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[World Bank]: World Bank Predicts Sharply Slower Growth -
"The new Global Economic Prospects update notes that global growth is expected to contract by 1.7 percent this year. This would be the first decline in world output since World War II. GDP is projected to decline by 3 percent in OECD countries and by 2 percent in other high-income economies." -
[Atlantic]: The Quiet Coup -
"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government -- a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF's staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we're running out of time." -
[CNBC]: Geithner Plan Will Rob US Taxpayers: Stiglitz -
"The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday." -
[FT]: China calls for new reserve currency -
""This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money," said Qu Hongbin, chief China economist for HSBC." -
[NYT]: Cuomo Says Most Huge A.I.G. Bonuses Were Returned -
"Attorney General Andrew M. Cuomo of New York announced late Monday afternoon that 9 of the top 10 bonus recipients at the American International Group had given back their bonuses." -
[Bloomberg]: Bank of America's Bernstein Says Sell Bank Stocks After Rally -
"Removing devalued loans and securities from banks' balance sheets is a short-term solution that will delay the problem's ultimate solution, which is bank takeovers, Bernstein said. The government won't be able to inflate the prices banks receive for selling bad assets indefinitely, he added. " -
[Max Hastings]: Seize their Porsches and throw them in jail! -
"How can the real world get through to these people that they are not success stories, winners, masters of the universe but failures, losers, impresarios of misery? Why should banking be singled out, to be rewarded differently from every other form of human endeavour?" -
[Felix Salmon]: Revolution in the Air -
"Might we might be seeing the first real rumblings of class warfare -- the genuine article, not the Republican talking-point -- in this country?" -
[NYT]: Sweden Says No to Saving Saab -
"The Swedish government has responded to Saab's desperate financial situation by saying, essentially, tough luck. Or, as the enterprise minister, Maud Olofsson, put it recently, "The Swedish state is not prepared to own car factories."" -
[WSJ]: Geithner: My Plan for Bad Bank Assets -
"The financial system as a whole is still working against recovery. Many banks, still burdened by bad lending decisions, are holding back on providing credit. Market prices for many assets held by financial institutions -- so-called legacy assets -- are either uncertain or depressed. With these pressures at work on bank balance sheets, credit remains a scarce commodity, and credit that is available carries a high cost for borrowers." -
[Reuters]: Obama says risks still haunt U.S. financial system -
"The U.S. financial system still faces risks requiring government intervention to avoid a more destructive recession, President Barack Obama said, before a critical week of fleshing out and selling his recovery plan. " -
[Frank Rich]: Has a 'Katrina Moment' Arrived? -
"It would be foolish to dismiss as hyperbole the stark warning delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor published by The Times last week: "President Obama may not realize it yet, but his Katrina moment has arrived."" -
I feel like the only way this would be Obama's Katrina moment is if the majority of the public viewed it that way. Given recent poll ratings, I think that to be unlikely. - David Wynn
People who expect an immediate (i.e., 100 days) solution to problems 8, 16, 35, or >100 years in the making (depending on your perspective) are delusional. - Steve Lowe
@steplow: +33. While I wouldn't mind more transparency the scope of the problem is far bigger than most realize. - AJ Kohn
Exactly, and I don't know what I can't stand more: people who are impatient, or those pretending to be impatient for political reasons. - Steve Lowe
People who are impatient might be that way for any number of reasons, and might yet learn (or might even be right). People who pretend to be impatient for political reasons are at best dangerously reckless; more likely pure evil. - David HC Soul
Hey *I disliked/distrusted Obama before he was elected....and I *will, unfortunately, in that, be vindicated, no offense. and "Moo," Obama took most money from Banks which get the most money.... - Marg Uerite
Among American politicians, Barack Obama was the fourth largest recipient of AIG lobbying funds, just before John McCain and just after George W. Bush. Most Barack Obama true believers don't want to hear about it. - Sean McBride
Politicians take money from corporations?!? Stop the press! I am SHOCKED! Lets pass legislation that no politician can accept money. Not from just corporations because "they" certainly have an agenda, but every last one of us has our own agenda. - AJ Kohn
Not "corporations" -- AIG in particular. And the Obama administration has been up to its eyeballs in engineering the AIG bonuses which have rightly stirred up so much anger during the last week. Timothy Geithner played the lead role in pushing the bonuses, and David Axelrod and Rahm Emanuel tried to blow off the bonus controversy as an inconsequential matter. - Sean McBride
Yes, I'm sure Obama's Administration is buying off the judges on the lawsuit AIG has against the government to get tax money back. Look, if it were up to me we wouldn't have given *any* of these bozos a dime. You want to be pissed, look at the non-TARP money being handed out without *any* transparency. Sorry, but to me you're running down the hallways they want you to run down. - AJ Kohn
AJ -- it's pretty difficult to manipulate Frank Rich and Paul Krugman. And generally I'm fairly hard to herd too. The AIG bonuses are symptomatic and symbolic of a much larger problem, of course. And leading Obama administration officials appear to be part of the problem. That is the main theme of Rich's broadside. - Sean McBride
[Brad DeLong]: The Geithner Plan FAQ -
"The Geithner Plan is a trillion-dollar operation by which the U.S. acts as the world's largest hedge fund investor, committing its money to funds to buy up risky and distressed but probably fundamentally undervalued assets and, as patient capital, holding them either until maturity or until markets recover so that risk discounts are normal and it can sell them off--in either case at an immense profit." -
The problem is, "the probably fundamentally undervalued" is a falshood. A bubble is a case of "absolutely fundamentally overvalued." It makes no diffence if we talking 'tulip bulbs', stock, or synthetic investments. The derivatives that are waiting to collapse have a notional value perhaps a hundred times world GDP... to believe that there is immense profit to be made in the process of extracting fake capitalists from their excesses is to be delusional beyond belief. - David HC Soul
[Paul Krugman]: More on the bank plan -
"Early on in this crisis, it was possible to argue that it was mainly a panic. But at this point, that's an indefensible position. Banks and other highly leveraged institutions collectively made a huge bet that the normal rules for house prices and sustainable levels of consumer debt no longer applied -
[ Paul Krugman]: Despair over financial policy -
"The Obama administration is now completely wedded to the idea that there's nothing fundamentally wrong with the financial system -- that what we're facing is the equivalent of a run on an essentially sound bank." -
If this analysis is correct the bursting of the derivative bubble is inevitable; there is no way to wind down the problems of AIG and the larger yet undisclosed/unadmitted by the admin/fFed larger financial environt catastrophe awaiting. It might be time to start walking around with "the end is near" signs. A few capitalists are in the final throes of allowing what will potentially the most destructive process ever seen to run unabated across the world. - David HC Soul
[Paul Krugman]: The Great Recession versus the Great Depression -
"At first, the current recession didn't hit industrial production all that hard. But the pace accelerated dramatically last fall, so that at this point we're sort of experiencing half a Great Depression. That's pretty bad." -
[NYT]: Off With the Bankers -
"The argument that A.I.G.'s traders are the people that we must depend on to save the United States economy is as weak and self-serving as it was in Thailand, Korea or Indonesia. A.I.G. is essentially advocating survival of the weakest. Thankfully, the American people are not buying it." -
[Maverecon]: It's the turn of the unsecured creditors now -
"Why are the unsecured creditors of banks and quasi-banks like AIG deemed too precious to take a hit or a haircut since Lehman Brothers went down? From the point of view of fairness they ought to have their heads on the block. It was they who funded the excessive leverage and risk-taking of banks and shadow banks. " -
[Political Wire]: Dodd Admits to Loophole -
"Senate Banking Committe Chairman Chris Dodd admitted to CNN that he was responsible for the loophole in the economic stimulus package that allowed firms like AIG receiving bailout funds to pay bonuses. " -
[MoneyWeek]: Will Britain go bankrupt? -
"Apparently, British house prices could fall by as much as a further 55%. Oh, and there's a real risk that the country could go bust on top as well." -
Wonderful news. - Roberto Bonini
[NewsHour/PBS]: AIG Chief Asks Execs to Return Part of Disputed Bonus Pay -
"The head of AIG appeared on Capitol Hill amid a furor over the company's bonus pay and told lawmakers that he's called on workers to return part of the payments." -
"Thy shall not steal, unless it's worth stealing" - Roberto Bonini
[Brad Setser]: A bit more to worry about -
"Foreign demand for long-term Treasuries has disappeared over the last few months. " -
Boom instant run on the dollar. - Roberto Bonini
[Washington Post]: Federal Reserve to Buy $1.2T in Bonds, Mortgage-Backed Securities -
"The central bank will increase its purchases of mortgage-backed securities by $750 billion, on top of a previously announced $500 billion. It also will double its purchases of debt in Fannie Mae and Freddie Mac to $200 billion. Those steps are intended to lower mortgage rates. The announcement of the previous purchases pushed mortgage rates down a full percentage point." -
One question. If it didint work the first time, why's it gonna work now?? - Roberto Bonini
[Mark Halperin]: Bush: Obama 'Deserves My Silence' -
"The former president refuses to criticize his successor in his speech to the Calgary Chamber of Commerce in Canada Tuesday. "I'm not going to spend my time criticizing him. There are plenty of critics in the arena." Speech was his first since leaving office in January. " -
[AP]: Obama, Congress knew about AIG bonuses for months -
"For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn't until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back." -
[Politico]: Grassley on AIG execs: Quit or suicide -
"Sen. Charles Grassley is so angry over AIG bonuses that he says the executives should resign or kill themselves." -
[Reuters]: Citigroup CEO awarded $10.8 million -
"Citigroup Inc awarded Chief Executive Vikram Pandit $10.82 million of compensation in 2008, a year when the government propped up the bank with $45 billion of capital." -
[Gallup]: Consumer Mood Index Hits Highest Mark Since September -
"Gallup's Consumer Mood Index rose sharply over the last week, to -90 for March 13-15. This is up from -120 a week ago and is the most positive the Index has been since mid-September 2008. " -
[Mish's]: Bank CEO calls Geithner's Plan -
"Wells Fargo's CEO Richard Kovacevich has some harsh words about Geithner's stress test. "It's Asinine" Says Wells' CEO. Henry Blodget seems to agree." -
[Paul Krugman]: A Continent Adrift -
"There's no government in a position to take responsibility for the European economy as a whole. What Europe has, instead, are national governments, each of which is reluctant to run up large debts to finance a stimulus that will convey many if not most of its benefits to voters in other countries." -
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