Larry Summers

Just under a year ago, we got the tax fraud, and the only remaining member of Obama's economic Titanic, praising the US recovery. His timing top ticked the economy, preceded the Hindenburg Omen by 10 days, and ushered in QE2. Now, we get his sidekick, long since departed after totally failing (we use the more polite F-form of the word) up at his job, writing the follow up, from the cushy confines of academia, warning America that unless there is a major fiscal stimulus (because presumably the monetary stimulus which everyone praised in the form of QE2 has now been proven to only be a boost to the stock market and a bailout of European banks), this once great country which once exhibited the world's reserve currency is on its way to another "lost decade." We wish Summers well: perhaps 3 of those who read the following drivel will take him seriously. Two of them are Krugman and Koo. We are taking bets as to who the third one will be...

The man who probably more so than anyone else can be singled out as the person (behind the scenes) responsible for the destruction of America, first with his successful drubbing of every vestige of regulation, then his isolation of Brooksley Born and her all too prescient concerns on structured products and derivatives, and finally, with carrying over his debilitating management practices from Harvard over to the US in general for the past two years, just had his farewell speech, which in typical fashion can be summarized as follows: "I am smarter than you peasants, go to hell." For a more official summary of his valedictory, here is WaPo's Dana Milbank: "Summers's final performance was very much in character. He arrived 10
minutes late for the speech, his suit jacket open, his shirt pulling
tightly at the buttons, his suitpants stained on one of the knees. His
hair showed signs of bedhead, but it could have been mussed by Summers
during one of his morning meetings. He jiggled his legs while listening
to the introduction by EPI President Larry Mishel, who had some edgy
words for his guest. Although both men grew up in Philly, Mishel said,
"when he moved to Boston, he adopted the Boston Red Sox as his baseball
team. Me? I'm still a fan of the Fightin' Phils." Summers rushed to rebut this point - by insulting the home team. "If I
lived in Washington, I might still be a Phillies fan, too." There were
groans in the audience." And of course, it is not like it was Summers fault for doing anything to bring unemployment down even as total US debt under his watch increased by over $2 trillion: "On Monday morning, he went to the Economic Policy Institute, a liberal
think tank, to give his "perspectives on the past two years." But in his
remarks, he spoke of not a single wrong decision he made." So now that the disastrous, and hopefully final, reign of this distant Tatooine descendant is over, here are the three finalist to fill his extra wide chair, two of whom promise to do absolutely nothing to break Wall Street's stranglehold over the White House, and thus increase the odds for a widespread populist mutiny with each passing day.

William Black continues with his campaign to not only bring sanity and transparency to an administration wrapped in secrecy, legacy cover ups and fraud, but to finally do what had to be down two years ago: bring down the big banks, force a balance sheet restructuring at the TBTFs, and force a systemic reset which is the only thing that could bring the much promised "change for good" to this country. " Don't talk about doing the right thing -- do it -- and do it to a major contributor. Don't do it because it's a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership." We once again hope that more people like Bill Black (if not he himself) will decide to run for president, and make the difficult choices necessary to begin the impossible task of truly fixing the mess this country finds itself in.

Let's cut to the chase: Larry Summers is leaving the Obama administration because he simply could not destroy the US economy fast enough. Which is why the next director of the National Economic Council should not be allowed to do a half-assed job. With that in mind, here are the best replacements for the now vacant post as suggested by Bloomberg's Jonathan Weil.

Rumor making rounds now that either of Pimco's top two men could replace the man who destroyed Harvard's endowment. Should either of these two be forced to quit Pimco, it would mean that QE would have to be massive to make sure that the Fed is a backstop of last reserve in case the next head of Pimco is unable to replicate his predecessor's success.

And then there was one, even if it was a TurboTax One. Bloomberg headlines flashing that Larry Summers is dunzo in November. He follows such other economic failures as Romer and Orszag, both of whom left the economy in a far more horrendous state than they found it. We wish godspeed to Larry, and hope he managed to get thick windows in the limo that will take him to his next private sector job, presumably somewhere above the 40th floor in 200 West.

You knew it was just a matter of time before prudent Larry looked for greener pastures. Courtesy of William Banzai, we bring you Larry Summers' LinkedIn profile. No matter what you think of it, it is a victory for the bulls.

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

Headlines for now, but we get it. Although hold on, wasn't it the ever reliable Timmy G who just last week said the US will not be impacted by the European crisis? Which of these pathological truth tellers to believe...so difficult to decide.

Larry Summers, whose days in the Obama administration are thankfully numbered, presents the most incoherent rambling defense of our monopoly banking system, yet to appear in the public domain. When asked if US mega banks should be broken up, reports the HuffPo, "Summers said no. He added that it's not significant. But that's not the important issue," Summers said during the interview, adding to his answer as to why the U.S. shouldn't break up megabanks. "[Observers] believe that it would actually make us less stable, because the individual banks would be less diversified and, therefore, at greater risk of failing, because they would haven't profits in one area to turn to when a different area got in trouble. And most observers believe that dealing with the simultaneous failure of many -- many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment." We dare you to reread the above from Larry the Hutt and not have your frontal lobe disintegrate into antimatter. Sure, 4 out of 5 Goldman CDO traders totally agree that Goldman's monopoly in the capital markets is terrific, and, in fact, if someone could "organize" a liquidity event at RBC, Barclays, UBS and CS, they would really apprciate it, doubly so if, like JPM, they could then acquire the firms for a dollar over their Fed guaranteed debt. As for everybody else, well, if you have any doubt that Larry Summers is having his future personal assistant organizing his corner office at 200 West, he hope this should resolve it.

Charlie Gasparino has just broken the story that Larry Summers may leave the Obama administration, presumably after the elections, based on the former DE Shaw man's disclosures to various Wall Street execs. This is not a very surprising move for Obama, who has bet his entire mid-term election campaign on his counter-Wall Street rhetoric, if not actions. Too bad that by this point, due to over a year of purposeful inactivity, the TBTF are Too Infinitely Big To Fail. With Summers a horrendous legacy of the administration's extensive ties to Wall Street, it was only a matter of time before he and Obama quietly parted ways. Following this development (and not a second too soon), everyone's attention shifts to Tim Geithner who has overstayed his welcome in the "public" scene for just about his entire tenure, and is way overdue in checking in to his reserved Goldman Sachs cubicle.

Larry is asked on his view of the ever escalating war with Wall Street
and its implications: "If you do the right things for the fundamentals
and for soundness, over time markets tend to work out. And if you let
your policies be guided by day to day market movements, that's what
tends to be the problem. If you ask yourself 'how did we get here?' one
central part of how we got there, one central part was all those people
who believed all those prices, believed all those credit spreads, who
let day to day market levels be their guide through 2006 through the early part of 2007." Wow, Larry - maybe Obama's speechwriter should tone down the constant reference to the "Dow Jones" in that case to highlight just what a great job the increasingly clueless president is doing.

As the administration's every TV appearance is predicated first and foremost by indicating just how high the market has "risen" in the past x minutes, hours, days, and months, Larry's statement that it is perfectly ok to use the market response when things are going ok, but to ignore it when its says the administration has fucked up beyond compare, is the supreme epitome of hypocrisy.

Heretic! Heretic!

Larry: So many of us really do appreciate your oft noted deep concern in regards to the unemployment situation in the USA as well as the big push to rein in the banks, but with thousands of comedians out of work, it just isn’t fair that you are delivering the best comedy and crowding out these comedians from their rightful work.

The man cited to be Ben Bernanke's replacement if and when the stock market (not the economy) takes a decided turn for the worse, Larry Summers, has been implicated in an act that may make his transitioning into his role of running monetary policy for the world's biggest economy slightly more complicated. A report that was issued several months ago by Asia Times' blog discloses that the man who has President Obama's attention on all matters financial was in fact selling the AAA-rated tranches of toxic CDOs held by his former employer, multi billion hedge fund D.E. Shaw after the collapse of the CDO-loaded Bear Stearns hedge fund.