Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.

For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.

Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!

E-mail us here.


This page contains a single entry from the blog posted on July 14, 2011 5:47 AM. The previous post in this blog was Hanford neighbors settle cheap in thyroid disease lawsuit. The next post in this blog is Hold out your wrists. Many more can be found on the main index page or by looking through the archives.



Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
Cat Eyes
Rhi in Pink
Ragwaters, Bitters, and Blue Ruin
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Two Pennies
This Stony Planet
1221 SW 4th
I am a Fish
Here Today
What If...?
Superinky Fixations
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
The Oregonian
Portland Tribune
Willamette Week
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

The Beatles
Bruce Springsteen
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Thursday, July 14, 2011

Is this handbasket fireproof?

We don't find ourselves talking back to the car radio much these days, but last evening's news got us going. First they put on the chairman of the Federal Reserve, Ben Bernanke, who was prattling on about how the Fed would do more to stop the invisible "recovery" from slipping back into an undeniable depression. Gee, Ben, you've got the money market at about 0.000001% interest; what else can you do? Print money is all. And apparently that's what he'll do. Our kids will eat that $20 loaf of bread yet.

Then they tell us that Moody's is threatening to lower the federal government's bond rating below AAA. What a joke. Moody's -- are they still in business? Those are the grifters that assigned AAA ratings to all the garbage securities that went bad three years ago. Somehow they're still pontificating about creditworthiness, and not from a jail cell, where some of them belong. Anyway, they're making their usual Wall Street Republican noises. As the financial collapse they engendered illustrates, the smart thing to do with Moody's is to not pay too much attention.

After we parked the car and went into the house, we started reading last Sunday's New York Times magazine, where we found this valuable interview with Sheila Bair, the just-departed chair of the Federal Deposit Insurance Corporation. When people like Henry Paulson and Tim Geithner were picking the middle class clean, handing the spoils over to Wall Street, Bair did what she could to stand up to them.

Here are a couple of money quotes from the interview:

"They would bring me in after they’d made their decision on what needed to be done, and without giving me any information they would say, 'You have to do this or the system will go down.' If I heard that once, I heard it a thousand times. 'Citi is systemic, you have to do this.' No analysis, no meaningful discussion. It was very frustrating."...

"I've always wondered why none of A.I.G.'s counterparties didn’t have to take any haircuts. There's no reason in the world why those swap counterparties couldn’t have taken a 10 percent haircut. There could have at least been a little pain for them." (All of A.I.G.’s counterparties received 100 cents on the dollar after the government pumped billions into A.I.G. There was a huge outcry when it was revealed that Goldman Sachs received more than $12 billion as a counterparty to A.I.G. swaps.)

Bair continued: "They didn’t even engage in conversation about that. You know, Wall Street barely missed a beat with their bonuses. Isn’t that ridiculous?"

She looked out for bank depositors, homeowners, and taxpayers -- you know, the folks who make this country a great place. Bair thought that investment banker fat cats, who privatized profits without paying government insurance premiums, should also absorb their losses, like grown adults.

But no. Too often she was ignored -- certainly by thieves like Paulson, but also by hot shots like Geithner in the Obama administration. The President's heart may be in the right place, but the crew he's assembled around him is continuing right along in the Bush and Clinton traditions of feeding the very few rich and pushing everyone else down.

I wish Bair, a Dole Republican from Kansas, would run for President. I'd vote for her, over Obama or anybody else in the field at this point.

Comments (13)

"I've always wondered why none of A.I.G.'s counterparties didn’t have to take any haircuts."

Because one of the biggest counterparties was Goldman. Paulsen had all his personal wealth in Goldman stock having run the place along with Corzine. We needed to protect Paulsen's wealth so we could have soccer here.

See it all fits together.

I don't get why they just never called bad debt bad instead of going through this long drawn-out process either.

"also by hot shots like Geithner"

One more thing, besides being a tax scofflaw, I think the only reason Geithner got the job is because he can have his strings pulled easily.

I have no love whatsover for Goldman Sachs or Hank Paulson or Geithner or Bernanke, but Sheila Bair's Monday Morning quarterbacking two and half years after the fact, polishing her own apple, is just about as convincing as Anthony Weiner's BS.

Paulson, Geithner and Bernanke had a few hours to make decisions in September 2008 as leaks were springing by the hour in the dikes around them. They didn't know what was going to happen next; Sheila Bair in her comfy world of FDIC insurance land wasn't prescient in real time and focused almost exclusively on the solvency of her proprietary insurance fund, to the exclusion of the broader systemic and cascading events affecting financial entities outside of her jurisdiction.

Going into the meltdown Sheila Bair was every bit as asleep at the wheel as her bretheren. As she acknowledged more candidly in Paris, July 2007,

"Loans were frequently made based on "stated income," without documentation. Many of these loans, some 2 million this year and next, will reset with the potential for widespread foreclosures."

"I don't know of anyone in the regulatory community or the ratings agencies who really "connected the dots" on this problem until late last year. Certainly, we all knew sub-prime lending was a growing asset class. We all understood that borrowers were exposed to rising interest rates. And we all knew that home prices would not rise at double-digit rates forever. But it took a long time to see the problem, and now we're scrambling to fix it."

"Paulson, Geithner and Bernanke had a few hours"

So you are saying they were taken totally by surprise with no clue whatsoever even after Bear Stearns sank several months earlier.

I think the main point is how many times are these people going to cry wolf to get another cash handout. Moreover, if you look at JP Morgan's profits this AM, it seems as though banks have plenty of cash so Bernanke throwing even more money in the pool is going to be diminishing, if any, returns.

On a larger scale, now we have Congress and the President crying wolf again on the debt limit, just so we can get away without any significant spending cuts and just bumping up the debt limit again instead of taking a stand.

So you are saying they were taken totally by surprise with no clue whatsoever even after Bear Stearns sank several months earlier.

No. By September PBG knew more was to come.

During July/August of 2008 they probably (and erroneously in my view at the time) thought, or at least hoped more than what was prudent (Geithner is no thinker by the way, thinking was done by Bernanke and Paulson), that the Fannie/Freddie bailouts had been enough to stop a meltdown.

There is a big difference between knowing something is going to happen and knowing what specifically is going to happen and how that specific event relates to the webs of relationships in the financial system.

In more recent venacular, come September PBG knew there were more Black Swans but they didn't know where the Black Swans were and how important they were. It was clear (to me at least) that without massive intervention the financial system was going to fail along the lines of what happened in the Great Depression, but not clear what interventions were big enough and timely enough to prevent that outcome. Paulson, Bernanke and Geithner were flying mostly blind.

The core problem is the tunnel vision, the ineptitude and the foolishness that led to the meltdown in the first place rather than the inevitably simple to criticize emergency responses.

I can't agree that Obama's heart is in the right place. Obama's heart is caged in by a mind that is craven when dealing with the powerful, manipulative when dealing with the weak, and, of course, hell-bent on reelection.

This would be the time to have a US leader that would be willing to stand up to the Saudi snake; instead, we are selling the Saudis arms, and our president is bowing to their royalty.

And we wonder why the world hates us even more than under Bush.

Check out the documentary "Inside Job." Summarizes the financial crisis nicely for those who were watching American Idol and not paying attention. Touches on the ratings agencies and academia too. Recommend it to anyone who will listen.

The systemic problem of asset price overvaluation (illegal under 18 USC 1014) became readily apparent to the big money folks no later than late 2005. Thereafter they positioned themselves to minimize their losses, culminating in the Fannie/Freddie bailouts.

Many of the big bailout ploys are directly related to saving the FDIC (and ultimately the taxpayer) from having to make good on deposit insurance. Sheila Blair was in the key position to insist that the FDIC would not cover for any loan amount that exceeded the rental-justified collateral value of any asset pledged for a loan. Her failure to insist upon this cap on FDIC cover allowed 2 evils to proceed with gusto:

1) wholesale transfer of risk to the public, and the unearned transfer of wealth to the already-rich (including foreign sovereign funds); and
2) the nearly 100 percent transfer of blame to borrowers who were not creditworthy at the outset, and who were snookered into agreeing to use borrowed money to pay double the value for an asset that they purchased (sellers got their money, taxed or even exempted as capital gains)

You have to witness the "glee" of a borrower who gets approved for some gargantuan loan to understand the dynamics. Being approved is like a vote of support from the general public, even though they are the mark for some bigger con game.

Sheila Blair was useful, because she apparently failed to understand enough about the system to put a halt to the greatest wholesale crime of Cronyism that the world has even seen -- on her watch. She should play dumb, because the alternative is much worse.

The "Inside Job" documentary starts with the repeal of Glass-Steagal, which is appropriate. The bi-partisan repeal of the regulatory framework that had worked for 65 years is what set the stage for and enabled everything that followed.

I read a column from Dwight Jaynes about his visit to the Timbers game last Sunday. He wrote about how much of the stadium is still old and in need of remodeling.

Question> Where did all the money go that the City gave to Little Lord Paulson?

"The core problem is the tunnel vision, the ineptitude and the foolishness that led to the meltdown in the first place rather than the inevitably simple to criticize emergency responses."

I don't know - We've had 2.5 years to address this problem and the one answer seems to be floating even more money to get the economy turned around. So far it's not working, or at least not working to the point of wondering if doing nothing would have the same effect.

If I criticize emergency responses they're simple since there only seems to be one approach taken. It might have been cheaper/quicker just to let banks get stuck with bad paper and recognize it as such.

Alternatively, what would suggest they do?

Steve, I may not be far from you on this.

The Fed's printing presses should have been turned off after the emergency passed. Had the ink stopped flowing there would have been another rough patch but we would have gotten through it and the economy would be rounding into better shape today.

A rough analolgy of what could have occured is the trajectory of economic growth during the first Reagan admistration, when the Gipper teamed up with Volcker at the Fed to induce a double dip to cleanse the system of double-digit inflation. After the second dip, in the 18 months prior to Reagan's re-election, payroll job growth averaged 350,000 per month (benchmarked to today's population that would be about 475,000 per month).

If Obama actually were actually a pea eater he could have taken bad economic news early on in the name of allowing market forces to reset the economy and set the stage for a resurgence of growth. That he didn't has left us in a zombie land of little to no growth and creeping inflation eating away at stagnant incomes. The man doesn't understand and doesn't deserve to be re-elected.

"If Obama actually were actually a pea eater he could have taken bad economic news early on in the name of allowing market forces to reset the economy and set the stage for a resurgence of growth."

OK - Agreed.

In Vino Veritas

Lange, Pinot Gris 2015
Kiona, Lemberger 2014
Willamette Valley, Pinot Gris 2015
Aix, Rosé de Provence 2016
Marchigüe, Cabernet 2013
Inazío Irruzola, Getariako Txakolina Rosé 2015
Maso Canali, Pinot Grigio 2015
Campo Viejo, Rioja Reserva 2011
Kirkland, Côtes de Provence Rosé 2016
Cantele, Salice Salentino Reserva 2013
Whispering Angel, Côtes de Provence Rosé 2013
Avissi, Prosecco
Cleto Charli, Lambrusco di Sorbara Secco, Vecchia Modena
Pique Poul, Rosé 2016
Edmunds St. John, Bone-Jolly Rosé 2016
Stoller, Pinot Noir Rosé 2016
Chehalem, Inox Chardonnay 2015
The Four Graces, Pinot Gris 2015
Gascón, Colosal Red 2013
Cardwell Hill, Pinot Gris 2015
L'Ecole No. 41, Merlot 2013
Della Terra, Anonymus
Willamette Valley, Dijon Clone Chardonnay 2013
Wraith, Cabernet, Eidolon Estate 2012
Januik, Red 2015
Tomassi, Valpolicella, Rafaél, 2014
Sharecropper's Pinot Noir 2013
Helix, Pomatia Red Blend 2013
La Espera, Cabernet 2011
Campo Viejo, Rioja Reserva 2011
Villa Antinori, Toscana 2013
Locations, Spanish Red Wine
Locations, Argentinian Red Wine
La Antigua Clásico, Rioja 2011
Shatter, Grenache, Maury 2012
Argyle, Vintage Brut 2011
Abacela, Vintner's Blend #16 Abacela, Fiesta Tempranillo 2014
Benton Hill, Pinot Gris 2015
Primarius, Pinot Gris 2015
Januik, Merlot 2013
Napa Cellars, Cabernet 2013
J. Bookwalter, Protagonist 2012
LAN, Rioja Edicion Limitada 2011
Beaulieu, Cabernet, Rutherford 2009
Denada Cellars, Cabernet, Maipo Valley 2014
Marchigüe, Cabernet, Colchagua Valley 2013
Oberon, Cabernet 2014
Hedges, Red Mountain 2012
Balboa, Rose of Grenache 2015
Ontañón, Rioja Reserva 2015
Three Horse Ranch, Pinot Gris 2014
Archery Summit, Vireton Pinot Gris 2014
Nelms Road, Merlot 2013
Chateau Ste. Michelle, Pinot Gris 2014
Conn Creek, Cabernet, Napa 2012
Conn Creek, Cabernet, Napa 2013
Villa Maria, Sauvignon Blanc 2015
G3, Cabernet 2013
Chateau Smith, Cabernet, Washington State 2014
Abacela, Vintner's Blend #16
Willamette Valley, Rose of Pinot Noir, Whole Clusters 2015
Albero, Bobal Rose 2015
Ca' del Baio Barbaresco Valgrande 2012
Goodfellow, Reserve Pinot Gris, Clover 2014
Lugana, San Benedetto 2014
Wente, Cabernet, Charles Wetmore 2011
La Espera, Cabernet 2011
King Estate, Pinot Gris 2015
Adelsheim, Pinot Gris 2015
Trader Joe's, Pinot Gris, Willamette Valley 2015
La Vite Lucente, Toscana Red 2013
St. Francis, Cabernet, Sonoma 2013
Kendall-Jackson, Pinot Noir, California 2013
Beaulieu, Cabernet, Napa Valley 2013
Erath, Pinot Noir, Estate Selection 2012
Abbot's Table, Columbia Valley 2014
Intrinsic, Cabernet 2014
Oyster Bay, Pinot Noir 2010
Occhipinti, SP68 Bianco 2014
Layer Cake, Shiraz 2013
Desert Wind, Ruah 2011
WillaKenzie, Pinot Gris 2014
Abacela, Fiesta Tempranillo 2013
Des Amis, Rose 2014
Dunham, Trautina 2012
RoxyAnn, Claret 2012
Del Ri, Claret 2012
Stoppa, Emilia, Red 2004
Primarius, Pinot Noir 2013
Domaines Bunan, Bandol Rose 2015
Albero, Bobal Rose 2015
Deer Creek, Pinot Gris 2015
Beaulieu, Rutherford Cabernet 2013
Archery Summit, Vireton Pinot Gris 2014
King Estate, Pinot Gris, Backbone 2014
Oberon, Napa Cabernet 2013
Apaltagua, Envero Carmenere Gran Reserva 2013
Chateau des Arnauds, Cuvee des Capucins 2012
Nine Hats, Red 2013
Benziger, Cabernet, Sonoma 2012
Roxy Ann, Claret 2012
Januik, Merlot 2012
Conundrum, White 2013
St. Francis, Sonoma Cabernet 2012

The Occasional Book

Marc Maron - Waiting for the Punch
Phil Stanford - Rose City Vice
Kenneth R. Feinberg - What is Life Worth?
Kent Haruf - Our Souls at Night
Peter Carey - True History of the Kelly Gang
Suzanne Collins - The Hunger Games
Amy Stewart - Girl Waits With Gun
Philip Roth - The Plot Against America
Norm Macdonald - Based on a True Story
Christopher Buckley - Boomsday
Ryan Holiday - The Obstacle is the Way
Ruth Sepetys - Between Shades of Gray
Richard Adams - Watership Down
Claire Vaye Watkins - Gold Fame Citrus
Markus Zusak - I am the Messenger
Anthony Doerr - All the Light We Cannot See
James Joyce - Dubliners
Cheryl Strayed - Torch
William Golding - Lord of the Flies
Saul Bellow - Mister Sammler's Planet
Phil Stanford - White House Call Girl
John Kaplan & Jon R. Waltz - The Trial of Jack Ruby
Kent Haruf - Eventide
David Halberstam - Summer of '49
Norman Mailer - The Naked and the Dead
Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 8
At this date last year: 0
Total run in 2018: 10
In 2017: 113
In 2016: 155
In 2015: 271
In 2014: 401
In 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269

Clicky Web Analytics