Monday, March 09, 2009

I'M WAITING FOR THE CHANGE I WANT TO BELIEVE IN

A friend sent me the link to a blog post by Karl Denninger at The Market Ticker. I've read a few of his posts before, but not many, so I'll admit I don't know that much about him. He seems a bit more voluntarily marginalized than the folks I normally prefer to link to, but he's really talking sense here so I'll give it a whirl.

He responds -- forcefully -- to Obama's recent conversation with The New York Times in which he “urged Americans not to 'stuff money in their mattresses,'” also explaining that he “do[es]n’t think that people should suddenly mistrust all of our financial institutions.”

I think such a suggestion is grossly irresponsible and borderline reprehensible. Denninger apparently thinks is well over the borderline of the latter, and lets loose. I don't agree with everything he says, and have selected quoted to reflect that. Nonetheless, I think his overall message is sound, and is well worth a quick read. A few highlights (and the various emphases, in the form of ALLCAPS and underlines are his):

You want Americans not to "stuff money in mattresses" and "not suddenly mistrust all of our financial institutions"? Fine. START LOCKING UP THE EMBEZZLERS AND THIEVES, MANY OF WHOM ARE YOUR CRONIES AND DONORS TO BOTH POLITICAL PARTIES. Until you do that, anyone with half a brain in their head will head to The Mattresstm, because it is the only place where one can be certain their money is safe.

* * *

If you think that the market is collapsing because people are worried about "socialism", you're wrong. Yes, that's a concern, and yes, people are worried that you're going "hard left" - but there are winners in such a marketplace.

No, the market is being beaten to a pulp because you have inherited a financial system that has for the last twenty years, under both Democrats and Republicans, been comprised of one fraud after another, starting with "the Internet is growing 50% a quarter" and now winding up with "home prices never go down."

You have inherited this President Obama, but you have also refused to change it. Let's tick it off, shall we?

  • You have refused to step on the neck of the CDS monster by declaring the uncovered writing of these swaps contrary to public policy and thus void, suspending all ability to collect until they are on a public exchange with nightly margin supervision.
  • You have refused to claw back the nearly $50 billion that our government paid to the bankers who caused the mess via bailing out AIG, and attempted to conceal same.
  • You have refused to compel The Federal Reserve to disclose the full details of who it is lending to and on what collateral.
  • You have refused to demand that the banks (and all other firms) produce accurate balance sheets showing the impairment on their so-called "assets".
* * *

We need a banking system Mr. President. We do not need these banks who gamed the rules, demanded unlimited leverage, colluded with one another to create unreasonable and systemic risk and fomented the great economic and financial collapse since the 1930s. You've done nothing to solve this problem Mr. President, instead choosing to continue trying to paper over it, as President Bush and Henry Paulson did.

What do we have left President Obama if not "The Mattress"?

You own this problem now. It is your responsibility. Either act - it is within your power to do it today - or watch our economy and markets implode. Pleading will not get it done; all that does is confirm that you either lack the balls to do the right thing or are personally complicit in the corruption and embezzlement.

This problem is systemic. Maybe, like a lot of people, I want to believe that Obama is not in bed with the Insiders and Oligarchs. But his actions -- starting last fall when he favored the TARP, along with Bush and Cheney and Paulson and Barney Frank and Bernanke -- have suggested that he is under the covers with them. Or he's in waaaaaaaaaayyy over his head.

And I'm not sure which one frightens me more.

But if he's not complicit in this looting and thievery (and I, like most of us, wish desperately to believe he's not), and he's as smart as we all think he is, then he must start acting appropriately. Fire Geithner. Fire Larry Summers. Fire Bernanke, or at least do not re-appoint him when his term ends later this year. Bring in folks who know what they're doing. Who are not former Goldman Sachs executives. Not former NY Federal reserve chairmen. Not former authors of the repeal of Glass-Steagle. Not fucking crooks.

Let's see some of the change he promised us. Because so far it's been business as usual -- Wall Street's business.

----------------------------------------------------------------------

Update - This short post at The Business Insider (H/T Naked Capitalism) shows that all the internet chirping about the disastrous Obama/Geithner/Summers policies is starting to hit its target.

Let's keep it noisy.

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9 Comments:

Blogger Smitty said...

I think such a suggestion is grossly irresponsible and borderline reprehensible

Have you closed your saving account yet?

I see that the number of Americans who have a savings account is 11%, up from 0% 2 years ago. I still plan to keep my money, way way WAY under the federally-guaranteed cap of $250,000, in our local credit union.

By the way...don't know if this is on purpose...my "word verification" is "fliessed."

9:20 AM  
Anonymous Applesaucer said...

It looks like the long knives are out for Geithner, as the stories pile up.

But the nature of such stories these days are more like "he can't handle the job" than "he's Goldman's bag man."

Anyway, we will know within a year where Obama's heart and mind are.

Applesaucer

9:50 AM  
Blogger Weaseldog said...

A year from now, no one will care where Obama's heart and mind are.

If we continue to follow Argentina's model for another year, most Americans will be worried more about where they'll sleep and or, what they'll eat.

So far we're nailing Argentina's plan.

This Is What A Financial Collapse Looks Like

2:49 PM  
Blogger Mr Furious said...

I'll start to feel better when Summers and Geithner are looking for work along with the other 750,000 that will be this month.

Obama's specific comments probably refer to people making a run on the banks and taking the $$ out of their savings and checking accounts. Obama is not only not reprehensible, he's correct. There is no need for people to bury their money in mason jars. The deposits of 95% of Americans are perfectly safe in whatever bank they curently reside.

Sparking a panic is NOT what I consider Obama's job, and he's be irresponsible if he did.

3:14 PM  
Blogger Bob said...

I think such a suggestion is grossly irresponsible and borderline reprehensible.

I have my money in a local credit union. My faith in them is pretty sound, so I'd say this particular comment is appropriate.

4:36 PM  
Blogger DED said...

Mike, in case you missed this post over at The Daily Bail.

4:44 PM  
Blogger Weaseldog said...

Mr. Furious, I think the issue is that Obama legitimized the discussion about whether we should be taking our money out of banks.

Further, folks that weren't thinking about it or talking about before, are worried about it now.

And one should wonder, if Obama is talking about it, how bad is the problem.

Further, FDIC is short on funds. They are now asking for a one time fee from banks, of 20 cents per $100 in deposits. This comes after assurances that they are fully funded.

So the deposits are completely safe if the FDIC get's a cash infusion. Perhaps Obama can announce a plan to bail out the FDIC?

4:50 PM  
Blogger Rickey Henderson said...

On a completely unrelated note, Mike, you can stop your kvetching--Rickey is officially blogging again.

(although given the influx of posts around here, Rickey strongly suspects you as the culprit for stealing his blogging mojo).

12:33 AM  
Blogger Mike said...

Obama's specific comments probably refer to people making a run on the banks and taking the $$ out of their savings and checking accounts. Obama is not only not reprehensible, he's correct. There is no need for people to bury their money in mason jars.

I have my money in a local credit union. My faith in them is pretty sound, so I'd say this particular comment is appropriate.


What people do with their money is none of Obama's business. It's irresponsible for him to give unsolicited advice that -- surprise, surprise! -- encourages folks to lend money to banks in danger of bankruptcy.

On a systemic level, if those banks go under and the FDIC has to bail them out to pay off depositors, where do you think that money is coming from anyway? Either the FDIC will borrow the money from treasury or the Fed. Which means inflation either way.

And inflation kills savings.

you can stop your kvetching

Is that an option?

7:02 AM  

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