News & Comment
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Running Citigroup Without Subsidies by Simon Johnson, economix.blogs.nytimes.com | October 18, 2012
On Tuesday, Vikram S. Pandit announced his resignation as the chief executive of Citigroup. He will also leave its board. Joining him in departing the company immediately is John P. Havens, the chief operating officer, who was already scheduled to retire at the end of the year. Michael L. Corbat, the new chief executive, faces the prospect of running Citigroup without the huge government subsidies to which the company has become accustomed. He could make himself into a hero to shareholders by breaking Citigroup into smaller, simpler and more dynamic companies that would be easier to manage. read more »Mitt Romney's Bailout Bonanza by Greg Palast, The Nation | October 18, 2012
Mitt Romney’s opposition to the auto bailout has haunted him on the campaign trail, especially in Rust Belt states like Ohio. There, in September, the Obama campaign launched television ads blasting Romney’s November 2008 New York Times op-ed, “Let Detroit Go Bankrupt.” But Romney has done a good job of concealing, until now, the fact that he and his wife, Ann, personally gained at least $15.3 million from the bailout—and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical—more than 3,000 percent on their investment. It all starts with Delphi Automotive, a former General Motors subsidiary whose auto parts remain essential to GM’s production lines. read more »"47 Percent" Host and Get-Rich-Quick Schemers Holding Romney Fundraisers by Andy Kroll, feedproxy.google.com | October 18, 2012
In a move that brings the Romney camp precariously close to the location of the candidate's 47 percent blunder, the campaign is scheduled to rake in contributions at three invite-only fundraisers in Boca Raton, Florida. One of the hosts for these events is Marc Leder, the controversial private equity fund manager who gained notoriety in 2011 for a bacchanalian party he threw in the Hamptons. Leder held the $50,000-per-plate fundraiser at his Boca mansion in May where Romney delivered his "47 percent" rant. But he's not the only member of the host committee with baggage. The organizers of this big-dollar fundraising spree include Mike and Irene Milin, a husband-wife team who have made a career out of peddling get-rich-quick schemes that state attorneys general have blasted as "deceptive," "unconscionable," and "illegal." read more »Direct Democracy, for Billionaires by David Callahan, prospect.org | October 18, 2012
Over a century ago, progressive reformers were deeply worried about how wealthy interests had hijacked American politics populating state legislatures with cronies who did as they were told and otherwise steamrolled the will of the people. To level the playing field, reformers worked to create mechanisms for direct democracy through state referendum and ballot initiatives, allowing voters to bypass corrupted political systems. Now, in a classic case of unintended consequences, these mechanisms for popular power are routinely used by the rich to change state laws—or try to, anyway. Regardless of what the rich want, the ability of a single wealthy person to wield so much influence over a state's political agenda is disturbing. And this year it is worse than ever, with more than a 170 ballot initiatives before voters in November. read more »For the Unemployed, Romney's Debate Was Full of "Wind Jobs" by Richard (RJ) Eskow, OurFuture.org | October 17, 2012
Mitt Romney's "binder full of women" comment has gone viral, which is pretty entertaining but has had the unfortunate side effect of crowding the phrase "wind jobs." That's a real loss, because that term could become a very useful part of our political vocabulary. read more »Mitt's Rules: "He does like pranks but he doesn't like to get pranked." by Digby , OurFuture.org | October 17, 2012
Michael Moore points out that Romney proved last night that he plays by different rules. Here's the president making the claim: read more »Student Loan Mimics Subprime Mortgage Industry by Natasha Leonard, salon.com | October 17, 2012
For many months, writers, commentators, economists and activists have argued that the student loan industry looks all too much like the subprime mortgage industry did on the brink of its collapse. On Tuesday, the Consumer Financial Protection Bureau admitted the same again. According to the government watchdog’s annual report, “Student loan borrower stories of detours and dead ends with their servicers bear an uncanny resemblance to problematic practices uncovered in the mortgage servicing business.” The student lending practices directly mimic the risky lending underpinning the housing crisis: private lenders giving out loans without considering whether borrowers would repay, then bundling and reselling the loans to investors to avoid losing money when students default. read more »Mitt Romney: The Great Deformer by David Stockman, thedailybeast.com | October 17, 2012
Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise. Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. read more »The Dirty Little Secret of Private Equity Profits by Jim Hightower, creators.com | October 17, 2012
Today, for the first time, I am officially notifying the honchos of Bain Capital, Blackstone Group, Carlyle Group, Kohlberg Kravis Roberts and other big-time private equity funds that I am available. My little company, Saddle Burr Productions, can be had. For a price. I publish this notice in response to a recent news item revealing that these firms have a unique and perplexing problem: They have too much money on hand. In all, they're holding a cool trillion dollars that super-rich speculators, banks and others have entrusted to them. Private equity funds are corporate predators that borrow huge sums from these richies, using the cash to buy out targeted corporations, dismantle them and sell off the parts to make a fat profit for the investors and themselves. The problem is that, under the rules of this high-stakes casino game, the firms have to spend their borrowed money by a set time — or give it back. And the clock is ticking. read more »How American And British Workers Can Fight For A Fairer Economic System by Damon Silvers, The Guardian | October 16, 2012
This weekend, the British labor movement will be marching in London for a future that works. Two weeks later, in the United States millions of workers and their unions will be mobilizing for our national election in critical states such as Ohio, Massachusetts and Wisconsin. These mobilizations may not seem surprising, but behind them lies a serious rethinking of the economic and political strategy on labor issues in both countries. It was the UK and the U.S. that gave birth to the economic ideas and the financial practices that led to the global economic crisis. Five years into the crisis, workers in both countries have paid a terrible price through lost jobs and incomes, while the incomes and assets of the wealthiest in both countries have largely recovered to their pre-crisis levels. But we have learned a few things from this experience. read more »
The Latest
Foreclosure: Nationwide Title goes on attack against vocal critics, tampabay.com | December 11, 2010
Foreclosure activity up across most US metro areas, finance.yahoo.com | October 28, 2010
Bank Of America Tries To Frame Foreclosure-Gate As Simply A Case Of Misspelled Names, wonkroom.thinkprogress.org | October 26, 2010
Since the foreclosure fraud scandal — in which banks were caught allowing “robo-signers” to approve potentially fraudulent foreclosure forms — first hit the national airwaves, Wall Street banks have been trying to downplay the extent of the problem, claiming that it only has to do with paperwork mistakes and not a compete disregard for due process and property rights. more »
Corporations Hide Election Spending From the Public Eye, The Nation | October 19, 2010
To avoid angering the public and their investors, some corporate interests are going to great lengths to hide their political spending. These companies have dumped money into nonprofits and trade associations that often have innocuous names like Americans for Job Security or Revere America, but in reality serve to shield donors from accountability for their spending in our elections. more »
Sorkin: Felix Rohatyn Looks Back, and Sighs, dealbook.blogs.nytimes.com | October 19, 2010
Felix G. Rohatyn, one of Wall Street’s last old wise-men, was sitting in his office at Lazard overlooking the Empire State Building on Monday morning. more »
The New Tax Man: Big Banks and Hedge Funds, huffpostfund.org | October 19, 2010
Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
How Do We Judge the Homeowner?, Huffington Post | October 19, 2010
In the rush to foreclosure, the banks and even government officials have been taking the position that the borrower/homeowners are fully to blame for the situations they find themselves in and that the paperwork technicalities just need to be worked out in order for there to be a just outcome, which is to say, a foreclosure.
The Washington Post's Entry in the "How Many Big Things Can You Get Wrong in a Short Article?" Contest, cepr.net | October 19, 2010
The Washington Post appears to have outdone itself in a discussion of the politics surrounding the foreclosure crisis. For beginners, it told readers that:
"Reviving the economy requires repairing the housing market." more »
Bondholders Pick a Fight With Banks, The Wall Street Journal | October 19, 2010
As banks restart foreclosures they had suspended, bondholders are stepping up efforts to recoup losses on soured mortgage portfolios amid concern about sloppy mortgage servicing and underwriting practices. more »
Foreclosure Fortune Buys Bugatti, Yacht, Mansions for Attorney, bloomberg.com | October 19, 2010
For Americans, the foreclosure crisis has wiped out fortunes, bringing destitution and homelessness. For Florida attorney David J. Stern, it has brought mansions, a Bugatti sports car and a luxury yacht. Florida has the third-highest residential foreclosure rate in the U.S., and Stern, 50, has made a fortune off the bust. more »
