Wednesday, November 25, 2009

Naomi Klein And Joseph Stiglitz Discuss The Cause And Effect Of The Financial Crisis

Alan Greenspan's economic legacy is slowly but surely deteriorating from that of one created by a "Maestro", to the deranged hungover flashbacks of the most inept monetarst dilettante and plutocrat puppet in the history of fiat capitalism...the man who took the mundane task of building bubbles and converted it into rocket science so complex that only a few people at Goldman Sachs figured out how to benefit from it.

A statement written by John Grey in the Observer. Geo political shift, the era of USA is over. Free market creed has self destructed, while countries who retained control of markets have been vindicated. As far reaching as the fall of the Soviet Union

Distinction between the rhetoric and the reality. Mkt fundamentalism is dead. Those ideas are flawed.

US as corporatism, corporate welfarism under the guise of free market economics. That mixture was flawed and been shown not to work. Consequences.

Political, the way this admin has mgt this bailout, if I were at the World Bank, no loans to the country, corrupt, bail outs are non transparent, no oversite, or judicial review. We should make sure we dont pour money out to the shareholders.

The neoliberal economic revolution, driven by power, a revolt of the elite, ideology comes in when the bubble is being created. Leveling of Glass Stegall, no regul of direvatives. The ideology is useful and people believe it but then they throw the ideology out the window and want intervention. After creating a bubble they have to nationalize the debt.

Trust each other. what is written on paper does reflect reality.a crisis is a divorce between the paper and the underlying assets.

Bankruptcy. Debtor prisons, no more. Revised our bankruptcy laws. We will have a bunkruptcy law where peopl will suffer a little more.

The same banks are paying the lobbyist to fight the mortgage holders. There is law for the client, but no law for the banks.

The ownership idea is the market will fix the problem, but the mkt doesnt solve everthing'

A financial coup against the peole. the terms of the first document written by GS, why would anybody who would do that. Maybe we are seeing where power lies.

The bailout is a massive redistrubution of wealth to the financial sector. right after the bailout share prices went out. massive transfer of wealth but very little commentary about what this all means.

How did this crisis come about. No one realized how bad this was. by the way, when we gave billions to aig, we are only covering eight percent, the whole amount of paper is 600 trillion, 55 trillion dollars, gdp world wide for the whole year. what causes the panic is that nobody trusts the paper, call it what ecver you want to, your paper no longer reflects what is going on, you lack information.

Ther is a whole bunch of new mkts, which didnt exist in the nineties. 600 trillion circulating in the markets and there is onlty 55 trillion world gdp

Who had the power to create these mkts and how did they extract wealth from it.

Natual eveolutin of a property based system without regulation. two individuals make a bet about what is going to happen to a share. we stop at a dollar that one thing, but make a billion dollar bet, these are gambling mkts. you can gamble on anytghing now and not just horses. in modern america yoy study companies, we bet a trillion on bear sterns going bankrupt. the guys who says its not going bankrupt goes bankrupt and the us government comes in abails him out. No regulation.

Greeenspan created the mkts. what were the key decisions. why arent we regulationg the derivitives. these are deals between pros abnd we should trust them, they are too complex for the government. trust matters in banks, it doesnt. golden parachutes trumps reputation.

We now what a truly de regulated mkt looks like.

The decision makers were ceo's. ther has been a fundamental change in captilism, individual bear the burdens.

Modern cap is not that way, it seperates ownership and control. The guys in control are interested in max their own well being. not anyothr stakeholder, it's not just bad regulation of the banking system, its bad corportate goverance which is pervative,

Stock options encourate reporting earnigns high, you do this by bad accounting, get it off the balance sheet, enron. we tried to change that, rueban opposed it, no one wanted to be a party pooper.

what has already been thrown at the banks is a drop in the bucket, there is no end to it. the bankruptcy of countries, iceland, this is a very urgent moment.

we dont want another wall streeter to be the next treasury sec, we need Stiglitz. it is impossible to figure out where GS ends and the Fed begins, look at the figure of henry paulson he personnly took GS risk from twenty billion in 1999 to 100billion in 2005. he is bailing out his own debt.

where a the politial movements, people shoudl be angry, the government is being privatized, they are contracting out the b ailout. they want say how much the vcontract is for, the business of valuing and buying the debt and the bank itself is a carrier of this debt.

its a good moment to really angry at wall street, they are people who created this.

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