Ward on Words

For all those who truly, madly, deeply love the notion that rational minds move the invisible hand – this one's for you... If Tom Delay (is he wearing heels a la Ginger Rogers?!) dancing the cha cha to "Wild Thing" on Dancing with the Stars isn't enough to erase all dreams of rationality in America, then dream on baby! Or better yet - show me those rational threads that bind the fabric of America together... Here's the Bloomberg TV report on the event...

In the year since the crash, Goldman Sachs has been very busy, as you would expect of the financial giant. The company has paid back its TARP loan (with interest!) and, after some haggling , paid the full amount the fed wanted for its warrants (good citizenship!) And it's been very clear that it never needed the $12 bil that it got from AIG via the feds. Apparently, according to Gary Cohn, Goldman president, Goldman didn't need any of the extraordinary financial interventions it received in the last year. He's quoted in a NY Times story last August: "'We did not have a near-death experience,' said Gary D. Cohn, Goldman’s president. The government saved the financial industry as a whole, but it did not save Goldman Sachs, he said." And Goldman has also stated publicly that it has not changed the way it does business, and in fact, has profited hugely by the current business climate , the climate that seems quite chilly and foreboding to so man...

Over at Rortybomb , Mike Konzal and Jeffrey Friedman have engaged in a lively discussion on the role of regulation in the failure of the financial sector. Jeffrey Friedman is the editor of Critical Review , and a contributor to the Causes of the Crisis blog (a great resource for people like me who are seeking out various perspectives in an attempt to understand why the economy tanked so terribly.) Jeffrey believes the crisis is the result of regulation - specifically, no-recourse laws that many states had on the books that enabled consumers to walk away from mortgages they had no interest in paying back, and the Recourse Rule, which rated MBSs favorably, thus were more attractive to bankers. Since I'm not a banker or economist, I'll let Jeffrey explain the Recourse Rule : "Under the Recourse Rule, an AA- or AAA-rated asset-backed security, such as a mortgage-backed bond, received a 20-percent risk weight, compared to a zero risk weight for cash and a 50-percent r...

The most provocative line in last week's Newsweek is not the inflammatory headline that graced the cover, " the case for killing granny ." No, the most provocative line in the magazine comes on page 47 of the print edition, early in a story about Jamie Dimon , our post-millennial American hero, the man who somehow had the strength, courage and conviction to "eschew the siren call of investing in risky mortgage securities." (That's what passes for heroic these days in America - god bless us everyone...) The line I found most astonishing was this: "The only remaining question was whether it would be Morgan Stanley or Goldman Sachs to fail next." How's that for a bit of revisionist history?! Goldman Sachs on the verge of failure - at least according to those liberals over at Newsweek. That's trash talking there - language far more inflammatory than that bit about killing granny. Because Goldman, as we know, is the gold standard ...

Thanks to the recession, the Hyatt hotels in Boston have experienced a significant drop in revenues - 21 percent. The corporation's response to such challenging times? According to this story , they fired their housekeeping staff - approximately 100 people. In their place, Hyatt brought in 100 housekeepers who agreed to work for half ($8.00/hour vs. $15/hour) of what the fired employees had gotten. And no benefits. The fired workers had been getting health insurance through Hyatt. Here's how Hyatt characterized the move: "'As part of an ongoing drive to address challenging economic conditions, the Hyatt hotels of Boston have restructured their housekeeping services,’ according to a statement from the hotel. 'Regrettably, the restructuring included staff reductions.'" Bringing in employees to replace the ones you've fired is not a "staff reduction." It's a transformation of the workplace. It's letting go of people, so...

All I can say after reading the story in this month's GQ written by Matt Latimer, Republican speechwriter for George Bush is: no wonder we're swirling around in the toilet today. Some quotes from Latimer's story below... Matt learns about the impending crash... "Chris had just come from a secret meeting in the Oval Office, and without so much as a hello he announced: 'Well, the economy is about to completely collapse.' "'You mean the stock market?' I asked. "'No, I mean the entire U.S. economy,' he replied. As in, capitalism. As in, hide your money in your mattress. The secretary of the treasury, Hank Paulson, had sketched out a dire scenario. And Chris said we’d have to write a speech for the president announcing his 'bold' plan to deal with the crisis. (The president loved the word bold .) We had to reassure the American people that everything was going to be okay. As it turned out, Secretary Paulson had a pla...

One of the top stories in the Wall Street Journal this week is "Man vs. God," which asks Karen Armstrong, a religious writer and Richard Dawkins, an evolutionary biologist to answer the same question: "Where does evolution leave God?" Leave aside for a moment the intriguing notion that the WSJ (whose readers tend to worship at the altar of Mammon) ran this story the week we commemorated both 9/11 and the collapse of Lehman Brothers. Let's look at how faith and biology influenced the answers of the two writers... Karen Armstrong starts out with a bang: "Evolution has indeed dealt a blow to the idea of a benign creator, literally conceived. It tells us that there is no Intelligence controlling the cosmos, and that life itself is the result of a blind process of natural selection, in which innumerable species failed to survive. The fossil record reveals a natural history of pain, death and racial extinction, so if there was a divine plan, it was cru...

The recession is "very likely over," Federal Reserve Chairman Ben Bernanke told us today, exactly one year after Lehman filed for bankruptcy. The recession may be over, but we're still left with an economy that sheds jobs by the hundreds of thousands each month, a bank closure rate that has increased significantly since July, and TBTF financial institutions that are now even bigger one year after the collapse of the financial sector. The end of the recession is not the end of pain . Though the economy is "growing," so, too, is the unemployment rate. In response to Bernanke's cheery update, stocks rose today to its highest finish since October 6th, 2008. And gold likes what Ben has to say ... Additional links below.... Newseek called it weeks before Bernanke did - in its its 8/3/09 issue WSJ declared recession's end on 8/11/09

U.S. District Court Judge Jed Rakoff today overturned the $33 million settlement hammered out between the SEC and BoA over the $3.6 billion in Merrill Lynch bonuses paid to execs just prior to Merrill's merge with BoA. (A deal to pay the bonuses, agreed to in secrecy, without notifying shareholders, allegedly.) In his ruling , the judge concludes the agreement "does not comport with the most elementary notions of justice and morality...." "Morality" - a rarely used word in today's business climate. The judge takes issue with the settlement because it "...proposes that the shareholders who were the victims of the alleged misconduct now pay the penalty for that misconduct." Which, according to Rakoff, makes such a settlement "neither fair, nor reasonable, nor adequate." Apparently he believes the people who allegedly lied to the shareholders about an extremely costly and secret business deal should be left holding the bag... not ...

Two fascinating stories coming out of the Center on Budget and Policy Priorities (CBPP) . First, a release issued by CBPP on 9/10/09 has this to say about the state of our economy: "Poverty increased, median household income fell, and the percentage of Americans with employer-based health coverage continued to decline in 2008...." Seems "trickle down" never worked all that well for those on the down-side of the policies. However, there was good news in a release issued by CBPP on 9/9/09 - for the top income earners: "Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928..." Seems Bush/Cheney knew how to enact policies that really rewarded their base - at the expense of everyone else. Links to the releases below.... Poverty Rose, Median Income Declined, and Job-Based Health Insurance Continued to W...

Health care costs are careening out of control - in the last decade, employer-provided premiums have risen 119 percent - four times the rate of inflation and wages, according to the National Coalition on Health Care. The number of uninsured Americans has grown to 46.3 million, an increase attributed to the job losses seen in the last year. Providing and paying for health care in America is seriously flawed these days. Thus, there is a push for reform. The president appears before Congress to outline key goals and provide motivation to affect change in this area. And what happens? Joe Wilson (R-SC) shouts out mid-speech that the president is a liar. It was, according to the NY Times , a rare breach of protocol. If you've got children, you know this kind of screeching happens all the time on the playground. And you know that calling someone a liar is never an appropriate way to solve a problem - especially when the other person isn't lying. At this time of...

On Friday, we began the Labor Day weekend with news that unemployment has increased to 9.7 percent. If you add in the figures for underemployment, the percentage of Americans who are not working as productively as they'd like is now almost 17 percent . As Robert Reich, former US Secretary of Labor, says: "Bottom line: almost one out of six Americans who need a full-time job either can't find one or is working part-time." So on Labor Day, the day we honor the achievements of labor, many of us lit up the barbecue feeling a bit queasy about our future prospects for employment. Today, the work week begins anew (for those of us who are gainfully employed.) And today, we sent our children off to school where they may or may not get to hear a highly controversial speech given by the president of the United States. The president's intention from the start was to "challenge students to work hard, set educational goals, and take responsibility for their lea...

On Monday, much of the employed population of America will be taking the day off. It is Labor Day, the "yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country." Today, we receive news that the unemployment rate in the United States has risen to 9.7 percent (up from 9.4 percent last month) - and that an additional 216,000 people were shed from productive employment in August. Certainly, the number of jobs shed is lower than in previous months. But it is no cause for celebration. The job market has yet to see any improvements as the result of all the many bailouts made to banks. Nor has the stimulus provided a much-needed positive boost to jobs creation at this point. As we light up the barbecues on Monday to celebrate "the social and economic achievements of American workers," it is clear that labor's achievements have been badly damaged as the result of the economic crisis. The abili...

...Plotted and implemented by the White House, apparently one of the most subversive organizations in the country. The president is giving a "back-to-school" speech next week at Wakefield High School in Arlington, Virginia. Here's what the US Department of Education says students can expect from the president: "During this special address, the president will speak directly to the nation’s children and youth about persisting and succeeding in school. The president will challenge students to work hard, set educational goals, and take responsibility for their learning." Here's how Jim Greer, the chairman of the Florida Republican Party, interprets the Dept. of Ed's press release : "As the father of four children, I am absolutely appalled that taxpayer dollars are being used to spread President Obama's socialist ideology. The idea that school children across our nation will be forced to watch the President justify his plans for government-...

Sheldon Kornpett, a very successful Manhattan dentist, is at a point in his life when he should be collaborating with his family to finalize his daughter's wedding plans. However, less than 24 hours after meeting his daughter's future father-in-law for the first time - and the day before the wedding - Sheldon's life is in an uproar. Instead of treating patients for crowns and cavities and celebrating his daughter's upcoming nuptials, Sheldon instead finds himself dodging bullets on the tarmac of a primitive Central American airport. If you're a fan of Alan Arkin, you know that Sheldon Kornpett is a character he played in the 1979 film The In-Laws. His counterpart, Vince Ricardo, the man who dragged Sheldon into a bizarre plot to take down the global economy, is played by Peter Falk. Here, the day before his daughter is to marry, Shelly learns to serpentine.... With the entrance of Vince Ricardo into Shelly's life, all the normality of his life has v...