Misblog

Originally Published December 15, 2009; Last Updated January 10, 2010; Last Republished January 10, 2010:

Our cannibal capitalists¹ ditched their meeting with our president—the excuse differed little from those routinely used in high school—the fog was so heavy I couldn't find the classroom².

Our president's 60 Minutes interview was persuasive evidence that he wasn't going to be passing out more bailout proceeds, or million dollar bonuses, or attaboys during the meeting. Rather, it was going to be a "come to Jesus" meeting for the purpose of communicating the catastrophic trauma their gross, if not criminal negligence has inflicted on our citizens and nation for generations.

Still, ditching even an unpleasant meeting with our president is probably not wise if you’re seeking to avoid turning a traditional handshake into a metaphorical kick in the balls.

Web:

• UPDATED 01/10/2010 NYT, Walk Away From Your Mortgage!.

  Instead of restructuring distorted (some might say fraudulent) primary residence mortgages our cannibal capitalists are telling our homeowners they have a responsibility to make good on their distorted mortgage.

  That's the same thing the cannibal capitalists has told our Treasury when the Treasury was forced to stabilize the financial system and bailout the bankrupt hedge funds—you have an obligation to pay 100% of our bet against homeowners' ability to pay and Treasury is so far doing it.

  How about instead if our cannibal capitalists apologize for their [insert your own words]; restructure (principle and interest) the distorted primary residence mortgages (perhaps all nonspeculative mortgages?) to reflect current economic conditions; and Not pay 100% on the dollar to the hedge funds (CDO) betting against our homeowners' ability to pay!

  Yes, it's "complex" and messy; Yes, our nation's international standing will suffer; Yes, it will take us years to recover; Yes, our free markets (financial or goods) are not always efficient; Yes, we must prohibit gambling with our nation's and children's future; Yes, we must restrain the insatiable cannibal capitalists (it's worth noting the cannibal capitalists' behavior risk taking or incentives for risk taking has changed little since the meltdown) lest they devour our nation, capitalists, others, and themselves.

• UPDATED 01/08/2010 ProPublica, With Bank Money Returning, Bailout Burden Shifts Toward Housing.

• UPDATED 12/23/2009 WP, Fed's approach to regulation left banks exposed to crisis.

  The reported exchange between Ben S. Bernanke and economist Richard Dekaser is interesting (see pg 4)

• UPDATED 12/18/2009 CSM OpEd, Goldman Sachs bonuses: more than just bad PR.
• UPDATED 12/16/2009 ProPublica, SEC Just Now Seeking Key Information On Meltdown.
• UPDATED 12/16/2009 CSM, Banks too big to fail? Break 'em up, Congress.
• CSM, Obama presses 'fat-cat bankers' to lend, but has no real leverage

-----notes-----

1. It's useful to distinguish between capitalists who routinely estimate and hedge against inherent market risks and the cannibal capitalists who do not.

Cannibal capitalists take pride (Enron on steroids like pride) in gambling regardless of the risks or inability to hedge or amount of leverage or lack of margins using other's capital. Not surprisingly, with catastrophic consequences.

Congress is currently working on legislation (H.R. 4173) to kill the cannibals while minimizing the impact to responsible capitalists.

UPDATED 12/16/2009 The CRS (Rena S. Miller) has put together a short and helpful primer on the Key Issues in Derivatives Reform (pdf) made available by FAS Secrecy Blog.

Not surprisingly the cannibal capitalists and some capitalists are doing everything they can to impede the legislation.

2. Humorous high school principal's response: "would that be a marijuana or weather fog".

Wonder if Baltimore Washington International Airport was fogged in too.