Friday, December 9, 2011

Last Call

A lot of numbers have been thrown around in the accounting of just hom much money the banks got from the Fed, but if this analysis is to believed, it's utterly insane: some $29 trillion total.  Randall Wray at EconoMonitor:

There are a number of issues that must be understood. First, the Fed quibbles about the differences among lending, guarantees, and spending. For the purposes of this blog I will accept these differences and call the sum across the three “commitments”. In spite of what Bernanke claims, these do commit “Uncle Sam” since Fed losses will be absorbed by the Treasury. (The Fed pays profits to Treasury, so if its profits are hurt by losses, payments to Treasury are reduced. If the Fed should go insolvent, the Treasury will almost certainly be forced to recapitalize it.) I do, however, agree with the Chairman that a tally should not include facilities that were created but not utilized (there were several of them, and the tally I present below does not include any facilities that were not used).

Second, there are (at least) three different ways to measure the Fed’s bail-out. One way would be to find the day on which the maximum outstanding Fed commitments was reached. According to the Fed, that appears to have been about $1.5 trillion sometime in December 2008. I’m willing to take Bernanke at his word. Another way would be to take the total of commitments made over a short period of time—say, a week or a month. That would be a measure of systemic distress and would help to identify the worst periods of the GFC (global financial crisis). Obviously, this will be a bigger number and will depend on the rate of turn-over of Fed loans. For example, many of the loans were very short-term but were renewed. Bernanke argues that it is misleading to add up across revolving loans. Let us say that a bank borrows $1 million over night each day for a week. The total would be $7 million for the week. In a period of particular distress, the peak weekly or monthly lending would spike as many institutions would be forced to continually borrow from the Fed. Bernanke argues we should look only at the lending at a peak instant of time.

Think about it this way. A half dozen drunken sailors are at the bar, and the bartender refills their shot glasses with whiskey each time a drink is taken. At any instant, the bar-keep has committed only six ounces of booze. That is a useful measure of whiskey outstanding. But it is not useful for telling us how much the drunks drank. Bernanke would like us to believe that if the Fed newly lent a trillion bucks every day for 3 years to all our drunken bankers that we should total that as only a trillion greenbacks committed. Yes, that provides some useful information but it does not really measure the necessary intervention by the Fed into financial markets to save Wall Street.

And that leads to the final way to measure the Fed’s commitments to propping up our drunks on Wall Street: add up every single damned loan, guarantee and asset purchase the Fed made to benefit banks, banksters, real Housewives on Wall Street, fraudsters, and their cousins, aunts and uncles. This gives us the cumulative Fed commitments.

And if you go ahead and do that, as two UMKC graduate students have done, you come up with a mind-busting figure:

When all individual transactions are summed across all facilities created to deal with the crisis, the Fed committed a total of $29,616.4 billion dollars. This includes direct lending plus asset purchases. Table 1 depicts the cumulative amounts for all facilities; any amount outstanding as of November 10, 2011 is in parentheses below the total in Table 1.  Three facilities—CBLS, PDCF, and TAF—overshadow all other facilities, and make up 71.1 percent ($22,826.8 billion) of all assistance.

Table 1: Cumulative facility totals, in billions
Source: Federal Reserve

Facility Total Percent of total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4(1.96) 33.96
Single Tranche Open Market Operation 855 2.89
Terms Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82(12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09(.794) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14(849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5(9.33) 0.07
Maiden Lane III 24.3(18.15) 0.08
AIA/ ALICO 25 0.08
Totals $29,616.4 100.0%

Yeah. That figure is in billions, as in $29,600 plus billions, commonly known as $29.6 trillion.  Some ten trillion just in liquidity swaps, and another nine trillion in the Fed's primary dealer credit window, plus another ten trillion in change in other various and sundry programs.  Twice our entire national debt, just to get the banks out of the hole they were in.  Helicopter Ben was dropping cash out of helicopters made of cash.

Oh, and the banks are right back to playing the same games they were before, because they know if they screw up again, the Fed will bail them out...again.

It is any wonder that the Village Elite are looking to scrap as many social programs as possible in order to make the average American pick up the tab for what's coming next?

Well That's A Crying Shame

Sadly, Republican presidential candidates aren't quite as stupid as we thought...well, not every single one of them, it seems.

Late on Thursday, Michele Bachmann confirmed that she would not participate in Donald Trump’s proposed GOP debate. This followed fast on the footsteps of Rick Perry, who earlier in the day “respectfully” declined the offer.

That means Trump’s “debate” is down to two participants — Newt Gingrich and Rick Santorum — with the noted businessman and celebrity birther activist Trump as moderator.

While Bachmann, Romney and Perry all had polite words to say as they ran from the TV star’s project, Ron Paul and Jon Huntsman went out of their way to reject Trump himself as a debate moderator who would demean the political process.

And Rick Santorum, one of the few candidates yet to have experienced a “boomlet,” leaped to Trump’s defense.

“Many of my opponents jockeyed to be the first to fly up to New York and use Donald Trump for a photo op and no doubt try and secure an endorsement,” Santorum said in a statement. “But when Donald wants to moderate a debate - they refuse to attend. That’s what’s so wrong with politics today - hypocrisy.”

That leaves just two, Gingrich and Santorum, for the Trump Debate on the 27th.  Sadly, I'm betting the debate gets axed.  If not, an hour of Gingrich on the hotseat trying to out-wingnut Rick Santorum the week before the Iowa Caucuses on January 3rd I'm thinking will only make the Iowa goofballs love him more...and alienate the rest of the voting populace.  Trump indeed is considering pulling the plug.

It's entirely possible that Newt could have this thing wrapped up by February 1 if he takes Florida on January 31 and has won Iowa and South Carolina before that.  Unless Mitt has won New Hampshire by a huge margin, I'm pretty sure it'll be over.  GOP may not have anything to play for on Super Tuesday on March 6.

Obama vs Gingrich?  The universe cannot be that stacked in the President's favor.

Of course, there's a debate tomorrow and another one Thursday, so the GOP Clown Car Show will roll on regardless, so we'll see if Newt can last.

Why Yes, Cenk Is Indeed "Mad, Bro"

I actually am glad Cenk Uygur has his own show on Current TV these days, right before Countdown with Keith Olbermann.  It's good to have as many liberal cable news voices as we can, because those voices are critically outnumbered.

Having said that, it's terribly, abundantly clear that Uygur isn't going to let go of Rev. Al Sharpton's PoliticsNation getting his old slot at MSNBC anytime this century.

Responding to a reader poll on Thursday night, Current TV’s “The Young Turks” host Cenk Uygur suggested that Al Sharpton, whose MSNBC program “PoliticsNation” airs at the same time as Uygur’s, is a cheerleader for President Barack Obama.

The Current reader poll Uygur was responding to showed that 84 percent of his viewers believed he was not being too tough on President Obama. Making good on his promise for “real interaction” with viewers, Uyger defended himself and pointed to Sharpton as the alternative.

“If [Obama's] wrong about something, I’ve got to tell you,” Uyger insisted. “I can’t be like, ‘Give me an O! Give me a B! Obama’s great!’ If you want that kind of show, go to Al Sharpton.”

“Did I say that?” he quipped immediately thereafter, drawing groans and laughter from the rest of his crew.

Hey, I've been pretty tough on President Obama this week myself:  I completely disagree with his Plan B drug reversal despite the FDA saying that it's safe enough for over-the-counter use, and the US climate change delegation in Durban this week has been basically worthless on the biggest issue facing the globe, choosing to punt until 2020.  Those are real problems, and real disagreements I have with this President's policies.

Having said that, is that enough to make me run screaming to vote for Republicans in November?  Hell no.  Thinking these issues will be revisited in a second Obama term may make me a sucker for believing there's a chance they'll be fixed, but thinking the Republicans will magically turn into the party of environmentalism and women's rights after they win in 2012 is an even worse bet.

I don't think Cenk remembers that always.

Privacy Law Takes Turn For The Stupid

Leon Walker, 34, is charged with a five-year felony after accessing now-ex-wife Clara Walker's Gmail account to see whether she was having an affair. Michigan's law prohibits accessing a computer system without consent.

Walker and his attorneys, Leon Weiss and Matthew Klakulak, said the law was never intended for domestic matters, but was designed to prevent identity theft and the theft of trade secrets.

But judge Pat Donofrio said Walker's actions appear to fall squarely under the law the way it was written.

"Your client is being charged with securing intellectual property -- her e-mail, accessing her intellectual property," he said.

Klakulak also argued legislators never intended the law to be used for snooping spouses and that if it's used as such, it could criminalize activities such as parents monitoring their children's online activities.

I'm going to stop there and call bullshit. First of all, it's illegal to access someone's postal mail without permission. This is an extension of that expectation of privacy. Second, an adult being punished for accessing private correspondence without permission in no way covers a parent's obligation and responsibility to check correspondence for a minor child. The man accused is described as a "computer technician" and had an advantage over his wife.

Cheating on your spouse is wrong, but it's not our business. Private correspondence and the right to expect privacy is a bigger deal and affects all Americans. Dismissing this as silly is wrong. I agree with the judge, this falls under the description of the law and appears to also follow the intent of the law, which was to protect our electronic privacy.

What do you guys think? Would you find this man guilty or not, based on the law and based on your own moral compass?

John Shore Puts A Fine Point On Christianity VS Gays

Before I post this, I want to say a few things.  I have never believed that religion is a reason to discriminate against others.  We are free to choose our religions, therefore it makes sense we can choose a religion that matches our own moral standing, and each one is as valid as the next.  In a country that proudly offers its citizens choice, and after reading religious doctrine that validates the gift of free will, what other conclusion could there be?  Some religious people aren't happy to control their own lives, they feel the need to extend their beliefs on those who do not live the way they feel is proper.  Whether that is in regards to tithing, prayer habits or our sexual lifestyle, it's wrong.  Period.

I have challenged homophobes to describe the logic as to why they feel the need and that they have the right to dictate to others how they should live.  "I don't like it" isn't a fair reason, but that is what it comes back to.  "It's offensive to God" is the only other reply.  Well, God's a big guy and He can take care of Himself.  I highly doubt a bunch of hypocrites are doing any favors to the cause.

The truth is, there isn't a logical reason to discriminate.  There is no right that is right enough to force changes on consenting adults who can make their own choices.  There is no reason law should dictate personal behavior if it isn't a crime or a threat to others.  Now enter John Shore, who wrote a beautiful article about a boy who got his attention on YouTube and is in anguish over how he is treated for feeling a certain way.  And that's all it is, folks.  How one feels towards others.  Shore calls out the religious might that says their beliefs is enough reason to treat this boy like a second-class citizen.  Tea Baggers like Michele Bachmann would also see their rights as citizens downgraded so they don't have protection or recognition under law.  But when you ask why, you get the same stuttering bullshit that has been spewed from the beginning of time.

This is a direct challenge to look this boy in the eye and tell him he's sick, broken or a criminal.  He could be anyone's son, brother, cousin or best friend.  He's just a normal kid who happens to be gay.  The pain on his face is real, and so is the stupidity he has endured for his entire life.  Look at him in the eye and explain why you think he's less of a person.  I dare you.

Evangelical, fundamentalist Christians -- by which I mean, specifically, Christians who believe that being gay is a moral abomination, an appalling affront to God -- talk to me, please, about this kid.

Tell me that your belief system didn't help put the hot tears on this kid's cheeks. Tell me that the bullies who torment this kid aren't in any way encouraged or empowered by your tacit approval of their actions. Tell me that the shame this kid feels about himself has nothing to do with the shame that you believe all gay people should feel for themselves.

Tell me that you can't comprehend the connection between your conviction that God finds homosexuals repulsive and the fact that this kid finds himself so repulsive that he habitually cuts his own flesh.

Tell me, please, how you love this kid. Tell me how you understand his pain. Tell me how when he cries, you cry.

Tell me how you want to do everything in your power to make sure that no one, ever again, feels free to in any way victimize a young, gay person.

A Christian myself, I am pleading with you to be honest with me about this.

Tell me, please, how none of this kid's anguish has anything to do with you.

I'm listening. I really am.

We all are.

Shutdown Countdown: Here We Go Again, Part 7

Ahh, but there's a much larger issue this weekend for Congress besides the payroll tax fight or nomination issues for the Consumer Financial Protection Bureau:  a government shutdown is right around the corner again.

Top lawmakers are aiming to forge a deal to keep the government operating beyond next week, even as Republican measures to restrict funding for abortions and the Obama administration's health care act threaten to derail it.

If Congress fails to iron out differences before December 16, lawmakers will be forced to pass another temporary spending measure or risk a government shutdown and the wrath of voters increasingly disenchanted with Washington.

"We cannot allow the government to remain on autopilot for another fiscal year," said Democratic Senator Daniel Inouye, who helps oversee spending as the chairman of the Senate Appropriations Committee. Inouye was speaking on Thursday to a committee of lawmakers in charge of hashing out the deal.

Congress managed to pass bills to fund housing, agriculture, transportation and justice departments for the fiscal year ending October 1, 2012. But it still needs to figure out how to fund other crucial government functions such as homeland security, labor, foreign affairs and health.

And make no mistake, health is the big one.  Republicans have eliminated almost all funding for implementing health care reform measures, and have zeroed out funding for Planned Parenthood.  Tea Party Republicans say they'll block any attempts to restore funding.  It's a mess, and without a deal by a week from today, there will be a partial shutdown of health services, possibly including VA hospitals, Medicare and Medicaid.

The clock is back on, and there appears to be no real change right now.  Will there be a punt until after the new year?  Who knows.  One thing's for sure:  Republicans cause a shutdown and they block the payroll tax extension again, the voters are not going to be happy with them.

And the Republicans know it.

Turn On The Lights, Watch The Roaches Scatter Part 82

The banks are now in full panic mode over the combination of Massachusetts leading the charge to sue the mortgage banks and Occupy Wall Street destroying the bank's public relations efforts.

A national effort to reclaim vacant properties has one of the country’s largest lenders scrambling.

The financial website Zero Hedge has allegedly obtained a memo from Bank of America’s field services operation warning, “We need to make sure we are all prepared.”

Vocal New York organizer Sean Barry told Raw Story Tuesday that an action known as “Occupy Our Homes” would place foreclosed and homeless families in otherwise-vacant homes. That effort began Tuesday with over 40 events in more than 20 cities.

“On Tuesday December 6th there is a potential nationwide protest planned that could impact our industry,” BofA employee Leonard Pavlov reportedly wrote to BAC Field Services. “We believe the protests will likely take place tomorrow at auction sites, homes that are being foreclosed, homes in the eviction stage and vacant homes.”

Indeed, the Occupy Our Homes movement is hitting the banks right where they hurt, by squatting in foreclosed homes in order to take them back from the banks.

Nick Espinosa, one of the organizers of Occupy Minneapolis, which officially launched Oct. 7, said Minnesota's cold makes it difficult for people to spend the winter outdoors, where the temperature is forecasted to reach a low of two degrees on Thursday just as Hennepin County authorities removed unattended tarps and chairs at the plaza outside the Minneapolis government center, the Associated Press reported.

The numbers at the plaza fluctuate, but they are "dwindling," Espinosa said.

"It makes sense to be indoors but really this is a larger issue," he said. "It's an opportunity for a way to bring what is happening on Wall Street to back to Main Street and to communities most affected by this crisis." 

The Occupy folks get out of the cold, and into where the real battle is taking place:  America's residential real estate market.  It's a maneuver than makes it much harder to evict Occupy volunteers for a number of reasons, and it provides shelter for folks this winter.  It's a smart move...and one that has the banks sweating bullets.


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