60 Minutes : Financial WMDs or How Wall Street Screwed The Country

You guys should really watch 60 Minutes sometimes. This is gambling and should be made illegal again. Put the regulations back or it's going to happen again. Does anyone learn from history?



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We learn from history...

FearlessFreep's picture

...that we never learn from history!


A fight is brewing over this

Rajah's picture

The fraud must continue!

Scumby's picture

People don't seem to understand that this depression was caused by the same thing that the previous one was: massive financial fraud.  Instead of regulating the fraud, the government is trying to find ways to perpetuate it "to keep credit flowing".

It ain't gonna last.

Most people assumed that real estate was a safe investment

Dan_in_Cincinnati's picture

Paul Krugman wrote a long article on the conflicts between liberal economists and conservative economists.  If you have any interest in the future of the dismal science you would probably enjoy reading it.  Here is a small excerpt:

"Now that the undiagnosed [real estate] bubble has burst, the true riskiness of supposedly safe assets has been revealed and the financial system has demonstrated its fragility. U.S. households have seen $13 trillion in wealth evaporate. More than six million jobs have been lost, and the unemployment rate appears headed for its highest level since 1940. So what guidance does modern economics have to offer in our current predicament? And should we trust it?"


{;-) Dan in Miami


Ugh. I take anything

jazzdrive3's picture

Ugh. I take anything Krugman says with a grain of salt. He's known to be blatantly disingenuous and outright lie.

"Undiagnosed housing bubble" my ass. He's the one who was calling for a housing bubble back in 2001 and 2002. Now he backsteps yet again when he realizes his Keynesian nonsense is just that...nonsense.

And there were plenty of people who diagnosed the housing bubble accurately and foresaw the problems. But because Krugman didn't realize it, or was hiding in his shell, or whatever he does that he calls economics, it was "undiagnosed".

Some economists predicted the housing bubble would burst

Dan_in_Cincinnati's picture

Krugman does mention that in his long essay.  Most people and most economists ignored the doomsayers.  Let the good times roll!  The economy was booming for a long time as people spent money they didn't have.  $13 Trillion in fake real estate wealth disappeared almost overnight when the bubble burst.  Frankly we will be lucky if we avoid another Great Depression.  Our problems today are almost identical with those of 1929.  The only difference is that President Herbert Hoover didn't want to pump money into the banks and the economy.  The result was a disaster.

I still think Obama's stimulus package is too little too late.  The vast majority of the money will not be spent in this fiscal year. 

{;-) Dan in Miami

The 9 things George Bush did to screw up the economy

Dan_in_Cincinnati's picture

The list is from Time Magazine.


Of course Bush had plenty of help including some from Bill Clinton.  Here is another list of the 25 people to blame for the current economic mess.


{;-) Dan in Miami

PS:  Don't you love lists?  Somehow they are comforting, even while your ship is sinking.


Reagan should be added to that list

Rajah's picture

His trickle down economics and deregulationing

Ronald Reagan hasn't been president for 20 years

Dan_in_Cincinnati's picture

Time Magazine probably felt there should be a statute of limitations.

{;-) Dan in Miami


gamerarocks's picture

Magazine is People Magazine for news.  Reagan isn't NOW so they can't be bothered and their research department only has issues of Oprah, Cosmo and Tiger Beat through May.

Impeach Jim Gibbons!


The banks STILL aren't lending

Dan_in_Cincinnati's picture

From Paul Krugman: But there’s an even bigger problem: while the wheeler-dealer side of the [banking] industry, AKA trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole.

And here’s the thing: The continuing weakness of many banks is helping to perpetuate that economic distress. Banks remain reluctant to lend, and tight credit, especially for small businesses, stands in the way of the strong recovery we need.

When bankers gamble with other people’s money, it’s heads they win, tails the rest of us lose.


{;-) Dan in Miami

Obama needs to fire his Treasury Sec.

Rajah's picture

This financial reform bill is a clusterfuck full of loopholes


Obama tries to increase small bank lending

Dan_in_Cincinnati's picture

WASHINGTON -- President Barack Obama wants smaller community banks to have greater access to the government's $700 billion financial rescue fund as the administration refocuses the bailout money on small businesses and homeowners and winds down programs aimed at big banks.

Obama on Wednesday plans to announce a package of initiatives designed to increase lending, including a request that Congress increase caps for existing Small Business Administration loans, the administration said.


{;-) Dan in Miami

PS:  I don't know if this new effort will work.  The US economy desperately needs the banks to start making loans again.  The big banks only seem to be interested in speculating in stocks and other dubious uses of our tax dollars.


Stimulus plan? What stimulus plan?

Dan_in_Cincinnati's picture

In other words, the new stimulus efforts, which are still under discussion [in the Obama administration], are unlikely to be packaged into a single bill, which would be politically unpopular. An August Gallup poll, for instance, found that 65% of Americans opposed a "second stimulus" and 51% thought that the Federal Government "should spend less" than it is currently spending on stimulus. And that opposition is likely to grow after the announcement on Oct. 16 that the federal deficit for the fiscal year that just ended hit $1.4 trillion, which, at almost 10% of the total economy, represents the largest share since the end of World War II.


{;-) Dan in Miami

Go see Michael Moore's new film.

HS's picture

As usual, it's more "propaganda" than actual documentary, but it's entertaining and educational.  I know that I learned a few things while watching it. 





In the film, Moore points out that Treasury Sec. Paulson, possibly in cahoots with Pelosi, Barney Frank, Chris Dodd, and others, rammed a bank bail-out bill down Congress's throat that gives ZERO stipulations on how said banks can spend that money...so naturally, the banks used it to give bonuses to the top execs.  I read today that Obama is ordering many large corporations that receive federal money - including some of these banks - to cut top executive pay by 50%.  I wonder if public outrage following the release of Moore's film had anything to do with this.  Do movies really have the power to create CHANGE?





Obama should do what Paul Volcker suggests

Dan_in_Cincinnati's picture

Former head of the Federal Reserve, Paul Volker, wants to split up the banks.  From today's NY Times:

The Obama team, in contrast, would let the giants survive, but would regulate them extensively, so they could not get themselves and the nation into trouble again. While the administration’s proposal languishes, giants like Goldman Sachs have re-engaged in old trading practices, once again earning big profits and planning big bonuses.

Mr. Volcker argues that regulation by itself will not work. Sooner or later, the giants, in pursuit of profits, will get into trouble. The administration should accept this and shield commercial banking from Wall Street’s wild ways.

“The banks are there to serve the public,” Mr. Volcker said, “and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties” and ultimately fails.

On the other side of the wall, investment houses would be free to buy and sell securities for their own accounts, borrowing to leverage these trades and thus multiplying the profits, and the risks.

Being separated from banks, the investment houses would no longer have access to federally insured deposits to finance this trading. If one failed, the government would supervise an orderly liquidation. None would be too big to fail — a designation that could arise for a handful of institutions under the administration’s proposal.


{;-) Dan in Miami

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