krebscycle

Sep 30

New York Time’s asks us to feel sorry for AIG shareholders

 I am not arguing that A.I.G. was an innocent in the economic debacle of 2008. But unlike its trading partners, it neither created garbage mortgage securities nor peddled them to unsuspecting investors. Its error — a whopper for sure — was not recognizing that it was the patsy at the poker table when it insured those troubled securities. [ Gretchen Morgenson, NYT]

Oh my! All AIG did was reap ENORMOUS profits writing unregulated insurance policies (in the form of derivatives) which it did not have reserves to pay, on financial assets it did not research, irresponsibly and probably illegally implicitly using the credit value of its regulated insurance business as backup, in order to facilitate bank evasion of regulatory requirements. And after booking immense profits and paying out obscene bonuses to the management who sold these policies the company collapsed when it turned out that the banks were not paying AIG insurance fees just to be nice but to cover an actual risk that AIG didn’t fucking bother to evaluate because it was too happy with the money. And then when AIG could not pay, its imminent bankruptcy threatened to pour tanker loads of gasoline on the burning finance industry in 2008, so the US Government had to step in and save the company.  AIG default on those derivatives would have probably caused major European banks to collapse and also triggered mandatory panic sales of assets by insurance companies and pension funds that were only permitted to own AAA rated assets. Fortunately the Government offered AIG assistance at punitive rates and secured, in the end, a strong profit for taxpayers as the price of this rescue. And now the entitled shareholders are back at the trough, demanding $40billion more for their inept, careless, and probably criminal  supervision of AIG and the New York Times Gretchen Morgenson, wants us to feel that AIG didn’t do anything wrong when the big bad gummint made them suffer some consequences.

Oh. Well. Let’s all scream about Geithner again.

Sep 27

The difference between Progressive Activism and Conservative Republicanism

One group condemns the Democrats as weak, corrupt captives of Finance and the other side, um, well the same. One side urges voters to turn out for the Republicans and the other side urges voters not to vote for Democrats. One side is nostalgic for the 1950s where there was free enterprise and hard working white men generated prosperity by hard work and white guy thinking, but the other side is nostalgic for the 1950s before “regulatory capture” when hard working white men shared in prosperity thanks to Franklin Roosevelt’s reforms. See they are totally different! That’s why we should agree to stand on principle and either vote Republican or not vote Democrat, and condemn Obama for being a communist affirmative action black guy empty suit controlled by “international finance” (um, you know what we mean ) or condemn him for being a neoliberal affirmative action black guy empty suit  controlled by Rahm/Goldman (you know what we mean).

See we have a robust argument on ideas! You can support Republican power and be nostalgic for the era of unquestioned white dominance for either reason! It’s paradise.

Aug 18

Middle East Experts wrong AGAIN.

The White House Monday confirmed all of Syria’s chemical weapons have been destroyed several weeks ahead of schedule. The destruction was completed by U.S. military and civilian experts aboard the M/V Cape Ray.

August 18 2014

We recognize, however, that more sincere defenders of the September 9 deal see great virtue in it. They argue, for example, that it will avert the need for military force (a threat most Americans did not want carried out anyway), that it will strip Assad of his chemical arms without fighting[1], and that it will force Putin to take ownership of the WMD question in Syria and thus obligate Russia to live up to better standards of global citizenship[2]. We find these to be optimistic and hopelessly naïve interpretations. It will be nearly impossible to move chemical weapons anywhere in the midst of a pitched civil war; moreover, the idea that the Putin regime cares anything for international norms or global citizenship beyond its own crudely defined interests is laughable on its face.

Nichols, Schindler, September 2013.

[1] “They” were right on both counts

[2] Nobody said that.

Perhaps that analytical methods that lead both of these gentlemen to support the invasion of Iraq need, like, a little reconsideration.