I attended a V to shining V party on Saturday night! It was great to be out among active women’s rights advocates. We also had some great snacks and games. We got to “Pin the Probe on the Politician”. Those pictures are of Bobby Jindal, Bill Cassidy, and Rick Perry all appropriately pinned at various points. I’m continuing my stump for Mary Landrieu and polls show that I’ve got to continue to work to find support and volunteers for her.
As Democratic Sen. Mary Landrieu defends her U.S. Senate seat in Louisiana, a new CNN/ORC International pollindicates the third-term incumbent carries a slim advantage over her closest GOP rival in the general election this November.
But this is Louisiana, and the election system can be complicated. There are nine candidates — Republicans, Democrats, and a Libertarian — on the ballot this November, and if no candidate crosses the 50% threshold, the race moves into a December runoff between the top two contenders.
Landrieu currently falls well below the 50% mark at 43% support among likely voters. Republican Rep. Bill Cassidy comes in second at 40%, according to the survey.
But the poll’s sampling error among likely voters is plus or minus four percentage points, meaning the two candidates are about even.
In a state with large swaths of conservative voters, Landrieu is considered one of the most vulnerable Democrats up for re-election this year. Republicans, eager to take control of the Senate, have focused on the race as a potential pick-up seat. The GOP needs a net gain of six seats to retake the majority.
If the horse race in Louisiana stays relatively the same, Landrieu and Cassidy would be the two candidates heading into the runoff — and that’s when things flip.
The poll indicates that Cassidy would fare slightly better in a runoff than Landrieu, 50%-47%.
“Keep in mind that the electorate in December is probably going to be smaller and quite a bit different from those who turn out to vote in November,” CNN Polling Director Keating Holland said.
I thought I’d bring up something that’s been intriguing me for a few days. A whistle blower–Fed Employee–has pretty much charged the New York Fed with being captured by Goldman Sach’s. The story was first broke by ProPublica. The woman was fired when she released a negative assessment of GS during an examination.
Barely a year removed from the devastation of the 2008 financial crisis, the president of the Federal Reserve Bank of New York faced a crossroads. Congress had set its sights on reform. The biggest banks in the nation had shown that their failure could threaten the entire financial system. Lawmakers wanted new safeguards.
This story was co-published with This American Life, from WBEZ Chicago.
The Federal Reserve, and, by dint of its location off Wall Street, the New York Fed, was the logical choice to head the effort. Except it had failed miserably in catching the meltdown.
New York Fed President William Dudley had to answer two questions quickly: Why had his institution blown it, and how could it do better? So he called in an outsider, a Columbia University finance professor named David Beim, and granted him unlimited access to investigate. In exchange, the results would remain secret.
After interviews with dozens of New York Fed employees, Beim learned something that surprised even him. The most daunting obstacle the New York Fed faced in overseeing the nation’s biggest financial institutions was its own culture. The New York Fed had become too risk-averse and deferential to the banks it supervised. Its examiners feared contradicting bosses, who too often forced their findings into an institutional consensus that watered down much of what they did.
The report didn’t only highlight problems. Beim provided a path forward. He urged the New York Fed to hire expert examiners who were unafraid to speak up and then encourage them to do so. It was essential, he said, to preventing the next crisis.
A year later, Congress gave the Federal Reserve even more oversight authority. And the New York Fed started hiring specialized examiners to station inside the too-big-to fail institutions, those that posed the most risk to the financial system.
One of the expert examiners it chose was Carmen Segarra.
Segarra appeared to be exactly what Beim ordered. Passionate and direct, schooled in the Ivy League and at the Sorbonne, she was a lawyer with more than 13 years of experience in compliance – the specialty of helping banks satisfy rules and regulations. The New York Fed placed her inside one of the biggest and, at the time, most controversial banks in the country, Goldman Sachs.
It did not go well. She was fired after only seven months.
So,I should remind you that I used to work for Fed Atlanta. I should also tell you that I’ve thought the NYC Fed has been a prime example of regulatory capture. You can go back into the files to see my dissections of the 2005 financial crisis as well as read my contempt for Gaithner. But, anyway, this story has legs, as they say so I wanted to share some updates.
Segarra found three clear cases where Goldman appeared to be engaged in wrongdoing, but where Fed staff pushed back at her attempts to correct it. The latter two incidents have audio evidence from Segarra’s recordings corroborating them.
The wealthy clients incident
A senior Goldman executive, at a meeting with Fed officials early in Segarra’s tenure, expressed the view that “once clients were wealthy enough, certain consumer laws didn’t apply to them,” in Bernstein’s words; this is corroborated by minutes from the meeting in questions. When Segarra tried to look into the issue further, a Fed colleague protested, saying the executive didn’t say that, or if he did, that he didn’t mean it.
The Santander incident
In early January, Goldman was closing a deal with the Spanish bank Santander, the point of which, Fed regulators discerned, was to take risky assets off of Santander’s hands so as to increase its ratio of capital to assets so as to comply with European regulators. The deal required Goldman to notify the Fed about the deal and get it to sign off, which Goldman hadn’t done.
While Fed officials, including Michael Silva, initially sounded outraged, in the end Silva only brought it up once, at the very end of a meeting with Goldman officials, and in a tone that Segarra found overly deferential. She thought the debrief from the meeting with other Fed officials suggested the Fed feared Goldman retaliation if they were too aggressive. This was despite the fact that Goldman was required to hand over information and the Fed could punish it, including criminally, if it failed to comply.
The most forceful action they considered taking against Goldman for the deal was sending them a letter; Bernstein couldn’t confirm that one was ever sent.
The conflict of interest policy incident
The Fed requires banks like Goldman to have firmwide conflict of interest policies that fit certain requirements. Segarra concluded that Goldman lacked such a policy, not least because Goldman’s staffer in charge of managing conflicts of interest told her the firm’s policy had no definition of “conflict of interest.”
Silva agreed with her. But after he got pushback from another Fed examiner, he changed his view, just as Segarra was about to take regulatory action to force Goldman to adopt a real policy. Silva protested that the bank had a conflict of interest policy, but Bernstein notes that it was “just a few paragraphs long and very general .… We showed it to two experts: former Fed examiners familiar with the Fed’s guidance on this issue. They both said it wouldn’t qualify as a policy.”
Silva urged her to recant her statement that there was no policy, despite the fact that he could have easily overridden her. Segarra suggests this was because, to quote Bernstein, “if she submitted her conclusions, it would create a formal record that her bosses didn’t want.” Eventually, Segarra agreed to say there was was a policy, albeit a “very poor policy,” but privately insisted to Silva that there was “no way this is a policy.” A week later, she was fired.
Elizabeth Warren–the senator at the right place, right time and with the right amount of expertise is calling for investigations. Notice both the Senator and the Whistle Blower are outspoken,intelligent, and obviously moral women.
An influential U.S. senator wants to hold hearings into “disturbing” issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc <gs.n>, a bank the Fed was tasked with policing.
Elizabeth Warren, a Democrat on the Senate Banking Committee, on Friday called for hearings after portions of the recordings from 2011 and 2012 were made public. Fellow Democrat Sherrod Brown, also a committee member, called for a “full and thorough investigation” into the allegations they raised.
I’m hoping this does lead to an investigation and perhaps a call for changes in laws and the regulatory regime. I see that Sherrod Brown from Ohio has also called for congressional investigations.
Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are both calling for Congress to investigate the New York Federal Reserve Bank after recently releasedsecret recordings show the central bank allegedly going light on firms it was supposed to regulate.
Warren and Brown, both members of the Senate Banking Committee, called for an investigation of the New York Fed after Carmen Segarra, a former examiner at the bank, released secretly recorded tapes that she claims show her superiors telling her to go easy on private banks. Segarra says that she was fired from her job in 2012 for refusing to overlook Goldman’s lack of a conflict of interest policy and other questionable practices that should have brought tougher regulatory scrutiny.
Finally, a right wing forced birth zygote fetishist who will fess up to wanting to kill doctors, women, nurses, and any one else who might be associated with an abortion. We’ve always known they were pro death penalty for any one that steps out side their narrow world. The National Review’s Kevin D. Williamson wants them all “shot or hung”.
So this morning on Twitter, this happened; National Review writer Kevin D. Williamson made the real “pro-life” agenda very, very clear, expressing his opinion that women who have abortions should be put to death — by hanging. And not just the women; he says the doctor who performs the abortion, the nurses who assist, and the hospital staff who enable it should also be executed.
This was not satire, or a “joke.” He really believes this, as you’ll see if you read the following Twitter collection from the bottom up.
Is it more or they just getting more out there and obvious all the time? I think they just want women to shut up and go away. Oh, in an interesting turn of events ABC’s Martha Raddatz cut off Rick Perry in mid conspiracy theory rant. Do you suppose they’re actually going make a practice of this?
ABC News host Martha Raddatz on Sunday cut off Texas Gov. Rick Perry (R) after he spent four minutes defending a conspiracy theory that President Barack Obama was plotting to fill up the United States with undocumented immigrants.
Speaking to Fox News last week, Perry had asserted that the president was responsible for the growing crisis of women and children immigrants coming across the border.
“We either have an incredibly inept administration, or they’re in on this somehow or another,” Perry opined. “I mean I hate to be conspiratorial, but I mean how do you move that many people from Central America across Mexico and then into the United States without there being a fairly coordinated effort?”
During a Sunday interview on ABC News, host Martha Raddatz gave the Republican governor a chance to back away from his conspiracy theory.
“Governor, do you really believe there’s some sort of conspiracy to get people into the United States by the federal government, by the Obama administration?” Raddatz asked.
“When I have written a letter that is dated May of 2012, and I have yet to have a response from this administration, I will tell you they either are inept or don’t care, and that is my position,” Perry said, doubling down on the theory. “We have been bringing to the attention of President Obama and his administration since 2010, he received a letter from me on the tarmac… I have to believe that when you do not respond in any way, that you are either inept, or you have some ulterior motive of which you are functioning from.”
The former Republican presidential candidate added that his theory was proved by the fact that the president had not responded to his letter, and had not deployed drones to the border.
“Unless we secure our southern border, this is going to continue to be a massive amount of individuals that are coming to the United States,” Perry warned. “And, frankly, we don’t have a place to house them as it is. And if we have a major event, a hurricane that comes in to the Gulf Coast, I don’t have a place to be housing people who are displaced because this administration…”
At that point, Raddatz interrupted Perry and ended the interview.
I will once again point out that it was MARTHA Raddatz and not GEORGE that stepped in and actually acted embarrassed to question an obviously whacked set of answers to a legitimate question.
So, that’s it for me this morning! What’s on your reading and blogging list today?
Bank regulators got a sense Thursday of how their lives will be slightly different now that Elizabeth Warren sits on a Senate committee overseeing their agencies.
At her first Banking, Housing and Urban Affairs Committee hearing, Warren questioned top regulators from the alphabet soup that is the nation’s financial regulatory structure: the FDIC, SEC, OCC, CFPB, CFTC, Fed and Treasury.
The Democratic senator from Massachusetts had a straightforward question for them: When was the last time you took a Wall Street bank to trial? It was a harder question than it seemed.
“We do not have to bring people to trial,” Thomas Curry, head of the Office of the Comptroller of the Currency, assured Warren, declaring that his agency had secured a large number of “consent orders,” or settlements.
“I appreciate that you say you don’t have to bring them to trial. My question is, when did you bring them to trial?” she responded.
“We have not had to do it as a practical matter to achieve our supervisory goals,” Curry offered.
Warren turned to Elisse Walter, chair of the Securities and Exchange Commission, who said that the agency weighs how much it can extract from a bank without taking it to court against the cost of going to trial.
“I appreciate that. That’s what everybody does,” said Warren, a former Harvard law professor. “Can you identify the last time when you took the Wall Street banks to trial?”
“I will have to get back to you with specific information,” Walter said as the audience tittered.
“There are district attorneys and United States attorneys out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it. I’m really concerned that ‘too big to fail’ has become ‘too big for trial,'” Warren said.
So, it’s going to be an interesting few weeks. I will once again be live blogging the Rising Tide conference of New Orleans Bloggers next Saturday. The topic is Oil on the Water and it promises to be a great one (Number 7). This evening I will be a guest on Loisirslit. This is a radio show dedicated to giving the community of New Orleans information on ways to improve literacy, arts and music. Its purpose is to inspire citizens to become change agents for these things in New Orleans. I will be talking about Sky Dancing Blog andabout my role as a New Orleans Blogger at our little corner of the blogosphere. I’m really excited about both of these projects and their role in shaping the city and its culture. I’ve always believed that activism begins in the place where you have the most to lose. I will be bringing several people with me to the show. The first is a representative from Rising Tide. The second is my friend Otter who runs the Backyard Ballroom. You may remember my adventures in playing the music for her play “Bourbon Street” a few years ago. I’m hoping to get some tape to share with you. We’ll be discussing our hopes for a New Orleans Renaissance. The panel–of which I am one of several people–will discuss the response to Hurricane Issac, our badly defunded and crippled criminal ‘justice’ system, and the quest for a New Orleans Renaissance. I’m really excited to bring our community here into the spotlight.
Well, some of us in New Orleans are trying to keep it real. The Republican party remains in the la la land of lies and obfuscation.
The Republicans appear to have nothing left this campaign season but a stack of lies. BB told me about John Kasich’s outrageous lies and misogyny yesterday. Try this one on for size: John Kasich: Political Spouses Are At Home Doing Laundry. Is this the HEY! Iron MY Shirt moment of this election?
Only, his wife is actually a career woman and very active in other things outside the home. This is not the party of respect for women no matter what their calling.
“It’s not easy to be the spouse of an elected official,” Ohio Governor John Kasich said at a rally for Mitt Romney in Cincinnati on Wednesday. “You know, they’re at home doing the laundry and doing so many things while we’re up here on stage getting a little bit of applause.” His comment set off a flurry of outrage .
But few have pointed out that for many years of Kasich’s political career, his wife worked outside of the home.
According to a 2010 article in The Columbus Dispatch, for nearly twenty years, until around 2002, Karen Kasich worked in marketing and public relations, serving most notably as vice president of public relations at Gerbig, Snell and Weisheimer, a healthcare advertising agency. The Kasichs began dating in 1989 and married in 1997, meaning that for much of the Governor’s political life (which began when he became a member of the Ohio Senate in 1978), Karen Kasich was working outside of the home.
Though she ended her almost two-decades-long professional career two years after giving birth to the couple’s twin daughters, she continues to stay highly involved in public life. Her official website states that she “is honored to have an opportunity to increase awareness on topics that are near and dear to her heart: children’s wellness and women’s heart health” and to this end she works with both The Partnership at Drugfree.org and Ohio Valley’s Go Red For Women Council. She’s run the Columbus and the Air Force marathons, she helped coach the girls’ soccer team, and she met her husband when she helped assemble the Ohio State University football guide and included a picture of the then-Representative.
It seems like Rush Limbaugh and Lynn Cheney are the only ones out defending Romney’s outrageous politicization of the death of US American diplomats through lies and disturbing sociopathic smirks. Limbaugh is on such a streak of unbelievable lies that one has to question if he’s gone back to using drugs. Maybe Community College Flunk-Outs just shouldn’t be doing foreign policy.
Polite and serious pundits were shocked when Mitt Romney suggested, and RNC Chairman Reince Priebus outright declared, that President Obama “sympathized” with those who killed American diplomats in Libya. But anyone familiar with the alternative universe version of Obama created by the right shouldn’t be too surprised. As TPM’s Josh Marshall wrote, the charge was “picked wholesale from the right-wing blogosphere.”
It’s now taken for granted on the far right that the statement issued by the U.S. Embassy in Cairo condemning the anti-Islamic film that sparked the violence (which was expressly not authorized by the Obama administration) is tantamount to ”apologizing to Al-Qaida,” as Fox News host Steve Doocy said this morning. But for those prone to believe Obama is a secret Muslim radical, or at least feckless enough to sympathize with them, there’s always been that one key bit of evidence that even a heavy does of cognitive dissonance can’t ignore — Obama authorized the mission that killed bin Laden.
Well, Rush Limbaugh today finally offered a Unified Theory of Obama’s Radical Muslim Sympathies, with a clever workaround for the bin Laden thing: Al-Qaida intentionally “gave up Osama Bin Laden” in order to “mak[e] Obama look good.” The “wild theory,” as Limbaugh himself call it, flagged by Media Matters, says al-Qaida wants to keep Obama in power because the Democrat is bad for Israel, so Islamists have a better chance of destroying the country than under a Republican president:
Liz Cheney has come up with a totally off-the-wall idea that apologies caused the attacks now that we know that Romney’s assertion that the apology came after the attack is completely untrue. This party not only has a war on women, it has declared war on Truth, Reason, and Reality.
As GOP foreign policy hands balk at Mitt Romney’s statements about the attacks on American diplomats in Libya and Egypt, the governor’s campaign and its surrogates continue to push the line that Obama’s “weak” foreign policy and his purported “apologies” for America invited the violence:
– LIZ CHENEY: “Apologizing for America, appeasing our enemies, abandoning our allies and slashing our military are the hallmarks of Mr. Obama’s foreign policy.” [Romney Press Release, 9/12/2012]
– SEN. JOHN MCCAIN (R-AZ): “The United States is weak and withdrawing and that’s why you’re seeing a lot of leaders reacting.” [Today Show, 9/13/2012]
— SEN. JIM INHOFE (R-OK): “What foreign policy? The policy of appeasement. Yes, it’s happening as a result of that.” [The Hill, 9/13/2012]
These direct swipes at the State Department and Hillary Clinton’s leadership of the state department goes beyond the pale. Are you aware that the Cairo Embassy is actually run by a woman who has been a Clinton, Bush and Obama Appointee? Ambassador Anne Patterson is one of the most experienced foreign service officers in the diplomatic corps.
Meanwhile, back here in reality where people actually count, SOS Clinton takes time to condemn the violence triggered by religious nuts offending other religious nuts.
Today, U.S. Secretary of State Hillary Rodham Clinton and Moroccan Foreign Minister Saad-Eddine Al-Othmani launched the U.S.-Morocco Strategic Dialogue at the U.S. Department of State in Washington, D.C. Before addressing the first session of this Strategic Dialogue, Secretary Clinton commented on events unfolding in the world. The Secretary said:
“We are closely watching what is happening in Yemen and elsewhere, and we certainly hope and expect that there will be steps taken to avoid violence and prevent the escalation of protests into violence.
“I also want to take a moment to address the video circulating on the internet that has led to these protests in a number of countries. Let me state very clearly — and I hope it is obvious — that the United States Government had absolutely nothing to do with this video. We absolutely reject its content and message. America’s commitment to religious tolerance goes back to the very beginning of our nation. And as you know, we are home to people of all religions, many of whom came to this country seeking the right to exercise their own religion, including, of course, millions of Muslims. And we have the greatest respect for people of faith.
“To us, to me personally, this video is disgusting and reprehensible. It appears to have a deeply cynical purpose: to denigrate a great religion and to provoke rage. But as I said yesterday, there is no justification, none at all, for responding to this video with violence. We condemn the violence that has resulted in the strongest terms, and we greatly appreciate that many Muslims in the United States and around the world have spoken out on this issue.
“Violence, we believe, has no place in religion and is no way to honor religion. Islam, like other religions, respects the fundamental dignity of human beings, and it is a violation of that fundamental dignity to wage attacks on innocents. As long as there are those who are willing to shed blood and take innocent life in the name of religion, the name of God, the world will never know a true and lasting peace. It is especially wrong for violence to be directed against diplomatic missions. These are places whose very purpose is peaceful: to promote better understanding across countries and cultures. All governments have a responsibility to protect those spaces and people, because to attack an embassy is to attack the idea that we can work together to build understanding and a better future.”
You can read the Secretary’s full remarks here.
So, would all those Romney backing assholes that call themselves Hillary supporters like to refer to her as an apologist for the sake of consistency or should we think any kind of rationality out of insane right wing nuts is just expecting a bull to give milk? Again, I find every voting strategy other than voting for Romney/Ryan rational. Supporting bigotry, racism and lies is unacceptable in my ethos.
There are lots of right wing lies going on about this event. One of the big ones is that the Marines at the Cairo Embassy weren’t allowed live ammo. Again, this swipe at Hillary Clinton’s leadership is purely political and aimed at making the Obama administration weak for the benefit of Chicken–4 time draft dodger–Mittens. This outright lie was hyped by a Fox guest and is all over right wing blogs right now. The Marine Corps itself has discredit this LIE.
In response, the U.S Marine Corps discredited the rumor, calling it “not accurate.” From the Corps congressional liaison’s memo:
The Ambassador did not impose restrictions on weapons or weapons status on the Marine Corps Embassy Security Group (MCESG) detachment. The MCESG Marines in Cairo were allowed to have live ammunition in their weapons. The Ambassador and Regional Security Officer have been completely and appropriately engaged with the security situation. Reports of Marines not being able to have their weapons loaded per direction from the Ambassador are not accurate.
Additionally, as Mother Jones points out, a glance at the State Department’s guidelines reveals that an ambassador could not give such an order. Accordingly to State Department regulations, Marines may be assigned “duties other than those previously described in this section to the Marines as may be required by urgent or security-related circumstances requiring immediate action,” but “[s]uch duties shall not contravene established Department or Marine Corps policy and shall not unduly jeopardize the safety or well-being of any Marine.”
I’m shuddering at the thought of having any Republican near the Fed right now. Here’s a Guardian article on ‘Ben Bernanke rescues the US economy from the nihilism of the right’. My guess would be that Romney wouldn’t care if the economy crashed because he’d just take his family and plant his ass where his money is.
Still, one can only imagine the teeth-gnashing and frothing at the mouth from conservatives and libertarians that will greet Thursday’s announcements.
It’s hard to know if the Republicans simply want to destroy the economy in order to deny Obama re-election, or if they really believe that Bernanke is corrupting the soul of America. In the end, it doesn’t really matter. It’s what Ben Bernanke does that matters.
Contrast this act of lashing himself to the mast to the hesitant and diffident statements made by the Fed chairman earlier this year, in which he admitted that the economy was doing poorly but wouldn’t commit to doing anything about it. And compare earlier statements of angst over tarnishing the Fed’s “hard-won inflation credibility” to the more recent statement of concern about the fate of America’s unemployed. Back then, it was clear that Bernanke, the clear-minded professor who knew what needed to be done, had been sidelined by Bernanke, the brow-beaten and bullied. Not any longer.
I suspect that the right’s unyielding and vitriolic nihilism towards the economy has been an education for Professor Bernanke. From Thursday’s actions, we can only infer that it has finally freed Chairman Bernanke to do the right thing.
I have a feeling that Bernanke will eventually change his voter registration. I’m not sure what to, but I’m pretty positive that he’s too smart to be a Republican or to back Romney.
What’s on your reading and blogging list today?
Well, we’ve always known Pat Robertson was a little off. Reconcile all his throw back ideas about women and the GLBT community with his views on decriminalizing marijuana, I dare you!!
“I really believe we should treat marijuana the way we treat beverage alcohol,” Mr. Robertson said in an interview on Wednesday. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think: this war on drugs just hasn’t succeeded.”
Mr. Robertson’s remarks echoed statements he made last week on “The 700 Club,” the signature program of his Christian Broadcasting Network, and other comments he made in 2010. While those earlier remarks were largely dismissed by his followers, Mr. Robertson has now apparently fully embraced the idea of legalizing marijuana, arguing that it is a way to bring down soaring rates of incarceration and reduce the social and financial costs.
“I believe in working with the hearts of people, and not locking them up,” he said.
Rush has lost at least 50 advertisers after his horrendous, personal attacks on a university student exercising her first amendment rights. Just what kind of advertisers does the big blowhard have left? Well, he’s picked up an online dating service for married people interested in extramarital relations. There’s your family values for you!!!
Advertisers learned something about Rush Limbaugh’s demographic this week.
“Here we thought lots of pleasant, upstanding people were listening to and enjoying the rational things Rush had to say,” dozens of companies said. “Apparently not.”
It turns out that people who really, truly still enjoy Rush Limbaugh’s show are — how do I put this? — jerks.
At least that’s what the new advertisements moving into the vast empty lot of Rush Limbaugh, Inc., implies. “Ah,” you say, as a rat runs over your foot and several people offer payday loans and try to sell you watches from their trench coats. “This place seems to have gone downhill somewhat.”
So far, he’s picked up AshleyMadison.com, the site where you go to cheat on your wife, and another Web site that is explicitly for sugar-daddy matchmaking.
Republicans in the House have basically gone after finance regulators in a way that would basically change one of the major mandates of the Fed’s economic stabilization mandate and the SEC’s ability to police the markets for fraud. The FED suggestions are outrageous. They would completely stop the FED’s ability to stimulate the economy and would change the composition of the FED board from economists to the Bank’s District Presidents who are answerable to their member banks.
The bill, which will be formally introduced later this week by Congressman Brady, would eliminate the employment leg of the dual mandate, requiring the Federal Reserve to focus only on price stability.
The legislation would also restructure the Federal Open Market Committee (FOMC). The bill would give permanent seats on the committee to the twelve regional Federal Reserve bank presidents, who are chosen by regional Federal Reserve Bank directors. Those boards are composed of private citizens.
Yesterday, SEC chairman Mary Schapiro begged Congress to increase the agency’s funding, arguing that “the rapidly expanding size and complexity of the markets presents enormous oversight challenges.” Representative Barney Frank, ranking member of the House Financial Services Committee, offered a bill to provide that funding—and Republicans voted lockstep to trash it.
Republicans on the committee offered the perverse argument that since the SEC has repeatedly suffered oversight breakdowns in the past, it’s not entitled to additional funding. Representative Jo Ann Emerson, a Missouri Republican and member of the House Appropriations Committee, echoed this argument in the hearing with Schapiro yesterday:
“I think this body is reticent to throw more money at the SEC until ya’ll have proven that you have addressed the structural problems from within…in a comprehensive way,” [Emerson said]. “Since 2001, SEC’s budget has increased over 200 percent. Despite this tremendous growth in resources over the past decade, the SEC failed to detect Ponzi schemes such as Madoff and Stanford, the U.S. financial system nearly collapsed, and judges continue to question SEC settlements and regulations.”
Further starving a regulatory agency that’s already clearly unable to handle its massive mission is not a terribly convincing argument—one would have to truly believe the SEC is completely capable of policing Wall Street but simply suffering from “structural problems,” as Emerson asserts. (To give a sense of the very real funding problems, JPMorgan Chase—only one of the 35,000 entities the SEC is tasked with regulating—spends four times the entire SEC budget on information technology alone). But it’s the only argument Republicans have—the SEC is funded entirely by fees from the financial industry, so Republicans can’t carp about the deficit.
None of these folks seem to have any idea about what caused the financial crisis nor how much the underfunding and disabling of regulators and regulators have played into all these problems It’s really disheartening.
Meanwhile, Romney has told a university student that students going to cheap schools they could afford would be better than government student loans. BTW, where are there cheap schools now?
Mr. Romney was perfectly polite to the student. He didn’t talk about the dangers of liberal indoctrination on college campuses, as Rick Santorum might have. But his warning was clear: shop around and get a good price, because you’re on your own.
“It would be popular for me to stand up and say I’m going to give you government money to pay for your college, but I’m not going to promise that,” he said, to sustained applause from the crowd at a high-tech metals assembly factory here. “Don’t just go to one that has the highest price. Go to one that has a little lower price where you can get a good education. And hopefully you’ll find that. And don’t expect the government to forgive the debt that you take on.”
There wasn’t a word about the variety of government loan programs, which have made it possible for millions of students to get college degrees. There wasn’t a word urging colleges to hold down tuition increases, as President Obama has been doing, or a suggestion that the student consider a work-study program.
And there wasn’t a word about Pell Grants, in case the student’s family had a low enough income to qualify. That may be because Mr. Romney supports the House Republican budget, which would cut Pell Grants by 25 percent or more at a time when they are needed more than ever.
Instead, the advice was pretty brutal: if you can’t afford college, look around for a scholarship (good luck with that), try to graduate in less than four years, or join the military if you want a free education.
Robert Scheer writes about Dennis Kucinich who will leave Congress after his term finishes. His district was merged with Marcy Kaptur’s and she won on Tuesday. It’s an interest profile for a quirky politician.
Kucinich never competed in that way. He has been a national symbol of resistance to excessive government power and waste. He also has been a champion of social justice. His has been a rare voice, and one way or another it must continue to be heard. Simply put, when it came to the struggle for peace over war, Dennis was the conscience of the Congress. And he was always at the forefront in defending the rights of unionized workers who once formed the backbone of a solid middle class and who are now threatened with extinction.
Kucinich will surely be back for another turn in public life. As he put it in our Playboy interview:
“I appreciate Woody Allen’s humor because one of my safety valves is an appreciation for life’s absurdities. His message is that life isn’t a funeral march to the grave. It’s a polka.”
What’s on your reading and blogging list today?
Well, it looks like I’m in a tropical storm warning right now. I’m just hoping the electricity stays on as TD 13 becomes TS Lee when it drifts around and comes on shore some time on Saturday. I’m also hoping Hurricane Katia stays a fish storm but that’s looking less likely at the moment. Lot’s of us may get flooded yet again. I’m just hoping we can go get NJ Governor Chris Christie to go beat up Eric Cantor in the interim. Poor Vermont looks like it needs a lot of help right now! We’re expected to get rain that may fall at 2-3 inches an hour. I’m not sure if our pumps can handle that; especially the crappy ones the Corps bought from Jeb Bush that have been problematic since they were installed.
So, it’s nice to see that the FED has decided that Goldman Sachs is now under its jurisdiction and is ordering it to review its foreclosure practices of a former subsidiary. So many heads should roll over the subprime mortgage market mess and so few have to date. The Fed’s a pretty aggressive regulator when it feels some institution is in its charter. It’s good to see the charter is extending beyond commercial banks and thrifts now that the cheap lending has been extended to other financial institutions too. They take the truth-in-lending laws very seriously.
The Federal Reserve ordered Goldman Sachs Group Inc to hire a consultant to review practices of a former mortgage subsidiary on Thursday and said it plans to assess a monetary penalty for wrongful foreclosures.
The Fed’s crackdown sent Goldman shares down 3.5 percent on Thursday, even as the bank announced that it had completed the sale of Litton Loan Servicing LP, the mortgage-servicing business at the heart of its foreclosure problems.
Litton’s regulatory troubles stem largely from the practice of “robosigning,” in which bank employees signed foreclosure documents without reviewing case files as required by law.
Many large banks, including Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc, have been targets of probes by state and federal regulators over the same issue, in the clean-up after a world financial crisis triggered in large part by bad mortgages in the United States and bonds backed by those loans.
The Fed cited “a pattern of misconduct and negligence” at Litton in announcing its enforcement action against Goldman.
The Economist has been having a reader debate on the necessity of Fiscal stimulus for the US. The Hell, Yes! vote appears to have it. The comments are about as interesting as the two economists debating the motion.
The American economy has remained extremely weak since officially leaving recession in mid-2009. The unemployment rate has barely fallen. Recent figures suggest GDP grew at less than a 1% annualised rate through the first half of the year and the odds of a return to recession have risen. The headwinds facing the economy are considerable: the private sector is still trying to reduce the burden of debt it is carrying from the pre-crisis boom years. House prices are still in the doldrums and mortgage credit is hard to get. State and local governments, which are required to balance their budgets, have been forced to cut spending, workers and hours to cope with falling tax collections. Many argue that in such a situation, the federal government is the only entity left that can provide a boost to overall demand and keep the economy from slipping back into recession or prolonged stagnation. At present, however, federal fiscal policy is scheduled to do the opposite: at the end of this year, a temporary payroll tax cut and enhanced jobless benefits expire.
George Stephanopoulos writes about James Carville who told him that the White House was “out of bounds” when it asked for time to speak to Congress at nearly the same time NBC broadcasts a Republican Presidential Candidate Debate.
“I do think this is a really big debate and I think the White House was out of bounds…in trying to schedule a speech during a debate,” Carville said on “GMA.”
This will be Gov. Rick Perry’s first debate, and as Carville said this morning the stakes are high.
“Given a choice between watching a debate and the speech I would have watched the debate and I’m not even a Republican or even close to being a Republican,” he said, adding it will be a “barn burner.”
The administration agreed to move the speech to Thursday- possibly competing with the kick off of the NFL season instead. The White House has been touting this jobs plan telling ABC News that he will propose tax relief, infrastructure investment and assistance for the long term unemployed.
Obama has received advice from both sides with some arguing for an ambitious proposal and others recommending finding middle ground.
Carville, an ABC News consultant, told me it doesn’t matter what Obama proposes, it won’t get through Congress.
For the first time this year, Texas Governor Rick Perry leads President Obama in a national Election 2012 survey. Other Republican candidates trail the president by single digits.
A new Rasmussen Reports national telephone survey shows Perry picking up 44% of the vote while the president earns support from 41%. Given the margin of sampling error (+/- 3 percentage points) and the fact that the election is more than a year away, the race between the two men is effectively a toss-up. Just over a week ago, the president held a three-point advantage over Perry. (To see question wording, click here.)
Perry leads by nine among men but trails by five among women. Among voters under 30, the president leads while Perry has the edge among those over 30. The president leads Perry by 16 percentage points among union members while Perry leads among those who do not belong to a union.
I’d vote for a dead dog before I’d vote for Rick Perry, just in case you’re wondering where I stand. A Quinnipiac University poll also shows the President’s approval on handling of unemployment and the economy is still bleak.
President Barack Obama’s overall job approval rating has sunk to an all-time low, as American voters disapprove 52 – 42 percent, compared to 47 – 46 percent approval in July, and among whites and men his approval has dropped into the 30s, according to a Quinnipiac University poll released today. Congressional leaders rate even lower in the public eye. Voters nationwide are more pessimistic about the economy, saying 49 – 11 percent that it is getting worse rather than improving, a precipitous drop from a July 14 survey by the independent Quinnipiac (KWIN-uh-pe-ack) University, in which voters said 32 – 23 percent the economy was worsening and January 18, when voters said 36 – 20 percent it was improving. The economy is in a recession, 76 percent of voters say, and is not beginning to recover, voters say 68 – 28 percent. Voters trust Obama more than congressional Republicans to handle the economy 44 – 41 percent, but they say 46 – 42 percent that Republican presidential candidate Mitt Romney would do a better job than Obama. They are split 43 – 41 percent on whether Obama or GOP candidate Rick Perry would be better on the economy.
This should be an interesting political season. My guess is that it’s going to get very ugly.
There’s some good news from NPR about the Obama Justice Department. It seems they have made a priority of keeping abortion providers and women seeking abortions safe from violence and protestor harassment.
The Obama Justice Department has been taking a more aggressive approach against people who block access to abortion clinics, using a 1994 law to bring cases in greater numbers than its predecessor.
The numbers are most stark when it comes to civil lawsuits, which seek to create buffer zones around clinic entrances for people who have blocked access in the past. Under the Freedom of Access to Clinic Entrances Act, or FACE Act, the Justice Department’s civil rights division has filed eight civil cases since the start of the Obama administration. That’s a big increase over the George W. Bush years, when one case was filed in eight years.
“There’s been a substantial difference between this administration and the one immediately prior,” says Ellen Gertzog, director of security for Planned Parenthood. “From where we sit, there’s currently much greater willingness to carefully assess incidents when they occur and to proceed with legal action when appropriate.”
Over the past two years, the Justice Department and FBI have been meeting with abortion-rights groups and medical providers all over the country to explain their work and talk about a federal task force designed to prevent violence against doctors and women seeking abortions.
The National Abortion Federation, which tracks violent incidents, says major violence is down since the 2009 murder of abortion doctor George Tiller. The man who killed Tiller has been convicted, and a federal grand jury is investigating the conduct of his alleged accomplices.
But Sharon Levin, a vice president at the National Abortion Federation, says there are still some signs of trouble, including two incidents this summer involving Molotov cocktails and the arrest of a man who told police he wanted to shoot two abortion doctors in Wisconsin.
So I admit to being totally fascinated by Stonehenge. I wanted to share this Tomb find in the place where the famous stones were most likely quarried.
The tomb for the original builders of Stonehenge could have been unearthed by an excavation at a site in Wales.
The Carn Menyn site in the Preseli Hills is where the bluestones used to construct the first stone phase of the henge were quarried in 2300BC.
Organic material from the site will be radiocarbon dated, but it is thought any remains have already been removed.
Archaeologists believe this could prove a conclusive link between the site and Stonehenge.
The remains of a ceremonial monument were found with a bank that appears to have a pair of standing stones embedded in it.
The bluestones at the earliest phase of Stonehenge – also set in pairs – give a direct architectural link from the iconic site to this newly discovered henge-like monument in Wales.The central site had already been disturbed so archaeologists chose to excavate around the edges
The tomb, which is a passage cairn – a style typical of Neolithic burial monument – was placed over this henge.
How cool is that?
So, that’s my contribution for the day. Hopefully, I’ll be on line through the weekend but if you don’t see me, you’ll know what happened!
What’s on your reading and blogging list today?
I’m watching Bernanke do a presser. Wow. (It’s a live blog … updates and explanations will be provided.) I can’t believe the press sent political reporters to this. What an amazing number of really rotten questions!!!
Some key points from the morning’s congressional testimony.
On Unemployment: We do see some grounds for optimism, including a decline to the unemployment rate, declines in the new unemployment insurance claims and improvements in firms’ reported hiring plans. But, even so, it could take quite a while for unemployment to come down to desired levels at current expected growth rates and, in particular, the FOMC projects unemployment still to be in the range of seven and-a-half to eight percent by the end of 2012. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.
On Inflation: “I want to go back over this whole line of interventions, including today quantitative easing. And there have been a series of criticisms that have been made and negative predictions, and my view is that none of them have come true. And I think it is important for us to — to note that. And — and I know you’ve talked about this. I know you mentioned in your statement some of the points. But we were told, for instance, that it was going to be very inflationary. And I know it is your view as of now, and I think supported by the facts, that inflation is not now a problem, and we do not see inflation, certainly not one caused by any of what’s been done going forward. We were told this was going to be extraordinarily expensive, that it was going to cost a lot of money. I believe the answer is that on many of these things the federal government has made a profit by the — by the intervention.”
On Crude Oil: “The relative price of oil, again, is primarily due to global supply and demand. I think it’s important to note that the United States is consuming less oil today, importing less oil and producing more oil than it did before the crisis. That all the increase in demand from outside the United States, particularly in the emerging markets. And so there’s limited amount of what the Fed can do about oil prices alone. Again though, we want to be very sure that it doesn’t feed into overall inflation. We will make sure that doesn’t happen.”
On the Dollar: If the dollar was no longer reserve currency there would – it would on the margin probably mean that we would have to pay highest interest rates to finance the federal debt, and that would be a negative obviously. On other other hand, we might not suffer some of the capital inflows that contributed to the boom and the bust in the recent crisis. But again, I know there was also a countervailing argument in the Journal this morning as well. And I – I just don’t see at this point that there is a major shift away from the dollar.
On the Consumer: We understand the visibility of gas prices and food prices and we want to be sure that people’s expectations aren’t adversely affected. I think it’s important to note that, according for example, to the Michigan survey of consumers, that long term inflation expectations have been basically flat. I mean, they haven’t moved, notwithstanding ups and downs in gas prices, for example.
On the U.S. Fiscal Situation: While I understand these are difficult decisions and we certainly can’t solve it all in the current fiscal year, I do think we need to look forward and I know the House Budget Committee and others will be setting up a 10 year proposal. It’s very important and would be very constructive for Congress to lay out a plan that would be credible that will help bring us to sustainability over the next few years. In particular, one rule of thumb is cutting enough that the ratio of the debt to GDP stops rising. Because currently it’s rising relatively quickly. If we could stabilize that, I think that would do a lot to increase confidence in our government and in our fiscal policies.
Obviously, Bernanke needs to drill baby drill to get rid of inflation … so simple!!!
Mr. Bernanke spent much of his academic career arguing that the Fed should be less opaque, and, as chairman, he has put his ideas into action. Now it’s time for those of us in the media to hold up our end of bargain. In the spirit of democratic accountability, we should ask hard questions — and we shouldn’t let him get away with the evasions and half-answers that members of Congress too often allow Fed chairmen during their appearances on Capitol Hill.
One question more than any than other is crying out for an answer: Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?
Here’s Paul Krugman’s take on the presser: Bernanke Wimps Out. He’s got the same questions I do about the inflation v. unemployment . (See my comments in the thread below.)
So Bernanke did get asked why, given low inflation and high unemployment, the Fed isn’t doing more. And his answer was disheartening.
As far as I can tell, his analytical framework isn’t too different from mine. The inflation rate to worry about is some underlying, inertial rate rather than the headline rate; the Fed likes the core personal consumer expenditures deflator; and this rate has actually been running below target, indicating that inflation isn’t a concern …
I’m a financial economist. I’ve worked for the Fed although not in that capacity. My grandfather worked for the FED doing the War Bonds thing for both World Wars and my exhusband worked for the Fed straight out of college. I’d like to think I have some familiarity with at least two of the districts. I also was schooled during the monetarist ascendancy so I was endowed with a certain amount of awe and respect for monetary policy. I don’t think–as a general rule–the FED’s current open market operations should be up for purview by politicians. I think it’s just fine and dandy that stuff comes out later because I certainly don’t want monetary policy neutralized or politicized. I would, however, like Ron Paul’s 3rd century world view of economics to be neutralized. However, I think all the adults in Washington, D.C. have moved. That would include the ones in the Board of Governor’s Building.
So, why am I saying all this? Well, I’m about to announce how absolutely appalled I was to find that the FED not only opened it’s discount window to our shadow banking industry and some commercial banks abroad, but it opened the windows, doors, and vaults to just about any bank or pseudo-bank on the planet that had the misfortune to be taken in by our financiers of greed and destruction. I know the Fed dabbles around the world. We’ve had to prop up Mexico and Citibank’s adventures from time-to-time which seemed way out of its jurisdiction even with the broadest interpretation of their charter. I know they “watch” our exchange rates while talking up the competitive exchange rate regime at times. Some how, this feels WAY different. I feel in need of a shower even reading about this.
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.
“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.
The FED’s always had an ‘usual and exigent circumstances’ clause that’s given a lot of leeway in times of financial crisis. Some how, I don’t even think Woodrow Wilson figured it would be used to lend money to a fishing-cooperative financier in Japan. You can also read Yves Smith at Naked Capitalism on exactly what went on at the Discount Window and with whom. She focuses on the ‘haircuts’. That would be the lousy deals made by the Fed to bail out a lot of lousy dealers. The numbers on how many of these borrowers were junk status awes.
The information was released yesterday and Bloomberg has provided a first cut on a small but juicy portion of it, the Primary Dealer Credit Facility. From a risk standpoint, the loans mace under this program violated the central bank guideline known as the Bagehot rule: “Lend freely, against good collateral, at penalty rates”. That is the prescription if the borrower is facing a bank run, meaning a liquidity crisis. The fact that 72% of the Fed’s loans on September 29 from the Primary Dealer Credit Facility were junk or equivalent (defaulted and unrated securities or equity) is further proof that many financial firms were facing a solvency, not a liquidity, crisis.
She also shows–in her words quelle suprise–which American Banks were the little failed piggies too. I’m going to throw one of the ‘haircuts’ or discounts a the front of this quote just to curl your toes a bit. I think we can effectively say that Wall Street trashed the value of nearly every firm in the country pretty effectively.
A 95% haircut on AAA rated ABS CDOs means the paper was effectively worthless.
This first cut by Bloomberg also shows that Morgan Stanley was the biggest user of the facility, receiving $61.3 billion of funds for securities “worth” $66.5 billion, 71.6% of which was junk or unrated. As eye-popping as those numbers are, the funds received are less than half the fall in Morgan Stanley’s liquidity pool in the two weeks after the Lehman failure, per Economics of Contempt. Merrill Lynch was second, getting $36.3 billion in funding for $39.1 billion of collateral, 83.4% of which was junk or unrated.
These are not the routine activities of central banks and central bankers. We basically bankrolled a bunch of businesses and financial outfits in a bunch of countries because they wanted in on the Wall Street greed and Wall Street failed them big time. I’m left wondering why all this money was thrown to the foreign gamblers while Americans were being foreclosed on, frankly. Let me also let you know that this is probably just the tip of the iceberg since there’s undoubtedly more documents that need to be discovered and analyzed. My hope is that when the congressional hearings on this get started, we have some real brain power behind the questions that need to be asked on this because questions do need to be asked about this. I’d like a few FED Governors around for the ride to see how many of them were on board with all of this or even knew of it. What we need right now are a few Ferdinand Pecoras.
I also wonder who masterminded all this? Paulson? Geithner? Bernanke? Were they that wedded to ensuring Wall Street didn’t look like a casino and American business didn’t look like a sham that they had to give away the house, the children, the pets, and the fatted calf? They basically threw every one’s kitchen sink overseas. Worse than that, they’ve really not solved the basic systemic problem and the banks are already niggling over the details of the few thinks done by Dodd-Frank. Feel used yet?