April 27, 2010

Silly Season


Things are reaching quite the bizarre crescendo this week for finance “reform”. We have the regular crooks and the windmill tilters, and sometimes it seems exciting enough that I’m ready to charge a windmill myself.
Today Lloyd Blankfein will go before Congress to talk about Goldman’s political plight. (This is definitely a political matter as far as its real significance; even if the SEC is serious about its action, it’s doubtful that with these rigged laws Goldman will end up getting more than a wrist slap.) They’ve already issued some preliminary lies and nonsense, as dissected here and here.
Is it really possible that the SEC suit against Goldman will be the tipping point? That even the worst Democrats like Blanche Lincoln are feeling the heat to the point that they might even pass a quasi-reform rather than a pseudo-reform? This past weekend they even made a good adjustment in the derivatives proposal. They beat back arch-criminal Warren Buffett’s brazen attempt to carve out an exception for himself, which was enough to piss off Buffett’s waterboy Ben Nelson, who yesterday voted with the Republicans to cut off debate on the bill….
…and that brings us back down to earth. What I just said is probably nonsense, since the very fact that with 59 votes on paper (which not long ago was the filibuster-busting 60), and certainly more than 50 even with the possible defection of absolute villains like Nelson, the Democrats still refuse to go ahead and use their majority, either through reconciliation or by just getting rid of the filibuster altogether, proves that they have no will to real reform. At most, like Lincoln they’re politically trembling for November, as well they should be. But even with those political fears, they’re still only going to pander and engage in pseudo-reformist political theater.
Yes, for the moment the derivatives regs are headed in the right direction. But they still fall far short of what’s necessary – the complete banning of speculative derivatives, period. And, the existing House bill contains nothing but loopholes and scams masquerading under the name of “derivatives reform”. What kind of odds would Goldman offer if I wanted to bet on that eventual negotiation improving or gutting whatever the Senate comes up with?
And the bill doesn’t break up the big banks. Instead it wants to enshrine an allegedly new “resolution authority” which would really take its place alongside the existing PCA law which was violated and ignored in 2008 and 2009, and would undergo the same fate in the next crash. This is a scam plain and simple. Via the Kanjorski amendment it may even be a Trojan Horse designed to guarantee further bailouts, by enshrining a new “right” of insolvent, collapsing banks to demand judicial review of resolution seizures. Since such resolutions would have to be undertaken with speed, to let the bankrupt banks sue can only be intended to ensure that if an administration ever actually wanted to use the resolution authority, it wouldn’t be able to, but would have to cave in and agree to a bailout.
Also, the mechanism by which this bill is supposed to “guarantee” that the resolution won’t cost the taxpayers any money is a fund which will allegedly be collected from all “big” banks, meaning banks with “assets” of $50 billion or more. While that’s pretty big, it’s still extending the net far and wide for the benefit of just a few of the biggest rackets. As we saw with CIT, the government doesn’t consider $100 billion “too big to fail”. So why are they mining as low as 50 to help out the likes of JPM, BofA, and Citi? It’s obviously a pro-oligopoly measure, meant to harm mid-level competitors of the biggest rackets. (Not that I’m getting teary-eyed for the mid-size rackets, but we have to recognize what’s going on here.)
So this “resolution authority”:
1. Will not be used in lieu of bailouts. In the crisis they’ll simply ignore it, just like they did before.
2. Even if they wanted to resolve an insolvent big bank, it’s likely the bank could take legal action to stall, thereby forcing the bailout through disaster capitalist extortion.
3. Whatever motions they go through to collect monies from the rackets themselves to fund these bailouts will fall disproportionately upon the smaller rackets. So just as from the Bailout’s inception, so the continuation of the Bailout will have intensifying monopoly as one of its primary goals.
Overall the Senate bill is shaping up to be sham. Even if the derivatives regulation does end up being strong on paper, it’s likely to remain ineffectual if the derivatives market remains in the stranglehold of a handful of rackets. The bill doesn’t break them up, so they’ll instead break up anything worthwhile that’s in the bill.
It seems that for all their public whining, the banksters are on more solid ground in their laughter. The laughter suffuses their jolly e-mails crowing over the cleverness of their crimes.
And then they have their ever-reliable MSM errand boys to package their propaganda for them.

“Because of the origins and the impact of the global financial crisis, we have now entered an historical phase in which most industrial country governments will restrain banks through the wide use of regulatory, tax and enforcement tools,” he said. “People can debate for hours whether this should happen or not. The fact is that it will happen.”

This is part of the full court press, everyone playing his role in putting over the farce of “reform.”
And of course Sorkin himself:

While most agree that the system needs to be reformed, the worry, at least in Beverly Hills, is whether the reform will go too far — in contrast to the rest of America, where many feel the reform won’t go far enough.

What an odd term – “rest of America.” By that he means, America, period. I think any real American recognizes that Wall Street is an alien cesspool, and the finance globalists, to the extent that they’re nominal American “citizens”, are a cabal of traitors. They’re all enemies of the true American people.
But I suppose he’s telling a kind of truth there. To the finance gangster elite and their little flunkeys, Wall Street is the “real America”, and a hack like Sorkin probably thinks he’s being magnanimous in referring to the feral, filthy peasants, slated for serfdom, as “Americans” at all.
That’s the same mindset which is producing the Senate bill, which produced the House bill, and the health racket bill and so much else, and encompassing it all, the Bailout itself.
In the ideology of Bailout America, only the rich are citizens. The rest are economic cannon fodder. We who truly do comprise the real people, the real economy, any real chance of human community and well-being, must turn this lie upside down. We must recognize these gangsters and their servants as the stateless, as the rootless, as the useless, as the worthless. They’re not Americans, and they have no legitimate place in America. With their treason, their robbery, their vandalism, they’ve forfeit all such consideration.
They’re rabid dogs, and must be driven as such.


  1. I’ll add a reminder about tomorrow’s Fiscal Sustainability Teach-In Counter-Conference in Washington.



    It’s an attempt to counteract the WaPo-supported Pete Peterson deficit terrorists convening a “Fiscal Summit” intended to launch the propaganda blitz for the campaign to gut Social Security and Medicare.

    While those programs aren’t ultimately sustainable since the system’s not sustainable, there’s no reason they shouldn’t be able to endure for as long as the system endures. Peterson, the WaPo, and behind them in the shadows Obama, want to gut all remaining social spending to try to help prop up the wealth of the super-rich just a little longer.

    That’s all this is.

    Comment by Russ — April 27, 2010 @ 8:56 am

  2. Buffet, our age’s premiere marquee billionaire success story, is famous for a number of things, one of which is for saying “You only see who’s swimming naked when the tide goes out.” Well, the tide’s going out, and he’s become more and more exposed, for those who hadn’t figured it out, as a massive humbug.

    I posited more or less the same thing you are putting forth today, that even though the SEC complaint is likely, in and of itself, a bit of toothless dreck, it may, unwittingly be opening the door to things that are anything but. We will see.

    Comment by Edwardo — April 27, 2010 @ 10:01 am

    • Yeah, I’d bet anything they have no intention of anything more coming of it than a cheap deal that tries to make Obama and the Dems look good.

      But in these kinds of unstable historical situations, it’s easy for TPTB to lose control of things they initiate.

      But it’s too early to get our hopes up much.

      Comment by Russ — April 27, 2010 @ 10:11 am

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