[WBAI is fundraising this week and next. My fundraiser is next week—be sure to pledge during my slot, details to follow!—and I was pre-empted on August 6. My KPFA show for August 8 is mostly a rerun, but it did contain this fresh commentary.] If you’re an American taxpayer, you’re an owner of AIG, the failed insurance company. According to a piece in Thursday’s Wall Street Journal (which did the research itself—God, I’m going to miss newspapers), AIG and the Federal Reserve, a branch of the U.S. government, will be paying Wall Street… Read More
Green shoots…shot? Some trouble lately for the “green shoots of recovery” thesis. Early in the week, we learned that retail sales fell by an unexpectedly large 1.1% in March, or 0.9% if you leave out autos. Sales had been up modestly in recent months, after plunging sharply late last year—in fact, while Wall Street loves to look at monthly changes, the year-to-year declines were about the steepest on record. So this big decline punched a hole in hopes that the economy might be bottoming out. But since it’s virtually certain that the American economy… Read More
Several new bits of economic news, most of them a little better than the recent run has been. First-time claims for unemployment insurance filed by people who’ve just lost their jobs fell by 12,000 last week. The four-week moving average, which smooths out this volatile series, rose slightly to make a new high for this recession. But it’s possible that the rate of deterioration is now slowing. In other words, the job market is terrible, but at least it’s not getting rapidly worse. At least over the last few weeks. The big surprise… Read More
This was originally posted as a comment, but I thought it was worth bringing up to the body of this esteemed blog: Santa Clara University law prof Steve Diamond on how the AIG bonuses could have been blocked, if the Obama admin had really wanted to: Thanks to Steve Diamond for pointing to this; glad he wasn’t inhibited by excessive modesty.
The Financial Times has a piece today about the Swedish bank bailout. Here’s a nice quote. You couldn’t imagine a sharper contrast with the American approach: Arne Berggren, the finance ministry official responsible for bank restructuring, is blunt about the approach he took. It was clear from the outset that the government would act as a commercial investor, demanding equity stakes in return for capital. “We were a no-bullshit investor – we were very brutal,” he says. The authorities also insisted on control. “You take command. If you put in equity, you have to… Read More
So Obama tells Geithner to do something, anything, to make sure the gov can get back the AIG bonuses. Who knows if this is real or a pose? I’m now leaning towards the latter, especially after getting this from a friend who works at a hedge fund: In the financial industry, reneging on contracts is, not quite SOP, but certainly not rare. From the company’s perspective, two things can happen. One, the employee eats the default. Free money. Two, he (more rarely, her) has a lawyer call you. At that point, you… Read More