Tuesday, May 17, 2011

More of those interesting times you've heard about

Economists had predicted an upturn in new home construction and instead it fell by 11%. These are the same economists that had no problem with the housing bubble during the Bush Administration or how the bubble was being driven by the large banks that were sucking trillions from the economy. You may jump to the conclusion that economists are stupid, well some are, but most simply are paid to say what their employers want to hear said in public. Instead of being the watch dogs of the economy, it’s really more of a public relations job that requires a lot of advanced math.

In the aftermath of the housing bubble/mortgage crisis the Dept of Housing and Urban Development has created a report for the DOJ on the recent activities of the top five mortgage service companies. The document is said to read like veritable indictments against Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. The report details various frauds against the government to the tune of 30 billion dollars. Mostly it involves how the banks creatively valued mortgages that they received bailouts on but other offenses as well.

The word is that the government is seeking a ten billion dollar settlement from these too big to fail banks. Besides letting them keep 2/3 of what they stole from taxpayers, don’t hold your breath for anybody to go to jail. In fact the government could invoke the False Claims Act and recoup three to one as a penalty or 90 billion instead of 30, but if past practice holds, don’t hold your breath for that either. The DOJ is largely populated with holdovers from the Bush Crime Family and the AG comes from the same corporate background that he doubtless intends to return to. That is the cynical view, we’ll see what really happens.

The shake up at the IMF is getting somewhat complicated. This would be the place to mention Arnold Schwarzenegger’s qualifications for the job but the top job normally goes to a European and the deputy is an American (maybe Arnold could do both). The current Deputy Governor had already announced before the DSK indictment that he is leaving in August so Obama will appoint them both but who?

There had been talk for some time that the job should go to somebody from one of the emerging markets instead of a European as is traditional but the Europeans want have the number two spot at least, of course they aren‘t in the best position to dictate policy at the moment and it‘s up to Obama. Coincidently, Chuck Schumer introduced a bill in March that would exempt 200 sub-cabinet jobs from the Advise and Consent rules of the Senate, including appointments to the IMF. Some on the right aren’t too happy about this streamlining of government but Schumer’s co-sponsors include republicans Alexander (TN), Brown (MA), Collins (ME), Johanns (NE), Kyl (AZ), Lugar (IN) and Minority Leader McConnell (KY) so it could pass.

After holding up all these appointments they may simply wash their hands of it as it looks like Obama will be re-elected unopposed by any serious candidate now that Newt has shot himself in the foot by pointing out that the Ryan budget was social engineering from the right. (the social engineers on the right aren’t happy so Michelle Bachman is now the front runner)

There is also talk that Obama will make some major recess appointments over the Memorial Day break including elevating Elizabeth Warren to head the Consumer Financial Protection Bureau that see has been creating. The Republicans tried to eliminate her salary during the last budget hostage taking session. We’ll just have to wait and see how this shakes out but this all could be “interesting“, in the way of Chinese curse “may you live in interesting times“.  www.prairie2.com

1 comments:

Anonymous said...

Does Candidate Bachmann use the HS sophomore who challenged her on constitutional knowledge as practice before debating the former Constitutional Law professor known as President Obama?