(Caution: language NSFW)
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It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have gotten them without that.
But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.
– New York Mayor Michael Bloomberg. Federal policy did not force the banks to create billions in collateralized debt obligations that sliced-and-diced mortgage pools into fictional “AAA-rated” debt. Federal policy did not force the banks to make “liar loans” with no documentation of income or ability to pay. Nor did Federal policy force the banks to make huge bets against their own customers without disclosure.
It’s as if the Europeans — or Merkel and Sarkozy alone — believed that they were in control of the people of Greece. But this is a democracy. In Greece, and even in Italy, you cannot expect to rule without the support and consent of the people. And you can’t impose an austerity program for a decade on a country, and even choose for them the austerity measures that country must implement.
– Jean-Paul Fitoussi, professor of economics at the Institute of Political Studies in Paris, addressing the pending Greek referendum on the bailout plan. If they wish, the Greek people should cease the austerity programs and default on its debt, which is largely held by German and French banks.
I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well. You ought to think a little about that before you start yelling at us.
– Bank of America’s CEO Bryan Moynihan, speaking to a townhall meeting of his bank’s employees. He is “incensed” by the criticism of his bank? A bank which was knee deep in the CDO collapse that was a core cause of the economic collapse? A bank which has been being challenged by multiple state attorneys general for failing to provide reasonable service to mortgagors seeking help or information? A bank that has deployed fleets of robosigners? A bank that charges checking account customers $5/month for the privilege of allowing BofA to hold their money? A bank that has performed this poorly in the stock market?
I am incensed that he is incensed.
Update: It now appears that BofA is at least reconsidering its $5/month fee to use debit cards for shopping.
In its report, the budget office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. For others in the top 20 percent of the population, average real after-tax household income grew by 65 percent.
By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent.
And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.
– The New York Times. Here is a direct link to the CBO report, which is fascinating if disturbing.
More than three years after the crisis and the accompanying bailouts, the six largest American financial institutions are significantly bigger than they were before the crisis, having been encouraged to snap up Bear Stearns and other competitors at bargain prices. These banks now have assets worth over 66 percent of gross domestic product — at least $9.4 trillion, up from 20 percent of G.D.P. in the 1990s. There is no evidence that institutions of this size add sufficient value to offset the systemic risk they pose.
– Jon Huntsman, GOP candidate for President, inveighing against “too big to fail” financial institutions.
You can watch streaming feeds from various Occupy Wall Street events around the world here.
Image via Wikipedia
Check out this statement from Treasury Secretary Tim Geithner:
You’ve seen very, very dramatic enforcement actions already by the enforcement authorities across the U.S. government, and I’m sure you’re going to see more to come. You should stay tuned for that.
My first reaction is to ask for specifics on the “very, very dramatic” enforcement that has already occurred. Is he referring to a better-late-then-never prosecution of Bernie Madoff? A one-off prosecution of a mid-level Goldman employee? Did I miss something else?
Second, I promise to “stay tuned” but all I see right now is a test pattern on the screen.
Who do you think pays the taxes? Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services. This is just disgruntled people.
– an unnamed longtime money manager, complaining about the Occupy Wall Street protestors. How can anyone involved in money management claim that our banking industry performs well, while we are still in the midst of a financial collapse caused directly by the financial sector taking unacceptable levels of risk? The arrogance, coupled with incompetence, is stunning.
(via Dangerous Minds)
They are starting to have the same sort of chutzpah that the Tea Party has. That’s what the political left sorely needs.
– Kalle Lasn, co-editor of Adbusters, on the growing anti-Wall Street protests in New York. The magazine’s July 2011 issue called for the occupation of Wall Street. (via Quotation of the Day Mailing List)
The super-rich (and their GOP supporters) appear to be running scared, given their shrill name-calling of the Occupy Wall Street protesters. Paul Krugman explains the panic:
The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.
And then there’s the campaign of character assassination against Elizabeth Warren, the financial reformer now running for the Senate in Massachusetts. Not long ago a YouTube video of Ms. Warren making an eloquent, down-to-earth case for taxes on the rich went viral. Nothing about what she said was radical — it was no more than a modern riff on Oliver Wendell Holmes’s famous dictum that “Taxes are what we pay for civilized society.”
But listening to the reliable defenders of the wealthy, you’d think that Ms. Warren was the second coming of Leon Trotsky. George Will declared that she has a “collectivist agenda,” that she believes that “individualism is a chimera.” And Rush Limbaugh called her “a parasite who hates her host. Willing to destroy the host while she sucks the life out of it.”
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is.
When was the last time you saw a major American corporation issue an official press release like this?
Either Mr. Lynch has a very poor memory or he’s lying.
Update: And now I am informed in the comments that Oracle has posted a follow-up. Terrific and now you can view Autonomy’s PowerPoint slides from the pitch meeting.
I am sure it is accurate. I wonder how many lawyers looked at this and, through an abundance of caution, warned against it? I am in awe of Larry Ellison and his apparent willingness to speak the truth directly.
And I think that this sort of press release is interesting, right now, because of how many major technology, media and retail companies are finding themselves at loggerheads with others, often in complicated ways. The disputes among companies now is not simply driven by the normal competitive environment, but rather by a large chess game on multiple levels, with literally billions at stake. Change is in the air (and in the cash register with the iPad/iPhone juggernaut) and the field is open for those with the guts to make big plays and carry them off. Alliances are ripe for creation and long-standing teams are at risk of destruction. Billions will be made and lost in the next year or two, from Wall Street to Hollywood to Silicon Valley to unnamed locales yet to be identified.
All of this is a result of rapid technological change (primarily driven by mobile device advances, social media and faster, broader Internet media streaming) and by fundamental realignments of profit opportunities brought on by the great recession. When banks don’t make money, but instead lose money in the billions, and when real estate collapses around the world and when China becomes by far the fastest growing economy, big money begins to reevaluate its opportunities. Bets are being placed on a grand scale by investment decisions and even more importantly by the decisions being made by the biggest enterprises of the day. There are multiple land rushes going on at the same time.
Perhaps this is all good news for the long run economy.
(via Daring Fireball)
This bad.
Laurie Anderson explains the (non-)solution to our problems: only an expert can do it. This is one song that addresses Oprah, Iraq, torture, and Wall Street financial crimes, while being kick-ass msuically. The version below is live, but the version on the album, Homeland, is even more terrific.
The studio version is available on iTunes for those who like her work.
