Yearly Archives: 2011
Beleaguered Bank of America Seeking Yet Another Get-Out-Liabilty-Almost-Free Card in AG Negotiations
Bank of America is hemorrhaging liability. Although it will take years for this drama to play its way out in court, the Charlotte bank, thanks in large measure to the self-inflicted wound of its Countrywide acquisition, faces litigation-related losses that will make a joke of its second quarter “we put it all behind us” $20 billion writedown. Anyone who followed the crisis reasonably closely will recall that banks similarly tried drawing a line in the sand when they wrote down subprime loans and CDOs, only to take additional life-threatening losses in the following quarters.
The credibility of BofA’s loss reserves took a nosedive last Friday, and I am sure they were delighted to have the debt ceiling nail-biter crowd out their bad news
Read more...Quelle Surprise! Greedy Rentiers Are the Same the World Over!
Tolstoy said that happy families are all alike, and it may be true of businesses as well. But while Tolstoy no doubt had an an image of settled domesticity in mind, the 21st century corporate version of happiness is much less appealing.
I thought US-based readers would find this extract from a recent post in the Australian blog MacroBusiness terribly familiar. While America’s extortionate class par none is the too big to fail financial firms, in Australia they have enough of a tradition of regulation that the banks are merely coddled as opposed to completely spoiled (they also never had the opportunity to engage in the wreck-the-economy-for-fun-and-profit exercise we had here that put them firmly in control).
Down under, the cohort that is now at the top of the economic pecking order is the miners. Notice the similarities to behavior we’ve seen over and over again here
Read more...Small Business Owners Using Pawnshops to Make Payroll
One of the reasons the economy continues to be mired in high unemployment is the lack of hiring by small businesses, which have been the engine of job growth in the US for the last decade. In the last expansion, the largest companies shed jobs, and that trend has gotten only worse as a result of the crisis. Not only are giants like Cisco cutting headcounts, but the heretofore-insulated-from-bad-things-by-your-tax-dollars big banks are following suit. And not surprisingly, recent surveys of new businesses show they remain cautious about hiring.
Needless to say, if companies can’t afford to hang on to the staff they have, that certainly isn’t a plus for the economy. The use of pawn shops by small enterprises to make ends meet is likely to be one step before the end of the rope.
Read more...“Is Too Much Significance Given to U.S. Credit Rating?”
A useful discussion with Marshall Auerback on Fox News on the debt ceiling deal and the implications of a possible downgrade of US Treasuries. Enjoy!
Read more...Randy Wray: The Budget Compromise – Congress Creates a Rube Goldberg Doomsday Machine
By Randy Wray, Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College. Cross posted from EconoMonitor
Don’t you feel relieved? After weeks of threats, hostage-taking, and other forms of deficit terrorism, our two political parties have finally “compromised” on what was always a foregone conclusion. (As I write, we still await the Senate vote—but it looks like a done deal.)
Washington got what it wanted—a down payment on destruction of the last remnants of progressive policy. Soon, it will be 1929 all over again. We can make believe that the New Deal and Great Society programs never existed, and go back to the good old days when it was every “man” for himself.
Read more...Guest Post: Obama Still Wall Street’s Honey … Raises More (As Both Raw Amount And Percentage) From Wall Street Than In 2008
He works hard for the money …
Read more...Links 8/2/11
Propagandized US Reporting on Recent Developments in Egypt?
As an old wag put it, “Just because you are paranoid does not mean they are not out to get you.”
Tonight, the Wall Street Journal and the Los Angeles Times both ran stories charging that the revolution in Egypt had lost a great deal of public support. The reason they triggered by BS detector was that they both appeared the same evening. If this had been a domestic story, it would be not unreasonable to assume that a seeming coincidence of that sort was the result of a PR push, particularly in the absence of a major news event as a trigger. And as we will see, when I checked the UK media and Aljazeera, the gap in reporting was noteworthy.
Read more...Software Outsourcer Infosys Sued for Alleged Large Scale Visa Fraud
Corporate miscreance takes so many forms that readers may wonder why I am highlighting the allegations against Infosys, the second biggest IT outsourcing company in India. The answer is that this case provides a window into a much bigger problem, namely, the lack of anything resembling coherent US industrial policy.
Read more...Tom Ferguson on the Debt Deal: Debt Ceiling Deal All Cuts No Taxes
Our favorite astute political observer (and curmudgeon) Tom Ferguson weighs in on the debt deal. The bottom line is that the deflationary impact starts relatively soon, what appears to be $300 billion starting in October.
Read more...Matt Stoller: What Presidency?
By Matt Stoller, who worked on the Dodd-Frank financial reform law and Federal Reserve transparency issues as a staffer for Rep. Alan Grayson (on Twitter at @matthewstoller)
If you have only one rule in politics, I suggest the following – get your head of out your television set, and start paying attention to government. The narrow intense focus of TV can constrain us so powerfully that we are blinded by technicolor.
To explain – there’s an endless stream of musings on our current political problems, with an attempt to apportion “blame” for what’s going on.
Read more...Links 8/1/11
“Europe plans its next crisis”
By Delusional Economics, who is unhappy with the current dumbed-down vested interest economic reporting. Cross posted from MacroBusiness
With the economic world firmly focussed on the US debt debacle this week it is likely that Europe will slip off the radar a little. I suspect, as many people do, that for the US there will be an eleventh hour resolution followed by a short lived bounce in the world markets. Once that bounce heads back to earth again it is likely that the world’s eyes will turn back to Europe. There is much to see.
Read more...Should Elizabeth Warren Run for President?
As the manufactured debt ceiling crisis provides an unflattering window into the reckless incompetence of pretty much all of our elected officials in DC, more and more readers have been calling for Elizabeth Warren to run for President.
The idea of punishing Obama by introducing a wild card into his stacked deck is enormously appealing. The assumption that he can abuse his everyman base as badly as he wants to because they won’t vote for someone further to the right (no matter how little further to the right that really is) after the bait and switch of his campaign is still seen as a viable strategy by most political commentators.
But discomfiting Obama isn’t a very good reason for Warren to consider throwing her hat into the ring. And as we’ve observed in past posts, the Harvard professor attracts a tremendous amount of projection. It would be hard for her, or anyone, to live up to the hopes vested in her.
We’ll take a dispassionate look at the notion of having Warren run for President. The bottom line is there is a sound case to be made for the idea, and it trumps having her run for the Senate. And if she is to go this route, she should primary Obama rather than run as a third party candidate.
Read more...