n/t

Alas, not of the sort we need.

Some might say it's not the sort of "Dyke Messinger" we need, either, but that's a local matter.

Heard discussion on WNYC of NYTimes front page article about SEC decision taken in 2004 which permitted higher leverage ratios (Heh, I typoed "rations," which also works) for the Big Banker Boiz.

...decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
...
They [The Big Banker Boiz} wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

A lone dissenter — a software consultant and expert on risk management — weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.

One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.

“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.” (My emphasis)

See, they knew even back then the name would be Big Me$$!

It's 3 NYTimes web site pages, but they're chockablock with interesting (alarming, telling, scarifying, should be nullifying the Paulson Fix Is In) details.

The 2004 decision also reflected a faith that Wall Street’s financial interests coincided with Washington’s regulatory interests.

“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).

“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson[Ya think?],” he added. (My emphasis)

And for this they deserve $Billions--$Trillions??

If House reps haven't read this they should prior to voting. Bizarro World, brought to you by Repubs in Power and Blind Faith in the Magic Hand of the Market.

There's an audio link of the meeting at the Times article site.

Years ago, I had the pleasure of hearing the former hostage Terry Anderson speak. One of the things he talked about was how much he owed to his sister for putting constant pressure on the government to keep working for his release, to keep him from being forgotten. As part of this effort, his sister went in often to speak with Lt. Col. Oliver North and demand the Reagan Administration DO SOMETHING! Later, of course, the news would break that one of the things the Reagan Administration did was Iran-Contra.* When Mr. Anderson's sister found out, she told Oliver North, "when I said do something, I didn't mean do something STUPID!"

I'm sure most Americans want Congress to do something. I want them to do something. But I don't want them to do something stupid. This is stupid.

* I realize that the Reagan Administration had many other reasons beyond the hostages to do the Iran-Contra stuff and Anderson was a very bright guy who I'm sure understood that too, but Anderson was speaking about it within the context of his being held hostage.

I love this job!

Paulson's role for the Big Banker Boiz as simlilar to that of Cheney for Halliburton and Blackwater--ensuring increased profits and, now, survival.

Posted at RGE Monitor, the home blog of Nouriel Roubini, this tells it like it is about Paulson's Fix (Is In) and the Big $h*t Pile, now exploding into the Big Me$$.

Having listened to all 42 minutes of the late night Treasury briefing of investment banks on Sunday, there is no doubt in my mind that this legislation represents the sort of federal largesse for Goldman Sachs, Morgan Stanley, Citibank and JPMorgan Chase that the Iraq war provided for Halliburton and Blackwater.

The most cynical moment in the call is when the Treasury official confirms, "our preference would be to help the healthy banks become even healthier" rather than helping troubled banks or illiquid banks.

America is now a centrally planned economy where the Treasury will determine which firms survive and prosper through allocation of scarce capital to an undercapitalised financial sector.

Clearly what is going on here has nothing to do with kick starting the credit markets or stabilising the equity markets or restoring depositor confidence in banks. (Treasury official: "No provision in the legislation that mandates re-lending.") What is going on here is a blatant attempt to provide government funds to a select cadre of firms (not all banks) which are chosen to be the survivors feasting off the carcasses of their less fortunate and less well-connected brethren as the downturn intensifies in the years to come.

The crash in equities will still happen. The debt deflation of the economy leading to mass commercial and consumer credit defaults will still happen. The collapse of many national, regional and local financial institutions will still happen. The bankruptcy of many municipalities and shortfalls in state budgets will still happen.

This bill is about engineering survivor bias to friends of the Bush administration so that they profit disproportionately from the collapse of these markets using the funds provided by the taxpayer via the unreviewable and unconditional authority of the Secretary of the Treasury.

The basic plan is to set up a federal money laundering operation. Bad assets come in, get laundered by the Treasury and put in a new AAA "wrapper" (as it's termed on the call), and good assets go out, issued as Treasury guaranteed securities. Whether the final value of the legislation this week is $700 billion or $150 billion is irrelevant as long as the laundering operation can accommodate the throughput, as that number is only a cap on total extensions at any one time. (My emphasis)

Read the whole thing; it's searing.

Please, feel free to use the Hank Paulson and His Merry Banksters riffs. Needs to be post so people link, goes in RSS feeds, etc. Come on!

[ ] Very tepidly voting for Obama [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

jones? Checking out soon for, like, sleep

Coleman on Moyers said that the Big Banker Boiz were "coercive," meaning just what we have been saying it means.

They're not only getting too big to fail, but too big to resist and control. Paulson's Fix is in creasing the concentration. I'm waiting for transcript.

I'll send it again. Check your spam filter. Or maybe the NSA is processing it more slowly than usual.

[ ] Very tepidly voting for Obama [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.