March 03, 2009 09:00 AM
Mike's Blog Roundup
Fact-esque: Did the SCOTUS just turn the Constitution into a popularity contest? Later this year they'll be deciding whether or not prisoners have the right to undergo DNA testing (at their own expense) to prove their innocence.
Shakesville: Major progress in stem cell research
AverageBro: Well that didn't take long did it? You and I both knew it would only be a matter of time before the GOP's real leaders handed poor Michael Steele his a$$ on a platter.
Afraid to Trade: Chilling similarities in Dow Jones 1937 and today
Informed Comment: Cairo donor conference nets $5 billion for Gaza reconstruction; Israelis block Gaza reconstruction
Blogoland: Wingnut adventures in 'grass roots' politics
bernanke speaking in front of the senate. live on cnbc.
This has been interesting and there ahve been excellent questions from both sides. Lindsey Graham (I know, yuch) actually got close to making Bernanke put a price tag on AIG's ultimate bailout.
Loose transcript.
Graham asked "1 trillion?"
benanke "I don't think it will come close to that."
Graham "Half a trillion?"
Bernanke "the cost of AIG failing would have had worldwide consequences that would have totaled over several trillion dollars."
Graham "So we need to throw two trillion dollars at AIG, let it fail and that would save us some money?"
I'm watching that too. These senators must be getting some static from their states because they all seem angry and frustrated.
Say what you mean. Mean what you say. But don't say it mean.
The one un asked question: What do we do to prevent companies from becoming "too big to fail".
One ultimate business reality that is happening here is we the tax payers are preserving the MARKET SHARE of these too big to fail companies.
By bailing out B of A, Citigroup, AIG, we guarantee no smaller better run institutions get any of their customers.
So with this approach, we will always have companies that are too big to fail.
Credit Union.
That's right. Smaller, local banks and credit unions are well capitalized and solvent. yet they throw money at these institutions so we take our loans out through Bank of America and GMAC.
This is just some of the evidence that a credit crunch does NOT exist.
Credit Unions are great; but, make sure that they do not have the word Federal in their business name. There are 2 kinds of bank charters. The 1st type of charter is a Federal Charter. These banks are allowed to open branches in other states. They are also just as unregulated as the big banks. These banks are just as at risk of mismanagement as the big banks.
The second type of banks are state chartered banks; they are not allowed to open branches acrossed state lines. These bank fall under the regulations of the states. The Republicans decided to deregulate the energy markets in the states. It was such a disaster that the state legislatures have been very hostile to the idea of deregulating the state chartered banks.
The other thing to keep in mind is that the state chartered banks have all their money tied up in the local community. They make most of their money making small business loans and home mortgages. They have always been leery of the balloon mortgages; just becuase they look at them and wonder how the hell the person recieving the mortgage is going to pay it back. They have also been very leery of investing in Wall Street; mainly becuase, the big banks have been so dominate in that area.
I would like to steal shamelessly from your comment for a blog post...may I?
A bad writer steals ideas from one author.
A good writer steals ideas from them all.
I'm no expert on banks. History is my field. I can tell you there has never been an argument about state chartered banks. There has aways been an argument about whether or not the Federal Government should be allowed to charter banks. The US has a long sordid history of Federal Chartered Banks being used for mischevious purposes. Just do a google search for "the panic of..." They always have there roots in the Federal Banking System. Even the one in which the state banks failed; it was instigated by the big Federal Banks. Economic Depressions are engineered from the top. What they really are is a massive transfer of wealth and power to the ruling elite.
In music, which I know better than anything, it is said:
That is to say, with a lesser composer, it will be clear where the ideas came from. Ignacio Pleyel sounds like Hadyn and then he will sound like Mozart. He writes well enough but it is readily apparent where the original thinking came from.
It took me twenty years to decide that Beethoven in his fourth string trio had been thinking of Mozart's fifth of the six 'Hadyn' quartets.
The ideas are so cleverly purloined that it is ingenious.
That is what being a genius is about.
statusquObama, change you can only pretend in
I heard Frank Zappa make that criticism of classical music, how formulaic it was. he even described the opening, the changes, it was really something. Opened my eyes. I'm also a musician.
I wasn't making a criticism of classical stuff, per se.
Haydn, Mozart and Beethoven were geniuses. That they were all alive at the same time in the same place was a rare quirk of history.
They all recognized the other's greatness and were careful not to be imitative.
Pleyel was less than a genius in composing but he went on to build great pianos which Chopin did wonders with.
There have been other geniuses since then, obviously but it is a rare occurrence.
Zappa's work I knew from the middle sixties when he began. It was interesting.
I have to say that I really don't think Zappa was being fully informed about any criticism that he was making.
And somewhat ill advised at that. I rather suspect that he knew very little of the then contemporary art music of the 60s going forward.
Krzysztof Penderecki is my great favorite although Elliot Carter is right behind him.
Music becomes 'classic' after a long time when the pretenders all fall away.
All music has formulas. All musicians must apply formulas to their music, however they go about it. However they think or don't think about it.
Tonality has structure, harmony and melody are joined. As they occur in time there are sequences. These are arranged to produce form.
Even atonal music has formulas, which involve avoiding harmony and the appearance of structure as understood in tonal music.
Analysis will tell you what each composer is doing.
Improvisers work with a toolkit of structures and formulas.
You can analysis Charlie Parker and find all of the things he was doing.
You can do the same with John Coltrane.
What you could not do, is analysis part and then predict what either was going to do next. Being able to defy prediction is what musical genius is about.
The greatest analysist of all time was Arnold Schoenberg. His early atonal music is challenging and compelling. He was very influential.
Unfortunately for him, he analyzed his own work and decided he was writing according to a pattern. He felt he needed a system to express the pattern, thus the twelve tone system came about.
Artistically his music went downhill after that.
You can analyze what Lennon and McCartney were doing or what Dylan was doing. When you lyrics you have different problems.
Here the great goddess of the violin Anne Sophie Mutter does Penderecki's second violin concerto.
Every time I listen to this it tears me up.
Analyzing that is a tall order. I am still working on the first one.
statusquObama, change you can only pretend in
There are errors in several points.
1 - Commercial (Deposit) Banks are regulated, no matter how large and the deposits are insured by the FDIC
2 - Investment Banks who not take deposits are not so strictly regulated. There are no large investment banks left. Morgan Stanley and Goldman Sachs became Bank holding companies, here. The others imploded and were sold or went bankrupt. There are relatively smaller pure investment banks that remain but it was the large ones that ran so much amok.
3 - Banks are privately owned, or publicly traded Corporations and are for profit.
4 - Credit Unions with a State charter are insured by NCUSIF or ASI. Those with a Federal Charter are members of FSLIC which insures their deposits. They a regulated by State or Federal regulators respectively.
Credit Unions are member owned and not for profit. Not for profit is distinct from non profit. That gives the member a considerable advantage, all else being equal.
Ralph Nader, How Credit Unions Survived the Crash. Here.
statusquObama, change you can only pretend in
For doing my homework. I would fact check anything anyway, but I liked his comment! Gave me food for thought.
(Thanks, Upchuck, too!)
If you and I get the money then we can put it aside safely for years if required, and then we can buy all property at 1 cent on the dollar. And stocks, continuing our strength and power over the minions of the world. See how it works?
I forgot all about that! Har har!
And don't forget in 20 years or such, we can again start over the process of creating fictitious wealth out of thin air without producing anything.
And the long forgotten lessons of the prior financial crisis...mixed in with an enormous amount of unfettered greed (think of the Gordon Lizard - sorry, forgot how to spell lizard boy's last name, but you get my drift - "Greed is Good," Reaganesque mantra) and WHAM, we are back in the '20s again, er '80s.
The never changing cycle of greed since the beginning of time.
The Republicans have been openly calling for the repeal of the New Deal Regulations since Ike was President. They finally repackaged the idea under the name of "Deregulation" and repealed many of the New Deal regulations.
The argument for deregulation is that the companies would make more money. There is some truth to this argument. The problem is this. There is a huge World of difference between a company being stable and a company making huge short term profits. The New Deal regulations were designed to make companies stable.
This is what people have forgotten. The Great Depression is not the only depression. There were 3 economic depressions during the 1800s. There was also one at the end of the 1700s. When the Great Depression arrived. The lawmakers had grown up during the Long Depression. Going trough something like that twice in a life time is a bit much. The New Deal had a number of quick fixes such as the WPA. These were designed to help the masses. People know about these reforms; becuase, they were the programs that helped the masses. The real nuts and bolts of the New Deal reforms was to regulate the financial markets and corporations. The regulations were not designed to punish the business sector; they were designed to protect the business sector from the greed of crooked businessmen. The real goal of the New Deal was to end the boom and bust cycle of business. They wanted to replace it with a system of sustained growth.
The Republicans pushed the repeal of the New Deal Era reforms and we entered into the boom bust cycle again. A lot of people are looking at this economic crash the wrong way. They are looking at this as if something went wrong. Nothing went wrong. What is happening is exactly what is supposed to happen. Business operates naturally on a boom and bust cycle. You take away those restrictive New Deal Era reforms and you enter into a boom cycle; twenty years later you go into the bust cycle. Just like clock work.
I don't disagree on the New Deal Regulation, which was the Glass Steagall Act of 1933.
This was repealed by the euphemistically entitled Financial Modernization Act of 1999. This allowed commerical (depositor) banks, investment banks and insurance companies to all do essentially the same thing, and to merge. It also allowed mortgages to be sold to other banks and investors as securities.
This had the unfortunate effect of distancing the originator (broker) of a mortgage from the consequences of its performance.
Loan originators stopped caring about the standards employed or even if the loans were repaid at all. Many of the loans were outright fraudulent.
The loans were sold to larger banks and bundled together in securities. They were split into safe, ok and risky.
They were rated by the Rating Agencies who stopped doing their jobs. They rated securities without actually reviewing them.
This was fraud.
The banks sold the securities to world (these could be $1 billion a piece) as rated without doing due diligence. They knew that the loan standards were unsatisfactory. That is being charitable.
This was fraud.
The world has learned the hard way and will not buy any more of them.
The banks still have a lot on their books. They have phony accounting to describe what they are.
They want we the peons to buy them for more than they are worth, which if you took the market approach, IE mark to market, is nothing.
So I would have to say that something did go terribly wrong.
There are people that should be in jail.
statusquObama, change you can only pretend in
No more money for Wall street, they are just taking the money and running. We dump it in and they draw it out.
LOL. There should be an open thread for this hearing. I almost feel sorry for bernanke, but no. he is behind this mess as much as anyone.
sucks. It never changes.
http://news.bbc.co.uk/2/hi/americas/7920759.stm
So does this mean we will be pointing more missiles at Russia as Iran doesn't have a nuclear weapons program but the Obama administration is pretending they are any way.
Dear Mr.
SpinelessSteeleMaybe if your lips weren’t pressed so tightly to Rush Limpliars @ss………..you`de think for yourself…….
You are a sad little worm, aren't you? ...
LuLu
The Reslugs handed Steele his ASS because LardAss, Limp-Dick and his hate-filled Reslug ilk hate blacks.
Bill Kristol's 1993 memo to GOP urging them to oppose Clinton's healthcare proposal for fear it would work and restore Americans faith in government
http://theplumline.whorunsgov.com/bill-kristo...
Steele apologized to Rush? How shocking!
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