Tag Archives | Financial Crisis
Media outlets love anniversaries. They become the makers and newspegs for one day stories that become pretexts for episodic coverage of key issues that substitute for ongoing critical reporting.
It’s a ‘how are we doing coverage ‘ that aims to give us a grade but not look too closely at the causes..
So, no surprise, the President will mark the occasion this week, with, what else—a speech, really remarks aimed at providing a positive spin for a series of economic disasters that we have yet to climb out of.
“A White House official said Obama will deliver remarks in the White House Rose Garden on Monday to mark the fifth anniversary of the financial crisis, which was accelerated on September 15, 2008 when the Lehman Brothers firm filed for bankruptcy protection.
The Democratic president will focus on the positive, discussing progress made and highlighting his prescriptions for boosting job creation amid budget battles expected with Republicans in Congress in the weeks ahead.”
Never mind that that venerable bank, Bear Stearns went down a year earlier in 2007, and that consumers were being targeted by financial predators pedaling subprime loans and other financial frauds for many years earlier.… Read the rest
First, the announced, then put off, and, now, increasingly back-on US punitive bombing of Syria, which seems to be timed around the anniversary of 9/11, just so we don’t lose our anger at the terrorist “bad guys” who, so it seems, are on our side for this great military salute to international law by breaking it.
And, then, there’s the anniversary of the financial crisis which all the military bang-bang is sure to drive off the front pages even as New York Times economist Paul Krugman noted Friday:
“In a few days, we’ll reach the fifth anniversary of the fall of Lehman Brothers — the moment when a recession, which was bad enough, turned into something much scarier. Suddenly, we were looking at the real possibility of economic catastrophe.
And the catastrophe came.”
President Obama has demanded TV airtime for Tuesday, the day after the Congress is supposed to vote on Syria (although he earlier said he would not be required to respect any vote.)
Currently calls to Congressional offices are reportedly running 540-1 against this war, but what the American people want does not seem to register with teeny alliance between the US, France and Israel—and not the rest of the world—determined to teach Assad a lesson no matter who likes it. The latest number I saw showed a majority of Americans oppose a military strike.… Read the rest
Elizabeth Warren for president? Reuters reports:
A small bipartisan group of senators on Thursday introduced legislation that would break up Wall Street’s megabanks by separating traditional banking activity from riskier financial services.
The bill, called the 21st Century Glass-Steagall Act, has an uncertain future, but it shows some lawmakers’ frustration that banks have only continued to grow since the 2007-2009 financial crisis.
Democratic Senator Elizabeth Warren from Massachusetts, is one of the sponsors of the bill [along with] Republican Senator John McCain from Arizona, Democratic Senator Maria Cantwell from Washington, and Senator Angus King, an independent from Maine.
The legislation would bring back elements of the 1933 Glass-Steagall Act, which divided commercial and investment banking, and was repealed in 1999. It would separate the operations of traditional banks with accounts backed by the FDIC from riskier activities such as investment banking, insurance, swaps and hedge funds.
Located in a region devastated by austerity and the global financial crisis, fascinatingly, Enniskillen will be turned into a movie-set-style simulation of a thriving town when global leaders pass through for the G8 Summit next month. Via PRI’s The World, Irish Times reporter Dan Keenan says:
These are basically empty shops that are being now made to look as if they are thriving businesses – what they’ve done is they have filled the shop front window with photographs in the windows of what was the business before it went bankrupt or closed. In other words, grocery shops, butcher shops, pharmacies, you name it. It’s an attempt to make the place look as positive as possible for the visiting G8 leaders and their entourages, and it’s really tried to put a mask on a recession that has really hit this part of Ireland really very badly indeed.
This initiative is stemming from the Foreign Office in London.
April was national financial literacy month, promoted heavily by major banks and other debt-producing institutions who want you to believe that poverty, the financial crisis, and mounting student debt are the result of ordinary people’s ignorant refusal to discipline themselves and budget properly. Via the Guardian, Helaine Olen writes:
Companies and colleges say that if we all understand our finances, financial crises won’t happen. This is simply untrue.
April is National Financial Capability Month. Federal Reserve chairman Ben Bernanke says: “Among the lessons of the recent financial crisis is the need for virtually everyone – both young and old – to acquire a basic knowledge of finance and economics.” Sounds great.
But it promotes the false equivalence that the victims of the financial shenanigans of the past several years are as responsible for the financial crisis as the financial services sector, the ultimate creator of all those financial products of mass destruction.
Here’s fair warning that if Bank of America, Citibank, Goldman Sachs, HSBC, or Wells Fargo illegally foreclose on your home, the piddling compensation check sent to you a few years later may bounce when you attempt to cash it. Via ABC News:
A bunch of big banks agreed to a $3.6 billion legal settlement a few months ago to halt a review of improper foreclosures, in which banks’ law firms fabricated and robosigned documents.
Under the settlement, checks will be sent to more than 4 million homeowners who lost their homes to foreclosure in 2009 and 2010.
The first wave of checks was sent Friday. And, according to the Federal Reserve, at least some of them bounced. The Fed phrased it this way: “Some early recipients of checks informed the Federal Reserve’s consumer helpline on Tuesday that they were told their checks could not be cashed.” The Fed says the problem has been solved.
Will unregulated, debt-based financial products destroy the world? Bloomberg reports that the funneling of capital into instruments of so-called “shadow banking” continues to balloon to unimaginably large proportions:
The shadow banking industry has grown to about $67 trillion, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The Financial Stability Board, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011.
The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the FSB said.
Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.
Matt Taibbi and Chrystia Freelan appeared on Moyers & Company a week ago for an illuminating discussion on the “literal and psychological takeover by the one percent of our society and government”:
The U.K.-based Spinwatch has created an eight-minute film on the “private conversations” between government and the banking industry, and the industry’s use of lobbying and public relations to attempt to shape consensus reality in the wake of the financial crisis:
‘What The Bankers Did Next…’ takes a look at the government’s close relationship with the finance industry, some of the key players involved, and their efforts to manage public opinion and shut down debate.