Posts Tagged ‘Larry Summers’

The Larry Summers hall of shame

The Larry Summers hall of shame


By MAXWELL STRACHAN, Salon 

This week’s announcement that Larry Summers will be stepping down as director of President Obama’s National Economic Council may have been most notable for the passionate reaction it prompted from his critics. "Good riddance," wrote the Progressive’s Matthew Rothschild, adding that "Summers has a resume of disaster."

The outpouring shouldn’t have been surprising. If nothing else, Summers, in his stints at Harvard, the World Bank and in two presidential administrations, has emerged as an accomplished lightning rod for controversy. As he prepares to decamp Washington for Harvard Yard — he’s going to be a professor — we remember the 10 most shameful moments that Larry has brought us.

10. Asking Chris Dodd to remove post-recession caps on executive pay: Summers ran into a bit of trouble after it leaked last year that he had received free rides on Citigroup’s corporate jet while working for the Obama White House — a major no-no. More appalling, however, was his subsequent decision to exempt Citigroup, a stimulus recipient,  from caps on executive pay.

9. Gambling away $1 billion of Harvard’s money:  Sure, it was unlucky that Summers’ stint as president of Harvard from 2001 to 2006 overlapped with the derivative craze of the mid-2000s, but he pushed to invest $3.5 billion in the complicated financial instruments — even though he knew the risks better than most. Only after Summers was fired did the market crash, taking $1 billion of Harvard’s money with it.

Read the rest here. > 

Photo courtesy of Jr. Deputy Accountant 


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More Thoughts on Larry Summers’ Goodbye

Barry Ritholtz discusses Larry Summers’ departure on Fast Money.


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WHAT DID WE EXPECT WITH LEADERS LIKE THIS?

Brief review of why it’s about time Summers says goodbye. – Ilene 

WHAT DID WE EXPECT WITH LEADERS LIKE THIS?

Courtesy of The Pragmatic Capitalist 

It’s no secret that the economic recovery in the United States has been meager at best (and that’s assuming you believe this is not just one ongoing recession). While there is plenty of blame to go around for our current plight the buck ultimately stops with the most influential people in this economy – the leaders that help frame the regulations and policies that help to keep the U.S. economy running smoothly. I don’t think these men and women (mostly men) have been held accountable over the years. I personally believe many of these men have flawed models (Alan Greenspan has admitted as much and Ben Bernanke has essentially rehashed his flawed model) and continue to help promote and implement economic policy in the U.S. that is counterproductive, ineffective and at times downright destructive.

I’ve been highly critical of Obama’s economic team over the years because many of them were key players in helping cause the financial crisis. Tim Geithner was the head of the NY Fed when the banks were busy turning themselves into casinos. Ben Bernanke (who Obama should have never reconfirmed) failed to even acknowledge the potential existence of problems in the U.S. economy leading up to the financial crisis and then implemented his great monetarist gaffe which has now been proven to be what I called it from the very beginning – a bailout of Wall Street and a slap in the face for Main Street. He receives endless praise for helping to avoid a supposed second Great Depression. This is like the man who sees a fire in his front yard, ignores it, then when it’s finally becoming a widespread danger decides to save his own house from burning (the banks), lets all of the surroundings houses burn to the ground (Main Street) and then receives endless praise for his courage under fire.

But there have been few people in power over the last 25 years that have been more misguided and downright destructive than Larry Summers. This is a man who believes that women are intellectually inferior (I’ll tell you one thing – this economy wouldn’t be such a mess if it wasn’t run primarily by arrogant, narcissistic males) and has done more to help


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Former Bank Regulator William Black: U.S. Using “Rally Stupid Strategy” to Hide Bank Losses – Will Produce Japanese Style Lost Decade

Former Bank Regulator William Black: U.S. Using "Rally Stupid Strategy" to Hide Bank Losses – Will Produce Japanese Style Lost Decade

William K. BlackCourtesy of Mish 

Aaron Task has a nice interview with former bank regulator William Black on our "Really Stupid Strategy" to Hide Bank Losses"

109 U.S. banks have failed so far this year, 23 in this quarter alone. These failures may not cost depositors, but they do come at a steep cost to the FDIC. As discussed here with ValuEngine’s Richard Suttmeier, the FDIC Deposit Insurance has already spent $18.93 billion this year, “well above the $15.33 billion prepaid assessments for all of 2010.”

The situation is likely even worse than the FDIC portrays, says William Black Associate Professor of Economics and Law at the University of Missouri-Kansas City.

“The FDIC is sitting there knowing that it has both the residential disaster and the commercial real estate disaster [and] knowing it doesn’t have remotely enough funds to pay for it,” he says.

William Black with Aaron Task Video

Partial Transcript

Aaron Task: Should we be surprise there are not more bank failures?

William Black: Not Surprised,we should be upset there are not more bank failures. The industry has used its political muscle to get Congress to extort the financial accounting standards board to gimmick the accounting rules so that banks do not have to recognize their losses.

Aaron Task: In practical terms, what does the gutting of that rule mean for the banks?

William Black: Capital is defined as assets minus liabilities. If I get to keep my assets at inflated bubble values that have nothing to do with their real value, then my reported capital will be greatly inflated. When I am insolvent I still report that I have lots of capital.

Aaron Task: You are saying the FDIC is intentionally keeping foreclosures down because it knows it does not have enough money to pay off depositors who are insured by the FDIC?

William Black: That is correct and that is going to make ultimate losses grow. It also means we are following a Japanese type strategy of hiding the losses and we know what that produces – a lost decade, which is now two lost decades. Your listeners and viewers if they are stock types, look at the Nikkei. It lost 75% in nominal terms and has stayed that way for 20 years. I…
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US money supply plunges at 1930s pace as Obama eyes fresh stimulus

US money supply plunges at 1930s pace as Obama eyes fresh stimulus

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

By Ambrose Evans-Pritchard, Telegraph 

The M3 figures – which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance – began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever.

"It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015.

Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200bn to keep growth on track. "We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

Read more here.>>

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Jr. Deputy Accountant notes:

That’s THIRD Stimulus, Not Second

 nope, you’re not getting a check this time either…

Remember standing by the mailbox waiting for Bushy Jr’s stimulus? So let’s keep that in perspective when discussing an additional stimulus measure – proposed by cheeseburger addict and serial maniac Larry Summers. Don’t credit Obama with making this statement, he was busy here in my home base of San Francisco this week trying to whore himself out for the sake of Barbara Boxer’s reelection campaign. Sexy.

The FT is reporting that
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Consumer Confidence Expectations Soar, Current Confidence in Gutter; Larry Summers Yaps about Second Stimulus

Consumer Confidence Expectations Soar, Current Confidence in Gutter; Larry Summers Yaps about Second Stimulus

Courtesy of Mish

A saleswoman at a clothing shop attracts customers in a shopping district in Tokyo

Although the consumer confidence current conditions index remains in the gutter, the expectations index shows increasing optimism. Please consider Consumers Gain Confidence as Employment Improves.

The Conference Board’s confidence index rose to 63.3, exceeding all estimates of economists surveyed by Bloomberg News and the highest level in two years, according to a report from the New York-based private research group. Other figures showed home prices rose less than projected in the year through March.

“I’m relatively optimistic that we’ll get through the European debt crisis without dire economic consequences, but the jury is still out on that one,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. Home prices “are going to drag along the bottom for a while until we get a better handle on the overhang” of inventories.

The Conference Board’s measure of present conditions increased to 30.2 this month, the highest level since December 2008. The gauge of expectations for the next six months surged to 85.3, the highest point since August 2007, four months before the recession began.

The percent of respondents expecting more jobs will become available increased to the highest point since December 2003.

Confidence, “although still weak by historical levels, appears to be gaining traction,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. Expectations have been “fueled primarily by growing optimism about business and labor market conditions,” she said.

Expectations Not the Same as Jobs

Present conditions are telling one story while expectations are another. However, expectations are not the same as jobs. People are starting to believe nonsense about the strengthening economy even as the treasury market and credit markets are singing a different tune.

I happen to believe the credit markets.

5-year treasury yields and rising junk bond yields paint a far different picture than consumer expectations. (Please see Corporate Bonds Smacked, Junk Yields Rise, Deals Pulled; Treasuries Rally; Yield Curve Flattens; Global Slowdown Coming for details).

No matter what one thinks of the US economy in isolation, it should be crystal clear that Europe is slowing and China is gasping for air with an export model not prepared for a slowdown anywhere, let alone a global slowdown.

Moreover, various stimulus packages in the US have run their…
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Taleb Says Focus on Specific Trades in Selloff Misguided

Just a minute or two on the silly theory, then Nassim Taleb discusses the economy more generally. – Ilene 

Taleb Says Focus on Specific Trades in Selloff Misguided

Bloomberg

May 13 (Bloomberg) — Nassim Taleb, a professor at New York University and author of "The Black Swan: The Impact of the Highly Improbable," talks with Bloomberg’s Erik Schatzker about the May 6 stock market selloff and his investment strategy. Taleb also discusses the drivers for the financial crisis, the U.S. economy and the performance of Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben S. Bernanke. 

Nassim Taleb: 

"When a bridge collapses, you don’t look at the last truck that was on it.  You look at the engineer.  You go look for structural…flaws."  (In regards to Universa’s trade that’s been connected to the market collapse.)

"The crisis of 2008 wasn’t a black swan event."

"A black swan is something that depends on the observer… For the turkey, Thanksgiving is a black swan, but not for the butcher."

 


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Cut the Partisan Crap … BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

Cut the Partisan Crap … BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

Courtesy of Washington’s Blog

Partisan GOP hacks say the financial crisis was caused by too much regulation, and government interference in the markets.

But Glass-Steagall was repealed, derivatives were left unregulated, and the regulators were watching porn instead of preventing fraud. Giant banks, hedge funds and other fat cat private players knowingly gamed the market and committed fraud in more ways than can be listed in a single post.

And remember, even the "father of economics" – Adam Smith – didn’t believe in completely unfettered free markets.

On the other hand, partisan Democratic party hacks say that bad corporations caused the crisis, and that if more power is given to Summers, Bernanke, Geithner and the other governmental honchos, they’ll fix everything.

But Summers, Bernanke, Geithner and the other meatheads largely caused the crisis through their actions. And as Simon Johnson points out, the government created the mega-giants, and they are not the product of free market competition.

As I pointed out in February 2009, government fraud is pervasive:

In case you believe that there are only "a couple of bad apples" in the United States, here is an off-the-top-of-my-head list of corruption by leading pillars of American society:

  • Senior military officials stole approximately $125 billion dollars out of Iraq reconstruction funds, dwarfing Madoff’s $50 billion Ponzi scheme (in turn, the looting which is now occurring under the bailout/stimulus programs will far surpass $150 billion)
  • The government-endorsed ratings agencies which were supposed to accurately rate the credit-worthiness of companies and nations committed massive fraud

There are hundreds of similar stories of corruption which have come out recently.

But surely government employees would have done something to stop such corruption if had known about it, right?

Well, actually:


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The Economic Elite Vs. The People of the United States of America (I – III)

Full Report: The Economic Elite Vs. The People of the United States of America (Parts I-III)

Courtesy of David DeGraw, AmpedStatus Report

This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.  

 

“The American oligarchy spares no pains in promoting the belief that it does not exist,
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”
– Michael Lind, To Have and to Have Not

 

The Economic Elite Vs. The People of the United States of America

 

It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.

Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy.

It has now become evident to a…
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Larry Summers Opens Mouth, Proves All His Critics Are Correct

Larry Summers Opens Mouth, Proves All His Critics Are Correct

Courtesy of Tyler Durden, Zero Hedge 

Larry Summers, whose days in the Obama administration are thankfully numbered, presents the most incoherent rambling defense of our monopoly banking system, yet to appear in the public domain. When asked if US mega banks should be broken up, reports the HuffPo, "Summers said no. He added that it’s not significant. But that’s not the important issue," Summers said during the interview, adding to his answer as to why the U.S. shouldn’t break up megabanks. "[Observers] believe that it would actually make us less stable, because the individual banks would be less diversified and, therefore, at greater risk of failing, because they would haven’t profits in one area to turn to when a different area got in trouble. And most observers believe that dealing with the simultaneous failure of many — many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment."

bankersWe dare you to reread the above from Larry the Hutt and not have your frontal lobe disintegrate into antimatter. Sure, 4 out of 5 Goldman CDO traders totally agree that Goldman’s monopoly in the capital markets is terrific, and, in fact, if someone could "organize" a liquidity event at RBC, Barclays, UBS and CS, they would really apprciate it, doubly so if, like JPM, they could then acquire the firms for a dollar over their Fed guaranteed debt. As for everybody else, well, if you have any doubt that Larry Summers is having his future personal assistant organizing his corner office at 200 West, we hope this should resolve it.

Yet there may still be hope that not all of America is run by corrupt demagogues. HuffPo writes:

A bill championed by Democratic Senators Ted Kaufman of Delaware, Sherrod Brown of Ohio, Robert P. Casey of Pennsylvania and Sheldon Whitehouse of Rhode Island proposes to break up financial behemoths. Observers say the proposal is gaining steam.

A test vote in the Senate Budget Committee on Thursday, which essentially would have expressed support for breaking up megabanks, failed by just a 12-10 vote. The small margin was surprising, one Senate aide said.

HuffPost posed the following questions, which were based on Summers’s remarks, to the White House:

- Does Mr. Summers and/or the administration wish to


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Politics

Trump's Coup Runneth Over

 

Trump's Coup Runneth Over

The president fancies himself a strongman. He's not.

Courtesy of Greg Olear at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

THERE ARE DAYS when a second Trump term—which would beget a third Trump term, followed by a few Ivanka Trump terms—feels inevitable. When the optimism of commentary like mine—“pseudo-sophisticated reassurance,”&...



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Phil's Favorites

Mapped: The Uneven Recovery of U.S. Small Businesses

 

Mapped: The Uneven Recovery of U.S. Small Businesses

Courtesy of Nick Routley, Visual Capitalist

 

Mapped: The Uneven Recovery of U.S. Small Businesses

Small businesses are the backbone of the U.S. economy, employing nearly half of the private sector workforce.

Unfortunately, lockdown and work-from-home measures brought about by COVID-19 have disproportionately affected small businesses – particularly in the leisure and hospitality sectors.

As metro-level data from ...



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ValueWalk

CNBC's Interview With Mary Callahan Erdoes, Joseph Tsai and John Vaske From The Delivering Alpha Conference

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC Exclusive: CNBC’s Andrew Ross Sorkin interviews Mary Callahan Erdoes, Joseph Tsai and John Vaske From CNBC Institutional Investor Delivering Alpha Conference

Q2 2020 hedge fund letters, conferences and more

Realtime Transcription by www.RealtimeTranscription.com

Interview with Mary Callahan Erdoes, Joseph Tsai and John Vaske

ANDREW ROSS SORKIN: Tyler, thank you, my friend. Appreciate it very, very much. And it's a privilege to be with all thre...



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Kimble Charting Solutions

Gold Price Breakout Facing Critical New Support Test!

Courtesy of Chris Kimble

It’s been a heck of a year for Gold. But the year isn’t over yet and precious metals investors are hoping it will close the year out strong. That may depend on what happens in the coming days/weeks.

In today’s article, we feature a “weekly” chart of the Gold ETF (GLD), highlighting its strong up-trend channel and summer breakout to new all-time highs at (1), from Marketsmith.com.

Recently, I provided an update on why ...



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Zero Hedge

We've Reached "The Endpoint" - Monetary And Fiscal Policy Won't Help

Courtesy of ZeroHedge View original post here.

Authored by James Rickards via The Daily Reckoning,

Remember all those “green shoots?”

That was the ubiquitous phrase used by White House officials and TV talking heads in 2009 to describe how the U.S. economy was coming back to life after the 2008 global financial crisis.

The problem was we did not get green shoots; what we got was more like brown weeds.

The economy did recover, yes, but it was th...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 01 May 2020, 11:47:29 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: In 2008 the Central banks were newbies, now there locked and loaded .. its going to be a great show



Date Found: Saturday, 02 May 2020, 12:21:35 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: The Fed has done everything it poss...



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Digital Currencies

The Great Unbanking: How DeFi Is Completing The Job Bitcoin Started

Courtesy of ZeroHedge View original post here.

Authored by Paul De Havilland via CoinTelegraph.com,

While most of us will prefer to forget the horrors of 2020, DeFi may well prove to be the guarantee of a better, more liberated future...

...



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Biotech/COVID-19

How and when will we know that a COVID-19 vaccine is safe and effective?

 

How and when will we know that a COVID-19 vaccine is safe and effective?

How much longer must society wait for a vaccine? ANDRZEJ WOJCICKI/Getty Images

By William Petri, University of Virginia

With COVID-19 vaccines currently in the final phase of study, you’ve probably been wondering how the FDA will decide if a vaccine is safe and effective.

Based on the status of the Phase 3 trials currently underway, it i...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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