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Occupy Wall Street: Not on major media but worth watching!

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DiscoBiscuit

weed fiend
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Abbot Downing, Wells Fargo's Bank For Super Rich

Abbot Downing, Wells Fargo's Bank For Super Rich

First Posted: 11/6/11 01:15 PM ET Updated: 11/6/11 01:15 PM ET

Wells Fargo & Co.'s new bank for the super rich is set to open in Chicago, targeting households with $50 million or more to invest.

Abbott Downing is named after a 19th century custom carriage builder who catered to the wealthy, according to UPI. The firm has $27.5 billion in client assets and about 300 people on staff -- including psychologists and staff dedicated to building family genealogies, the Chicago Sun-Times reports.

"Abbot Downing goes beyond traditional wealth planning analysis by focusing on clients' values, goals and vision," James Steiner, who will run Abbot Downing, said in a statement. "Our advisors and Family Dynamics consultants focus not only on traditional wealth planning, such as cash flow, investments and wealth transfer, but also on human dimensions, such as family legacy, governance, leadership transition, family education and risk management."

The brand will reportedly be launched in April 2012. Aside from an office in Chicago, they will also be opening in San Francisco, Los Angeles, Scottsdale, Denver, Houston, Minneapolis, Philadelphia, Charlotte, Winston-Salem, Raleigh, Naples, Jacksonville and Palm Beach.

The announcement comes as banks are increasingly desperate to increase revenues after new regulations put a stop to some fees they were charging average customers and small businesses.

“Clearly it’s a profitable area, and good businesses are always looking to leverage profitable segments,” Steven Crosby, a senior managing director for PricewaterhouseCoopers, told Scripps Howard News Service. The bank will focus particularly on baby boomers looking to sell family businesses.

http://www.huffingtonpost.com/2011/11/06/abbot-downing-wells-fargo_n_1078513.html

goes beyond traditional wealth planning analysis by focusing on clients' values, goals and vision

:laughing:

Goes beyond traditional ways to rip folks off.
 

dagnabit

Game Bred
Veteran
http://www.marketwatch.com/story/we...sses-under-new-brand-abbot-downing-2011-11-01


SAN FRANCISCO, Nov 01, 2011 (BUSINESS WIRE) -- Wells Fargo & Company WFC
+0.75% announced today an
increased focus on serving the growing segment of individuals and families with $50 million or more in assets, as well as their foundations and endowments, through a newly branded boutique to be known as Abbot Downing, a Wells Fargo Business.

Abbot Downing combines two well established Wells Fargo businesses--Wells Fargo Family Wealth and Lowry Hill. The combined firm, led by James Steiner, has $27.5 billion in client assets and a staff of approximately 300. The firm is part of Wells Fargo's Wealth, Brokerage and Retirement group, one of the largest U.S. wealth managers, with $1.3 trillion in client assets as of Sept. 30.

Abbot Downing was a 19th-century New Hampshire builder of the iconic stagecoaches that have come to represent Wells Fargo, who was Abbot Downing's largest customer. Abbot Downing was known worldwide for their ingenuity, high-quality craftsmanship, and distinctive passenger experience.

"We pride ourselves on the values on which Abbot Downing was founded and will use the name to reflect the tailored solutions, high-touch service and attention to detail our clients expect," Steiner said. "With the strength of Wells Fargo, our team of highly specialized professionals delivers a full suite of services to address the financial, social and human dimensions of multi-generational wealth."

The Abbot Downing brand will be launched in April 2012. The firm, which has financial relationships with clients dating back generations, will seek to expand its market share among the roughly 10,000 households in the U.S. that have $50 million or more in investable assets and collectively control more than $1 trillion.

"By helping clients access the financial strength and tremendous breadth of capabilities across Wells Fargo, we have a significant opportunity to grow in this market," said David Carroll, head of Wealth, Brokerage and Retirement. "Whether the client needs merger and acquisition services, insurance, or commercial banking, we can integrate our services across Wells Fargo and ultimately provide a better client experience."

If a family business owner is ready to sell, for example, Abbot Downing can partner with Wells Fargo Securities to provide access to private equity firms and other qualified buyers, helping business owners turn their illiquid assets into liquid assets to be reinvested. U.S. middle market M&A deal activity was up 30 percent in the first half of 2011 from the first half of 2010, according to Thomson Financial. Privately held firms represented almost 60 percent of M&A deals. Families who experience sudden wealth from such liquidity events have complex needs beyond the scope of investment management.

"Abbot Downing goes beyond traditional wealth planning analysis by focusing on clients' values, goals and vision," Steiner said. "Our advisors and Family Dynamics consultants focus not only on traditional wealth planning, such as cash flow, investments and wealth transfer, but also on human dimensions, such as family legacy, governance, leadership transition, family education and risk management."

The firm has teams of regionally based investment managers who act as chief investment officers to their clients. In combination with Wells Fargo, Abbot Downing conducts exhaustive manager research to provide sophisticated solutions not widely available to individual investors. The firm's investment capabilities include trading and customized investment solutions for complex client needs. Objectivity to avoid conflicts of interest is a key tenet of the investment process. Trust and fiduciary services address wealth structuring, wealth management and wealth transition.

Credit solutions include customized leverage to meet estate, financial and investment planning objectives; personal lines of credit; specialized financing for aircraft, yachts and alternative investments; and investment finance for commercial real estate, LLCs and LLPs. Banking products include checking, foreign exchange and business checking; treasury management; and interest rate risk management.

Abbot Downing serves clients nationwide through offices in San Francisco, Los Angeles, Scottsdale, Denver, Houston, Minneapolis, Chicago, Philadelphia, Charlotte, Winston-Salem, Raleigh, Naples, Jacksonville and Palm Beach.

Wells Fargo & Company is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and distribution channels across North America and internationally. With approximately 270,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company ranked No. 23 on Fortune's 2011 rankings of America's largest corporations.

Abbot Downing provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries.

Wells Fargo Bank, N.A. Member FDIC

Equal Housing Lender

Investment and Insurance Products:

-- Are NOT insured by the FDIC or any other federal government agency

-- Are NOT deposits of or guaranteed by the Bank or any Bank affiliate

-- May Lose Value

SOURCE: Wells Fargo & Company



Wells Fargo & Company
Media
Sandy Deem, 704-374-2710
Julie Andrews, 704-374-4828

some more...
 

DiscoBiscuit

weed fiend
Veteran
"By helping clients access the financial strength and tremendous breadth of capabilities across Wells Fargo, we have a significant opportunity to grow in this market," said David Carroll, head of Wealth, Brokerage and Retirement. "Whether the client needs merger and acquisition services, insurance, or commercial banking, we can integrate our services across Wells Fargo and ultimately provide a better client experience."

Just updated....

"We forgot to include we can use regular, Wells Fargo customer accounts to back all the high-risk transactions associated with Abbot Downing."
 

MadBuddhaAbuser

Kush, Sour Diesel, Puday boys
Veteran
some heavily slanted opinions from the NY POST.

NYPost Demands Mayor Bloomberg Reclaim Zuccotti Park Today From Occupy Wall Streeters
Julia La Roche | Nov. 3, 2011, 8:21 AM | 1,016 | 2

A A A

inShare5

The New York Post is out with an op-ed piece today demanding that Mayor Michael Bloomberg start showing some "mayoral leadership" in his response to the Occupy Wall Street movement.

The News Corp-owned newspaper said the New York City mayor can do this by kicking the Occupy Wall Street "bums" out of Lower Manhattan starting as early as today.

The paper argues what were once credible protests with understandable grievances have transformed into a "public nuisance" full of incessant noise, public urination and defecation, drugs and criminals.

One reason the mayor has been reluctant to remove the demonstrators from their Zuccotti Park headquarters in Manhattan's Financial District is because the property is a private park owned by Brookfield Properties.

The Post says he needs to quit hiding behind that excuse and get it over with now.

NYPost Cover
nypost-cover.jpg

Image: NYPost
See Also:

Read more: http://www.businessinsider.com/nypost-mayor-bloomberg-occupy-wall-street-2011-11#ixzz1cyenbqw3

i picked up fridays edition, after and the cover is has a full page pic of some nuts fighting each other in the park, and spends a good ten pages demanding an end to OWS. Not surprising considering their bread and butter in page six gossip bullshit, where I learned kim kardashians wedding dress will still be in stores. What useful information.
 

MadBuddhaAbuser

Kush, Sour Diesel, Puday boys
Veteran
fridays edition

OWS: The New York Post Instigate An Attack In Zuccotti Park-Huff Post
Lead [-]

avatar

Posts: 943

11/05/11 18:15:29


r-OCCUPY-WALL-STREET-large570.jpg

Occupy Wall Street

Recai "Rocky" Iskender woke up in his Zuccotti Park tent yesterday morning to the unpleasant sensation of being kicked in the head. He scrambled out of the tent and onto the sidewalk, where he found a man with wild hair and a deranged look screaming at him. He knocked the man on his back with a left hook.

Standing there capturing the action on his camera was Kevin Fasick, a reporter for the New York Post. This was excellent timing for Fasick. The Post has covered the seedy and criminal element in Zuccotti Park almost to the exclusion of any other aspect of the Occupy Wall Street movement. The morning of the attack, an op-ed urging Mayor Bloomberg to banish the "bums" appeared on the cover of the paper under a headline that screamed "ENOUGH!" Now Fasick had found the perfect opportunity to lend some reportorial weight to the editorial board's assertion that the protests had largely been "hijacked by crazies and criminals." The attacker, Jeremy Clinch of Cleveland, played the part of violent lunatic to perfection. He seemed to be performing just for Fasick's benefit, turning and ranting directly to the camera.

After the incident, Iskender told Fasick that he suspected Clinch may have been put up to the job by someone employed by the "Bloomberg police machine," and he says he accused Fasick of misrepresenting the protests by focusing on the violence. He says that Fasick managed to calm him down by repeatedly referring to him as a "victim." But when Fasick's article and video came out Friday morning, Iskender learned that the reporter was perhaps not as sympathetic to his plight as he had seemed. The article referred to Iskender as one of two "wackos" in the confrontation, the other being the man who attacked him, and said that he was "up to the bizarre standards" set by the assailant. Iskender now suspects Fasick had coaxed Clinch into starting the fight. Fasick told this reporter he would not be giving any interviews.

There's no evidence that Post reporters have actually instigated violence, but the paper has hardly been even-handed in its coverage, and plenty of protesters have accused it of deliberately attempting to undermine the movement. Amid this atmosphere of tension, strange interactions have been cropping up. Thursday afternoon, as this reporter was interviewing Iskender about a separate series of events, a man with a voice recorder came up to him and began barraging him with questions about the assault. The man introduced himself by his first name only -– Frank –- and refused to reveal his last name or to provide any contact information to this reporter. Someone named Frank Rosario received an "additional reporting" credit on Fasick's article Friday morning.

Carolyn Questa, the executive assistant to the editor-in-chief of the New York Post, directed questions about the incident to Rubenstein Public Relations, which handles all press inquiries for the paper. A spokesperson at Rubenstein did not respond Friday night to allegations that the Post had asked reporters to undermine and start fights between the protesters. She would not confirm whether Frank Rosario was on staff, and would not answer whether or not the Post required reporters on the job to identify themselves if asked.

As with everything else discussed in the little park between Broadway and Church Street, the question of how to deal with the Post's presence there has prompted a variety of answers. At the information desk on the eastern side of Zuccotti this morning, several protesters said they advised giving Post reporters the silent treatment. But Wes Trexler, a musician who said he can usually be found at the coaching station, took a different view. "There's always going to be a segment of people who give credence to yellow journalism," he said. "They're the followers. We're interested in changing the leaders."
 

DiscoBiscuit

weed fiend
Veteran
The Great Deflation

Robert Cutner
Posted: 11/6/11 10:07 PM ET

I never liked the term "The Great Recession," because this is not an ordinary recession, not even a great one. It is a period of protracted deflation, where weak demand, declining incomes, and falling asset prices keep dragging the economy downward into a self-deepening sinkhole.

With the latest unemployment numbers, the evidence keeps accumulating that this will be a prolonged economic stagnation. The unemployment rate -- stuck around 9 percent -- is not as bad as that of the Great Depression, but in some respects the prognosis is equally grim.

We are already entering year four of the crisis, with a strong recovery nowhere in sight. Household income has declined by 10 percent since the recession began in 2007. GDP growth improved slightly, to 2.5 percent, in the third quarter, but only because households began borrowing more, and that can't continue for very long. Consumer income was actually down 1.7 percent.

If you compare our progress with the comparable period in the Great Depression, things actually looked more promising in the mid 1930s. By late 1933, on the fourth anniversary of the stock market crash, strong economic growth had resumed. The economy expanded by 11 percent in 1934, 9 percent in 1935, and 14 percent in 1936.

By contrast, optimists today hope the economy will somehow reach 3-percent growth. The Federal Reserve, once again, has just revised its growth forecasts downward to well under 3 percent, and expects unemployment still to be in excess of 8 percent in 2013.

By the end of year four of the Great Depression, the banking crisis was over. The 1933 Glass-Steagall Act, deposit insurance, and the Reconstruction Finance Corporation stabilized the financial system. Bank failures ceased -- while in the current crisis our banks are still a mess.

The Roosevelt administration dealt forthrightly with the housing crisis of that era, creating a Home Owners Loan Corporation that made direct loans to one homeowner in five, to keep people from losing their homes. In the current crisis, some 10 million homeowners are still on track to default, and the Obama administration keeps producing half-measures too feeble to solve the problem.

Four years into the Roosevelt administration, unemployment was still high, but Roosevelt was re-elected by a landslide in 1936 because things were improving and people felt he was on their side. It's anybody's guess who will win the White House in 2012.

A lot of pundits seem to think that the current crisis has no solution, and that we just have to get used to a prolonged period of slow growth, high unemployment, and general belt tightening. This is nonsense, but the remedies that might actually solve the crisis are mostly outside mainstream debate.

A real recovery program would be one part massive public investment -- partly financed by higher taxes on the wealthy, partly by deficits -- and one part a complete reconstruction of the financial system so that it returns to its role of servant of the real economy rather than master.

Neither party is proposing this, and proponents of a new political center are mainly promoting austerity.

The Republicans would drastically cut taxes, shrink public spending, and repeal regulations. All this, presumably, would liberate businesses to create more jobs.

However, taxes were cut several times under President Bush, but that didn't prevent the recession. Government revenues are already at their lowest share of the economy since the 1950s.

The financial collapse was caused mainly by the repeal of regulations that had contained the speculative tendencies of bankers. It's hard to see how more deregulation would promote entrepreneurship in an economy when consumers lack money to buy products.

Centrist groups like Third Way and No Labels decry the extreme partisanship and call for a new consensus to deal with the crisis. These and similar groups begin with a plea for budget discipline.

But austerity would not solve the economic crisis either. With unemployment high, consumer demand depressed, and businesses understandably hesitant to invest, more belt-tightening will only worsen conditions.

The Obama administration, for its part, has tried a blend of modest economic stimulus and a long-term path to budget balance. Obama's latest jobs program proposed a total of $447 billion over 10 years -- better than nothing but far from enough to produce a sustained recovery. Even if by some miracle Republicans were to relent, the stimulus is insufficient.

Obama's original Recovery Act, enacted back in February 2009 when the Democrats controlled both Houses of Congress, spent $775 billion over three years. But during the same three years, state and local governments cut about $460 billion. So the net government stimulus was barely $100 billion a year in a more than $14-trillion economy. Obama's own top advisers considered the sum inadequate.

In the Great Depression, it was the massive spending of World War II that finally cut unemployment to less than 2 percent and then powered the postwar recovery. The wartime deficits were astronomical -- nearly 30 percent of GDP in the last year of the war. But after the war, high growth paid down the debt, which was nearly twice the level of the current debt relative to GDP.

Nobody in mainstream American politics is proposing public outlays anywhere near this scale. So the likelihood is for continued economic deflation -- and deepening voter frustration.

Absent a more radical recovery program than anything on offer in mainstream politics, the chief executive elected in 2012, whether Obama or his Republican opponent, is likely to be the next Herbert Hoover, presiding over a prolonged economic slump with popularity to match.

Ours is a very resilient political system. But before America emerges from this combined economic and political crisis, it will take some new combination of mass reform movements at the grassroots and more effective leadership at the top than we've seen in a very long time.

Robert Kuttner is co-editor of
The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.

http://www.huffingtonpost.com/robert-kuttner/the-great-deflation_b_1078965.html
 

Dudesome

Active member
Veteran
[
The Great Deflation

Robert Cutner
Posted: 11/6/11 10:07 PM ET

I never liked the term "The Great Recession," because this is not an ordinary recession, not even a great one. It is a period of protracted deflation, where weak demand, declining incomes, and falling asset prices keep dragging the economy downward into a self-deepening sinkhole.

With the latest unemployment numbers, the evidence keeps accumulating that this will be a prolonged economic stagnation. The unemployment rate -- stuck around 9 percent -- is not as bad as that of the Great Depression, but in some respects the prognosis is equally grim.

We are already entering year four of the crisis, with a strong recovery nowhere in sight. Household income has declined by 10 percent since the recession began in 2007. GDP growth improved slightly, to 2.5 percent, in the third quarter, but only because households began borrowing more, and that can't continue for very long. Consumer income was actually down 1.7 percent.

If you compare our progress with the comparable period in the Great Depression, things actually looked more promising in the mid 1930s. By late 1933, on the fourth anniversary of the stock market crash, strong economic growth had resumed. The economy expanded by 11 percent in 1934, 9 percent in 1935, and 14 percent in 1936.

By contrast, optimists today hope the economy will somehow reach 3-percent growth. The Federal Reserve, once again, has just revised its growth forecasts downward to well under 3 percent, and expects unemployment still to be in excess of 8 percent in 2013.

By the end of year four of the Great Depression, the banking crisis was over. The 1933 Glass-Steagall Act, deposit insurance, and the Reconstruction Finance Corporation stabilized the financial system. Bank failures ceased -- while in the current crisis our banks are still a mess.

The Roosevelt administration dealt forthrightly with the housing crisis of that era, creating a Home Owners Loan Corporation that made direct loans to one homeowner in five, to keep people from losing their homes. In the current crisis, some 10 million homeowners are still on track to default, and the Obama administration keeps producing half-measures too feeble to solve the problem.

Four years into the Roosevelt administration, unemployment was still high, but Roosevelt was re-elected by a landslide in 1936 because things were improving and people felt he was on their side. It's anybody's guess who will win the White House in 2012.

A lot of pundits seem to think that the current crisis has no solution, and that we just have to get used to a prolonged period of slow growth, high unemployment, and general belt tightening. This is nonsense, but the remedies that might actually solve the crisis are mostly outside mainstream debate.

A real recovery program would be one part massive public investment -- partly financed by higher taxes on the wealthy, partly by deficits -- and one part a complete reconstruction of the financial system so that it returns to its role of servant of the real economy rather than master.

Neither party is proposing this, and proponents of a new political center are mainly promoting austerity.

The Republicans would drastically cut taxes, shrink public spending, and repeal regulations. All this, presumably, would liberate businesses to create more jobs.

However, taxes were cut several times under President Bush, but that didn't prevent the recession. Government revenues are already at their lowest share of the economy since the 1950s.

The financial collapse was caused mainly by the repeal of regulations that had contained the speculative tendencies of bankers. It's hard to see how more deregulation would promote entrepreneurship in an economy when consumers lack money to buy products.

Centrist groups like Third Way and No Labels decry the extreme partisanship and call for a new consensus to deal with the crisis. These and similar groups begin with a plea for budget discipline.

But austerity would not solve the economic crisis either. With unemployment high, consumer demand depressed, and businesses understandably hesitant to invest, more belt-tightening will only worsen conditions.

The Obama administration, for its part, has tried a blend of modest economic stimulus and a long-term path to budget balance. Obama's latest jobs program proposed a total of $447 billion over 10 years -- better than nothing but far from enough to produce a sustained recovery. Even if by some miracle Republicans were to relent, the stimulus is insufficient.

Obama's original Recovery Act, enacted back in February 2009 when the Democrats controlled both Houses of Congress, spent $775 billion over three years. But during the same three years, state and local governments cut about $460 billion. So the net government stimulus was barely $100 billion a year in a more than $14-trillion economy. Obama's own top advisers considered the sum inadequate.

In the Great Depression, it was the massive spending of World War II that finally cut unemployment to less than 2 percent and then powered the postwar recovery. The wartime deficits were astronomical -- nearly 30 percent of GDP in the last year of the war. But after the war, high growth paid down the debt, which was nearly twice the level of the current debt relative to GDP.

Nobody in mainstream American politics is proposing public outlays anywhere near this scale. So the likelihood is for continued economic deflation -- and deepening voter frustration.

Absent a more radical recovery program than anything on offer in mainstream politics, the chief executive elected in 2012, whether Obama or his Republican opponent, is likely to be the next Herbert Hoover, presiding over a prolonged economic slump with popularity to match.

Ours is a very resilient political system. But before America emerges from this combined economic and political crisis, it will take some new combination of mass reform movements at the grassroots and more effective leadership at the top than we've seen in a very long time.

Robert Kuttner is co-editor of
The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.

http://www.huffingtonpost.com/robert-kuttner/the-great-deflation_b_1078965.html

this is an absolute test of things guys.
If what this guys says is true, there is no real intention to wipe out the masses behind this crisis.


But here is my view on things:

Nobody will let a great Deflation happen. Not banks, nobody.

The Deflation/Inflation shit is 100% controlled by the banks. They can manipulate it any way they want.

Now you wanna say currency rate influeces inflation/deflation and currency rate is influenced by gdp and exports especially. Because we all heard the fact that the bigger deflation, the smaller the GDP. Well this is not the case in this REAL world anymore.
Compare 2 graphs:

Swiss Balance of trade
switzerland-balance-of-trade.png
and

Swiss franc deflation:

switzerland-exchange-rate.png


Can you see that while the frank was deflating, the exports grew?

Here is what happened to it's GDP within that same time

switzerland-gdp.png

fuck those pics don't work with the needed timeframe. Check them @ http://www.tradingeconomics.com/switzerland/balance-of-trade

set from 70s till today

good stuff.




So nobody's heading for a great Depression or Deflation. For some reason I'm pretty sure about that. If anything this road is going to be hyperinflationary... that's for sure.
 

Headbandf1

Bent Member
Veteran
[YOUTUBEIF]I0pX9LeE-g8[/YOUTUBEIF]

Photography Is Not A Crime of the Day: Just when you think the Oakland PD’s response to Occupy Oakland couldn’t get any worse, a new video emerges to prove you wrong.
YouTuber antiprocon writes:
While filming a police line at Occupy Oakland after midnight on Nov. 3 following the Nov. 2 general strike, an officer opens fire and shoots me with a rubber bullet. I was standing well back. There was no violence or confrontations of any kind underway.
The incident starts @ 0:31, when a tall police officer can be seen raising his rifle. Moments later a shot is heard, followed immediately by a clearly visible smoke trail.
 

DiscoBiscuit

weed fiend
Veteran
What caused the financial crisis? The Big Lie goes viral.

Barry Ritholtz
Published: November 5

I have a fairly simple approach to investing: Start with data and objective evidence to determine the dominant elements driving the market action right now. Figure out what objective reality is beneath all of the noise. Use that information to try to make intelligent investing decisions.

But then, I’m an investor focused on preserving capital and managing risk. I’m not out to win the next election or drive the debate. For those who are, facts and data matter much less than a narrative that supports their interests.

One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.
Rather than admit the error of their ways — Repent! — these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible.

They prevent measures from being put into place to prevent another crisis.

Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.

A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously. There are many examples: Claims that Earth is not warming, or that evolution is not the best thesis we have for how humans developed. Those opposed to stimulus spending have gone so far as to claim that the infrastructure of the United States is just fine, Grade A (not D, as the we discussed last month), and needs little repair.

Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.

Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

What made his comments so stunning is that he built Bloomberg Data Services on the notion that data are what matter most to investors. The terminals are found on nearly 400,000 trading desks around the world, at a cost of $1,500 a month. (Do the math — that’s over half a billion dollars a month.) Perhaps the fact that Wall Street was the source of his vast wealth biased him. But the key principle of the business that made the mayor a billionaire is that fund managers, economists, researchers and traders should ignore the squishy narrative and, instead, focus on facts. Yet he ignored his own principles to repeat statements he should have known were false.

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility.

And what about those facts? To be clear, no single issue was the cause. Our economy is a complex and intricate system. What caused the crisis? Look:

1 - Fed Chair Alan Greenspan dropped rates to 1 percent — levels not seen for half a century — and kept them there for an unprecedentedly long period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).

2 - Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities. Nearly all of them failed to do adequate due diligence before buying them, did not understand these instruments or the risk involved. They violated one of the most important rules of investing: Know what you own.

3 - Fund managers made this error because they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

4 - Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

5 - The Securities and Exchange Commission changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error.

6 - Wall Street’s compensation system was skewed toward short-term performance. It gives traders lots of upside and none of the downside. This creates incentives to take excessive risks.

7 - The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations. The Fed could have supervised them, but Greenspan did not.

8 - These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to get creative with underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.

9 - “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.

10 - To keep up with these newfangled originators, traditional banks developed automated underwriting systems. The software was gamed by employees paid on loan volume, not quality.

11 - Glass-Steagall legislation, which kept Wall Street and Main Street banks walled off from each other, was repealed in 1998. This allowed FDIC-insured banks, whose deposits were guaranteed by the government, to engage in highly risky business. It also allowed the banks to bulk up, becoming bigger, more complex and unwieldy.

12 - Many states had anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks. Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates skyrocketed.

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

The previous Big Lie — the discredited belief that free markets require no adult supervision — is the reason people have created a new false narrative.

Now it’s time for the Big Truth.

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Pearlstein: You bet it’s another bubble
Sloan: The bailout was awful, but it worked
Ritholtz is chief executive of FusionIQ, a quantitative research firm. He is the author of “Bailout Nation” and runs a finance blog, the Big Picture.

http://www.washingtonpost.com/busin...goes-viral/2011/10/31/gIQAXlSOqM_story_1.html
 

dagnabit

Game Bred
Veteran
love the article.
but it leaves out a major contributor when the government backed bundles that included subprime garbage earning what was previously untouched garbage into A++ rated fools gold.
 

bombadil.360

Andinismo Hierbatero
Veteran
I'm not sure why you're so angry with people. Imo we should really try to see best in eachother in order for it to appear.
How else are you going to turn a zombie into an exciting individual?


angry at people? that's like saying I'm angry at birds because they are birds; or angry at zombies because it is their nature to be zombies; nonsense it would be.

if you asked me, I think it is ridiculous to think you can "turn a zombie into an exciting individual", as you put it, not only does it sound corny, but it is highly unlikely, some would even say impossible.

Live and let live is a far better philosophy than running around trying to 'turn' people to this or that.

if people cannot make something out of themselves without others 'turning' them into it, heck, the title 'people' would be a shoe too big to fit.

:tiphat:
 

DiscoBiscuit

weed fiend
Veteran
love the article.
but it leaves out a major contributor when the government backed bundles that included subprime garbage earning what was previously untouched garbage into A++ rated fools gold.

Government doesn't bundle mortgages but the private sector does. The big thing government did was allow the fox to guard the chickens. i.e. deregulation.

3 - Fund managers made this error because they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

4 - Derivatives [credit default swaps] had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

7 - The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations. The Fed could have supervised them, but Greenspan did not.

8 - These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to get creative with underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value. [i.e. due diligence - lenders aren't supposed to lend to deadbeats]

9 - “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.

10 - To keep up with these newfangled originators, traditional banks developed automated underwriting systems. The software was gamed by employees paid on loan volume, not quality.

11 - Glass-Steagall legislation, which kept Wall Street and Main Street banks walled off from each other, was repealed in 1998. This allowed FDIC-insured banks, whose deposits were guaranteed by the government, to engage in highly risky business. It also allowed the banks to bulk up, becoming bigger, more complex and unwieldy.

12 - Many states had anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks. Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates skyrocketed.
 

dagnabit

Game Bred
Veteran
fannie and freddie backed bundles with subprime for the first time in the mid '90s.

i found that out from YOU a few pages back.
 

DiscoBiscuit

weed fiend
Veteran
The Federal National Mortgage Association (FNMA; OTCBB: FNMA), commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.[2] The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS),[3] allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.[4]

http://en.wikipedia.org/wiki/Fannie_Mae
Federal takeover of Fannie Mae and Freddie Mac

The federal takeover of Fannie Mae and Freddie Mac refers to the placing into conservatorship of government sponsored enterprises Fannie Mae and Freddie Mac by the U.S. Treasury in September 2008. It was one financial event among many in the ongoing subprime mortgage crisis.

On September 6, 2008, the director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, announced his decision to place two Government sponsored enterprises (GSEs), Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), into conservatorship run by the FHFA.[1][2][3]

At the same press conference, United States Treasury Secretary Henry Paulson, stated that placing the two GSEs into conservatorship was a decision he fully supported, and that he advised "that conservatorship was the only form in which I would commit taxpayer money to the GSEs." He further said that "I attribute the need for today's action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction."[1]

The same day, Federal Reserve Bank chairman Ben Bernanke stated in support: "I strongly endorse both the decision by FHFA Director Lockhart to place Fannie Mae and Freddie Mac into conservatorship and the actions taken by Treasury Secretary Paulson to ensure the financial soundness of those two companies."[4] The following day, Herbert M. Allison was appointed chief

http://en.wikipedia.org/wiki/Federa...ition_of_Fannie_and_Freddie_prior_to_takeover
.
 
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