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| Economy |
| On historic day, Obama warns of financial 'collapse' |
| 2009-09-16 |
| A year after the start of the financial crisis in the US, President Barack Obama warns of "complacency" that might lead the country to an economic standstill. Speaking on Monday in the US financial hub, Wall Street, to mark the first anniversary of the latest US economic downturn sparked by the collapse of one of America's oldest commercial banks -- Lehman Brothers -- Obama called for an imminent launch of regulatory bodies in order to implement 'effective' oversight of America's Treasury on the financial industry without holding back capital market and enterprises. The US president told financial executives present at New York's Federal Hall that the old appeals to the unregulated free market system have jeopardized the US economy, putting it on the verge of "collapse." He defended his controversial economic reforms that favor more government spending to help move the clogged credit market and called for "strong" regulations intended to discourage creditors who lend without specifying loopholes set in their loan contracts. Obama urged the nation to learn from past lessons of Lehman Brothers and other fiscal institutes that filed for the so-called chapter 11 bankruptcy protections and called on the financial sector to join efforts with the federal government in an attempt "to update the rules and regulatory structure to meet the challenges of this new century." Obama also made a reference to the insolvency of Lehman Brothers and noted that "history can not be allowed to repeat itself." The 150-year-old bank went down on September 15, 2008 only a day after Merrill Lynch, a global financial services company, was taken over by Bank of America, the largest US commercial bank. The US president stressed that his major overhaul bids to fully restructure US economic statutes are meant to bring "transparency and accountability" to the broader financial system. He warned financiers against 'recklessness' in their transactions and held out the olive branch to those observing the law. Obama blamed the current economic woes on both the US citizens for their indiscretion in seeking the so-called easy credit without considering the consequences and creditors "who did not always tell the truth." He informed the US public of the instigation of 'Consumer Financial Protection Agency' capable of curbing deception in the financial market. Obama went further to secure large banks against risks by introducing new 'Resolution Authorities' along the Federal Reserve and the Treasury in a bid to stave off fiscal hazards that might threaten pillars of US economy such as the large insurance group known as American International Group (AIG). He also asked world leaders to pitch in with his economic revamp polices in order to prevent another economic meltdown. The US president rejected charges of promoting a leftist agenda in his economic plans and called on the Congress to pass his financial overhaul bids. Meanwhile, economists say that Obama's efforts to fix the US economy would push the country's liabilities to its limits as the government has spent public money on bailout schemes and debt defaults instead of being invested in productive projects. |
| Posted by:Fred |
| #24 The Wall Street Journal has a hilarious version of Ambrose Bierce's 'Devil's Dictionary' today: CREDIT-DEFAULT SWAP, n. loose translation from the original Latin "ubi mel ibi apes," or "where there's honey there are bees." 1. A complex financial instrument vital to the functioning of a modern economy in the way it spreads risk among consenting parties. (Greenspan, A., pre-Sept. 2008.) 2. A complex financial instrument that nearly destroyed modern capitalism (Greenspan, A., post-Sept. 2008) |
| Posted by: Anguper Hupomosing9418 2009-09-16 23:42 |
| #23 We are alread IN financial collapse - we just haven't admitted it yet. Yes, if complacency is all it will take to get us back to "standstill" then bring on the complacency. Faster please! Err, or not. |
| Posted by: AzCat 2009-09-16 23:14 |
| #22 Soros is right because CDS allowed the true credit risks to be hidden behind apparently risk spreading swaps that were nothing more than a shell game. And Buffet who played this shell game big time and is now paying out big time. |
| Posted by: phil_b 2009-09-16 22:35 |
| #21 Bloomberg: A collection of advice that 0 and his henchmen have ignored: Sec Treas Geithner asked Camden Fine, the president of the trade group Independent Community Bankers of America what should be done, on the day after he took office: Fine advised that behemoths such as Citigroup Inc. and Bank of America Corp. were a menace. “They should be broken up and sold off,” Fine, 58, said he declared, as Geithner scribbled notes before thanking him for his time and ushering him out into the January chill. The Treasury secretary didn’t follow through on Fine’s suggestion, just as he didn’t act on the advice of former Federal Reserve Chairman Paul A. Volcker, or Federal Deposit Insurance Corp. head Sheila C. Bair, or the dozens of economists and politicians who pressed the White House for measures that would limit the size or activities of U.S. banks...“Does anyone think it’s a coincidence that less than 10 years after they repealed Glass-Steagall, the financial markets collapsed?” said Fine of the community bankers group. He called current rules for banking a recipe for a “Molotov cocktail.” All this ignored advice I've been citing is from people with way better track records than 0, Geithner or Larry Summers have. |
| Posted by: Anguper Hupomosing9418 2009-09-16 16:27 |
| #20 Bloomberg: From another guy who seems to know a lot about making money (as opposed to losing it), whatever Rantburgers may think of his politics, George Soros: The market “held up because it was effectively put on artificial life support” by government bailouts, said Soros, chairman of New York-based hedge fund Soros Fund Management, which has $24 billion under management. “[A credit default swap is] a toxic instrument, and if people want to forget it, I think they’ll regret it.” And so far nothing from 0 about banning the d-d things, which was the law prior to the year 2000. |
| Posted by: Anguper Hupomosing9418 2009-09-16 16:10 |
| #19 Bloomberg: From a guy who's been there & done that: Paul Volcker, the former Federal Reserve chairman who’s an economic adviser to U.S. President Barack Obama, today renewed his call for a limit on the activities of banks that are considered “too big to fail.” Since January, Volcker has advocated that regulators should prohibit financial companies whose collapse would pose a risk to the economy -- those considered “too big to fail” -- from engaging in certain types of trading and investing activities I see no evidence that 0 has been carrying out any of Volcker's advice. |
| Posted by: Anguper Hupomosing9418 2009-09-16 16:04 |
| #18 Damn, the trolls these days are absolutely pathetic. Murat would run circles around this "No Politics" and then steal his lunch. |
| Posted by: Rex Mundi 2009-09-16 15:21 |
| #17 Barry - "It's MY Prophecy and I'll do everything I can to make sure it comes TRUE!" |
| Posted by: Mullah Richard 2009-09-16 14:03 |
| #16 LOL! |
| Posted by: Ebbang Uluque6305 2009-09-16 12:35 |
| #15 It's wallstreet's fault. Wake up! http://www.crisisofcredit.com/ Posted by No Politics No Politics: You were sent to the Burg to observe and report, NOT participate. Your statement is indefensible, and besides, we have whores to worry about this week. Please get back to observing and reporting. |
| Posted by: ACORN Central 2009-09-16 11:43 |
| #14 I dont agree with the commenter but that video was informative. |
| Posted by: Craick Panda5644 2009-09-16 11:15 |
| #13 http://www.crisisofcredit.com/ |
| Posted by: Craick Panda5644 2009-09-16 11:14 |
| #12 Actually the financial collpase occured on Bush's watch and his team was the one who initialited the bailouts and Obama took it over and it was needed. It's wallstreet's fault. Wake up! http://www.crisisofcredit.com/ |
| Posted by: No Politics 2009-09-16 11:13 |
| #11 Actually the financial collpase occured on Bush's watch and his team was the one who initialited the bailouts and Obama took it over and it was needed. It's wallstreet's fault. Wake up! |
| Posted by: No Politics 2009-09-16 11:12 |
| #10 Is there a stronger word than despicable? Not really, but the concept you seek is embodied by our government in its present form. |
| Posted by: gorb 2009-09-16 10:51 |
| #9 The mind-numbing hypocrisy and demogoguery of Obama blamed the current economic woes on both the US citizens for their indiscretion in seeking the so-called easy credit without considering the consequences and creditors "who did not always tell the truth." is truly frightening to behold. Not a word about he and Barney et.al. forced banks to make all those bad loans. And not a word about the wink, wink pledges from the Feds Frannie and Freddie about backing them up. Is there a stronger word than despicable? |
| Posted by: AlanC 2009-09-16 09:03 |
| #8 We are alread IN financial collapse - we just haven't admitted it yet. |
| Posted by: Glenmore 2009-09-16 08:01 |
| #7 Obama blamed the current economic woes on both the US citizens At LAST! "EVIL" |
| Posted by: Besoeker 2009-09-16 07:45 |
| #6 phil_b EXACTLY! |
| Posted by: Bright Pebbles 2009-09-16 07:36 |
| #5 The crisis was caused by too much credit and hence too much credit risk relative to capital. The solution is therefore to reduce the amount of credit that is made available. Of course, no one wants to hear that a permanent reduction in the level of credit is the solution. So we get snakeoil instead. |
| Posted by: phil_b 2009-09-16 04:10 |
| #4 Move along, folks. No scare tactics here. |
| Posted by: gorb 2009-09-16 03:54 |
| #3 I was worried about the Bush debt, Regan principles could have bailed us out of that. Obama made this debt. He personally instituted this collapse. He is suffocating us in all sectors, and all business owners tell me the same thing. They are closing shop. |
| Posted by: newc 2009-09-16 00:42 |
| #2 He's scared shitless, no sales, no taxes. |
| Posted by: Redneck Jim 2009-09-16 00:28 |
| #1 It's amazing how much Obama claims to know without having investigated much of anything. Here's a story from the early FDR administration about a Sicilian prosecutor who made Wall Street an offer it couldn't refuse: subpoenas. The result was a relentless investigation, 12,000 pages of transcripts that laid bare abuses on Wall Street and failures of Washington to adequately regulate the nation's financial system. Pecora's efforts provided a basis for reforms that would alter Wall Street and maintain relative stability in the banking industry until the recent crisis. Unfortunately the article doesn't cite the laws passed as a result of Pecora's and other investigations, that were later repealed, followed by the recent crisis. I'm with Karl Denninger, who said yesterday: This is just more mealy-mouth BS. I'll get impressed when I see indictments, clawbacks, honest balance sheets, the end of unsustainable housing lending by Fannie, Freddie and the FHA, a bill to reimpose Glass-Steagall, the enforcement of anti-trust laws already on the books and more. |
| Posted by: Anguper Hupomosing9418 2009-09-16 00:15 |