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Bad news wish list

October 3, 2012

You know that feeling you get when, a few years after you went to a wedding of your friends, you find out they’re getting a divorce?

It’s not a nice feeling. It’s work for you, and nasty work at that: you have to go back over your memories of those two in the past years, where you’d been projecting happiness and contentment all this time, and replace it with argument and bitterness. Not to mention the sorrow and sympathy you naturally bestow on your friends.

If it happens enough times, which it has to me, then going to weddings at all is kind of a funereal affair. I no longer project happy thoughts towards the newly married couple. If anything I worry for them and cross my fingers, hoping for the best. You may even say I’ve lost my faith in the institution.

Considering this, I can kind of understand why some religions don’t allow divorce. If you don’t allow it, then the bad news will never come out, and you won’t have to retroactively fit your internal model of other people’s lives to reality. You can go on blithely assuming everyone’s doing great. While we’re at it, no kids are getting neglected or abused because we don’t talk about that kind of thing.

By way of unreasonable analogy, I’d like to discuss the lack of conversation we’ve seen by the presidential campaigns on both sides about the state of the financial system. I’m starting to think it’s part of the religion of politicians that they never talk about this stuff, because they treat it as an embarrassing failure along the lines of a catholic divorce.

Or maybe I don’t have to be so philosophical about it- is it religion, or is it just money?

I had trouble following much about the two national conventions, because it made me so incensed that nothing was really being discussed, and that it was all so full of shit. But one thing I managed to glean from the coverage of the “events” being sponsored by the various lobbyist groups at the two conventions is that, whereas most lobbyists sponsor events at one of the conventions, like the NRA sponsors something at the Republican convention and the unions sponsor stuff at the Democratic convention, the financial lobbyists sponsor huge swanky events at both.

I interpret this to mean that they are paying to not be discussed as a platform issue. They seem to have paid enough, because I don’t hear anything from the Romney camp about shit Obama has or hasn’t done, or shit Geithner has or hasn’t done.

In fact, there’s a “Stories I’d like to See” column in Reuters column entitled “Tales of a TARP built to benefit bankers, and waiting for CEOs to pay the price”, and written by Stephen Brill, which discusses this exact issue in the context of Neil Barofsky’s book Bailout, which I blogged about here. From the column:

A presidential campaign that wanted to call out the Obama administration for being too friendly to Wall Street and the banks at the expense of Main Street would be using Bailout as the cheat sheet that keeps on giving. But with the Romney campaign’s attack coming from the opposite direction – that the president and his team have killed the economy by shackling Wall Street – and with Romney on record in favor of allowing the mortgage crisis to “bottom out” with no government intervention, the former Massachusetts governor and his team have no use for Bailout.

The second half of the article is really good, asking very commonsensical question about the recent settlement BofA got from the SEC for blatantly lying to shareholders around the time they acquired Merrill Lynch. Specifically the author notes that the (current) shareholders are left paying the (2008) shareholders, which is dumb, but the asshole Ken Lewis, who actually lied doesn’t seem to be getting into any trouble at all. From the column:

And, as long as we’re talking about harm done to shareholders, why wouldn’t we now see a new, post-settlement shareholders’ suit not against the company but targeted only at Lewis and some of his former colleagues who got Bank of America into this jam in the first place and just caused it to pay out $2.4 billion? (The plaintiffs here could be any current shareholders, because they are the ones who are writing the $2.4 billion check.) Again, did the company indemnify Lewis and other executives against shareholder suits, meaning that if a shareholder now sues Lewis over this $2.4 billion settlement, the shareholder is once again only suing himself?

Can someone please sort this out?

I really like this idea, that we have a list of topics for people to sort out, even though it’s going to be bad news. What other topics should we ask for on our bad news wish list?

Categories: #OWS, finance, news
  1. October 3, 2012 at 10:38 am

    You could always argue with Xenakis about this from a generational perspective.

    Basically Xers don’t send other Xers to jail.

    This is really bad.

    He recently posted about the AmEx consumer fraud fine:


    “I have to repeat, as I’ve said so many times, that the world has changed enormously since the 1990s. At that time, Amex really WAS a “reputable” company, as were the other companies listed above, and a scam like this in the 1980s would have been next to impossible. But ever since the Gen-Xers reached middle management positions in the last decade, we’ve had one major crime after another — from tens of trillions of dollars in fraudulent mortgage-backed securities to the recent LIBOR scandal.

    As I’ve also said many times, there may be no more criminals among Gen-Xers than among other generations, but what defines the Gen-Xers and makes then unique is their adamant refusal to blame other Gen-Xers for anything. Boomers happily sent Boomers to jail, but the Obama justice department has not sent a bankster to jail for the massive fraud that caused the global financial crisis. Thus, banksters are free to continue committing crimes, with no fear of prosecution.

    And sure enough, Amex is not admitting that they did anything wrong, and none of the Amex crooks will go to jail. Bloomberg”


    • Dinamo
      October 3, 2012 at 11:09 am

      Xrs… Just wait until they get old and decrepit. Vengeance is served cold.


  2. mathematrucker
    October 3, 2012 at 9:40 pm

    Recently picked up Zinn’s “People’s History of the U.S.” It’s been a triple shot of reality-espresso. The grand theme of “how can I gain at your expense” found unbelievably fertile ground here hundreds of years ago. It has flourished ever since, often in truth-is-stranger-than-fiction ways.

    Nobody said it better than George Carlin: Might as well sit back and enjoy the show.

    Tonight’s episode has already started…I better go watch!


    • mathematrucker
      October 4, 2012 at 12:44 am

      Re what gets discussed and what doesn’t, I just came across the following relevant passage in Zinn 258:4-5 that begins with a (blatantly overt, by today’s standards) quote from a newly-elected president in the Democratic party, who had just replaced a Republican:

      “‘No harm shall come to any business interest as the result of administrative policy so long as I am President … a transfer of executive control from one party to another does not mean any serious disturbance of existing conditions.’

      The presidential election itself had avoided real issues; there was no clear understanding of which interests would gain and which would lose if certain policies were adopted. It took the usual form of election campaigns, concealing the basic similarity of the parties by dwelling on personalities, gossip, trivialities.”

      This refers to events that took place 128 years ago. The quoted president is Grover Cleveland.

      Realistically speaking, at present there is still little reason to expect much, if any, substantive discussion in American electoral campaigns.


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