asterisk2a + larrysummers   28

BBC News - Worrying trends for the UK economy
In other words, the record amount of private debt, which has just reached £1.43 trillion, points to how borrowing has fuelled consumption. As we saw from the crash five years ago when debt was lower than now, debt-fuelled consumption isn't a sustainable or reliable source of growth. [...] Could the UK be facing what the US economist Larry Summers has described as America's "secular stagnation". It's a worry that the ageing population and a slower growth of the labour force mean a slower growing economy.
GFC  greatdepression  greatrecession  UK  2013  economic  history  recovery  austerity  deflationary  deflation  inflation  working  poor  squeezed  middle  class  zombie  consumer  consumer  debt  deleveraging  balance  sheet  recession  output-gap  productivity  larrysummers  stagflation  stagnation  secular  cycle  Japan  lostdecade  lostgeneration  fiscal  policy  monetary  policy  liquidity-trap  spare  capacity 
december 2013 by asterisk2a
Wall Streets Euthanasia of Industry | Michael Hudson
Last weekend’s New York Times magazine had an interview with Sheila Bair, whose five-year term heading the Federal Deposit Insurance Corp. (FDIC) expired last week. Now she can begin to tell what happened. She said that Mr. Obama promised her that he would try to prevent the mortgage frauds that were occurring, especially in subprime mortgages, and support better bank regulation. But then she would learn, just an hour before he gave a speech, that he would have changed the draft that she had seen, and took out what he’d promised her. The rewrites apparently were done mainly by Tim Geithner, who acts as a lobby for the big bank contributors. Instead of running the Treasury to benefit the U.S. economy, he’s benefiting his Wall Street constituency. Significantly, he was a protégé of Clinton Treasury Secretary Robert Rubin, who gave the name “Rubinomics” to pro-Wall Street opposition to bank regulation and a dismantling of public control over the banking system.
sheilabair  lobby  lobbyist  Lobbying  timgeithner  robertrubin  larrysummers  greenspan  Dodd-Frank  subprime  regulation  reform  wallstreet  presidency  barackobama  oligopol  pharma  industry 
july 2011 by asterisk2a
Pension Pulse: Rottenness of the World?
On that gloomy note, I leave you by recommending Joe Nocera's New York Times article, Sheila Bair’s Bank Shot. Like Brooksley Born, Ms. Bair tried to do the right thing but she realized her efforts are futile. The reality is that no matter what measures regulators implement to reign in banks, the rottenness of the world always prevails.
society  culture  inequality  wallstreet  lobby  lobbyist  Lobbying  interestgroups  money  power  politics  accountability  fraud  taxevasion  capitalism  corporate  crisis  sovereign  debt  GFC  sheilabair  brooksleyborn  larrysummers  greenspan  robertrubin  policy  folly 
july 2011 by asterisk2a
Larry Summers Learned One Invaluable Lesson While Running Harvard Dealbreaker: Wall Street Insider Financial News, Headlines, Commentary and Analysis Hedge Funds, Private Equity, Banks
What did Larry Summers really think of the Winklevoss twins? “Rarely, have I encountered such swagger, and I tried to respond in kind,” the former president of Harvard said in an interview at Fortune’s Brainstorm Tech conference. Cameron and Tyler Winklevoss were at Harvard at the same time that Mark Zuckerberg launched Facebook, and they had come to Summers for help in their fight for a piece of the action. Summers dismissed them, a scene dramatized in the movie the “Social Network.” Summers didn’t try to dispel the portrayal. “One of the things you learn as a college president is that if an undergraduate is wearing a tie and jacket on Thursday afternoon at three o’clock, there are two possibilities. One is that they’re looking for a job and have an interview; the other is that they are an a**hole. This was the latter case.”
larrysummers  facebook  markzuckerberg  lawsuit 
july 2011 by asterisk2a
Stephen Schwarzman Is Pretty Sure Larry Summers Could Be The Next Horatio Sanz Dealbreaker: A Wall Street Tabloid Business News Headlines and Financial Gossip
Morning Money hears that at yesterday’s executive meeting, Blackstone chief Steve Schwarzman took a shot at former NEC Chair Larry Summers’ FT column calling for a number of actions to spur job growth, including expanding the payroll tax cut to employers. “I thought I was looking at a Saturday Night Live script,” Schwarzman said, according to our source. “Who was in charge the past two years?” [MM via BI]
larrysummers  greatrecession  recovery  2011  presidency  barackobama  stimulus 
june 2011 by asterisk2a
How to avoid a lost decade - The Washington Post
Even with the massive 2008-09 policy effort that prevented financial collapse and depression, the United States is now halfway to a lost economic decade. From the first quarter of 2006 to the first quarter of 2011, the U.S. economy’s growth rate averaged less than 1 percent a year, similar to Japan in the period its bubble burst. 

After bubbles burst there is no pent-up desire to invest. Instead there is a glut of capital caused by overinvestment during the period of confidence — vacant houses, malls without tenants and factories without customers. Meanwhile, consumers discover that they have less wealth than they expected, less collateral to borrow against and are under more pressure than they expected from their creditors. Pressure on private spending is enhanced by structural changes.

ecognizing current economic reality.
lostdecade  japan  USA  greatrecession  recovery  financialcrisis  deleveraging  richardkoo  larrysummers  monetary  fiscal  policy  paulkrugman  stimulus  2011  double-dip 
june 2011 by asterisk2a
Op-Ed Columnist - The Mortgage Morass -
Lawrence Summers, then the Treasury secretary, declared that the keys to avoiding financial crisis were “well-capitalized and supervised banks, effective corporate governance and bankruptcy codes, and credible means of contract enforcement.” By implication, these were things the Asians lacked but we had.

The accounting scandals at Enron and WorldCom dispelled the myth of effective corporate governance. These days, the idea that our banks were well capitalized and supervised sounds like a sick joke. And now the mortgage mess is making nonsense of claims that we have effective contract enforcement — in fact, the question is whether our economy is governed by any kind of rule of law.

Horror stories have been proliferating, like the case of the Florida man whose home was taken even though he had no mortgage.
larrysummers  history  financialcrisis  USA  lessons  foreclosure  2010  BofA  rule-of-law  fraud  Enron  WorldCom  law  WSJ  wallstreet  wallstreetjournal  paulkrugman 
october 2010 by asterisk2a
Dealbook - Paulson Likes What He Sees in Overhaul -
In the end, though, Mr. Paulson said that regulation on its own would not be enough to prevent another crisis. No, that will come down to people.

“As I’ve thought about it, this is very people-driven,” he said. “A lot of this is about the people who have the responsibility for the regulation when there isn’t a crisis and the people who have the responsibility during a crisis. Unless you believe that the big financial institutions were intentionally trying to blow themselves up, they were unable to spot a number of the issues.”

He continued: “I think it is asking a lot for regulators to be perfect — because they won’t be. But what you h
henrypaulson  financial  regulation  reform  crisis  creditcrunch  depression  greatrecession  usa  regulators  timgeithner  larrysummers  paulvolcker  VolckerRule  2010  2011  presidency  barackobama  Fed  treasury  fdic 
july 2010 by asterisk2a
Blaming Rubin | Analysis & Opinion |
When he was in the Clinton administration, Rubin thought that absent a crisis, it would be politically impossible to pass new rules because of the intensity of the opposition from his former colleagues on Wall Street. He also faced disagreement from Fed Chairman Alan Greenspan, who believed that markets were essentially self-regulating, and some skepticism from his own deputy at Treasury, Larry Summers. Rubin goes into this at length in his book, noting that Summers later ridiculed the kind of comprehensive margin requirements Rubin favored as “playing tennis with wooden rackets.” The three did agree, however, that a legally ambiguous effort by the Commodity Futures Trading Corp., then led by Brooksley Born, to regulate over-the-counter derivatives could have created dangerous market uncertainty.
robertrubin  hypocrisy  hypocrite  alangreenspan  larrysummers  regulation  reform  derivatives  billclinton 
may 2010 by asterisk2a
If We Broke Up Standard Oil, We Can Break Up the Giant Banks | zero hedge
Indeed, even the FDIC mentions Continental Illinois in the same breadth as "too big to fail" banks.

And William K. Black - the senior regulator during the S&L crisis, and an Associate Professor of both Economics and Law at the University of Missouri - says that the Prompt Corrective Action Law (PCA), 12 U.S.C. § 1831o, not only authorizes the government to seize insolvent banks, it mandates it, and that the Bush and Obama administrations broke the law by refusing to close insolvent banks. And see this. Whether or not the financial giants can be broken up using the PCA, no one can doubt that the government could find a way to break them up if it wanted.
toobigtofail  bank  banks  alangreenspan  larrysummers  FDIC  SEC  break-up  2010  law 
may 2010 by asterisk2a
Clinton Calls Advice He Got on Derivatives ‘Wrong’ (Update1) -
April 19 (Bloomberg) -- Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office.

“I think they were wrong and I think I was wrong to take” their advice, Clinton said in an interview on ABC’s “This Week” program broadcast yesterday.

Their argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people will buy them and they don’t need any extra protection,” Clinton said. “The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”

“Even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect 100 percent of the investments,” Clinton said.
billclinton  larrysummers  robertrubin  derivatives  warrenbuffet  Lobbying  lobby  lobbyist  Fed  alangreenspan  GSE  mortage  housing  bubble  fanniemae  freddiemac 
april 2010 by asterisk2a
Wirtschaftswachstum: Obamas Spitzenberater sagt Europa lange Krise voraus - SPIEGEL ONLINE - Nachrichten - Wirtschaft
Summers gibt sich im Gespräch mit der "Zeit" als Keynesianer. Während er in der Amtszeit von Bill Clinton als Finanz-Staatssekretär auf Haushaltsdisziplin bestand, pocht er nun auf Konjunkturankurbelung auf Staatskosten: "Keynes zentrale Einsicht lautete, dass die Wirtschaft nicht immer wie ein Thermostat funktioniert, also sich selber korrigiert." Ein paar Mal pro Jahrhundert versage der Mechanismus unter dem Druck einander verstärkender Teufelskreise, "und dann ist die korrekte Metapher nicht das Thermostat, sondern die Lawine".
larrysummers  europe  usa  recovery  greatrecession  2010 
april 2010 by asterisk2a
Obama's Big Sellout : Rolling Stone
Then he got elected.

What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.
BobRubin  bailout  corruption  barackobama  presidency  government  usa  politics  economy  JosephStiglitz  AIG  bonuses  citigroup  campaign  TARP  history  lobby  wallstreet  lobbyist  Lobbying  larrysummers  timgeithner  goldmansachs  RahmEmanuel  barofsky  CDS  derivatives  regulation  reform  barneyfrank  LTCM  SEC  CFTC  ConsumerFinanceProtectionAgency  CFPA  coruption  FDIC  treasury 
february 2010 by asterisk2a
Summers: GDP ‘Favorable,’ but More Effort Needed - Real Time Economics - WSJ
But he said the administration isn’t satisfied, and that President Barack Obama is focused on tackling the “profoundly serious” problems of unemployment and weak income growth for the middle class cited in the State of the Union address.

For the dollar to remain a reserve currency, however, U.S. policymakers must pursue measures that create strong fundamentals, the former Treasury secretary said.

“That’s why the emphasis on budget deficit reduction was such an important component of the president’s State of the Union [on Wednesday],” said Summers.
middleclass  USA  recession  2009  2010  GDP  larrysummers  unemployment  income  barackobama  presidency  recovery 
january 2010 by asterisk2a
The Reckoning - Citigroup Saw No Red Flags Even as It Made Bolder Bets - Series -
The bank’s downfall was years in the making and involved many in its hierarchy, particularly Mr. Prince and Robert E. Rubin, an influential director and senior adviser.

Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

-- with hindsight -- these people were the architects of this crisis.
Summers and Greenspan and Rubin were part of the Clinton administration, and Bush partly too.
citigroup  MBS  robertrubin  fed  treasury  billclinton  administration  history  housing  bubble  architect  bailout  CDO  housemarket  barackobama  larrysummers  timgeithner  alangreenspan 
december 2009 by asterisk2a
Jeffrey Sachs: The Geithner-Summers Plan is Even Worse Than We Thought
Two weeks ago, I posted an article showing how the Geithner-Summers banking plan could potentially and unnecessarily transfer hundreds of billions of dollars of wealth from taxpayers to banks. The same basic arithmetic was later described by Joseph Stiglitz in the New York Times (April 1) and by Peyton Young in the Financial Times (April 1). In fact, the situation is even potentially more disastrous than we wrote. Insiders can easily game the system created by Geithner and Summers to cost up to a trillion dollars or more to the taxpayers.
jeffreysachs  JosephStiglitz  economics  timgeithner  larrysummers  bailout  toxicassets  PPIP  USA  2009 
november 2009 by asterisk2a
Brooksley Born, the Cassandra of the Derivatives Crisis -
A little more than a decade ago, Born foresaw a financial cataclysm, accurately predicting that exotic investments known as over-the-counter derivatives could play a crucial role in a crisis much like the one now convulsing America. Her efforts to stop that from happening ran afoul of some of the most influential men in Washington, men with names like Greenspan and Levitt and Rubin and Summers -- the same Larry Summers who is now a key economic adviser to President Obama.

She was the head of a tiny government agency who wanted to regulate the derivatives. They were the men who stopped her.
BobRubin  derivatives  creditcrunch  alangreenspan  larrysummers  CDS 
august 2009 by asterisk2a
The Ladies Of The Financial Crisis
Eleven years ago, then-CFTC chairman Brooksley Born campaigned tirelessly for someone -- she wanted it for her agency, but she would have been happy for anyone to have just done it -- to get the authority to regulate derivatives. Bill Clinton now openly admits that his biggest mistake was allowing Larry Summers, Bob Rubin and Alan Greenspan to spend three years bullying her out of the job, in a nasty battle that culminated in a conference call in which Larry Summers bellowed: "I have 13 bankers in my office and they say if you go forward with this, you will cause the worst financial crisis since World War II." It wasn't a particularly cerebral debate; as the Wall Street Journal observed at the time, "the nation's top financial regulators wish Brooksley Born would just shut up."
larrysummers  BobRubin  alangreenspan 
august 2009 by asterisk2a

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