The reporter seems to be completely unprepared. Could have asked some far more pointed questions without having to go into attack mode. Like: Will the composition of your profits change in the new banking environment? Or- How much of that profit will come from Merrill or from Countrywide.

See you don’t have to scream at them to force them to put up some numbers and assumptions.

In honor of this post by Rolfe, I would like to send out a complementary copy of my new book discussing how Ken Lewis managed to rope two bum steers in one year (CFC and MER). Lewis is still bullish on America, CFC and MER. What a dingbat Lewis is! I sent copies of my book out to some 40 different national newspapers. I purposefully did not send one to the Charlotte Observer, because of hometown bias. Send a mailing addy to my email at jb2@structurallogic.com

Grazie!

I want him to testify under oath how much money he got from AIG on top of the up-front bailout money. I then want him to be forced, given his statements, TO GIVE IT ALL BACK.

Knowing that venal incompetents like Lewis still run banks only guarantees that the taxpayer will be on the hook for trillions in losses.

It has always been pro- B of A, Anti First Union / Wachovia, with a liberal democratic editorial page.

Complete waste of print.

This excessive consumption has been made possible by the miracles of loose credit standards and free Fed money always bailing out the economy beyond normal macro stabilization. The whole racket stemming from loose monetary policy and the ability to borrow from Asia, whose househods actually save and whose Central Banks add to the party by pegging their currencies with the fortunate byproduct (due to past pressures to appreciation) of financing US Govt deficits at low rates and US trade deficits. Again, everyone knows this.

So this brings us to the typical talk like BoA and City-AIG people, as in this “interview”. What is to be expected in the coming years?

1) real growth forecasts will NOT materialize because there is simply no way insolvent households, firms, and governments will rebuild their budget health within such a short time frame and have the ability to buy goods and services at the rate they were before. That would be magic, and I keep telling my students that if there seems to be magic in economics, then something is wrong or missing in the picture.

2) “Too Big To Fail” institutions will thus continue sucking the life out of everything they can while making it LOOK like “it’s not their fault, they would really love to give all that taxpayer cash back, but “the situation” is beyond their control and requires exceptional measures” (looting).

3) Obama, Geithner, Bernanke, Summers and co will continue being extremely intelligent people giving great speeches and saying they are “acting boldly”, while actually avoiding what would be bold in these extreme times – full public control/takeover of financial firms, MAJOR overhaul of financial regulation, and a return to sane capitalism based on value added production and innovation in tradeable (market-desired) goods and services. Remember, the BASIC law of free markets is shared risk = shared potential profits. Right now we have “dump all risk on taxpayers without anything in return” type of policies. It can’t work. When common sense is out the window, something has to give. I don’t care how sophisticated the DSGE models behind the arguments are.

4) All top ranked officials will be “shocked shocked” that the stagnation is continuing unabated and will call for MORE credit and messy taxpayer-to-Big-Finance transfers. Give the alcoholic more alcohol to get through his “cold turkey” and don’t mind the fundamentals of purchasing power.

5) Renewed calls that the end is near will come and new (”updated”) forecasts will come out.

6) All this time, while the Crazy House (White House, WS, etc.) continues with its nonsense, normal people with down-to-earth common sense will deleverage, firms will deleverage against their will, and MUCH later, normal times will come back.

7) Officials will say “see we told you the end of the slump was coming soon” and will all inter-congratulate themselves on a fine job.

Hopefully, what will have been lost in the process will be Disconnected-From-Reality capitalism. The capitalism that pads excessive mega risk takers and irresponsible policies. Free credit capitalism. Freen Lunch capitalism. Looting and in-your-face nonsense public policies.

Hopefully what will emerge down the road is a return to sane capitalism. The one based on private initiative, innovation and sane, calculated risk taking. A system that will penalize poor business judgement without mercy and will NOT transfer all risk to taxpayers when the going gets tough. A system that will provide profits to value adders and good business positioning. A system in which bondholders will understand that default is possible and will not be “bailed out”, where shareholders will understand that returns are not guaranteed and risk is real. A system which will internalize externalities and market imperfections such as information assymetries, near rationality and bubble psychology. A system that will get back to at least trying to bring equality of chance for as many as possible, while letting life takes its course, efforts bring rewards, and differences bring different outcomes. A system that will heavily regulate and oversee “too big to fail” firms, since they are all implicitly insured by the taxpayer. A world where consumers will buy stuff mostly with… money they HAVE in their bank account, mostly from their labour income! A return to sanity with sane leverage ratios, risk assessment and clear frontiers between the various players in the economy. Yes We Can!

PascalB