A few days ago I posted a video of Larry Summers talking about FinReg on CNBC with Maria Bartiromo.
At the time, I was content to simply post the video with some snide
remarks about what a devilish doofus and utter cad the man was, leaving
it up to the reader to watch the video and see how obviously arbitrary
and self-serving his opinionating on the subject was.
Alas, it
seems that with the clarity of retrospect I see now that I misjudged
the psychic value I would derive from leaving the video up without
specific comment. It turns out I misjudged my future value system
(insert statist/interventionist guffaw here, along with requisite claim
that this situation highlights the need for a monopolist regulator who
could smooth out market inefficiencies, failures and information
asymmetries) and I have no choice (!!, double guffaw) but to present to
you now a series of nearly verbatim (I might have blown a preposition
or tense here or there) transcripts of The Sleepy One's comments to the
Money Hunny, along with my very own color commentary. Let us begin:
It's
the most important Wall Street reform legislation in 75 years. It will
substantially reduce the probability of another financial crisis. It
will eliminate the prospect of large-scale federal bailouts of the kind
we were forced into a year ago. And it will change the financial life
of every American household by forcing the right kinds of protections
and restrictions on egregious credit card practices, on mortgages that
have exploding and unfair terms, on payday loans and other means in
which consumers have been taken advantage of.
This one is just hilarious. Summers is going to be eating these words for the rest of his life.
We're
on the verge of Re-Depression 2.0, so Summers' calculation that this
will "substantially" reduce the probability of another financial crisis
demonstrates that Summers either doesn't understand what the word
substantially means, or else he doesn't understand what generates
business cycles. Another option is that both of these are true.
The
federal bailout "clause" in his defense is based on the premise that
the federal tax-funded bailouts of the financial industry were
"necessary and proper" (having fun with Constitutional/legal language
here, if you can't tell). Of course, they were neither. They may have
been politically necessary lest the criminal scumbag politicians be
voted out for not "doing something" but they were not economically
necessary. In fact, they were highly economically improper, as they
prevented in large part the self-correcting mechanism of the market
place from operating and cleaning out all this much bewailed and
bemoaned toxicity still lying semi-dormant in the financial system.
The
last bit is just political demagoguery. "Unfair" is a relative term and
it leaves the door open for all kinds of bureaucratic intervention, all
manner of which will be entirely arbitrary and entirely ruinous to the
operation of free markets everywhere. Credit cards and payday loans had
nothing to do with the cause of this crisis, that part of FinReg was
simply a way to buy some votes of angry, entitled, tapped out voters.
Similarly, the mortgage debacle was a symptom, not a cause, of the
financial crisis. The crisis itself was caused by the Fed.
Curious, no mention of the Fed so far. Moving on:
You
know if you look at the financial history of this country we had a
catastrophe in the 1930s. We put in place a system of regulation that
really set that right. We went a long period with almost no, major,
financial incident, but in the last 20 years we've seen one almost
every 3 years: the S&L debacle of Mexico, LTCM, the NASDAQ Bubble
and so forth. And so we clearly had a major task to do, which was to
put in place a regulatory system which was updated to keep pace with
the pace of innovation in the markets. That's what the framework put in
place today has done. It's a huge achievement for the country, it
reflects enormous leadership and hard work of many people, the
President, who was talking about this in a major way in campaign
speeches, an unlikely subject in campaign speeches, long before the
Lehman crisis happened.
Summers proves he is no student of US or even global financial market history with this one.
He
also misinterprets his selection-bias riddled data set and draws
"clear" conclusions that should, in fact, be highly controversial.
Namely, all of these debacles he mentions (and MORE!) can be directly
tied to a preceding government intervention or central bank policy
action as the ultimate cause. Yet, what conclusion does Summers arrive
at but that all of these situations "clearly" demonstrate a more urgent
need for more of the same interventions and narrow-minded policy
measures that got us all into the mess we find ourselves in today.
Could his theorizing be any more self-justifying and self-serving?
But
that self-serving takes a back seat to his disgusting political
genuflecting for Master Obama. Good gracious, if we had only recognized
the visionary leadership of that young, upstart senator and Marxist
community organizer from the state of Illinois and elected him to the
newly created position of Emperor For Life when we had had the chance,
none of this would have ever happened! May we be a little wiser, next
time... even though there PROBABLY won't be a "next time", financial
debacle-wise, because as Mr. Summers has already pointed out this
whizbang FinReg stuff really socks it to impending financial
meltdown-causing bacteria and viruses.
My friends in the
business community sometimes like to try to have it both ways. They're
for standards, for clear standards, but then if they don't like the
standards, they're for regulatory discretion in a lot of areas, the
Volcker Rule for example. It was business that was working very hard to
get regulatory discretion and to avoid detailed statutory mandates.So, I think it's a little rich for them to complain that there is now a certain amount of regulatory discretion.
Look,
there's things Congress should not do. Congress doesn't know the
details of the circumstances of an individual financial institution,
those are enormously technical areas. So there needs to be discretion;
discretion circumscribed by a framework; a framework that rules out the
prospect of a taxpayer bailout; a framework that provides for
resolution authority; a framework that insists that things that can be
put on clearinghouses and exchanges be put on clearinghouses and
exchanges; a framework that insists that every systemic institution, if
you're big enough to bring down the system, you're big enough for
someone to regulate you comprehensively.
You're right Larry, that IS rich! But not for any of the reasons you just mentioned.
First,
let's consider what kind of person in the business community would be a
"friend" of Larry Summers', metaphorically or otherwise. This would
probably be a person who has been sucking on the government's teat to
ensure they are always pulling those big, bottom-line surprises out of
their hat at the end of each quarter for SO long that when their
parents bring them to social events and explain their child-raising
lifestyle choices to other partygoers, the average Jane becomes pretty
alarmed and has to slap her husband across the face a few times to
remind him that it's not polite to stare, especially at a
fifty-year-old woman breastfeeding a teenager.
In other words,
these businessmen friends of Larry are not the kind of businessmen you
and I are familiar with-- you know, the kind that have to manage
consumer preferences and costs of doing business as they quest after
profit, the whole time exposed to the possibility of loss and financial
ruin. Instead, they are members of the political entrepreneurial class
who are so dependent on their government mommy's tax-financed plastic
surgery-enhanced breast-milk that they'd soon die without it. But not
before throwing one hell of a noisy, pathetic tantrum, first.
Okay,
now that we've got that out of the way, let's consider what else is
rich about Larry's latest observation. How about... Larry Summers and
all the other assorted politicians who helped put it together as well
as the bureaucrats at the various agencies tasked with interpreting
FinReg and "fleshing it out"?
Yeah, little Larry is going to be
riding that revolving door between government "service" and political
consultancy like a turbocharged merry-go-round, and you can bet there
are more than a few booze-and-sex-filled Bermuda cruises for the agency
task force personnel charged with interfacing with 202's greatest
lobbyist minds being finalized in the government relations departments
of major Wall Street firms as we speak.
Question to Larry: if
Congress can't properly regulate an individual financial institution
due to "enormous" technical difficulties, how in the eff are they
supposed to figure out an entire industry, like finance, or an entire
economy, like the United States'?
Don't bother getting back to
me with an answer, by the time you figure it out more than a few years
will have passed and in the land of ObamaCare I'll surely be dead.
If
you're worried about uncertainty, the people who decided to make 10s,
if not hundreds of billions of dollars of subprime loans, and they're
saying the uncertainty is about what the government is going to do?
People have off-balance sheet SIVs where they can't even calculate what
the total extent of their liabilities are, their uncertainty wasn't
caused by the government. Their uncertainty was protected by what the
government did, by the fact that those institutions were facing, in
many cases, catastrophe.And the government, NOT to help them,
but to protect the system, did what was necessary to take what was a
tale, of literally a depression, out of the market. That's the
important thing that's happened about uncertainty.
I fear I
am echoing myself here but, if financial institutions can't know what
they're holding and calculate what it's worth, what hope do regulators
have?
'Course, that's not the point-- that was just a red
herring lightfoot Larry came up with to distract from the real issue,
that being that the government IS causing massive uncertainty in the
financial markets and real economy. Will there be another stimulus bill
or not? If so, how much and who gets the money? Will the Fed be
accomodative or complacent? Will the government allow the market to
deflate or try to fight it with occasional, hyperactive bouts of
inflation along the way? Will Congress pass more, moronic laws aimed at
micromanaging everybody else's business while their various and growing
ethics violations multiply or will they all sleep-in one morning after
a lobbyist-financed night of coke and hookers on K Street and leave
everyone alone for a change? Etc. etc., ad infinitum ad absurdum.
Again,
Larry tries on a bit of politicized, revisionist history, where in this
version of the story the government was NOT, I repeat, and emphatically
so, good sir, NOT, bailing out connected cronies on Wall Street, but
was in fact the knight in shining armor of the good, honest people of
Main Street USA. 'TWAS FOR YOUR OWN GOOD, I MIGHT ADD, PAL!
Look,
Maria, what am I going to do, give you a number [for what bank capital
ratios should be in the future]? It's a very complex subject.I
will say this: it's clear that there wasn't enough capital in the
system and there was too much leverage before. And it's clear that
whatever we do we're going to need to do in a way that recognizes that
we've got a recession from which we have to recover and that's going to
depend on a strong flow of credit. And so, assuring a strong flow of
credit, but getting to healthier, better capitalized institutions,
that's the tradeoff we're going to make on Basel.
Ha, Maria
baby, please, what do you want me to do get my little calculator out
and do some math for everybody? Please, ya wastin' my time!
Of
course, yes, that is exactly what we'd like you to do, Larry. Do your
little calculation and show it to us so we can all check your math and
make sure there was nothing arbitrary or subjective about the process.
Like
all pseudo-economists, Larry is all about the tradeoffs, but he's also
all about the free lunches (which don't exist). And what he's REALLY
all about is not disclosing how he arrives at the tradeoffs he
ultimately decides to make.
Hmmmm, we need more credit which
requires more leverage, but we also need more capital, hmmmm, hmmmm,
how to solve this puzzle, how to "tradeoff" between these two,
seemingly mutually exclusive needs. Methinks some money-printing might
not be far off in mine future!
We're determined, the
President has said it many times, to do what's necessary for growth.
The fact that it happened too late, it happened too slowly, but the
fact that Congress is at last extending unemployment insurance, looks
like it is on the verge of providing new credit and tax incentives for
small business, it's starting to move on a broader range of programs to
support energy, remembering the needs of state and local governments.All
of this will contribute to supporting and extending the momentum of
growth. This is an economy we're watching very closely and we'll do
what's necessary.
Larry Summers apparently does not
subscribe to Ben Bernanke's tweets. The man still thinks there are
green shoots out there and that it's appropriate to talk about
shepherding their growth and development into big, strong economic oak
trees. Little does he realize that "momentum" is a term borrowed from
physics and it is not necessarily positive in value. Consider: what is
the momentum of a massive object with negative velocity?
Haha, idiot. (Sorry, couldn't help myself.)
The
last bit about necessity is, as you can see, a recurring theme in
Larry's Logic. It's also probably the most horrifying part of the plan.
Remember, the way it should read, if Larry were a bit more into honesty
than he actually is, would be:
We'll do what [we think] is necessary.
As
for what Summers and Co. think is necessary, don't bother him with
requests for specific details, like what bank capital requirements
should be. Instead, let him sleep on it, and together we can all cross
that bridge (with the help of a friendly, well-groomed, handsomely
suited financial lobbyist) when we come to it:
One last question, before I go, but...
Is
it just me, or does Larry Summers have a more-than-merely-striking
resemblance to South Park's wunderkind mystery sleuths, the Hardly Boys?
Eh? Huh? No? Just me? Well, alright then.
With Baheye!
that, I bid you adieu in the immortal style of Larry Summers at the end
of his nearly 10 minute long propagandizing, dissembling "interview"
with Maria "Mouthpiece of the Markets" B, in what can best be described
as the awful love child of an Eastern New England accent and the tone of a person who has zero respect for the annoying person they have just finished talking to:
"It's a very complex subject" ... and because of the vast complexity we needed 2300 pages to open at least 1000 loop holes and create enough complexity (an infinite number of agencies, commissions, and panels) to preclude anyone from objecting to anything that we may come up with.
We are indeed doomed to global irrelevancy. (not just because we are broke ... but because we elected the Keystone Cops to run our Nation's affairs ... I can't imagine that we are not the laughingstock stock of the world ... and to rub it in next year's Nobel Prize for Economics will be shared by Ben Bernanke, Larry Summers, Tim Geithner, and Barry Obama)
And how many pages was the Glass-Steagall Act, which worked fine for many decades until some bought-n-sold idiots decided to remove it?
Amen ... Glass-Steagall repeal laid the foundation of our current mess
And of course larry forgot to mention that.
Ron Paul's "Audit the Fed" (HR 1207) fits on one page. Just sayin':
http://www.govtrack.us/congress/billtext.xpd?bill=h111-1207
---
Separately, Larry looks like the love child of the Hardly Boys.
Did u catch how he was praising Obama, stating that Obama was campaigning for FinReg way before the Lehman crisis. Obama, Chris and Dodd are some kind of oracles.
I will sleep better at night knowing people are not buying homes on pay day loans. Now if they could justclamp down on the lottery players.
I suspect any company on the Dow is big enough to be a "systemic" risk , and therefore vunerable of being dimantled by the gov?
What if the company posing to be a "systemic risk" is a forgien company?
Maybe Halburton could dismantle it?
I think this idea of "stystemic risk" opens up a whole can of worms.
Too make matters worse...apparently the SEC can repeal "at will" any one liner in the bill....like the one involving credit agencies "signing off" on their ratings AND being financially liable if they were wrong...WTF? Already? Really? I mean Really!
Maybe they should treat LS for sleep apnea..........
LS...sounds like a pretty nasty disease to me.
If only Larry Scumbag had a few more billion at Hahvahd, he would have MADE a profit instead of a loss. The problem is he didn't calculate the proper capital requirements. Now that he has Capitol to play with, his schemes will go swimmingly.
I suspect that it's just a scale thingy. Carrying zeros is hard. Just ask the poor sap who had to carry Larry home after the pictured meeting.
Cheers,
Larry represents the banksters. It is hard for normal people to understand the mentality of a corrupt individual. He does not have the interests of America, Americans or even Obama in mind. Look to the Baltic states for an indication of what will happen to us. It is incredibly sad. He left despair and suicide in his wake in the Baltics. No different now. He helped 7 men (6 of a certain ethnic disposition) gain control of 65% of the Russian economy.
Uhhhg. That is the worst picture I've ever seen of him -- and that is saying a lot.
Thanks for the dissection...
Was it Summers who taught Geithner's 'Turbo Tax 501 class' at Harvard?
My post has nothing to do with this topic........but i wanted to put it up anyway.....we have been hearing about this wikileaks issue for quite sometime...including the famous video of murdered iraqis............but i think u have to look deeper and u will find a deeper level of deception ........yesterday Wikileaks was out with a huge amnount of Docs posted on the internet.........but strangely ...the issue has recieved much publicity in the MSM ....from the likes of NYT , WSJ etc etc......both newspapers have pointed out the parts of the leaked docs where the mention of ISIs support to Taliban and Al-qaeda have been documented......
Wow...is this an attempt to expand the war on terror in Pakistan....gaining sympathies....
Wikileaks has CIA written all over it ::
http://kennysideshow.blogspot.com/2010/07/wikileaks-partners-ny-times-an...
i hate to put up something by AlEX JONES ...i know that he is a controlled opposition....but still his website has this nice article ............notice the comments...
http://www.prisonplanet.com/wikileaks-docs-target-pakistan.html
Thanks for providing an opportunity to comment on this issue. :)
I have been disgusted by the attempts by the guest commentators on Alex's show to paint Wikileaks as a CIA front. It seems that they see a conspiracy theory under every bed. To Alex's credit, he did not join them and repeatedly said he was "still looking for further info to either endorse or discredit the leaks" (or words to that effect).
In every Assange interview and seminar appearance that I have seen, he seems (to me) to be entirely genuine. He is focused, calm and direct in answering questions - and firmly emphasises a commitment to exposing corruption and human rights abuses.
After initially focussing on the ISI-Taliban connection, the MSM is already trying to shift the focus away from the leaks to Assange himself (Who is he? Where does he buy his shirts? What did he have for breakfast? etc ... the usual MSM tripe). Yet Assange - in his interviews - keeps bringing the subject back to the killings and massacres of civilians and children that are exposed in the leaks. Hardly a topic that will help O'Bummer to expand his empire into Iran, if the stories of possible war crimes were given proper coverage by the MSM and the alternative media.
Commentators are also suggesting that the leaks will help to bring down the internet. It seems that Wikileaks is damned if they do, and damned if they don't. This time, instead of just dumping the documents onto the internet for every schoolkid to read from a "conspiracy website", Wikileaks -- very cleverly in my opinion -- had the leaks analysed and the story broken by the most credible (to the masses, not here!) print publications in each of the three main western markets: the Guardian in the UK, Der Spiegel in Germany, and the NYT in the US. This is hardly an indictment of the internet. Au contraire, it bypassed the internet until the internet sites picked up the story. I think this is a message from Wikileaks to TPTB that shutting down the internet will not stop the leaks from continuing into the future. That is a good thing.
i am not sure about this ....but everytime i see something in the MASS media i have all kinds of thought.....i dnt really get it...they are so good at covering up...why the publicity ....and on top of that splash all over mainly the parts linking ISI to Taliban....
atleast the Pakistani Taliban is funded by CIA and MOssad and RAW...i m sure of that
and that ALEX JONES is a fraud...
but in this case i m really confused who to believe
There should be no confusion that these fuckers ALWAYS fund both sides of every war. There's money to be made you know!
As far as the Internet goes, I'm sure the TPTB hate it. They don't have the option of shutting it down since that would cause mass hysteria, let alone shutting down the economy since most commerce relies on the Internet. So what other options do they have? Cause confusion and spin things the way they want.
I'm also trying to figure out the wikileaks thing...
To:
i-dog:
1. Not all the controlling elite are blind to the fact that the "American Empire" project, while quite effective in consolidating wealth and power in the short run, is suicidal for America over time.
2. however, for some America is a temporary "host nation" to be looted and bled dry (as were England and Germany) before moving on to the next victim; or perhaps the analogy is to think of those running America as those running an itinerant circus who happen to be performing in D.C. presently---they will move along to another venue, perhaps sooner than later.
I agree with both of your points. Interesting times :)
Also agree. Their think-tanks essentially run the nation. And many of these thinkers want total collapse and mass starvation/war - whether it be a twisted euphoria and/or to save Earth from the "human virus" they are accumulating hard assets with paper while the music is still playing - they intend to have a chair when it stops.
http://en.wikipedia.org/wiki/Georgia_Guidestones
Marla is that you? To whomever wrote this: KUDOS!!
Pure hilarity...
Btw, this is a great article: "The Rot from Within: Character Disorders of the Republic." It uses Obama as a prime example, but this applies to every fucker in our political system and the TPTB.
http://original.antiwar.com/robert-logan/2010/07/16/the-rot-from-within-character-disorders-of-the-republic/
...how pervasive the symptoms of these destructive personality disorders had become in our society, especially in politics, and the importance of changing the message to our children.
But what the children are getting instead is the slickest death-merchant we have yet seen in our republic, simultaneously winning the Nobel Peace Prize while accelerating the longest war in our history. Obama is the poster boy for covert aggression: war crimes in the name of award-winning humanitarian objectives; announcing a surge at the same time he insists there will be a draw-down.
Obama represents the development of an even more insidious personality disorder in our national character – a more polished version of the same destructive malady. We did not learn from 9/11, we did not learn from Bush’s tragic aggression, and the children most of all learn that the response to increasingly obvious destructive behavior is to become even better at it.
Why does the word "PIG" spring to mind when the words "Larry Summers" appear?
Harvard (I am a graduate) will be hard-pressed to recover from having had this grotesque swine as its president.
On Derivatives
On July 30, 1998, then-Deputy Secretary of the Treasury Summers testified before congress that "the parties to these kinds of contract are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies."
Summers approved the decision to enter into the swap contracts as president of the university and as a member of Harvard Corp., "the university’s seven-member ruling body" which bears "the school’s ultimate fiduciary responsibility."[40] By late 2008, those positions had lost approximately $1 billion in value.
Isn't it ironic that the very people that had a hand in causing the financial meltdown are the ones solving it ?
As David Brooks describes Summers in April 2009 "I do know that this White House is very much an intellectual hothouse <hahahahahahaha!>. It's a little different from the... last White House <uhhh... good one!>... But, there are certain intellects, which are flourescent <seriously David?> and they are taking over the place! And the President is one of them, but...I think Larry Summers is another. And those MINDS - you just see them crowding everyone else out... It's astonishing..." Wow! Now there's an ass kisser, teat sucker if I've ever seen one - David Brooks.
http://www.charlierose.com/view/interview/10250 (1:52)
The Sleepy One longs for the sleep chamber of Edward G. Robinson's character in "Soylent Green."
Larry is nothing but a PR front man.
Thanks for the post, Tyler and the commentary that just shows how shallow and hypocritical the 'wise guy' is.
"Harvard president Lawrence H. Summers, facing a faculty revolt and eroding support from the university's governing board, announced yesterday he will resign, ending the briefest tenure at the Ivy League school's helm in 144 years." - Boston Globe 2/22/06
The Crimson couldn't even stand him for long...
EURO buying support mentioned since June continues and further upside is expected.
http://stockmarket618.wordpress.com
Tyler, you are violating B9K9's law...
"As an online financial discussion grows longer, the probability of a suggestion involving lack of awareness or knowledge by the power-elite approaches 1."
Does it matter what Larry Summers says? Summers has been the mouthpiece for years for the owners of the Federal Reserve banks. The only reason we don’t have Bob Rubin shuckin’ and jivin’ instead of Summers is because there are still a few people left in America who don’t realize that Summers is the same thing, a member of the Goldmanite Mafia.
It won’t be long before the oligarchs can’t find a Goldman Club member unknown enough to peddle their lies; it’s to the point where America’s choices are slavery or pulling these people out.
Thanks, Conant, for pulverizing this lightweight liar.
I have to share that I am astonished at how few people actually recognize his name, let alone know what his history is. Please realize that I am not talking about the ZH crowd.
It is really strange (although I'm getting used to it) to explain a little about Larry to folks who don't know and watch their faces get all twisted up.
I think that that is the cognitive dissonance kickin' in...Many still seem to find it implausible that their hip-slick-young president would actually choose a lead financial advisor who lost a billion for Harvard as its president and got asked to leave...
In my experience, this is NOT the best time to start trying to explain GLASS-STEAGALL to this person -- but God knows I've tried.
As James grant has mentioned there is No Credit, thus we have one of two types of depressions.
Deflationary depression with lower rates or just a plain old Depression with higher rates. Credit availabilty
seems to be the determining factor and all we readers know there is no credit available. Why do we keep hearing thr word "recession" and why does anythying relative to politicians matter ?. Greenspan & Bernanke, Dems & Reps
Libs too are all guilty. We all abused the system and now it all requires an unwinding. Unfortunately higher taxes and destroying credit are two of the worst factors ailing everyone except the cash rich. If there has to be a tax then make it upon the wealthy as measured by net worth, holdings of treasuries and even municipals and NOT a tax upon income. BTW what do you expect, American education is so behind reality I can't get the CAPTCHA answer right on the first try-ever!
....presented for some background:
http://jboy.chaosnet.org/misc/docs/articles/shleifer.pdf
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