Ward on Words

I have not read Tim Geithner's memoir of the crash, Stress Test. [I did read Hank Paulson's memoir of the crash - and discovered that we shared three things in common - birding, residence in Barrington IL (I lived there once, a long time ago) and a love of the boundary waters near Ely MN. Otherwise, Paulson and I do not see eye-to-eye on much, particularly on his handling of the bailout.] I don't know if I will read Geithner's book. It is well-written, says Michael Lewis (author of Liar's Poker) in a NY Times review. But as I read Lewis's review, I wanted to throw the book at a wall - and I don't even own the book. Lewis quotes Geithner as saying: "We did save the economy, but we lost the country doing it..."  (My God! Is the economy "saved"? Not in my neck of the woods! But the country was indeed lost as a result of the crash.) Lewis goes on to say: " Geithner seems genuinely to believe that the details of the behavior in...

There's been much discussion of the value and impact of the recent bank stress tests. Saturday Night Live offers its interpretation: I give that skit an A for effort....

Workers continue to lose jobs! Unemployment rate in the U.S. has risen to 8.9 percent! That's the news out of the Bureau of Labor Statistics today. And yesterday, the Treasury Department rejoiced in their discovery that 19 of the biggest American banks could lose nearly $600 billion by the end of 2010, if the economy worsens! Other good news out of Treasury - ten of these 19 banks are now required to raise billions as a capital cushion! More than half of our biggest banks are teetering on the wire without an appropriate safety net! All this good news leaves me feeling like I'm inhabiting a Terry Gilliam movie. Why do I feel gloom instead of joy when reading these stories? What am I missing? According to the NY Times , the jobs report was "pretty encouraging." Because the loss of 539,000 jobs in April was not nearly as big a slide as we've seen in previous months (699,000 in March, 681,000 in February, 741,000 in January), the green shoot in th...

I have previously expressed my puzzlement at Tim Geithner's desire to create a market for toxicity by using tax dollars to snap up the toxic assets clogging the pipes over on Wall Street. Of course, he'll give "the market" the chance to buy these "assets" too, but if there are losses to take, it looks like, under his plan, the taxpayers will take the biggest hit. The guys over at Baseline Scenario are promoting a better use of these funds - let's use these toxic assets to fund the bonuses of the Wall Street executives who worked so hard to accumulate them. I like this idea. I like it very much. The guys on Wall Street worked very hard - and earned so very much - as they accumulated these poisonous assets on their books. Let that work pay off - use those funds to pay their bonuses - not taxpayer dollars from the feds. The good news - I'll bet there'd be no regulatory strings attached to those bonuses.... The Baseline Scenario folks a...

"Straddling the top of the world, one foot in China and the other in Nepal, I cleared the ice from my oxygen mask, hunched a shoulder against the wind, and stared absently down at the vastness of Tibet. I understood on some dim, detached level that the sweep of earth beneath my feet was a spectacular sight. I'd been fantasizing about this moment, and the release of emotion that would accompany it, for many months. But now that I was finally here, actually standing on the summit of Mount Everest, I just couldn't summon the energy to care." Thus begins Jonathon Krakauer's best seller, Into Thin Air . The thrill of achieving a lifetime goal - to stand on the rooftop of the world – is dramatically diminished by the overwhelming fatigue and lack of oxygen one finds at such a height. Sometimes I think that Washington, D.C. is like Everest. People arrive there and soon find themselves disoriented, out of touch, talking the nonsense that comes from the oxygen depr...

Execs at "too-big-too-fail" AIG got fat bonuses this week, despite the fact that their company has in reality failed and would be out of business were it not for a massive infusion of federal (tax) money. And people on Wall Street and in Washington seem caught off-guard by the populist outrage spawned by these bonuses. The legal obligation claimed by Tim Geithner to use tax dollars to pay large sums of money to failed execs has apparently enraged large numbers of people who live outside of NY and the Beltway. They simply do not understand why, at a time when the economy is in the toilet and millions of people have lost their jobs, the people who played a role in the collapse of the economy are being rewarded with millions of dollars in bonuses. And it is puzzling. We keep hearing that bonuses for performance are an integral part of how Wall Street does business. These struggling firms need to pay large sums of money to "the best and brightest" in order to re...