More projection from a leftist:
Just a few days ago in a meeting with American CEOs of American banks, President Obama’s tone and attitude were rife with the arrogance, dismissiveness, and derision he had just criticized in Europe. A participant in the meeting told Politico that when the CEOs tried to explain that the nature, complexities, and competition of the finance and banking industries required that they continue retention bonuses for their employees, the president became impatient. He interrupted them and said, “Be careful how you make those statements, gentlemen. The public isn’t buying that. My administration is the only thing between you and the pitchforks.”
The imagery behind Obama’s threat couldn’t be more obvious: comply with my demands or I will make sure you are harassed, intimidated, and run out of town on a rail. He made them an offer they couldn’t refuse. Don Corleone couldn’t have said it better.
We can not forget, however, that it was Barack Obama himself along with his fellow Democrats who agitated this mob-like frenzy about the banks, the CEOs, and the bonuses. It was Obama who said the bonuses were an “outrage” and a “violation of our fundamental values.” Democrat Barney Frank hauled AIG’s CEO in front of the House Financial Services Committee and interrogated him, demanding to know why he approved the hundreds of millions of dollars of bonuses. Conveniently, Congressman Frank failed to mention that the approval was inside the very stimulus bill Obama championed and the Democrats overwhelmingly voted for.
Funny, that.
Funny, I thought of the same analogy with Don Corleone, and briefly contemplated blogging about about our gangster President. But no doubt the same people who think “niggardly” has the same etymology as the racist term for black people would accuse me of talking about the gangsta President….
BBB
These banks are insolvent. Normal capitalism
would have them in front of a bankruptcy judge,
have 50% of the staff laid off right then, have
a clean wind up in 90 days and pay the creditors
20 cents on the dollar. That’s what happened to Lehman.
Neither Bush now nor Obama seem committed to using
Bankruptcy as the Tool it is meant to be.
These banks are insolvent.
Bullshit. In many cases, the banks are alread trying to pay back the TARP money.
Trying, but not being allowed to. After all, that money is now a means of direct government control, and a little thing like “no longer needing it” can’t be allowed to step in the way of increasing that control.
I do hope people stop using the term “liberal” for Obama though. He’s done nothing liberal since taking office, and is demonstrably much more of a left-wing authoritarian, as are his allies in Congress. Which is pretty much the worst kind of government you can elect.
They can’t say Republicans snuck in an amendment either, because Republicans were literally locked out of the room. We said then that they would own this disaster of a stimulus bill, we should hold them to it, even if the MSM won’t.
These banks are insolvent.
Which banks are those? Wells Fargo is not insolvent. Its doing just fine, yet Obama went off on their outting to Las Vegas, pissing off both Wells Fargo and Las Vegas. Hopefully this will comeback to haunt Harry Reid.
Obama was just telling them how it is. He’s hardly on an anti-Wall Street crusade — he supported TARP, hasn’t called for nationalization, and is throwing lots of money at Wall Street. If anything the criticism is that he’s been too indulgent of the banks, compared (say) to the car companies. But any bank exec who goes into the White House to whine about losing bonuses is completely out of touch with the national mood, and needs to be reminded that they’re living on our dime, and are lucky that we need a functioning financial system more than we need justice. Otherwise most of them would be unemployed, and some would be facing prosecution for bringing down the economy.
The anti-Obama critique needs to settle on a storyline. Is he an arrogant anti-capitalist waging a war on investors? Or is he a tool of Wall Street, voting for their bonuses, bailing them out and offering them the PPIP windfall in place of receivership?
John: One liberal thing that Obama has done is stop federal prosecution of medical marijuana use in states where it’s legal under state law.
“Nice place you’ve got here. Shame if something was to happen to it. But hey, that’s just how it is.”
He’s a bonehead who doesn’t know what the fuck he’s doing because his teleprompter does all his thinking for him.
That’s a funny sentence.
TARP is now showing its true colors – a Trojan Horse allowing de facto “partial” nationalization of Wall St: all the command & control (and ability to pay political favors), none of the responsibility. It’s a politician’s wet dream.
Obama is neither pro- nor anti-Wall St. He is pro-concentration of power in the White House. Wall St. has power, and therefore he wants it. He believes that he can control the wealth of the nation, and spend it, without destroying it. This belief is false (the wealth only exists as long as control exists in the private sector, and nationalization will extinguish it as sure as throwing a candle into the sea) but he is willfully deaf to the arguments of Smith, Bastiat, Hayek, Friedman, et. al.
How’s that storyline for you?
Except of course TARP was brought to you by a Republican administration and at the request of the same bank CEOs that are now complaining.
It seems to me that the bank CEOs want socialization – we socialize their losses while they privatize the gains.
“Obama was just telling them how it is. ”
He helped create the environment that let him threaten private citizens. Now, some want to give the money back and he won’t let them. What part of National Socialism don’t you understand? The ghost of Mussolini nods in approval.
> at the request of the same bank CEOs that are now complaining.
Not at all. Every couple of days we find out about more banks had to be coerced into participating.
> Except of course TARP was brought to you by a Republican administration
Until Obama ends it, he owns it.
And, this audience thought that it was a bad idea when Bush did it.
However, Gerrib’s “Bush did it, so you folks should think that it’s okay” argument is only valid if he himself thinks that “Bush did it” means that it’s okay. So, either we get to hang every bogus Bush policy on him or he gets to admit that he’s pushing bogus arguments. I’m good either way.
Andy Freeman – my argument is that TARP wasn’t cooked up (by anybody) as way to seize control of the banks.
The whole point of this article is bogus. Obama was pointing out that there are influential people in his party that would be glad to fully nationalize banks. There are also folks, like Sheila Bair, the Republican head of the FDIC, who would like to break up the “too big to fail” banks.
Obama’s remark is similar to saying “don’t go down a dark alley at night.” It’s a warning.
“Obama’s remark is similar to saying “don’t go down a dark alley at night.” It’s a warning.”
He’s the friggin President. His warnings carry the implicit threat of presidential action. “Keep the money or I’ll make you sorry you didn’t.” He’s already demonstrated how. He and his allies will demonize anyone not playing ball with them. If he will attack a radio talk show host, he’ll attack anyone.
The whole point of this article is bogus. Obama was pointing out that there are influential people in his party that would be glad to fully nationalize banks. There are also folks, like Sheila Bair, the Republican head of the FDIC, who would like to break up the “too big to fail” banks.
It is bogus if you really think that is all Obama was doing. If you think the pitchforks are the Congressional Democrats that want to do more.
Obama’s remark is similar to saying “don’t go down a dark alley at night.” It’s a warning.
That would be a hell of a thing for a POTUS to say. Becareful out there, because if the US government decides to not to protect you, then you may never know what will happen to you. This is usually know as protection racketeering, but I guess for Obama supporters, it is just a fair warning. To the rest of the world, your simile is exactly the point of the article, and your response suggests we weren’t off the mark.
Back to the pitchforks, if you think banks should be worried about Congressmen using ACORN workers to imitidate with pitchforks, then you might want to keep an eye on the ground swell of resentment to the “Stimulus” package and pending TARP II. There’s a lot more pitchforks coming out for politicians than for bankers.
As much as I’d like to see this come back to haunt Reid, Leland, I have my doubts that it will. Reid is not popular here in Nevada, but the Republican party is much less so at the present time. Our Republican Governor is extremely unpopular, and our Lieutenant Governor is under investigation by the Nevada Attorney General (a Democrat) for alleged misuse of state funds when he was Treasurer (his previous office). The balance of power in the state lies in Las Vegas, and even despite the tourism fiasco, Las Vegas is likely to remain heavily on the side of the Democrats for the foreseeable future.
He’s the friggin President. His warnings carry the implicit threat of presidential action.
So now the President can’t warn anybody? He can’t, in a private meeting, tell the bank CEOs what you would think would be obvious? He also can’t use a rhetorical overstatement?
If he will attack a radio talk show host, he’ll attack anyone.
First, Limbaugh makes his living attacking people, including Presidents. If the kitchen is too hot, get out.
Second, saying “you can’t just listen to Rush all day” has got to be the mildest attack known to man. I’ve heard stronger “attacks” out of Mister Rogers.
“He’s hardly on an anti-Wall Street crusade”
LOL are you serious? He’s been crusading against wall street since he started campaigning. How many times has he uttered the phrase “wall street greed” The problem is so was McCain.
come on man at least try to be serious and join everyone in reality for a second
So now the President can’t warn anybody? He can’t, in a private meeting, tell the bank CEOs what you would think would be obvious? He also can’t use a rhetorical overstatement?
Obviously he can. And we can draw the obvious conclusions.
“So now the President can’t warn anybody? He can’t, in a private meeting, tell the bank CEOs what you would think would be obvious? He also can’t use a rhetorical overstatement?”
In a private meeting he has much more liberty to say what he wants, but in public the President should be careful. Remember these outrages and blasting people were the same thing people got pissed off at Bush for, for not understanding diplomacy and just going off on people.
Greenspan mentioned the same thing, he has to be absolutely careful about what he says, because he’s one of the most powerful men on the planet, and his words carry weight.
Kurt, I’m afraid you are right, but I still hold out hope for change.
Will no man rid me of this meddlesome priest?
“He can’t, in a private meeting, tell the bank CEOs what you would think would be obvious?”
What? With a word from me you’ll end up spit on a pitchfork? If this was Bush, you’d be sceaming from the mountaintops about abuse of power. I would too but I would understand why.
Rush doesn’t have 100s of thousands of employees with guns at his beck and call. Presidential whispers and all that.
If this was Bush, you’d be sceaming from the mountaintops about abuse of power.
Not really.
Rush doesn’t have 100s of thousands of employees with guns at his beck and call.
If you truly believe that the President of the United States would order the shooting of a radio commentor, we are not living in the same reality. In my reality, neither Bush nor Obama, nor even Tricky Dick Nixon, would attempt such a thing.
If the President would do such a thing, protests would not be needed or advised, and I sure as hell would not be discussing my plans on a public web page.
Chris, You need to remember the definition for obtuse. You’ll like it. Your picture resides there.
Again, the critique is all over the place. He’s a crafty fascist who is using TARP to quietly take over the banks. Or he is a bonehead who can’t think without a teleprompter. Or he’s a raging populist trying to incite violence against the bankers. Or he’s a puppet of Wall Street, giving them piles of taxpayer dollars.
The complaints Obama was getting from the bank execs, and the NYT Op-Ed by the quitting AIG exec who didn’t see any problem with his $700K bonus, suggest that Wall Street is still deeply in denial. The financial sector took in 40% of U.S. corporate profits in 2006, and in return they tanked the global economy. They should feel a deep sense of shame for the damage that their firms have caused, but instead they seem to see themselves and their work the same way they did in 2006: as the best and the brightest, entitled by merit to outsized rewards, never mind that they’ve been outperformed by cash stuck in mattresses.
Jim, we’re different from you lefties. Each of us has his own idea that, to our thinking, explains what we observe.
Just because over on your side such diversity of opinion would be instantly squelched in favor of a unified message, doesn’t make your side stronger or ours weaker.
McGehee: You’re welcome to your collection of opinions, just realize that they’re mutually incompatible, so at least some of them are just wrong. You yourself posted two views of Obama in this one thread, that he is 1) An extortionist making veiled threats, and 2) A “bonehead” who can’t think without a teleprompter. So which is it? There wasn’t a teleprompter in the room when he made the pitchfork comment, so was that him thinking for himself? Or can we dismiss the comment entirely because his electronic brain was absent?
Leland Responds:
“These banks are insolvent.
Which banks are those? Wells Fargo is not insolvent. Its doing just fine, yet Obama went off on their outting to Las Vegas, pissing off both Wells Fargo and Las Vegas. Hopefully this will comeback to haunt Harry Reid.”
Leland, there are numbers and there is opinion. I prefer numbers.
http://finance.yahoo.com/q/bs?s=WFC&annual
Wells Fargo Assets 1.3 Trillion.
Total Equity 99 Billion
Equity as a percent of Assets 7.6%.
But lets look at this 1/3 preferred, 1/3 retained earnings,
1/3 capital surplus.
so of that 31 Billion in Preferred, 25 Billion came from
TARP on 10/31/08. So most of that Preferred Shares
are Federal Reserve dollars.
so they have about 75 Billion in capital and retained earnings.
Lets see, looking at the 10-K, i see
65 Billion in Mortgage backed securities from Federal entities and from private entities. Hmm. What are those really worth? 80 % of face? 40% of face? Does anyone believe an MBS from Florida or Arizona is worth anything?
Lets be broad and say the MBS portfolio is worth 50% on the dollar.
So Wells Fargo has 43 Billion in Equity
Then Other debt securities 12 Billion. and Mortgages held for sale 25 Billion.
Say those are equally impaired and mark those down 18 Billion and
Wells Fargo is at 25 Billion in Equity.
Commercial and Commercial real estate. 166 Billion.
we are starting to see lossing in Commercial Real estate, take the Hancock building sold 2 years ago for 1.3 Billion dollars now sold
for 490 Million including a 5% Mortgage. So say CRE is down 10%,
and that leaves wells with? 9 Billion in Equity.
Consumer Lending 224 Billion.
Lets see, 75 Billion in Primary mortgages, lets say those are mostly good,
say 5% are bad. Okay, so mark down 3 Billion there.
Then Junior Liens 75 Billion again. Lets say 20% of those are bad.
That’s 15 Billion in defective second mortgages. Oh and Wells Fargo?
Negative 6 Billion in equity now.
Credit card and Installment credit? 75 Billion, say 20% are bad there?
Negative 21 Billion.
That’s from the EDGAR filing of the year end 10-K, looking at
pages 80-86. Now, if you think I am full of Crap on these numbers
I suggest you read Note 5 on page 104, which covers impairment
and gains on assetsavailable for sale and is showing them as down 5%,
continuing to Note 6, they comment that NO securities from Wachovia are being marked down, that they are carried at full value. These were the same pieces of radioactive garbage that sank Wachovia, and you think they are full value?
I will leave it to you, to look at the balance sheets of your favorite bank to see if they are in better shape.
Don’t believe the Hype, There is over 8 trillion going to support these banksters, and TARP is only 375 Billion. Sure, they are giving back TARP.
how about TALF, MMCLSDF, TAF, or any of the other Federal Reserve credit facilities.
> The complaints Obama was getting from the bank execs, and the NYT Op-Ed by the quitting AIG exec who didn’t see any problem with his $700K bonus, suggest that Wall Street is still deeply in denial.
The AIG exec in question didn’t screw up AIG. Instead, he was brought in to clean up AIG, to get the most out of the assets. He took the standard deal, low-monthly salary with a year-end kicker because that’s how Wall Street works.
And Jim thinks that welshing on those deals, shorting folks who are fixing the problems, is a good idea.
> The financial sector took in 40% of U.S. corporate profits in 2006, and in return they tanked the global economy.
All of them?
Note that Jim never criticises anyone associated with Freddie Mac or Fannie Mae.
Andy: Nowhere did I say that we should welsh on contracts. But for the exec to expect the public to be happy about paying him $700K to clean up after a mess that his employer created shows an alarming lack of perspective. Of course not every banker or financier was personally responsible for the crisis. But collectively they made a ton of money and then wrecked the global economy. Their line of work was seen as prestigious and deserving of great rewards, far out of proportion to the rest of the workforce. Instead it has been shown to be a source of enormous danger for the whole world, and the extravagant compensation in money and social prestige we now know to have been completely misplaced. I’m sure it’s difficult for bankers to come around to seeing themselves that way, but until they do it will be plain to the rest of us that they still don’t get it.
The same goes for people at Fannie/Freddie as well, of course, even if ideologues are exaggerating their particular role in the crisis.
Jim, you wrote:
The same goes for people at Fannie/Freddie as well, of course, even if ideologues are exaggerating their particular role in the crisis.
Like you’d know.
There’s a simple solution here. Take these companies through bankruptcy court. Stop throwing money at failure. The concern over the stability of the global banking system is misplaced. The banking system has been taken down before (in 1873 and 1929) and it only takes a few years to come back up.
And I don’t care what the public thinks of executive compensation. It’s not their business even if government continues to insist on squandering public funds on executive compensation.
“my argument is that TARP wasn’t cooked up (by anybody) as way to seize control of the banks.”
Judge a program by its actual impact and effects, not its intent. The instant Geithner refused to permit early payback of TARP funds, he revealed exactly what the effect of the program will be – a centralized control of the nation’s financial power through Geithner’s office (nominally under the control of the Administration, and ultimately of Congress and the voters). That doesn’t necessarily mean Geithner (or Bernanke before him) was sitting in darkened office grinning over steepled fingers like Mr. Burns when this was all started. That said, just because he’s not some caricature of a villain doesn’t mean what they’re doing is A-OK and conducive to a swift and full recovery either.
Remember the relationship between malice vs stupidity and ignorance. Just because the heavies in DC have the fancy Ivy-League credentials, doesn’t make them in fact the smartest people in the room – on any subject. To say nothing of being smartest beings ever in human history, which they all act with the arrogance that tells the rest of us that they deem themselves to be.
“Geithner (or Bernanke before him) was sitting in darkened office grinning over steepled fingers like Mr. Burns when this was all started”
You mean Paulsen. Bernanke is still fed chief.
Leland, there are numbers and there is opinion.
Apparently you prefer opinion:
Hmm. What are those really worth? 80 % of face? 40% of face? Does anyone believe an MBS from Florida or Arizona is worth anything?
Lets be broad and say the MBS portfolio is worth 50% on the dollar.
So say CRE is down 10%, and that leaves wells with?
Lets say 20% of those are bad.
Looking at the site you linked, total assets exceeds total liability. As I said, Wells Fargo isn’t insolvent, and thanks for providing the link that proves I was correct.
The rest of your speculation is pathetic. But hey, you got somebody to respond to you, so I guess that made your day.
Leland – 7% tier one capital ratio is barely sufficient for a bank. If you back out the TARP money (AKA “our money”) the bank is legally undercapitalized and the FDIC could shut it down.
So the only thing keeping Wells afloat is TARP.
> Andy: Nowhere did I say that we should welsh on contracts.
Not in those words, at least not when pressed, but Jim’s perfectly happy with pressuring folks to “give back”.
> But for the exec to expect the public to be happy about paying him $700K to clean up after a mess that his employer created shows an alarming lack of perspective.
Yeah, what a dummy, thinking that he should be paid the going rate to deal with a serious problem. ($700k is cheaper than hiring an incompetent and Jim has yet to show that cheaper competent people were available.)
The problem with his “perspective” is that folks like Jim have created an unthinking mob.
Jim may tut-tut the excesses and the illogic of said mob, but that’s a sham. He really wishes that he had the courage to be on the bus, to crack a few heads.
It’s the start of Obama’s Cultural Revolution.
> Of course not every banker or financier was personally responsible for the crisis.
And then Jim goes on to damn them all.
Gerrib, do you know what the definition of insolvent is?
Leland – yes, I do.
I also know that, since the 1930s, we don’t wait until banks go completely out of money before we step in. We require them to maintain certain capital ratios, and if they don’t maintain those ratios, they are seized.
I spent the Inaguration weekend taking over such an undercapitalized institution.
Chris
Leland is a Gasbag, who doesn’t know what he’s
talking about, and wants to score points as opposed
to engage in honest discussion. It’s pathetic really
because it leaves him with no place to go.
If Leland actually believes what he was spouting he
and Rand would take every penny they have and
pour it into buying Wells Fargo Common Stock.
You see, Leland knows something that nobody
else knows, so, that, is a huge buying opportunity.
Leland knows Wells doesn’t need TARP, doesn’t
need Help from the Fed, Doesn’t need Jack, so,
Leland should not only buy Wells Stock, he should
Buy Wells Calls out of the Money for 90 days.
See, Wells is going to return that TARP money,
shake off the oppressive hand of Obama and Geithner
and rock the world.
But Leland won’t.
Jack,
You are showing your ignorance again. I didn’t say Wells Fargo is a place to invest heavily because its stock is on the rise. My point is you lied about it being insolvent. And apparently you can’t handle being corrected on it, so now you are trying personal attacks, when your other arguments have failed.
Actually, let me take that back. Not personal attacks… rather totally incoherent and wandering attacks that suggest a lost mind. You refer to yourself in third person. You suggest I have secret information, when I used your data. Your last statement is totally incomprehensible.
Gerrib,
I’m sorry, but for Jack’s mental health, I think this discussion should stop. I accept your point that Wells Fargo is at its limits. My point is it is not insolvent. Again, I think that point was made. If it indeed needs to be taken over by FDIC, then that’s why FDIC exists. If the FDIC isn’t sufficient, then there is your problem.
I’ll admit… I was wrong.
leland did you think Enron was Solvent in May 2001?
Sure Wells Fargo can say almost anything on it’s Balance
Sheet, but, the real truth is what are the key assets worth?
Wells wants to keep it’s Balance sheet looking good,
so it’s not marking down any of the assets, well, thats fine
i’m not in Wells Fargo.
Most of these banks have internal accounts that make Enron look good.
Chris
Actually under the Prompt Corrective Action Law, the
Feds are required to shut down every bank that is
below required capital.
Leland for some bizarre reason wants to buy the
Wells Fargo lies. I’m not sure why, I just guess the lies
let him justify large bonuses to the Wells fargo managers.