My Bank Is Involved in State-icide


As Greece’s financial condition has worsened,
undermining the euro, the role of Goldman Sachs and other
major banks in masking the true extent of the country’s
problems has drawn criticism from European leaders. But
even before that issue became apparent, a little-known
company backed by Goldman, JP Morgan Chase and about
a dozen other banks had created an index that enabled
market players to bet on whether Greece and other European
nations would go bust.



What The Stress Tests May Show

I think stress tests on the banks are going to be a continuing saga of gloom that will further sour the public on high salaries for incompetent management. This from Obsidian Wings is conclusive, even if it is extreme. FULL SOURCE

Hilzoy writes:

I have been hearing for years and years about how the financial services sector pays such exorbitant wages because the people who work there are so immensely talented that they are cheap at $50 million a year. I never particularly bought that line before. But I never imagined that all those Masters of the Universe would do quite this badly. If we had paid them $50 million a year to go far, far away and leave our financial system alone, it would have been a bargain.


Food for Thought on The Banks

From Simon Johnson, quoted by Economist’s View:

How then do we really privatize? By exercising leadership: take over insolvent banks and immediately reprivatize them. … The taxpayer retains a significant number of shares (or the option to buy common stock) as a way to ensure upside participation…

Above all, we need to encourage or, most likely, force the large insolvent banks to break up. Their political power needs to be broken, and the only way to do that is to pull apart their economic empires. It doesn’t have to be done immediately, but it needs to be a clearly stated goal and metric for the entire reprivatization process.



Best Film Review of The Day: The International



The timing of the film’s release is interesting, in light of the current banking crisis and the plethora of financial scandals. From what I understand, screenwriter Eric Singer (no relation to the drummer from Kiss) based certain elements of the story on the real-life B.C.C.I. scandal. I predict that this will become the ubiquitous new trend in screen villains-the R. Allen Stanfords and Bernie Madoffs seem heaven-sent to replace Middle-Eastern terrorists as the Heavies du Jour for action thrillers. You can take that to the bank.


What? Nationalize Everything?

OK, so Greenspan is now saying nationalize the banks? If so, what else? Amazing. Hmm. Follow Once. Follow Twice. What is Third? Who’s on first? Are you confused? Join the club.



What Is The Problem? What Do You Think?

Cars — we cannot have an automobile economy anymore. We need transit, not more cars.

Convert everything dealing with moving to transit.

Build car free communities.

Cyberfy all office work so that no one is more than a walk from an employment connection.

Houses — we cannot have a housing economy anymore.

We need communities that are car free with dwellings that are entirely beyond anyone’s current imagination.

Eventually the thing one aspires to own will be one’s own room.

And the economy will be built around the support of multiple new professions related to the sustaining of vital communities.

We are currently involved in propping up housing and automobiles because no one yet sees the future. This will be a holding action as the eyes of a growing green economy dig deeper beyond retrofitting and making separated homes more energy independent. They will see the sustainability argument and why it is what people will be willing to pay for.

Banks — banks are so tied in with houses and cars and the culture of careful capitalism that they are becoming more retro by the minute. They are mortuaries for money.

We probably could figure this all out with computers if there were no banks. Give everyone credit for what they have on deposit and get rid of banks completely. Then give credit for work. Pay everyone who does anything useful.

If we continue to think that the answer is we are moving too far right or left, we miss the point. The whole world is realizing that it is not cost effective to do the car, banks, houses, expanding economy thing anymore.

It is cost effective to devise an economy around sustainable communities and the creation of a safe and secure infrastructure that is built around the matrix needed to support communities of the future. It is cost effective to allow for modular construction of mass-produced lego-block construction elements. It is cost effective to have all energy producing and recycling on site. It is cost effective to build with all urban amenities within walking distance no matter where you are.


Private Bailout $$$? Good Idea!


Why didn’t Paulson think of this?

A government floor against horrific risk?

Get the players who still have come money involved.

Could this turn things around? Today is a big day in the bailout-recovery world.