So now we are bailing out Citigroup:
Federal regulators approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank, the government announced late Sunday night.
So now the jackasses who extend credit to people who should not have it, charge 29 percent interest rates, intentionally process payments late so they can charge late fees and over-limit fees and who spent all their time and energy lobbying to change the bankruptcy laws several years ago are sucking at the public teat.
Can’t tell you how awesome that is. These guys get money from us, there should be some changes to their shitty business practices. Feingold, Sanders, anyone? You out there? Go get it done.
Michael D.
It’s only $20 billion. $66 per person.
That’s what? 1.5 late fees??
Wilfred
Repeat after me: Capitalism Is Dead.
These bailouts, buy-ins, or whatever they call them, are the natural by-product of a system that cannot sustain itself any longer. Get used to it.
J.
Seems like someone’s in a bad mood because of yesterday’s big Jets win, giving Gang Green an 8 – 3 record (like another AFC team I know).
@Michael D., great comment. Loved it. But just remember: that’s on top of all the other money us taxpayers are now on the hook for.
As someone who has lost a lot of money on Citi stock the last year or two, I guess I should be happy(ier), but as a taxpayer, I feel pretty sh*tty.
Seriously, when is all this bailing going to end?
Ming
Wow. So communism is dead, and socialism is dead, and now capitalism. So… what works? Are there any good examples out there? Sweden? (real question)
Napoleon
Of course big bailouts like this will not stop people like George Will and Mimority Leaders Behnor (ps?) and McConnell from clutching their pearls if the government helps the little guy. There was actually someone on NBC yesterday explaining in so many words why this is only being fair to the shareholders. What a tool.
Dennis - SGMM
Not to worry, Republicans have the answer to our problems. From a piece in today’s WaPo re the Democrats’ stimulus package:
You’re right, Rep. Boehner: if we all just went shopping everything would be fine. After driving the country into the ditch, the Republicans will now offer many happy suggestions (Along with as much obstructionism as they can muster.) to get it out.
mikkel
It’s actually $325 Billion. Sure $300 of that only kicks in to cover "potential" losses, but "potential" just means they haven’t actually written it down yet. It’s almost guaranteed that if they marked the assets properly that most of that $300 billion is already gone.
So $1000 per person..or at the rate they’re going, still only 1.5 late fees.
ksmiami
And yet… since markets really are driven by irrationality of emotion, this combined with Obama competence in the near future is sending a big signal to the world that we are acknowledging the suck and will change course so your money will be okay in the long term. Look, I am not the most sympathetic person to wall street bankers and Paulson (think he needs to be waterboarded), but weak markets and no access to credit hurt even the little people like the independent restaurant owner who needs to float capital to rent equipment and pay for food delivery. On the upside the slogan "The Citi never sleeps" conjures up a funny image of restless i-bankers having nightsweats
sparky
i don’t wanna hear any more arguments about whether we OUGHT to bail out the automakers. if we can throw 300 billion at the world’s stupidest bank (AND HAVE NO RECOURSE) we can certainly give them a bridge loan for ONE TENTH of that amount.
FSM on a pogo stick, we suck. if i were a member in good standing of Main Street, as soon as i finished spluttering with outrage, i’d be out looking for the new madame defarge.
XYZ
Last week Paulson said we are done with bailouts for the mmoment. Then one week later, the mother of all bailouts. So even now, Citigroup are lying their asses off about their true liabilities
Punchy
Y’all mighta missed this over the ‘kend (from Eschaton):
That’s right. Subsidized mortgage payments. Seriously, isn’t that at pretty much communism at its purest?
I agree with Wilfred here (yikes) that capatilism as we know it appears to be dying quickly, and everyone wants a piece before it goes completely under.
Punchy
John? Did you say $20 billion?
I say multiply that by THREE HUNDRED AND SEVENTY-fold.
These fucking numbers are just mind-blowing. Monopoly money, natch.
sparky
@Punchy: i think you mean the Ponzi scheme we’ve been playing since 1984 is collapsing.
but fret not, the US is too big to fail, so SOMEONE will continue to buy USA effluvia.
China! Hello!…No?!
Anyone? Hellooooooo….
Meanwhile, at the Treasury: "I’ve got it! We’ll all make payday loans to each other! What can we call them? I know! Treasuries!" Problem solved.
jrg
I’m so glad that Mitt Romney is leading the way against the elitists that have declared war on America by, like, reading books and stuff.
No way this reeks of class warfare. Nope. Nosiree.
But seriously – Citi can burn in hell. You don’t get to charge 20% interest because a borrower is risky, then get the taxpayer to cover your broke ass when the borrower cannot pay.
Wilfred
The truth is that neither socialism nor communism has ever existed since, according to Marx, they would supercede capitalism in the natural process of history. In fact, they can only occur when a fully mature (or ripe) capitalism exhausts itself.
That’s what’s happening right now.
Ben
It’s all a giant shell game… not to mention we give hundreds of billions of dollars to one industry that has pretty much tanked the entire American economy… but the auto industry… they’ve been irresponsible by paying their workers to much so we can’t help them… we can’t give them a cent.
ksmiami
No, no, no capitalism isn’t dead yet – but unregulated capitalism as dictated by the Republican fucktards is six feet under. Now we have to create a sustainable, regulated model in its place. You all just have to unlearn all the previous free market BS. Regulated capitalism might not produce the billionaires, but if more people get a few more weeks of vacation and decent healthcare and education, our society as a whole will probably be like Sweden and that is a good thing. I always thought that the fact that Republicans denied biogical Darwinism and embraced extreme socio-capital Darwinism was a really strange thing.
mikkel
@Punchy: No, communism at its purest is public ownership of means of production. That means the profits go into the public coffer.
This is corporatism, where corporations are given prominence in policy making (although technically speaking in corporatism labor is supposed to have a vote too, I don’t see the unions having any direct late night chats), while the people are given handouts so they don’t revolt.
Absurd
So now the jackasses who extend credit to people who should not have it, charge 29 percent interest rates, intentionally process payments late so they can charge late fees and over-limit fees and who spent all their time and energy lobbying to change the bankruptcy laws several years ago are sucking at the public teat.
It’s. All. About. Them.
Dennis - SGMM
Well, fuck me, I thought that homeowners already received a generous tax credit in the deductability of mortgage interest. What’s next, furniture stores asking for a generous tax credit and subsidized payments for the new furniture for your new tax-credited, subsidized home? Interesting that these ideas are being floated when UHC is still referred to as "Socialized Medicine" by those on the right.
TheHatOnMyCat
One intelligent comment to this thread, including the top post by John:
It’s post number 1, by Michael D.
Look, all you dumbass pitchfork grabbers: The country and the world are about to sink into the World War Two of economic crises.
It is going to take drastic action and spending and government that can think and act in an agile fashion to keep you and your family from ending up in bread lines.
WTF, John? Is Balloon Juice now going to turn into the Stupid Channel? The interest rates you bitch about are limited by regulation and the regulations now in place are the ones your Republican friends wanted, to grease the rails for the very fat cats you now deride.
It is now going to cost money and effort to restore order and put things back on track. You are probably looking at 2-3 years, minimum, of severe pain. Get used to it and get over it for crissakes. Can you college studs find an economist out there who knows what the fuck he is talking about to write some intelligent posts on this subject?
Just a thought.
Tim Fuller
Yes, I believe in the post mortem, payday lenders will be seen as the first sign of the Apocalypse. Here in Jackson Miss, every failed gas station in the city is either:
1. Payday lender
2. Liquor store
3. Auto detail shop
We’re being ripped off, robbed and cheated by the very folks who were ripping us off, robbing and cheating us before, and that’s just the folks in Congress.
Didn’t the Bible specifically address the sin of usury, and why are the religious nuts so single mindedly focused on bashing queers to ‘save the institution of marriage" while letting the usurers destroy our very way of life?
Enjoy.
Wilfred
Hey, that’ s socialism! But we already knew that.
Napoleon
@TheHatOnMyCat:
Hey dumb f–k. I don’t see a single person not saying it is needed, just that they don’t like it, kind of in the way no one likes a prostate exam but you know its a good idea to get one every once and a while.
Rick Taylor
Well look on the bright side. At least greedy little kids with nice counter-tops trying to leech of the public dole for luxuries like health insurance have been foiled; let them sell their extra car or get a crummier house or something.
Are you sure you’re still a conservative? I’m not sure what you mean by that word; I don’t think it has much to do with what I’ve bee taught "conservative" means this past decade.
On a side note, I’ve read smaller banks are doing just fine, it’s only the mega-banks that are tanking because they bought so many of these lucrative derivatives that couldn’t possibly fail.
Xenos
Right on. I have had many unpleasant experiences with this mob of jerks, including many broke people honestly trying to pay debts which were beyond usurious. Can we make all of the executives of Citibank attend credit counseling before they get a bailout?
jrg
TheHatOnMyCat – with all due respect, screw you. Do we need these financial institutions? Yes. Are we under any obligation to protect the share holders and bond holders from losing value? Hell no.
Shareholders lose value first, then bond holders, then, (if needed, to keep the economy afloat), the taxpayers pitch in. Them’s the rules, sport.
demimondian
There’s nothing communist about this at all; it’s a string of corporate bailouts, and nothing more.
Ironically, this is exactly what Hoover should have done in 1929. In the end, protecting large companies from failing during the early part of the collapse slows, and with luck stops, the cycle of mass disinflation that triggers a major depression. (There is one difference: Hoover might at least have done it honorably, and asked for an ownership stake instead of opening the discount window and tacking up a "candy store" sign over top of it.) Failing to do that makes the ultimate failure that much worse.
(If you want a recent example when this did work, look at the Korean financial crisis of 1998.)
Unfortunately, it appears that we didn’t step in fast enough when the Ponzi scheme started to implode. That leaves us with two alternatives: either inflate our way out of the crisis through public works projects, or inflate our way out of the crisis by going to war (for real, this time, with full civilian mobilization and a war-time scarcity economy).
Brian J
I’m enough of a rationalist about this that I’m willing to support something like this. I don’t particularly like it in any way, but if it needs to happen, it needs to happen. I’d just wish they’d stop the nonsense and fully nationalize, if that what’s it’s going to come to. (I’m reminded of that quote I read on a blog when all of this first going down: "In times like these, the real capitalists nationalize.") I do wonder why it’s so out of the question for any heads to roll when it comes to this shit. I’m not saying that these people should be thrown in prison, but is it really out of the question to make sure that those who really messed up lose their jobs?
Xenos
All the local banks out in rural New England appear to be doing just fine so far. They tend to keep the loans that they originated, and while they did not get rich over the last 20 years they remembered how lots of banks were wiped out the last time around.
A few went running for federal charters a few years ago. I expect that they are the ones to watch out for.
jenniebee
I just can’t fucking wait until the health insurance industry comes asking for their piece of the pie.
Public-private partnership, beeyatch!
Walker
Why do we not f*cking own this company outright? Between this and the money we gave them before, we have spent many times over their market cap.
There was a news article recently about how community (not national) banks are doing just fine, and probably will do just fine. We need to buy banks like Citi and break them up (selling off the little bits for a profit).
Napoleon
Krugman thinks its a bad deal.
Punchy
@TheHatOnMyCat: Shorter THOMC: Since you don’t have a PhD in economics from Harvard or Yale, how dare you offer your opinion on how all of this looks and feels to the layman! Please STFU about bailouts and just post pics of dogs with big ears, assuming of course you have a degree in veterinary medicine.
demimondian
@TheHatOnMyCat: Ri-ight. Aren’t you also the guy who said something about oil prices not having an impact on the economy in the long term, TZ, because, when averaged over time, oil prices remained roughly constant?
I wouldn’t make too many remarks about the stupid channel, dude.
sparky
@TheHatOnMyCat: i agree with you as to the reality that this is going to take time money and effort.
i also agree that it will take agility. IMO so far we’ve seen none of that. what we’ve seen are desperate attempts to prolong the bleeding by stanching the wound rather than amputating.
thus Citibank: a necessary but badly designed bailout that i am willing to wager will not even do what it is supposed to do.
the way we are going we’ll be Japan. but maybe that’s the goal of the uberclass–at least they keep their cash. but that’s the death of growth in this country. i think much more drastic measures than throwing money at banks is required, now.
sure we need to keep the banking system afloat. but we also need to have some job creation, too.
Dennis - SGMM
@TheHatOnMyCat:
Thanks for the gratuitous insult. Yes, Citibank has to be bailed out and yes, it’s because they destroyed themselves with the potential to take us with them. No, we don’t have to like it and no, they shouldn’t be bailed out absent an ownership stake for the government and a change in their business practices. If nothing else, charging usurious credit card interest to many of the people who are paying to save you seems a bit ungrateful.
TheHatOnMyCat
Yes, and I said it because it was true for the better part of a hundred years, you phony stupid motherfucker.
Also, my earlier statements were about the price of gasoline, not oil. If you are going to make shit up at least try to get it right.
Last, the situation has now drastically changed. Try to get used to it. You might have to change your whole troll style now, eh?
Try reading the paper, dumbfuck.
Libby Spencer
It gets better. We’re bailing them out and what are they are going to do with the money? Expand their foreign operation, setting up a call center in the Philippines, employing 1,000 people. As said at my place, I want to know why these thieves are going before the Fed for handouts instead of standing in front of a judge waiting for bail to be set.
demimondian
@Xenos: A great many smaller banks are doing *ok*, but I wouldn’t want to say "just fine". Because they were small, they couldn’t hop onto the Ponzi scheme gravy train of issuing CDO’s. That means that they aren’t in over their heads, and, barring a run, will remain adequately capitalized.
Fine. But they still need depositors to provide them with working capital to lend, and they still need safe borrowers to pay them interest on that working capital. A lot of their borrowers were local home builders, and a lot of *those* folks are going to default. A lot of their depositors are people who will lose their jobs when other large companies go under, and a lot of *those* folks are going to consume their savings while they look for a new job.
Right now…I wouldn’t want to be in the banking business.
demimondian
@TheHatOnMyCat: And you were simply wrong, weren’t you? And the DFH’s who you called fools at the time were right? Yeah, like I said — don’t talk about the stupid channel.
mikkel
@demimondian: Uh, sorry but Hoover did do it.
The key sentence is "The recapitalization of banks alone was not enough to get them to start lending, however. They didn’t have enough credit-worthy borrowers."
There is one major problem: we are in a ton of shit that is the result of decades of unsustainable lifestyle. The amount of debt that we are in compared to GDP is 50% more than during 1929. We are broke as a government, as businesses, as individuals.
Our world is more in debt — meaning it’s lived more on the promises of fantasy growth that never materialized — than at any time in recorded history…so at least since the 1850s. You can try to pump in trillions upon trillions of dollars into the economy. You can give everyone a job and money. You can do whatever you want, and it won’t matter for a simple reason: the way we are living cannot physically be supported by our resources.
The only real way out of it is to invest heavily and wisely into things like renewable energy, infrastructure, basic science and other things that let us use our resources more efficiently — combined with a drastic reduction in consumption. Of course this will cause a depression, but contrary to popular belief a depression is a symptom of a problem, not a problem in itself. All the flailing about throwing money at the problem forgets that a) money is completely imaginary and doesn’t mean shit and b) that trying to grow at the same rate we have been will destroy the earth.
What I can’t get is that a lot of people on this board are the type that were the ones warning that we couldn’t keep up our lifestyle: couldn’t keep burning oil like we had been, couldn’t keep consuming crap that just goes into landfills, couldn’t keep spending most our time and resources on blowing shit up and rebuilding it to blow up again. Well guess what? We were 100% right!! Now comes the consequences because nothing changed.
Trying to bail everything out will just create hyperinflation and we’ll be spending all our resources trying to pay for past sins instead of letting it all deflate. Then the whole world will be Zimbabwe.
The Other Steve
I just realized that my oldest credit card… AT&T Universal Card I got back in 1994 is actually owned by Citi.
I want to thank everyone for their generosity.
See those idiots over at Citi about five years back offered me a 1.9% interest rate for life for any debt I rolled over to my credit card. Not just six months, not just a year, but for LIFE! BWAAAHAHAHAHAHAHA! ! ! ! ! I’m still getting 3% on my savings account. So I’m making just slightly more than minimum payments towards this, and at the rate I’m going I’ll have paid it off in 3 more years. KA-CHING! KA-CHING! KA-CHING!
Citi’s expectation was I’d make one late payment and have my rate yanked up to 29%. They never imagined I would setup a recurring payment from my Wells Fargo account guaranteeing I am never late.
You is all paying me! SUCK ON THAT! :-)
TheHatOnMyCat
well………
Aw, cut the phony victim crap, man. John’s post is just bone stupid. I said so. Get over it.
mikkel
@demimondian: Also sorry for not breaking up my post. The first link was to you and you seem to understand the two choices. The rest was to a different audience.
TheHatOnMyCat
No, I was exactly right, and posted the links to prove it.
What is your fucking problem? Hemmorhoids acting up today?
ksmiami
Brian J –
I know it is going to be hell for the next few years, but really, I think what we’re seeing now is the result of a complete leadership vacuum at the top that will be addressed by the next administration and a shift to goverment getting more involved with markets cause it has to happen. Capitalism really only works with regulation or there is too much cheating and greed followed by greed-induced stupidity. 20% stock returns and 30% annual appreciation of non-income producing assets is dead and gone and that is a good thing since bubbles are not real growth. We are going to have to accept less growth, but maybe we can trade in terms of quality of life issues. I mean what is the point of a society that is only about accumulation?
Napoleon
I have that deal from them too, but at 2.9%. I was actually retiring it (the money was used to renovate my bathroom) but with the economy going south I don’t think I will, just in case I end up needing the money for something else.
TheHatOnMyCat
You might want to buy a tv and watch it for the next couple years. You are going to see some amazing stuff.
The rules have changed, in case you aren’t paying attention. And they are being made up anew on a daily basis.
sparky
@mikkel: i like to think that i understand your point(s). but since i am not an economist, i’ll just ask a question: given that we have to consume less, don’t we want to try to reach that point in a fashion other than collapse? if i can use an analogy, a controlled glide is a bit better than a straight drop, no? i understand there’s an inflation (ok, hyperinflation) risk, but is it possible that that risk is worthwhile given the scope of the damage? or is it your position that any intervention will be useless or generate hyperinflation, or both?
Montysano (All Hail Marx & Lennon)
And yet….. and yet I hear wingnuts whinging about Obama’s proposed stimulus plan ’cause it’s ZOMGG1!1 socialism!
Has anyone heard Obama say a word about re-regulating the swaps market? I plan to lean hard on my representatives and Obama about this.
Make no mistake: allowing the investment banks to leverage at 30:1 and more, and the runaway swap market are the root causes of this crisis. My head may go xsplody if I hear one more wingnut rant about the poor, poor banks being forced, FORCED I tell you, to loan money to brown people. What a load of total bullshit.
Has there ever been a more glaring abdication of financial oversight?
Napoleon
@sparky: Yes, yes and yes,
TheHatOnMyCat
To what effect?
And, in light of the alternatives, for what possible purpose?
The bad news probably hasn’t even reached terminal velocity yet, much less hit bottom. What will John Cole do for an encore when things get really bad for the middle of the middle class?
Balloon Juice’s contribution to the next two years of economic misery is to sit here and go "Waaaaaaaaaaaaaaah. Why should I have to pay?"
Because we are all in it together, that’s why. So thank your lucky stars that there are mechanisms in place to try to save your ass from complete financial ruin.
TheHatOnMyCat
Actually, socialism is collective ownership and control of the means of production, absence of private property, pretty much. Dictionaries are available free online now.
TheHatOnMyCat
Maybe you potatoheads should learn how to run a goddam moderation filter before you start opining on how to prevent a depression?
Just a fucking suggestion.
Napoleon
@TheHatOnMyCat:
Are you always this incoherent?
jrg
Really? You better call the SEC – their website is obsolete.
Look, I’m not opposed to a bailout. It’s evident that the financial industry needs one. My contention is simply that the people who put money on the table lose that money first. We are under no obligation to protect investors, only the institutions.
Montysano (All Hail Marx & Lennon)
@ksmiami: Brilliant comment, esp. about the leadership vacuum. When you allow people who hate government, who think government should be "drowned in a bathtub", to run things, this is what you get.
And yet the foundation of Allen Greenspan’s belief system was essentially "financial institutions will do the right thing if left alone". That’s just criminal negligence right there.
Joe Beese
I wish myiq2xu was here. He’d know what to do. :-(
mikkel
@sparky: Yes, a controlled effort would be far better, but even that has unintended consequences. I would say that Japan is the example of the best that we can hope for. They never collapsed, but they have stagnated for the past two decades. This means that a good portion of their populace has spent most of its working life unable to earn any interest on savings, and watching asset values stay still. In essence, it is very hard to growth enough wealth to retire on. This is leading to a huge senior citizen crime spree, which I’m not sure whether it’s hilarious or depressing. By the time all is said and done, it will be another 10-15 years before Japan can work things out, even if all goes well. It is uncertain whether they can support their aging populace or whether everything will fall apart.
Secondly, Japan was lucky to have most of their time take place while the rest of the world had the largest expansion in history. Also they had lots of savings. The world in general is going to be contracting and we are in trillions of dollars of debt, so that works against us and brings the hyperinflation probability WAAAAAAAAAY higher.
Really the only choices are: do we have a decade or so that is as bad as the depression, or do we have declining standards of living for the next three to four decades (assuming we do everything right).
Due to feedback loops, I think it’s easier to land at the moon simply by aiming at it and without any calculations than it is to have a controlled descent in the type of macroenvironment we are facing.
TheHatOnMyCat
No, can’t agree.
The fact that you despise the financial machine doesn’t change the fact that it’s the only financial machine you have. If you smash it, or let it implode, you do so at your peril.
Well, unless bartering for food and fuel looks like a good alternative to you.
Today in ninety five minutes you are going to hear from some people who are going to be working night and day to save your ass from ruin. You can get behind them, or you can throw another log on the fires of Balloon-Juice marginalization and uselessness. Turn on your tv set.
Call the Waaambulance!
Napoleon
@jrg:
Bingo, they should take the hit to their stock which is now worthless. Why use any of the bailout funds to prop up the shareholders, which is what is happening.
TheHatOnMyCat
Do you always stand there with your hand inside your lapel?
4tehlulz
If you don’t support the banker bailout, you objectively hate America.
TheHatOnMyCat
What would be the point, at this juncture in the history of US economics, of wiping out wealth as a vindictive measure?
Not all investors are evil fat cats. Many of them are just your parents trying to figure out how to save some money for their retirement and doing the best they can.
But, don’t let that get in the way of your righteous indignation.
TheHatOnMyCat
Okay, fuck the moderation filter. I will just do another post and say the same thing and beat the filter.
Socialism is collective ownership of property and the means of production.
Dictionaries are free online now.
With that, I am off to earn a crust while I still can. No thanks to this bunch of DFH whiners.
TheHatOnMyCat
Okay, fuck the moderation filter. I will just do yet another post and say the same thing and beat the filter.
Socialism is collective ownership of property and the means of production.
Dictionaries are free online now.
With that, I am off to earn a crust while I still can. No thanks to this bunch of DFH whiners.
Napoleon
@TheHatOnMyCat:
Actually I take the name from the character from Animal Farm, so no (long story, it started on an auto racing forum, but amazingly over the last 10 years or so since I started using it George Orwell has become more relevant then ever).
ThymeZone
Okay, to hell with the moderation filter. I will just do still another post and say the same thing and beat the filter.
Socialism is collective ownership of property and the means of production.
Dictionaries are free online now.
With that, I am off to earn a crust while I still can. No thanks to this bunch of DFH whiners.
jrg
Right. The shareholders should lose all of their value – every cent. The bond holders should have their debt re-negotiated (in order to protect the credit ratings of the banks, but only to a degree), and the institutions should issue new stocks to raise money.
Let me spell this out for you again, since you’re not getting it – The. Taxpayer. Is. Not. On. The. Hook. To. Bail. Out. Shareholders.
Mother Theresa could own 51% of Citi and I still would not care. The law does not change because someone’s business model sucks.
Napoleon
@TheHatOnMyCat:
No only the overwelming majority. Something like 95% of shares are held by 1% of the population. They should take their wacks. A bailout without it is nothing more then welfare for the riches people in this country paid for by the working stiff.
ksmiami
Why all the hostility toward investors when it is the crooked CEOs who fudged numbers and let their companies become leveraged to zero? Most investors like say Calpers are just made up of normal people putting money to work. Where it got out of control was in A. incompetent CEOs and B) the betting against securitization defaults.
I also think America will go through a period of deflation, but unlike Japan which is incredibly bureaucratic and homogeneous, we actually embrace diversity and innovation and our government will be more responsive to crisis unlike the Diet. And as much as I like Krugman and think he is a genius, I don’t think he would really embrace any plan whole-heartedly and there is a reason why economists are in academia.
**Fundamentally though is the problem that most Americans don’t understand basic economics and banking and we should cut out geometry in high school and replace it with financial acumen 101.
ThymeZoneThePlumber
Ah, the pig, not the emperor. That changes everything :)
ThymeZoneThePlumber
I think you should start writing letters to your congressman.
The next year is going to be very upsetting for you.
Between the banks and auto companies, you are going to be really pissed.
Just remember to make an outraged post the day you get your next stimulus check!
srv
By the same people who got us there. What a change. I’m sure glad we’ll be doing "what is necessary". Let’s all get behind propping up the ponzi scheme, not like it’s long before they run out of the first $700B.
The only people who are useless are the folks that keep asking for more of the same ass raping. Glad you feel so empowered to be a part of the next Enron.
Napoleon
@ThymeZoneThePlumber:
Yes, and don’t confuse me with Snowball or Old Major.
ThymeZoneThePlumber
Ixnay! According to all BJ traditions, it’s the evil rich!
ThymeZoneThePlumber
I won’t, I promise.
Hey, can you get me into the house?
ThymeZoneThePlumber
No free soup for you.
Punchy
What rules, specifically? Or are you just trying to be rhetorical? Please explain.
jrg
Shorter ksmiami: "I should be able to invest all of my money in pets.com, keep the proceeds if things go well, but be reimbursed by Uncle Sam if things don’t".
TZ, I’ll take this non-response as a win. Thanks.
Xenos
@The Other Steve:
I would say that you stole that money fair and square. I just try to bleed them dry by making them pay more for collections than the debts are worth, but it is really just unproductive spite on my part, a token effort at rebellion.
ksmiami
Sorry Montysanto, I didn’t thank you for your gracious comment. But I am sure I am not alone in saying that I just want the U-Haul to show up at the White house NOWWWWW. Can’t we move the date up? Pretty Please. BTW, your comment is exactly what I have been telling my friends for the past 8 years – that you can’t entrust the government duties to people who "fundamentally" don’t believe in government… well that and the Republicans have become the stupid party too.
The Moar You Know
@Napoleon: No, he’s just very pro-bailout. And he turns into more than a little bit of a holier-than-thou asshole when you dare to question the wisdom of throwing trillions of dollars at industries that have proven to be so incompetent that they end up bankrupt in spite of charging 29% interest rates on what is, for them, free money.
It’s why we love him so.
sparky
@mikkel: thanks for taking the time to respond. i was under the impression that the current administration was aiming for something like Japan, which i thought was a bad idea. i hadn’t thought about your point that the world is quite different now than it was in the early 1990s. it does seem to me that the major problem is the US’ existing debt is so huge that hyperinflation is a real risk. you are starting to convince me that the unintended (read:bad) consequences of attempting to control this uh decline may be much more likely than i’d considered.
srv
When you complained about Bush doing it, you were a good guy. When you complain about MUP doing the same thing, you are a very bad person.
That’s the next four years for you.
Napoleon
@ThymeZoneThePlumber:
Come on in.
burnspbesq
Ten stoopid here consists of the Government taking only preferred eqity in Citi.
The amount they are asking for is more than their market cap. We should OWN the fucking place. We should have a majority of seats on the board, and geithner should be chair of the compensation committee. The C-level execs should all have base salaries of about $225K, with everything above that contingent on hitting performance targets that have real meaning.
And Pandit has to go. Preferably by COB tomorrow. There is a real need for a public hanging.
ThymeZoneThePlumber
Why don’t you watch cable for a year or two and check back with me.
In case you haven’t been paying attention for the last 75 years or so, the government can and will do whatever it pleases to do. If it wants to give $100b to AIG, it will. If it wants to give it to me, it will. I am working on that last suggestion, you might try putting together an appeal of your own.
Just don’t fly to Washington on a private jet.
Rules, schmules. Nobody is going to care about the rules when the unemployment rate tops 15%, my friends.
dbrown
“communism is dead”
People, get this right and stop saying this nonsense. Communism was never alive, has never existed in any country in the world and in all truth, most likely never will exist in the future. (Note: neither Russia in the past nor China now were ever communist economies (nor countries) in any sense of that word. Look up the real definition and stop the mis-statememnts. )
Nicole
So… basically the gov’t is not also bailing out the auto companies because it wants to break the unions, right? This just seems like a really blatant double standard.
Napoleon
Well the more I read about the Citi deal the clearer it becomes that it is an absolutely horrible deal for this country. The Republicans are hell bent on absolutely raping this country before they leave office.
ksmiami
No JRG – as an investor, I am fully aware of risk, but I also know that companies today are run by greedy incompetents who need heavy regulation to keep them honest and transparency in everything including government is a much better way to go than Bush’s merry band of backroom cronies. Additionally, you would all be surprised at how fucked up the Board-Management relationship is at most companies especially in terms of looking out for shareholders. I believe in American capitalism as long as the assholes can get punished in a big effin way.
Besides, Pets.com is a stupid company that I would never take seriously as an investment option
ThymeZoneThePlumber
Proven to directly or indirectly impact somewhere in the realm of 15% of American jobs?
Proven to have kept millions off the healthcare welfare rolls lo these many years because the government can’t step up to its responsibilities?
I only wish that you could in fact let them fail just to see what happens, without fucking me, ThymeZone, over. If that were possible. No, not really, because throwing millions out of work just to satisfy your fauxtrage really doesn’t make a lot of sense.
Yeah, let’s let millions go broke because a few buttheads flew on their private jets. Makes perfect sense to me.
srv
burn, they’re just making it sweet enough so Goldman can take them over if this doesn’t work out:
Expect Mike Froman’s name to start poping up again soon.
The Other Steve
Ownership society, bitches!
We’re all investors now.
Especially since taxpayers now own shares in half the financial institutions in the country. :-)
mikkel
@sparky: Thanks. I’ve written extensively about this, trying to condense the concerns of the people that I’ve read that I feel have the best grip into a cohesive package. If you are interested then I can send links.
srv
TOS, you only own the losses. And once that doesn’t work out (which it won’t), you’ll still own all the unemployment/welfare costs.
srv
More and better war! We’re going to bring Victory with Honor in Afghanistan! Now, stfu if you don’t agree.
John Cole
Who pissed in ThymeZone’s geritol?
Fed guarantees just topped seven trillion, citigroup just pissed away a 1/3 of a trillion, has always been run by wankers who screw their customers at every chance with usurious interest rates and excessive fees, and I am “stupid” and this post is “dumb” because I am frustrated?
Go fuck yourself, Cat in a Hat. Or eat some bran, you bitter old douchebag.
4tehlulz
@srv: Oh wow what a shock GS is mixed up in this somehow…..
..rolleyes…
GM needs to figure out how to get GS to buy a chunk of it so Paulson will push for an auto bailout.
Zifnab
As far as boondoggle rapes of the US Treasury, I really didn’t think we would see a bigger shameless plunder than the Iraq War. But if we just started shipping serene wrapped bricks of money to corporate financial CEOs, we couldn’t do worse than we’re doing right now.
When do we get back to the 90% tax on folks making more than a million a year? I miss the Eisenhower Administration.
The Moar You Know
I spent years in poverty, some of it real nasty slum-level grade. Worked my ass off. Got dumped, more than once, for not having "enough money" as I was trying to do this right. Didn’t spend – saved. Took every bit of bullshit from those who thought they were dealing with a poor person – there are a lot of self-righteous dicks out there. Ate it all up with a smile and came back for more – I knew what I was doing. Took years. Finally got all my ducks in a row, saved enough money, and bought a house. Well under market – I’m not stupid, and I won’t be going underwater.
And now I’m told that I’m supposed to shut the fuck up, smile and pay, not only for my own housing, food and car, but for that of a bunch of other people who abused the shit out of the system, ran up huge credit card bills, HELOC’d every single bit of inflated value out of their houses. I can’t believe it. I cannot fucking believe that anyone is sitting before me and seriously proposing that I have to make up the income difference to homebuilders and credit card companies. You want money? Recind all the bankruptcy laws and go after every single person who defaulted. Throw their worthless stealing lying asses in debtor’s prison. Put them to work digging coal with their bare fucking hands.
Get the fucking money from the people who stole it. Not from me. I didn’t steal it. Not a fucking dime. Go after my fucking neighbor who just wrote off thirty large in credit card bankruptcy. Throw her in jail for all I care. Haul off the stupid sack of crap across the street from me who HELOC’d 200 large out of his home and then had the gall to come crying about how he couldn’t afford housing and the system was so unfair. I’d love to see him flogged in the town square, prefereably with live high-tension powerlines. That goddamned fucker deserves the electric chair. He stole 200 grand from the bank and is in line to steal more. From me, and everyone else like me who did it right.
But don’t ask me to pay it back for these people. It’s their debt, not mine. Don’t tax me. Don’t use my government to bail them out. Get it from those who incurred the debt and I do not care how you do it – sell their fucking organs for all I care.
I did everything by the book. Don’t take my money. It ain’t my debt.
4tehlulz
@Zifnab: You would miss that socialist, commie.
Comrade Dread
Comrades, glorious Republican revolution continues unabated as the corrupt and rotting pillars of capitalism fall one by one under ever continuing control of the Party.
Is grand scheme by our great leader, Comrade Bush, who rather than lead a bloody coup, with many purges, simply let the evil capitalist oppressors hang themselves by their own greed and stupidity, then let us buy out all without a shot being fired.
Okay, taking a moment to be serious, I am, of course, disgusted and revolted. Mainly because we don’t have the money, we won’t be able to borrow it, which means the goverment will be pulling imaginary dollars out of it’s butt and devaluing the currency in the process to help its campaign contributors.
I’m all for free markets, but frankly, if this is what we can expect, how’s about we beef up the antitrust laws to prevent firms from becoming "TOO BIG TO FAIL"?
Comrade Stuck
This IS Free Trade Beatches! Uncle Sam is free to trade your hard earned tax pesos, for a grade A pig-in-a-poke, complete with late fees and over limit ones too. Resistance is futile. Grab your Vasoline and thank your lucky stars you now live in a trickle-up economy.
Eric U.
I’m not sure that firing Pandit will solve anything, he took over after the damage was done. I hope he got enough money out of the deal to make it worthwhile though, he took the job with the expectation that the situation would play out like this.
sparky
@mikkel: please.
also did you read the piece on Geithner this morning over at the Big Picture? he makes the point i’ve been wondering about: why not just destroy the CDS market through bankruptcy? it’s one thing to bail out institutions, but something else to keep that ultimate Ponzi scheme afloat. (just to clarify, i mean the speculative swaps, not the genuine hedges. i suspect it will not be that difficult to figure that particular little piece out.)
jrg
The Moar You Know:
Hear, Hear! No one was jumping in to save me (or my near-retirement co-workers) when the company I was working for went bankrupt (MCI Worldcom). I had nothing to do with the failure, but I learned quite a few lessons about finance, diversification, and corporate crooks.
I learned those lessons well, and they have governed my saving and spending strategies since.
That’s exactly what pisses me off so much. I might not write the rules, but if I have to play by them, so should everyone else.
Svensker
Well, d’oh, I’ve just now found out that TZ is CatHat. Things are explained!
Someone wanna ‘splain me why bailing out Citi MUST BE DONE but bailing out the auto makers is THE DOOM?
I remain, yours truly, a long-suffering but probably stupid and ungrateful taxpayer. (Hey, I remind myself of an Iraqi! USA! USA!)
Punchy
what happens when Citi goes AIG and comes back in 2 months needing another $50 Bill? Do we give it to ’em so not to lose this $20 Bill "investment" or cut bait? Notice I said "when", not "if"….
Comrade Stuck
Nothing is as it seems and nobody is who they say they are. It’s the new pair-a-dine.
Zifnab
Sorry, dude. That’s the system we live in. If it makes you feel any better, the guys who took out the HELOC loans aren’t receiving bailouts at all. The banks that extended these massive lines of credit to folks who couldn’t pay it back – however – are getting money dumped on them by the truckload. So when all your neighbors get evicted, feel better knowing they got what they deserved. But you’re still getting all your tax dollars sucked out your ass, because someone’s got to pay the bank back and the value of the real estate that just got foreclosed isn’t going to cover it.
Zifnab
Citigroup doesn’t have a union. The end.
Muhshin
The CEO alone took took about 217 Mil from Citgroup in less than a year and we’re bailing out with a billions of dollars. Give me break.
Cain
@Rick Taylor:
Mine’s in a credit union, and they’ve not been putting any of my money in bad mortgage loans. Unfortunately, my house loan is in Countrywide. Paying that off as soon as I can… But man, watching all these guys with hats in their hands and showing attitude is just fucked up. I expect regulation. And if they complain, they can suck it. They had their wild west and it didn’t work out. What a great way to end this fucking presidency.
cain
The Moar You Know
Actually, now they are. Assuming they haven’t lost their houses yet, the banks are rewriting the loans of HELOC abusers and others who now can’t make their payments, writing down the principal so they don’t have to pay all of it back!
Then the bank just declares it a loss and asks Uncle Sam for more monies.
Read Irvine Housing Blog sometime. When you wrap your mind around what certain elements of the citizenry, the lenders, and the government have done to cause this crisis, you’ll be foaming at the mouth just like I am.
South of I-10
@The Moar You Know: I am with you on this one. While I realize that some bailing out is probably necessary, it pisses me off. We lived in a shitty apartment complex so we could save enough money for a down payment on our little tiny 1950’s ranch house. I drive a Civic. For years, I watched people I know don’t make a dime more than we do buying huge houses and driving SUVs and wondered how they could possibly afford it. So now I feel as though I am getting screwed for being responsible.
I do think that all rules that were put in place for individuals filing bankruptcy should definitely apply if you are being bailed out. Maybe some credit counseling would help.
Hyperion
it’s very simple.
we are in deep shit.
how deep? we don’t know.
nobody knows.
THAT is the problem.
we do NOT understand what is going on.
throwing money at bailouts may help.
and it MAY NOT help.
we don’t know what to do.
we are flying completely blind.
economics is NOT a science.
this is about human behavior.
confidence, right?
perception.
so prop up companies to convince everybody that things are OK.
just give them money because some fear the alternative.
that might work.
but we really have no idea.
TZ keeps ranting about 15% unemployment.
we could bail everybody out and still have that.
if ever there were a Tinker Bell moment, this is it.
start clapping!
ThymeZone
Obama Remarks Pre-Revealed!
Good morning. I had planned to describe to you some plans to save the American economy from the severe crisis that is looming as we speak.
However, after reading a blog called Balloon-Juice this morning, I came to realize that it’s just too damn bad that these banks and companies are failing and that millions of you will be thrown out of work and into soup and bread lines.
Therefore, there is nothing I can do. Sorry.
I’ll take a few questions …..
ThymeZone
That’s right, that’s how bad it is.
Good reason then to just sit back and let nature takes its course to a long depression. Fuck it! This will weed out the riffraff, once and for all …..
srv
So guess what happens if the value of the house keeps falling? Or when they can’t give the foreclosure away? Or the bank uses that bailout to re-leverage?
It’s sealed now. There is nowhere to go but down.
ThymeZone
Same here, literally. Right down to the 1954 house and the Civic (coupe LX).
Now I feel as though I am getting a government that is going to do what it takes to stabilize the impending trainwreck and possibly save my job and health insurance for the next couple years.
I am very glad that they are doing this. The more they do, the better. Bring it.
ThymeZone
Your dreams are coming true, then.
ThymeZone
Worst kept secret in Hollywood, I think …..
Personal Designation
Damn its getting cold, why it was so cold today I saw a politician with his hands in his own pockets.
ThymeZone
Hope you can find a wi-fi hotspot on that soup line you are headed for, you damned fool. Otherwise we will miss you.
South of I-10
@Personal Designation: bah dum bump ching!
jrg
Anyone who opposes giving these institutions money (while they retain shareholder value) is objectively pro-depression!
Give it a rest, TZ. The fact that you will wet your bed if the feds do not give Citi a blank check is not a compelling argument for a massive giveaway to Citi shareholders.
No one is saying we don’t need a healthy financial sector, so stop pretending that you’re the only one arguing for it.
Zifnab
Right. Because the value of the house plummeted like a rock. You blame the folks who took out the HELOC. I blame the folks who issued the damn loan to begin with.
Someone started a silly little rumor that real estate values never ever ever ever ever go down, and that’s what got us in this mess to begin with. That said, there is a general rule in finance that when you’ve got a big ticket item – like a car or a house – and the value of the property drops well under the amount you owe on the property, the best thing you can do is to just let the creditors repo the asset.
Banks and savy financiers have known about this rule for centuries. Blaming home owners for taking out HELOC loans freely provided by banks is silly. They were offered loans at favorable rates on good terms, and they signed on to the deal. If anything, you should be applauding these savy consumers for tapping their home equity rather than throwing all the debt on credit cards.
If you want to be pissy at anyone, get mad at the bankers. They’re the ones crunching numbers in the back rooms, thoroughly convinced that extending massive credit lines to millions of home owners will result in record profits for their firms. No one forced BoA or Citigroup to offer the HELOCs. No one demanded these companies leverage out 40 to 1. Don’t go screaming at your neighbors for accepting a business proposal freely offered, then demanding better terms when the deal went bad. These are savy consumers you are dealing with. Compared to the laughing stock economic wizards at the big financials, they are playing this game straight by the numbers. They borrowed when rates were cheap. They threatened to get out of the market when they got upside-down in a collapsed economy. They are smart. The Wall Street Execs are dumb. And ultimately its the execs who are demanding a bailout. So don’t go whining at the HELOC recipient. You’re barking up the wrong tree.
Rick Taylor
@TheHatOnMyCat
Ok. Paul Krugman:
There’s links to more when you get there.
srv
Well, why else would Paulson ask for it?
ThymeZone
That’s right, genius. This is all about me. The check to Citibank was pretty much written over the weekend before Cole ever made his Waaambulance post. He thinks this is all about how the bank execs are getting off too easy? Listen, you could pay every top bank exec in the country $50m to take a walk and not even make a drop in the bucket of what it’s going to cost to save our bacon.
All of you are going be screaming for help the day the unemployment rate soars into the double digits.
For $3.33 a person in this country you can gin up a billion dollars to give away to just to the bank execs.
I think Cole has gotten his $3.33 worth of outrage, eh?
On to bigger problems.
ThymeZone
So? What’s the alternative, today? Seriously? It’s Nov 24 in the middle of a lame duck period.
What’s the alternative? Doing nothing? I didn’t hire you the potatohead government you have now. Somebody else did that. Like somebody with the initials JC. What the hell did you expect?
Maybe if Krugman worked as hard to do something constructive as he does to show up on the Rachel Maddow show and crap on the current government, which in case nobody noticed, has been fired but just hasn’t left the building yet …. we’d be better off.
Montysano (All Hail Marx & Lennon)
@Zifnab: You nailed it. I was trying to make the same point upthread.
I grew up believing that the banker was this cautious gray-haired dude in a suit, who would not allow me to do something stupid. In the last few years, this banker transformed into something comparable to the salesmen in Glengarry Glen Ross, someone who would do, say, and promise anything to get you to sign on the dotted line.
A friend with 25 years in the banking business confirms this. Her first 20 years were what you would expect of the banking industry: cautious and conservative. In the last 5 years, her marching orders were: find someone, find anyone, find any way to qualify them, and then loan them as much money as possible.
Should consumers have been more informed and more cautious? Of course. But I’m tired of hearing the lion’s share of the blame getting laid at the feet of the consumer. Poor brown people did not create a $60T shadow banking industry; rich white men did.
John S.
I think the Masters of the Universe keep applying this "Too Big to Fail" label to anything and everything to compensate for the fact that our most important institution is already failing:
America.
It was nice knowing ya.
JR
Actually, if a great Depression would shut up the Cat in the TimeZone freaks it would have value.
TZ: You have to give all the money to the banks, because, well you HAVE TO and I’ll insult you until you understand.
Uh, hang just one of those Con Republican banksters from the neck high above Wall Street and watch how fast this shit gets solved for real. The nation is being looted, and instead of coming together as a people we have Con traitors trying to spin us into the grave.
TZ/COTH are talking their book: they want some of the taxpayers’ money and that is all it is. Punch him in the mouth and he would stop, but no amount of reasoning, ethics or concern for his fellow man will stop him.
ThymeZone
ThymeZone: Too big to fail.
Heh. You should all be saying that slogan with your own name in the front of it.
Hey, I am in Arizona. It’s 75 degrees here in January, I can stand in a soup line easier than you can in West Virginia.
ksmiami
In defense of TZ, the other problem with letting everything fail is as you guessed… more WARs with a capital W! Geez, what happens when the economy melts down globally? You guessed it – people start fighting (not counting Iraq and Afghanistan.) It is almost a mathematical certainty and since our economy is wrapped up with the success and failure of other nations, I would prefer to try and save the patient than give up the fight and end up with more deaths.
ThymeZone
Ah, the reveal. You just want to hang some fat cats.
The fact that doing nothing else might bring on a depression, meh, who cares?
This is the same group of commenters that only weeks ago was going to vote for John McCain because Obama didn’t give them the vote they wanted on FISA.
There isn’t a face around here that has an original nose on it. Spite is the coin of this realm.
Rick Taylor
I’m not saying there is an alternative; not many people here have said there is one. You go to economic war with the government you have, not the one you wish you had. I suppose the one bright spot is it’s Obama coming into power January and not McCain.
The Moar You Know
Christ, Zif, read what you wrote. This is like saying that I should applaud any junkie who is smart enough to snort heroin rather than shoot it.
Howsabout not taking on debt? Living within your means? America is not having that conversation yet, and that is worrisome.
Comrade Dread
No, I want those that had a hand in these irresponsible decisions to pay some sort of consequence for their folly, and I would like the government to set up some strict guidelines to curb this sort of fiscal shell game behavior in the future.
Granted, I would also like a flying pony so I wouldn’t have to sit in gridlock, and, barring a genie, I suspect this latter is a ish that has a greater chance of being fulfilled than the former two.
TenguPhule
It’s about the only economic stimulus that hasn’t been tried yet.
Comrade Kevin
The TZ special: arguing against something nobody has actually said.
The Moar You Know
Hmmm, who else who posts here does that?
garyb50
Fuck hanging, I want the guillotine.
And cake.
TenguPhule
So that was Bush’s mistake.
He shold have scared people with threats about destroying their retirement instead of scary brown people.
Channel that Inner McCain!
ThymeZone
Okay, but let’s cut to the chase: How much money in your bank account, and how much of your job security in the next two years, hinges on those consequences taking priority here?
In my view, for me ….. zero.
I don’t have any love for the fat cats who fucked up. I just don’t have any room on my calendar for getting revenge when there are more important issues to deal with.
Calouste
I’m getting convinced it’s the only way to prevent this whole thing from happening again in 20 or 30 years. Fat cats will do a cost/benefit analysis and conclude that $200 million or so is worth 4 or 5 years in the pen (which is what Charles Keating ended up with). And that is if they get caught and convicted. I mean, you can hire some decent lawyers if you have that kind of money.
It’s just a matter of safeguarding a decent amount of the money by moving it to your children or so. Even if you do it indirectly by buying them an education and a fat cat job themselves.
mikkel
@sparky: Sorry, work. Here is a post I just wrote and if you search that site you’ll find a lot more. I try to keep my posts relatively well connected to each other. Leave a message if you have a question/comment.
JasonDL
speaking of the change in bankruptcy laws…i know today might not be the day to discuss it publicly,but while we’re supposedly turning a corner in washinton and kicking lobbyists out of the legislative process(lol),wouldnt it be incredible to see some forgiveness visited upon "main street" again financially??
the irony is maddening.how did it come to be that an individual in this country was stripped of a true opportunity to crawl out from beneath their debt and start anew?forget every 7 as it were..how about once per lifetime.
this is why i’ve always been scrutinous of our form of capitalism.it creates a structure that is vitally dependent upon the perpetuation of classes.it becomes generational most of the time i feel.the downward spiral of being sucked into predatory lending practices is more than many can recover from once they’ve made a few mistakes with their credit.yet we have come to rescue the vultures that feed on these people?…disgusting
Patrick
my initial thought upon hearing about Citibank’s potential bankrupcy was, Yipee! this will cancel out the small fortune’s worth of debt I have stored up on my trusty Citi-card… right?
bondboy
John, Citi’s predicament has almost nothing to do with its routine business practices like credit cards and mortgage lending. The vast majority of the firm’s business lines did not contribute to the mess.
The major issue, as is the case with Lehman and Bear and others, is collateralized debt obligations and the unregulated derivatives markets. If a bank writes a $1 million mortgage, or lends $10,000 on a credit card, its loss can be no more than $1 million or $10,000 (and loss severity is usually much less). But in the derivatives market, losses are unlimited because there are no real assets behind the trades. Trading desks of banks used real transactions to create trillions of dollars of bets out of thin air. Losses on those bets that are dragging the entire banks down.
It’s way too complicated to explain in a blog post. It’s also too complicated for any one person at a bank to understand. I worked in the fixed-income industry and I’ve heard senior executives at huge investment firms admit (for example) that they didn’t know what SIVs were before they all crashed.
Read the NYT article the other day about Citi, that’s a good start.
chris
Anybody know which asshole pushed through the last bankruptcy bill give away to citigroup… Joe Biden. The whore that made it harder for the working class to declare bankruptcy from credit card debt – while allowing the credit card industry to keep their outrageous fees and to keep signing up people who can’t afford a credit card, etc.
This is why there is no hope for us – the Democrats are corporate whores just like the Republicans. Neither party represents the taxpaying working class.
Drefal
Congress has been well aware of the financial and emotional distress caused by the abusive credit card practices of Citigroup and its ilk. Instead of curbing these abuses, Congress has decided to provide these companies with a "no-strings" bailout, all at the taxpayers’ expense. What a cruel hoax this is considering that so many of these same taxpayers are also victims of the abuses committed by Citigroup.
There has been no meaningful Congressional effort to enact pro-consumer legislation in years. In fact, the opposite is unfortunately true.
With respect to the average consumer/taxpayer, our elected officials’ response to "yes we can," has only been "no we won’t."