the economy.

Read more... (4 comments, 941 words in story)

What Might Real Financial Reform Look Like?

by NBBooks Sat Oct 18th, 2008 at 10:27:25 AM EST

In What Might Real Financial Reform Look Like?, The Agonist editor and former Morgan Stanley banker Sean-Paul Kelley has outlined ten critical financial reforms that, amazingly, neither Obama nor McCain -- nor anyone in the mainstream media for that matter -- are even discussing.

I'm tempted to just copy and paste the entire article, but of course I can't do that. So, I'll urge you to follow the link. But here's the ten-point reform plan, in brief:

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US Financial Crisis: The Constitutional Moment Arrives

by NBBooks Sat Sep 20th, 2008 at 03:11:17 PM EST

Crossposted on DailyKos at http://www.dailykos.com/story/2008/9/20/143821/377

In an extraordinarily important article today The Constitutional Moment Arrives, Stirling Newberry observes that

The key question is this: the American tax payers just bought the banking system. We are going to pay, with interest, upwards of three trillion dollars for it. A relative bargain actually. The question is what we are going to do with it now that we own it.

Read more... (26 comments, 1013 words in story)

Let Wall Street Burn

by NBBooks Wed Sep 17th, 2008 at 07:18:31 PM EST

Cross posted to DailyKos at http://www.dailykos.com/story/2008/9/17/174555/389/60/602022

At the cost of your future, the U.S. financial system is being saved. For a half century, the United States has been unable to find a hundred billion or so a year to fund general healthcare, but now that financial powerhouses like Bear Stearns, Freddie Mac, Fannie Mae, and AIG are crumbling, the U.S. Treasury can magically procure trillions of dollars in promises without so much as a nit of resistance in either chamber of the U.S. Congress.

Your future earnings have now been committed to saving the asses of the millionaire and billionaires who postured as geniuses as they managed and oversaw the financial follies of the past 28 years. The future potential of your country - and the future potential of your children and grandchildren, is being wasted, now, to save a financial system that subtracts real value from the economy; a financial system that enriches the few by impoverishing the many.

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Next Phase of Credit Crisis Begins to Emerge

by NBBooks Sun Jun 15th, 2008 at 12:01:15 AM EST

Over at The Agonist, Numerian, who is one of the keener observers of the financial markets, and, I suspect, has a bit too much vested interest in the financial markets his- or her-self, has an excellent summary of the rapidly approaching next phase of the credit market crunch and its impact on the economy:
Don't Be Fooled by Wall Street's Happy Talk

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Can the U.S. achieve 20% wind energy by 2030?

by NBBooks Wed May 14th, 2008 at 05:04:23 PM EST

On Monday, May 12, the U.S. Department of Energy released its long-awaited report on wind energy 20 Percent Wind Energy by 2030. Fortunately, two weeks ago the American Wind Energy Association (AWEA) accepted my media credentials from epluribusmedia.com, allowing me to attend a special seminar and workshop in Des Moines, Iowa, on the supply chain problems and opportunities of an incipient boom in wind generated electricity.

Wind has the potential to meet most if not all of U.S. electricity needs within the next two to three decade, if - IF - we can surmount significant obstacles caused by the "post-industrial" neglect and withering of the U.S. manufacturing base. Contrary to the unrealistic beliefs of many who yearn for clean energy, heavy industry is absolutely essential to the development of wind powered electricity generation. For example, 114 tons of steel are required for every megawatt of wind energy installed. In fact, the wind turbines now being developed and brought on line are mammoth industrial projects, that dwarf a Boeing 747 passenger jet in size. But only half the content of a wind turbine can now be made in the U.S. We are at the dawn of a new age of clean, renewable energy, but if we are to realize the full potential of this new era, there is no getting around the need to rebuild U.S. heavy industry and manufacturing.

Read more... (16 comments, 5746 words in story)

Euthanize Wall Street to save the economy

by NBBooks Fri Apr 18th, 2008 at 04:46:38 AM EST

First, please note this is a work in progress. I just tossed part of this into this diary on Daily Kos: Icelandic bank failures could sink us because I want to get the ideas out there and force people to start thinking outside the box. There's much I want to add (including at least a link to Chris Cook's Peak Credit) but I am preparing to leave in a few days for a three week trip, and I'm not sure I'll be able to finish the diary my complete satisfaction. And, generally, I find the best minds here and at The Agonist, so I wanted to get your feedback and see if this is far too radical. Of course, politically, at this point in time it is. I am not looking for an assessment of what is politically feasible. I am operating on the assumption the various  financial crises are going to wreck such havoc in the real economies of the world, including the U.S., that we are looking at a period pregnant with great changes. This is, in fact, the type of tumultuous period that Naomi Klein has identified in her book Shock Doctrine that has been used to implement radical free market fundamentalism.

Promoted by afew

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Economic Collapse Watch: Riots in Haiti over Food Prices

by NBBooks Thu Apr 17th, 2008 at 07:50:35 AM EST

In The Crash is past. Comes now Inflation, on March 2 (it seems so long ago), I warned that the official response to the financial crises so far was to save Wall Street and the financial system at all costs; that inflation was being unleashed; and this would mean a severe decline in our standard of living over the next few years. I alluded to a rise in food prices being one immediate cause of pain, and intimated that social unrest might be the result.

It's happening much faster than I thought possible.

From the BBC:

Hungry mob attacks Haiti palace
Crowds of demonstrators in Haiti have tried to storm the presidential palace in the capital Port-au-Prince as protests continue over food prices.

I learned of this just a few minutes ago, from this diary from someone who has a friend in the U.S. Embassy to Haiti: Haiti Riots - StateDept trapped. DAILY KOS FIRST

Promoted by Migeru

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Excellent MUST LISTEN interview with former CFTC regulator

by NBBooks Sun Apr 6th, 2008 at 11:40:08 AM EST

Michael Greenberger, former Director of Trading and Markets at the United States Commodity Futures Trading Commission (CFTC), was interviewed by NPR's Terry Gross this past Thursday, April 3. He explained that the sub-prime mortgage crisis was caused by financial derivatives, and that there are more crises coming, because there are many more financial derivatives out there. He notes that the one act of deregulation most to blame - even more to blame than the 1999 repeal of the Glass-Steagal Act (the law passed in the First Great Depression to separate commercial banking from investment banking)- is the Commodities Futures Modernization Act of 2000, introduced on the sly by then Senator Phil Gramm (R-TX), who is now the top economic advisor to John McCain:

And Greenberger warns that we are at the beginning of the financial crises, not the end.

When people tell you this is the worst economic crisis since World War Two, that's a way of not saying the panicky thing, which is, we may be heading for a depression. And if a Bear Stearns collapses, you're going back to 1929.

The [stock] market went up last week because there is the belief that Bear Stearns is the end. But there are some of us who are very worried that Bear Stearns is the beginning and not the end, and if we needed $30 billion to bail out Bear Stearns . . . .

You really, really, really, really need to listen to this interview, and get other people to listen to it, also. It is almost 40 minutes long, but worth every info-packed, thought-provoking second.

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USA 1860: What a brokered convention looks like

by NBBooks Mon Mar 17th, 2008 at 12:00:03 AM EST

Laying the Groundwork for the Ultimate Backroom Deal
The 1854 Kansas-Nebraska Act, allowing territories and new states to decide for themselves whether to be free or slave, began the final phase of disintegration of the old political order, and the Whig and Democratic Parties of the time. In 1856, the new-fangled Republican Party fielded its first candidate for President of the United States. A little known fact is that one of the people discussed at the 1856 Republican convention for the vice-presidential position was a gangly, rather ugly prairie lawyer from Illinois. You’all can easily guess his name.

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The Crash is past. Comes now Inflation.

by NBBooks Mon Mar 3rd, 2008 at 02:33:30 AM EST

Seems to me a lot of people don't realize the worst financial crash since 1929 has already occurred. I suppose they are waiting for a big explosive fireball and a lot of noise like in a Hollywood movie, or for the nightly news on their wide-screen televisions to show pictures of desperate bankers and brokers splattered on the sidewalks in front of 60-story temples of finance.

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Geneticist Craig Venter says fuel from CO2 only 18 months away

by NBBooks Thu Feb 28th, 2008 at 07:06:44 PM EST

At the Technology, Entertainment and Design conference in Monterey, California today, pioneer geneticist Craig Venter revealed a "fourth-generation fuel" project he believes is about 18 months away from perfecting a bio-engineered life form that will produce fuel by feeding on carbon dioxide, a common waste product responsible for much of global warming.

"We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Venter told an audience that included Al Gore and Google co-founder Larry Page. "We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock."

Read more... (12 comments, 308 words in story)

Is America Ready for Revolution?

by NBBooks Thu Feb 28th, 2008 at 07:00:05 AM EST

Sara Robinson posted an excellent article on Campaign for America's Future a few days ago, outlining the seven preconditions for violent revolution discussed by Caltech sociologist James C. Davies in a 1962 article in the American Sociological Review. Davies's work was largely based on the seven "tentative uniformities" identified by another scholar, Crane Brinton, who had studied and correlated the origins of the Puritan, American, French, and Russian revolutions.

"...it struck me," Robinson writes,  "that the same seven stars Brinton named are now precisely lined up at midheaven over America in 2008."

Diary rescue by Migeru

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Risk, Uncertainty, and the Real Economy

by NBBooks Wed Feb 20th, 2008 at 04:16:44 AM EST

Last week, the financial news was full of stories on credit default swaps, which appear to be the next shoe ready to drop in the financial crises millipede that has engulfed the globe since the IKB Deutsche Industriebank of Germany announced on July 30, 2007 that it was marking down the value of some of its financial derivatives based on U.S. sub-prime mortgages. From the comments posted in various blog discussions,  of credit default swaps, it is very clear that most people are very, very confused. More troubling, most people are unable - or unwilling - to recognize that the world as they know it is now crashing down about their ears.

Diary rescue by Migeru

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Chalmers Johnson book review tackles the Myth of Free Trade

by NBBooks Fri Feb 8th, 2008 at 04:41:30 PM EST

Chalmers Johnson has an lengthy but very informative review of South Korean economist Ha-Joon Chang's Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism at truthdig.org
Publisher: Bloomsbury USA
Pub. Date: December 2007
ISBN-13: 9781596913998

Read more... (3 comments, 539 words in story)

A Trojan Horse brought to you by DailyKos UPDATED

by NBBooks Mon Feb 4th, 2008 at 01:58:55 AM EST

(Update note: I added more material to the discussion of what happened in the 1970s when Volcker was Fed chairman).

For the past few years, DailyKos is reportedly the most popularly read progressive political blog in the world. And on DailyKos, one "BondDad" has established a huge following for his posts on financial and economic matters, usually full of vivid graphs and concise explanations of events in the financial markets. Up until this past summer or autumn, "BondDad" presented his analysis from a perspective I fully agreed with: the U.S. economy was much weaker than it appeared to be because wages and earnings for the working and middle classes have stagnated since the 1970s, and a monstrous bubble of debt has been created to allow Americans to keep consuming despite their declining incomes.

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From inside the crater - Let's Keep Digging

by NBBooks Wed Jan 30th, 2008 at 10:09:10 AM EST

One of the few useful things I learned in my 9 to 5 job years ago was the business adage, "If you find yourself in a hole, the first thing you do is stop digging." Well, what was decided last week at the World Economic Summit in Davos about the systemic solvency crises unleashed by the debacle in U.S. subprime mortgages has been made rather clear today: we're going to keep on digging. British Prime Minister Gordon Brown announced that he intends to give Mervyn King a second five-year term as governor of the Bank of England, the central bank of the United Kingdom. King's current term ends in July.

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Liu: No Choice Now But Depression or Hyperinflation

by NBBooks Fri Jan 25th, 2008 at 07:07:40 PM EST

In Asia Times Online, the inestimable Henry C. K. Liu lays out the terrifying reality of where the world financial crisis is headed. In a lengthy article entitled, The Road To Hyperinflation, Fed Helpless In Its Own Crisis, Liu responds to the former U.S. Federal Reserve chairman Alan Greenspan's defensive but arrogant article in the December 12, 2007 edition of the Wall Street Journal, in which Greenspan blamed the current world financial crises on China and the developing world for "saving too much." Liu harshly condemns Greenspan, explains how Greenspan engineered the mess during his tenure as Fed chairman, and concludes that now there are only two options left:

The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity.

Read more... (32 comments, 1276 words in story)
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