Will the regulation we're getting be the right regulation?
Will it be compromised beyond recognition, thanks to paid-for Dems, and watered down like healthcare?
Among other things, as of today, it looks like AIG and Citibank are still feeding from the Federal trough.
From an article in the New York Times, one learns that:
A.I.G., the insurance conglomerate, recently drew $2 billion from a special $30 billion government facility, which was created in the spring after a $40 billion infusion proved inadequate.
And from TPM one learns that:
Obama Admin Grants Mega Tax Break To Citi In Bailout Deal
Did the Obama Administration just deliver a $38 billion stealth bailout to Citigroup?
According to several outside experts the answer is yes, but the Treasury is maintaining an IRS ruling that granted Citi a $38 billion tax break was routine and proper. The Washington Post first reported the news of the IRS ruling in a front-page story today.
[...]
But one tax accounting expert told the Post:
"The government is consciously forfeiting future tax revenues. It's another form of assistance, maybe not as obvious as direct assistance but certainly another form," said Robert Willens, an expert on tax accounting who runs a firm of the same name. "I've been doing taxes for almost 40 years, and I've never seen anything like this, where the IRS and Treasury acted unilaterally on so many fronts."
First, about AIG, it was recently noted by the WSJ that:
Goldman Fueled AIG Gambles
Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group Inc.
[...]
Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman, according an analysis of ratings-firm reports and an internal AIG document that details several financial firms' roles in the transactions.
So why is AIG still being kept afloat? Good question. Consider:
'Kill AIG Now' Is Starting to Catch On
“Kill AIG now,” has been said before, but seldom as coherently as it’s expressed by Eli Lehrer, director of the Center on Risk, Regulation and Markets.
Lehrer works for the Heartland Institute, a Conservative think tank, but don’t hold that against him. While he has distinct libertarian views, he knows insurance and has followed the Florida flip-flops of Gov. Charlie Crist as he tries to finagle his way into a U.S. Senate seat while stopping State Farm from packing up and leaving.
Lehrer analyzed American International Group and concluded: Kick it to the curb.
He (Lehrer) may be a libertarian, but I can't say I don't agree.
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So how's Wall Street doing?
For starters, it's doing better than Detroit, where unemployment, at nearly 50%, is worse than Afghanistan, that's for sure.
Wall Street’s $49.7 Billion Profit Tops Outlook
Dec. 16 (Bloomberg) -- Wall Street earnings soared to $49.7 billion in the first three quarters of the year, exceeding the state’s forecast for all of 2009, New York Comptroller Thomas DiNapoli said.
[...]
Wall Street bonuses for employees in New York City may be as much as 40 percent higher than in 2008 “since there are fewer jobs than last year,” DiNapoli said. From September 2008 to October 2009, New York City lost 125,300 jobs, many in the finance industry, according to the report.
So it looks like there was some attrition in terms of Wall Street jobs, but for the top dogs it hardly matters, even if Goldman had to balk somewhat on its bonuses.
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Meanwhile the bankers, ignoring Obama's pleas to lend again, are working to crush reform:
Bank Lobbyists Launch 'Call To Action' To Crush Financial Reform (MEMO)
The American Bankers Association issued a "Call to Action" on Wednesday, urging its lobbyists and member banks to make an all-out effort to crush regulatory reform in Senate. As part of that campaign, it lashed out at its community-bank rival, charging it with being too soft on bank reform efforts.
In an unusually frank memo from ABA Chairman Art Johnson, the lobby group congratulates bankers for sending some 300,000 letters to Congress opposing reform, crediting the effort with killing several significant provisions.
And at the same time they are not lending:
Another $1 billion in small business credit vanishes
NEW YORK (CNNMoney.com) -- The small business credit crunch is still deepening: Major banks cut their small business loan balances by another $1 billion in October, according to a Treasury report released late Tuesday.
The 22 banks that got the most help from the Treasury's bailout programs have decreased their small business lending by a collective $11.6 billion since April, when the Treasury began requiring them to file monthly reports. The banks' total lending has fallen 4.3% in that six-month period, to $257.7 billion.
Meanwhile, TIME's choice for Person of the Year seems a bit awkward:
David Prosser: An odd time to applaud Bernanke
Thursday, 17 December 2009
Congratulations then to Ben Bernanke, Time magazine's person of the year. In a year when the competition for the title was not hotly contested – judging by the other contenders the magazine says it considered – the US Federal Reserve chairman won because without him "a weak economy could have been much, much weaker".
Still, this was a brave choice because although Mr Bernanke has now won a second term at the Fed – he is due at a confirmation hearing today – the chairman has no shortage of critics, and not just among Republicans who believe his economic stimulus programme will eventually cause an inflationary crisis.
Yes it is a curious choice, given the oppostion:
MoveOn Fighting Bernanke Reappointment
If Ben Bernanke wants the people to give him a second term, according to a leading progressive advocacy organization, he'd better convince them he's on their side.
Though he moved quickly to save the big banks last year, the Federal Reserve chairman has offered few solutions to the problems of burgeoning unemployment. His suggestion for taming the national debt is to target the nation's social safety net.
Now, MoveOn.org is gearing up to demand hard answers from Bernanke, who Americans believe by wide margins to be serving Wall Street's interests, rather than Main Street's.
Consider also that there seems to be some understandable confusion about who Bernanke works for:
Poll: Americans Say Bernanke Cares More About Wall Street
The Senate Banking Committee will vote on the renomination of Fed Chairman Ben Bernanke tomorrow, and he faces some vocal opposition: Sen. Jim Bunning (R-KY) pledged that he would "do everything I can to stop your nomination and drag out this process as long as I can," and Sen. Bernie Sanders (I-VT), who is not a member of the committee, has placed a hold on Bernanke's nomination that would prevent the entire chamber from voting on it.
One of the main complaints is that Bernanke has been too friendly to banks under the government's bailout regime. According to a new poll, Americans agree.
In a new poll by Research 2000, 47 percent of respondents said Bernanke cares more about Wall Street; 20 percent said he cares more about "Main Street"; 33 percent weren't sure. The poll was commissioned by the Progressive Campaign Change Committee.
Which brings me back to Wall Street and its culture of unending and unchecked greed.
How is it that McCain, a man whom I have nothing but antipathy for, for whom I voted against and would vote against again, is nevertheless now co-sponsoring potential regulatory legislation that appears to actually make sense: since it would reinstate the Glass-Steagall Act--something that Paul Volcker, John Reed, and others have argued may be necessary to reign in Wall Street?
I know this may piss some folks off, but Is it not ironic that John f'ing McCain may be offering more in the way of meaningful banking reform than President Obama currently is? What's up with that? Even if it's a stunt, it's still as far as I can tell a good idea.
Anyway that's my 2c. Merry Christmas.