Government’s Leap Into Banking
The NYT graphic department has been working overtime:
Source:
Government’s Leap Into Banking Has Its Perils
STEVE LOHR
NYT, October 17, 2008
http://www.nytimes.com/2008/10/18/business/18system.html
Sunday, October 19, 2008 | 12:30 PM | Permalink
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Jeez, Barry, how about using a log scale to soften the depressing reality of all the white area in the bottom of the chart? [joke]
Staggering graphic of The Folly.
Has anyone seen the film "W." yet? Maybe you could add a big "W" in the lower left part of the chart?
Posted by: PeterR | Oct 19, 2008 12:40:35 PM
Americans are such pussies today.
Posted by: Herbert Hoover | Oct 19, 2008 1:06:35 PM
I just read the WSJ Weekend Interview with Anna Schwartz. Bernanke fighting the last war. Excellent piece, I think.
Posted by: cloudy | Oct 19, 2008 1:28:47 PM
And today's NY Times shows this all should have been avoided, if law enforcement had been allowed to do their job.
http://www.nytimes.com/2008/10/19/washington/19fbi.html?pagewanted=2&th&emc=th
F.B.I. Struggles to Handle Financial Fraud Cases
key snippet: "Interviews and internal records show that F.B.I. officials realized the growing danger posed by financial fraud in the housing market beginning in 2003 and 2004 but were rebuffed by the Justice Department and the budget office in their efforts to acquire more resources."
Of course, why bother with laws for financial fraud.... it's only money.
Who are we kidding? How long before society disintegrates at this rate?
Posted by: Ed Miller | Oct 19, 2008 1:36:26 PM
The thing that bothers me, and I don't hear it being talked about: When these financial obligations (debts) are owed to the government of the US, default on them becomes either: 1. (if you are 'domestic')A Federal felony; and 2. (more worrying) an act of aggression against the sovereignty of the US.
At what point does the threat of selling off USD become casus belli? What are the FBI/Military capable of doing in that case?
Posted by: xon | Oct 19, 2008 1:39:53 PM
"Who are we kidding? How long before society disintegrates at this rate?"
Posted by: Ed Miller
Ed, it may have already occured, if the polarization evident in this interview is any guage of prevailing ideology.
http://blogs.suntimes.com/sweet/2008/10/rep_michele_bachmann_tells_chr.html
Next idea will be for the good guys to wear identifying colors - maybe something classic like brown shirts...
Posted by: Winston Munn | Oct 19, 2008 1:55:32 PM
The 2008 Federal Budget for food stamps was about $36 billion. Or roughly about .6 percent of the $5.7 trillion total.
Damn hungry socialists.
Posted by: RJ | Oct 19, 2008 2:24:43 PM
Two essential quotes from the article referenced above by “cloudy” (@ 1:28:47 PM):
"They should not be re-capitalizing firms that should be shut down."
Rather, "firms that made wrong decisions should fail," she says bluntly. "You shouldn't rescue them.
…
It takes real guts to let a large, powerful institution go down. But the alternative -- the current credit freeze -- is worse, Ms. Schwartz argues.
…
Posted by: DL | Oct 19, 2008 2:33:00 PM
Have to admit bought into the "socialism" meme these last two weeks, until saw this:
http://video.google.com/videoplay?docid=4353655982817317115&hl=en
about how the private world banks gutted Argentina's social economy. Then occurred that this isn't 'socialism', this is an outright looting future SSTF shortfalls, 'paying it backwards' as loans against ourselves, into private UAE bank vaults!
Purloining $T's in public funds to cover private CDSs debt that's unregulated and likely is deliberately fraudulent isn't socialism, it's...,it's Neo-Wahhabi'ism!
(declaring Fed as the one true Market,
based on "Democratic Capitalism"...WTF!?)
BTW last time a wealthy industrialist said it's 'patriot's duty to buy US equities':
http://hoover.archives.gov/exhibits/Hooverstory/gallery06/gallery06.html
Posted by: Gerald MacIntyre | Oct 19, 2008 3:22:28 PM
If you really want to find out the root cause of the crisis. Here is a comprehensive reading recommendations.
Posted by: Oil Shock | Oct 19, 2008 3:29:39 PM
Wall Street banks in $70bn staff payout ---- Pay and bonus deals equivalent to 10% of US government bail-out package
Readers of The Guardian were greeted with this leading story –
- front-page, up top -- on Saturday morning - WORLD knows this - AMERICANS ...not-so-much:
http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking
Posted by: AnonMe | Oct 19, 2008 3:30:19 PM
That graphic is beginning to look like the kind of asset mix you'd see in a 3rd-world central bank: Not just fully guaranteed, home country or G7 treasury debt but the whole gamut of paper right down to the weird and illiquid with more presumably yet to come; guess we're all going to be Argentina now.
Posted by: RW | Oct 19, 2008 3:59:18 PM
"That graphic is beginning to look like the kind of asset mix you'd see in a 3rd-world central bank: Not just fully guaranteed, home country or G7 treasury debt but the whole gamut of paper right down to the weird and illiquid with more presumably yet to come; guess we're all going to be Argentina now"
------------------------------------------
Gawd. Do you even know what it feels to live in a third world country? All this alarmist/fear-mongering nonsense is just so irritating: buy canned beans, guns, gold, the dollar is just TP...just pure BS. People in the US *know* things will never get that bad but take a perverse pleasure in saying stupid stuff like that, just for the thrill of it.
You government just conjured up $700B of million and guaranteed all deposits under the sun and all still countries are flocking to the USD. So quit whining about "turning into Argentina" coz' you'll never know what that feels like.
For crying out load, Pakistan, a country with *half* the US population, a country with 170,000,000 people is begging for $10B in aid. Imagine that. A handful of hedge fund managers actually own that much money in the US. The disparity is sickening.
Just count yourself lucky to live here in the US and at the risk of repeating myself, quit whining.
Posted by: Sam | Oct 19, 2008 6:02:18 PM
I don't see how anybody, anywhere can regard such a tectonic shift in structure, organization and responsibilities in the fundamental financial systems around the world as a stabilizing event to be marked by a few percentage point drops in overpriced financial markets and then back to 'normal' business.
It is like trying to overhaul the engines of an airplane in flight; the odds of getting it right would seem to be vanishingly small.
Posted by: wally | Oct 19, 2008 6:05:58 PM
