Tag Archives | Finance

The Bank Bailout Was Actually $8 Trillion

largeAh, free-market capitalism — the economic system that works best, provided that one infuses $8 trillion to stave off total collapse. The Atlantic Wire writes:

Remember the $700 billion Troubled Asset Relief Program with which the federal government came to the rescue of faltering banks in 2008? Well, according to a Bloomberg report, that was just a fraction of the financial help the Federal Reserve Bank wound up doling out to troubled lenders. The real total was reportedly closer to $8 trillion, after you add up benefits outside TARP, including emergency loans given at below-market rates:

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S.

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Five More Countries For Goldman Sachs To Take Over

octoNow that Goldman Sachs has achieved coups d’etats in Greece and Italy, DJ Pangburn at Death and Taxes lays out five additional countries ripe for bankdom to install leaders:

We present five other countries where Goldman Sachs could install bankers as heads of state.

Where to begin, though? Originally, I considered Ireland to be a prime candidate for some Goldman Sachs coup d’etat action, but it seems that Ireland already got the old Goldman Sachs in/out in the form of Peter Sutherland, a non-executive director of Goldman Sachs, as well as a non-executive at BP. Here are five countries that could use a little Goldman Sachs in/out.

Spain: With concerns in Italy lessening amidst the installation of ex-Goldman man Mario Monti as PM, bankers and investors in the eurozone and abroad are looking to Spain, which the BBC is calling the “weaker link in the eurozone chain.”

This is obviously the first country that requires a Goldman Sachs premiership.

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Greece’s Choice, And Ours: Rule By Democracy or Finance?

GreeceBank575A number of nations, including Greece and the United States, are in the process of deciding between being governed by democracy or by finance, Bill Clinton’s Secretary of Labor Robert Reich writes:

Greek Prime Minister George Papandreou decided in favor of democracy yesterday when he announced a national referendum on the draconian budget cuts Europe and the IMF are demanding from Greece in return for bailing it out.

(Or, more accurately, the cuts Europe and the IMF are demanding for bailing out big European banks that have lent Greece lots of money and stand to lose big if Greece defaults on those loans—not to mention Wall Street banks that will also suffer because of their intertwined financial connections with European banks.)

If Greek voters accept the bailout terms, unemployment will rise even further in Greece, public services will be cut more than they have already, the Greek economy will contract, and the standard of living of most Greeks will deteriorate further.

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Five Demands To Rein In Wall Street

99marchIf we want a country in which the most powerful financial institutions may longer hold our political process hostage, where do we start? Via Rolling Stone, Matt Taibbi puts forth his list of five demands for anti-Wall Street protesters to push for:

1. Break up the monopolies. The so-called “Too Big to Fail” financial companies – now sometimes called by the more accurate term “Systemically Dangerous Institutions” – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.

2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about.

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“Monetizing” Electoral Politics: TV Networks Are Out To Sell, Not Tell

CampaignPinsAlready the projections are in—not for who is going to win the election in 2012—but for how much it is likely to cost.

Public Radio International concludes: “Campaign spending in the 2012 US election could reach $6 or 7 billion dollars as outside groups pay for electoral influence.”

Here we are in the middle of a deep recession that’s getting deeper by the day, with austerity the unofficial slogan du jour while Republican scheme up new ways to trim, cut and decimate government spending, and parties are spending billions on political horse races.

They decry government spending but they don’t talk much about their own spending, do they?

And neither do the Democrats who are also backing an orgy of spending cuts if only to show their opponents how “responsible” they are.

As both parties slash spending that benefits people, they are in a manic overdrive effort to raise more for themselves and their campaigns.… Read the rest

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Systems Collapse When The Irrational Is Considered Rational


Photo: Agamisudo (CC)

Oh thank you, Wikipedia, for this definition:

“Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate reasoning, emotional distress, or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful or more illogical than other more rational alternatives.”

And what about this one? Market Psychology?  This term is defined in the Investopedia this way:

“The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group’s overall investing mentality of sentiment.”

Q: What do we have when we put the two together?

A: The current madness and market mayhem.

S&P’s downgrade is being blamed for the market panic even though all the business media expected a downgrade and initially minimized its potential impact.… Read the rest

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Who Rules America? Breaking Down the Top 1%

Here's an excerpt from an article by G. William Domhoff on Global Research. This may not exactly be news to some of us, but it certainly re-affirms a lot:
...the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.
(Full Article Here)
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‘Herd-Like’ Financial Reporting Could Predict Stock Market Bubbles

NasdaqVia ScienceDaily:

When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.

After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.

The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.

“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in the research.

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Sacred Economics

SacredEconomicsThis is the introduction to Sacred Economics: Money, Gift, and Society in the Age of Transition, by Charles Eisenstein, courtesy of Evolver Editions/North Atlantic Books and Reality Sandwich.

The purpose of this book is to make money and human economy as sacred as everything else in the universe.

Today we associate money with the profane, and for good reason. If anything is sacred in this world, it is surely not money. Money seems to be the enemy of our better instincts, as is clear every time the thought “I can’t afford to” blocks an impulse toward kindness or generosity. Money seems to be the enemy of beauty, as the disparaging term “a sellout” demonstrates. Money seems to be the enemy of every worthy social and political reform, as corporate power steers legislation toward the aggrandizement of its own profits. Money seems to be destroying the earth, as we pillage the oceans, the forests, the soil, and every species to feed a greed that knows no end.… Read the rest

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