Let me take you back to Christmas Eve, 2009. It was a time to wrap gifts for loved-ones. That's how the Obama Administration felt about the financial industry when it lifted all caps in emergency bailout money to Fannie Mae and Freddie Mac. That means the taxpayer was on the hook for all losses at these two mortgage giants no matter how large the losses.
The move caused a slight stir, but never got the attention of the American public because the announcement was timed to coincide with the peak season of distraction. And so it was forgotten...but not by Fannie and Freddie.
Indonesian police have used tear gas and water canon to disperse about 2,000 anti-government protesters who tried to enter the parliament building in the capital, Jakarta.
The scuffles broke out on Tuesday as members of parliament began a debate over the possible impeachment of the country's vice-president and finance minister.
...
His vice president, Boediono, and finance minister, Sri Mulyani Indrawati, approved the bailout and opposition leaders have demanded their resignation saying they must be held accountable for losses to the state.
On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.
Sometimes though, one cannot say it better but miss those who did.
Must Read Post #1
We have astounding statistics on how the financial sector has grown and how just a few of our Zombie banks control it in this detailed Naked Capitalism guest post. The combined assets of the 6 largest U.S. banks are now 63% of U.S. GDP!
Because of the Republicans new found concern for budget deficits, 1.2 million American families will be cut adrift today.
Nearly 1.2 million unemployed Americans - including 27,000 in Wisconsin - face an imminent cutoff of government unemployment checks if Congress cannot pass emergency legislation to extend federal benefits before funding expires Sunday.
On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.
Sometimes though, one cannot say it better but miss those who did.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Below is a talk on the actual mathematical models behind credit default swaps, credit default obligations and a very "Pro" Quant MIT Professor, Dr. Andrew Lo describing the mess. Here are some slides from a talk on the same topic. Now I do blame the mathematical models themselves, sorry we've looked at the mathematics, but this guy is a Financial Engineering Professor, so listening to his views and insights one must, as well as not discredit human nature as he points out. Lo has also testified before Congress on systemic risk. Here is the actual testimony with select quotes extracted and Baseline Scenario pulling out some quotes as well.
Are Mathematical Models the Cause of the Financial Crisis in the Global Economy?
I'm not so arrogant as to believe that I know the perfect solution to our economic problems. Anyone that tells you they know is either a fool or a liar.
However, that doesn't mean we can't discover where we went wrong once you apply a little logic and data to the situation.
For instance, if you realize you have taken a wrong turn, it makes more sense to turn around and go back to the corner where the mistake was made, than it does to drive in a general direction and hope you can find your way home.
When it comes to the economy, its pretty easy to discover when the wrong turn was made - 1972.
I have a friend named Maya, who is very talented at advanced statistics. Over the weekend, together with some others across North America, we sat down to look over the numbers pertaining to unemployment. At least one was online via the telephone (that would be landline to you data comm and SS7 aficionados), the others communicated over the Web.
In looking at those numbers, together with correlating data, we arrived at some rough calculations that might give one pause.
“Behind every great fortune lies a great crime.”
- Balzac
Capitalism hasn't failed. What has failed is the economic system in place today.
No amount of government taxes, trade barriers, or regulation caused it to fail.
No investigative reporter, or congressional oversight committee, or regulatory watchdog, exposed the massive fraud and corruption in the financial system today. All of the safeguards put in place to protect the public, and the current system from itself, failed.
The global financial crisis came to light because what amounts to a falling out amongst thieves. They simply stopped trusting the ability of each other to pay their debts. Once lending stopped, credit creation froze, and the Ponzi-scheme that parallels our financial system broke down.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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