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Matt Taibbi's Latest: Wall Street's War, And Some New Perspectives On The Fed's Goblin-In-Chief
It's early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once-indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.
The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America's banking giants to either forgo their access to the public teat they receive through the Federal Reserve's discount window, or give up the insanely risky, casino-style bets they've been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street's most lucrative profit centers: Five of America's biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan's trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.
"When I first heard about 716, I thought, 'This is never gonna fly,'" says Adam White, a derivatives expert who has been among the most vocal advocates for reform. When I speak to him early in May, he sounds slightly befuddled, like he can't believe his good fortune. "It's funny," he says. "We keep waiting for the watering-down to take place – but we keep getting to the next hurdle, and it's still staying strong."
In the weeks leading up to the vote on the reform bill, I hear one variation or another on this same theme from Senate insiders: that the usual process of chipping away at key legislation is not taking place with its customary dispatch, despite a full-court press by Wall Street. The financial-services industry has reportedly flooded the Capitol with more than 2,000 paid lobbyists; even veteran members are stunned by the intensity of the blitz. "They're trying everything," says Sen. Sherrod Brown, a Democrat from Ohio. Wall Street's army is especially imposing given that the main (really, the only) progressive coalition working the other side of the aisle, Americans for Financial Reform, has been in existence less than a year – and has just 60 unpaid "volunteer" lobbyists working the Senate halls.
The companies with the most at stake are particularly well-connected. The lobbying campaign for Goldman Sachs, for instance, is being headed up by a former top staffer for Rep. Barney Frank, Michael Paese, who is coordinating some 14 different lobbying firms to fight on Goldman's behalf. The bank is also represented by Capitol Hill heavyweights like former House majority leader Dick Gephardt and former Reagan chief of staff Ken Duberstein. All told, there are at least 40 ex-staffers of the Senate Banking Committee – and even one former senator, Trent Lott – lobbying on behalf of Wall Street. Until the final weeks of the reform debate, however, it seemed that all these insiders were facing the prospect of a rare defeat – and they weren't pleased. One lobbyist even complained to The Washington Post that the bill was being debated out in the open, on the Senate floor, instead of in a smoky backroom. "They've got to get this thing off the floor and into a reasonable, behind-the-scenes" discussion, he groused. "Let's have a few wise fathers sit around the table in some quiet room" to work it out.
As it neared the finish line, the Restoring American Financial Stability Act was almost unprecedentedly broad in scope, in some ways surpassing even the health care bill in size and societal impact. It would rein in $600 trillion in derivatives, create a giant new federal agency to protect financial consumers, open up the books of the Federal Reserve for the first time in history and perhaps even break up the so-called "Too Big to Fail" giants on Wall Street. The recent history of the U.S. Congress suggests that it was almost a given that they would fuck up this one real shot at slaying the dragon of corruption that has been slowly devouring not just our economy but our whole way of life over the past 20 years. Yet with just weeks left in the nearly year-long process at hammering out this huge new law, the bad guys were still on the run. Even the senators themselves seemed surprised at what assholes they weren't being. This new baby of theirs, finance reform, was going to be that one rare kid who made it out of the filth and the crime of the hood for everybody to be proud of.
Then reality set in.
h/t Ian
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bernanke is the fed's fucktard-in-chief
Hey Tyler!!!
Is there a way y'all can let us read shit without exiting tha site?
Right click on the link, and choose Open in a new tab, or Open in a new window.
I think this html code would do the trick...
<a href="http://www.rollingstone.com/politics/news/;kw=%5b36899,157778%5d?RS_show..." target="_blank">Continue reading here</a>
Uh, <ctrl>click or <shift><ctrl>click. Is that what you mean?
Nice but I picture the hamburglar instead.
"robble robble!"
Lol
I'm feelin' this one:
http://www.imdb.com/media/rm1502256128/tt0091142
Matt Taibbi is one of the only true financial journalists left.
+1. He's the Seymore Hirsch of finance.
I cant help but picture Stieg Larsson's Mikael Blomkvist from the Girl with the dragon tattoo.
The problem with GS's Lloyd C. Blankfein is that he is compromised.
On the one hand he wants to be on the good side of those in office who have the force of power --- the administration an the congress
On the other hand as spelled out in another book by another financial author Michael Lewis in his book"the Big Short" ---Blankfien was only reacting to the mortgage crisis ---- Created By those in office --- who have the force of power.
Faced with toxic mortgages---a poison so deadly that it would take down the entire free market ---- the finacial wizzards ---- Mike Burry and others shorted the shit out of the worthless crap
In the process of providing a market for the worthless mortgage crap foistered on the American taxpayer by the congress and various presidents ----the risk was spread to many --- and we may yet dodge another government bullet at the taxpaying public
But poor conflicted Floyd --- he is not a polititian ---- he only knows how to kiss their arses. And in doing so he becomes a tool of the socialist who are taking over
ANDcorrupting the American dream
"Goblin-in-Chief" gives Bernanke too much credit. The man isn't "evil". And to be fair, I don't believe he even knows he's a tool. The man is basically a cult member. A lifetime of indoctrination into the kool-aid drinking sect of devout Randian believers has left us with a brainwashed, non-critical thinker, who honestly believes that free markets are self-preserving markets.
Bernanke fails to understand the primary modus operandi of Wall Street: Make money now, and do not under any circumstances give a shit about tomorrow.
His belief not only in an invisible hand, but in a specially endowed invisible hand which not only recognizes some sort of overall 'social good', but contains a subroutine for its own self-preservation is nothing short of a wacky alt-religion. Ayn Rand believed it. Greenspan believed it. And now Bernanke believes it. Decades of Wall Street implosions tell a different story of course, and give us ample contrary evidence.
Bernanke isn't evil. He's a man deeply immersed in the warm bubbles of groupthink, and enamored with the thoroughly disproven belief-systems of his predecessors. He's a religious "believer": Historically the most dangerous of all character-types to occupy a position of power.
He's not bad, per se. He's just not smart.
How do you figure Bernanke is "Randian"? Oh I get it, like Mr. Magoo (Greenspan) was randian. Gotcha.
>> Mr. Magoo (Greenspan)
That's hilarious.
Greenspan was "Randian" at a point in time when he also argued for the gold standard. People change. I don't think what Greenspan morphed into aligns with "Randian" philosophy. Maybe none of it matters.
How do I figure that the Greenspan/Bernanke lineage is Randian? Huh? The most laissez-faire, "Thou shalt not regulate the big boys", Fed leadership in history? They are they epitomy of Randian.
Oh, and then there's this from Wikipedia:
"During the 1950s, Greenspan was one of the members of Ayn Rand's inner circle, the Ayn Rand Collective, who read Atlas Shrugged while it was being written."
Maybe, but you can't know that for sure. Maybe he's just a useful tool of the elite, or maybe he actually is bad per se, and smart enough to cover it.
You're conflating Free Markets with Command Economies. Bernanke is free market in rhetoric only, if that. As to the supposed Randian influence, maybe somebody who's got Galt's diatribe on currency debasement memorized can post that up and show you that the current direction of Fed policy is emphatically NOT Randian.
As to the evidence provided to us by repeated Wall Street implosions:
Step 1) Get some Human Action in your face and let Mises slap you around with his Austrian knowledge penis.
Step 2) Wear the mushroom-shaped bruises with honour.
Step 3) Understand the effects Fed-created distortions in the gross market rate of interest have on allocations of capital in an economy.
Check it out, Human Action is even free: http://mises.org/humanaction/chap20sec6.asp
Agree with that. Keynseian yes, Randian no.
...Another argument which conveniently starts Fed history in 2007.
I'll give you that *current* Fed policy is nothing more than a sticksave. But the entire reason we're in this mess to begin with is a philosophy of devout non-regulation and non-government intervention in markets.
Saying that "the current direction of Fed policy is NOT Randian" is to start the clock at a very convenient point to your argument. The system is collapsing BECAUSE of an open adherence to Randian philosophy. (Does anyone need to re-watch Greenspan's painfully pathetic "I found a flaw in my philosophy" testimony?)
The problem with the Fed, since the early warning signs of LTCM has been a pathalogical adherence to de-regulated (and inherently dangerous) market behavior.
The exact, and openly communicated basis for this non-regulation was Rand, with whom Greenspan was personally close and openly shared philosophical common-ground.
read Greenspan's essay on gold from the mid 60s and tell me that was the same man who chaired the Fed. it wasnt greenspan once got it. rand got it. bernanke, a career academic hack from the Woodrow WIlson school at Princeton never got it
Maybe Bern-yank-me isn't stupid. He just knows so much that isn't so. Ignorance and self-righteous certainty is a really bad combination.
How telling is it that the best 'news' program on TV is on Comedy Channel and the best financial journalist is found at Rolling Stone? Is that a pathetic commentary on our corporate media or what? And the MSM wonders why we hate them... Are they really that stupid?
I don't think they are stupid. I think they are just bought and controlled by their corporate masters.
On second thought...
weiner...:
Serious news channels can be sued for defamation if allegations made are not provable or at least, previously reported elsewhere.
Satire or comedy doesn't have to meet such high standards.
Very true, but truth is an absolute defense. My particular beef is the idea of 'so called equivalency'. In other words, merely reporting that '...some people say the Earth is round. Other disagree.' is pointless. If it is a fact; report it as such. Would it be too hard for someone at the Wall St. Journal (a Murdoch rag), report on the stuff we see everyday over here?
Still, point taken.
He is a good journalist and adds humor to the ugly truth. A good book of his about the presidential campaign and the media is "Spanking the Donkey". Really entertaining.
He makes the Bill sound like its worth the paper its printed on.
It isn't and or won't be. A real audit (Paul's not Sanders') is what is essential and what will never be.
Taibbi is a 8-year old girl who's only way of winning an argument is by calling the other girls names
i would rather listen to taibbi's 8 year old girlie talk than your 2 year old diaper talk.
tailbbi is the finest financial journalist in america.....go matt go!!!
Matt
is that you ???
Taibbi is a 8-year old girl who's only way of winning an argument is by calling the other girls names
Taibbi is a 8-year old girl who's only way of winning an argument is by calling the other girls names
Yeah Remington?
Fuck you, your fucking horse and Toto too.
Well said Duuude
get to a methadone clinic ASAP
Didn't you just call him a name?
Nah, I insulted tha Asshole's horse though.
+1
Funny names, though. "Sumo wrestler in drag" - good.
8 year old girl - not so much. And he wins the argument through very thorough research and careful writing. The names are just for fun.
Why Mr Gephart you know better than to try to hid behind a false name like Remington IV, or is that you Barney...can't tell you to apart anymore.
"create a giant new federal agency to protect financial consumers, open up the books of the Federal Reserve for the first time in history and perhaps even break up the so-called "Too Big to Fail" giants on Wall Street."
You believe that entire statement,you drank the coolaid.
The first SIX words tells it all...............
Wiff....nothing will change, withness the huge strategy change Corzine implementing at MFG, he's firing 100s of exchange derivatives guys fully confident that the OTC model will basically remain intact....big yawner Matt...
BTW, the MSM makes much more $ than Comedy Central or Rolling Stone, so Steve Liesman asks, "would you rather be right or better paid??"
"would you rather be right or better paid??" Personally, I'd rather be right, ethical and moral than "better paid". It's that whore-mentality that permiates Wall Street and DC and frankly, too many other areas of our country that cause a lot of our current problems.
Money at any cost, more more more. OR, like the Dire Straits song title: Money for Nothin'.
BTW, I don't have the money figures for the MSM, but I would bet that the revenue arrow is pointing down, just like their ratings.
As for Corzine, what a fucking loser. Nice job he did for New Jersey!
Taiibi does a great public service in revealing the true nature of the snakes infesting the Senate leadership. Shelby as a "sumo wrestler in drag," and the "monster love between Dodd & Shelby." That's just too good. The real public servants like Brown, Kaufman, Sanders, Merkley, really don't have a chance in this broken system. The old deadwood like Reid, Dodd and Schumer long ago lost their soul, and they have a new sponsor in Wall Street's newest and bestest friend, Barack Obama. The alternative to orderly reform is collapse, and the persistent failure to do anything effective ensures us we're headed for Door #2.
He strikes me as an angry, intelligent outsider who digs in until he understands how things work. I doubt we'd agree on too many things, but I like the way he writes. He has a very populist, accessible way of describing financial shenanigans, dontcha think?
He was also quite open and accurate on the industry prostitution that we called the medical reform bill. As other's have said, he is one of the most honest and inquiring modern main stream journalists (Tyler excluded). His tone and language is also appropriate to the crime, chaos and collapse he covers
Perfectly said, perfectly said.
The truly shocking situation today, is that there is almost one of him, when there should be thousands.
Only one Matt Taibbi, only one Greg Palast, only one Larisa Alexandrovna, only one Pam Martens.
We are in dire need of thousands more where they came from......
I wouldn't trust these lobbyists as far as I could drop-kick them.
If I was altogether evil and devious, I would put out the message that me and my kind were losing, that the mighty people's representatives in the House and the Senate were just too tough for us, ....... and we're reelly, reelly worried.
Meantime a few subtle loopholes are being slipped in or protected from srutiny.
Gephardt and Lott - someone give them a case of ball cancer, stat. Traitors.
Since you're getting a 2 for 1, we'll include each to have a rectal polyp the size of a bread loaf. Bon apetite!
thank you again, Matt
MODERNIZED PHILLIPS MACHINE:
http://williambanzai7.blogspot.com/2010/05/modernized-phillips-machine.html
ben s bernanke, s stands for Shalom (???????) (Sephardic Hebrew/Israeli Hebrew: Shalom; Ashkenazi Hebrew/Yiddish: Sholem or Shulem) is a Hebrew word meaning peace, completeness, and welfare and can be used idiomatically to mean both hello and goodbye.[1][2][3] As it does in English, it can refer to either peace between two entities (especially between man and God or between two countries), or to the well-being, welfare or safety of an individual or a group of individuals
Haha, I added Matt Taibbi on facebook and he accepted me as a facebook friend. Must be my cute photos on fb. lol
Bottom line is that Matt is helping get the message to the masses similar to Dylan. Once Ratigan has an 6pm or 8pm show expect many banks pants to be pooped. America is certainly awakening, albeit slowly, to the incontrovertible fact that they have been hijacked. November will just be the beginning and in 2012 it will be lights out as Ron Paul becomes President. On Midnight of election night 2012 I expect Teterboro to be the busiest private airport that ever existed.
It is going to be like the reverse of the end scene in Die Hard 2 when the runway is illuminated with flames.
http://video.foxnews.com/v/4214417/the-one-thing-526
Beck did a piece on Dodd.
Beware the law of unintended consequences...
The beautiful poetry of the "financial reform" bill is that the law-makers so singularly focused on ensuring their own career-sustaining campaign contributions, have in fact hastened a global financial day of reckoning. In their unending quest to please their masters, they have unwittingly cemented an eventual final collapse that will annihilate them, Wall Street, and the rest of the ponsi scheme we euphemistically call our "free market".
Taking the long view, I couldn't be happier with the final version of the bill. The only thing that will prevent my children and grandchildren from the debt slavery I have endured is a complete system reset. The astute gentlemen and women sipping sherry at D & 1st have all but guaranteed that for me.
Thank you, Chris Dodd.
I agree, wish it would get on with it. I have prepared best I can food, PM's,ammo,etc. My kid's are young and mabye we can get back on track so they will have a future. Ron Paul2012
Has Ron Paul mentioned in the past how he would clean up Wall street?
Just posted a EURO monthly chart ...
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1