Stop it with the #Krugman for Treasury nonsense, please

First, the neoliberal president who appointed the Catfood Commission and who 10 days ago made Social Security cuts part of "fiscal cliff" talks is not going to nominate Paul Krugman to be his next Treasury Secretary to replace Little Timmy Geithner. In fact, Beltway rumor  is solidifying that the Compromiser in Chief will nominate his chief of staff, Jack Lew.

Second, Krugman wouldn't take it if offered. Besides leaving both academia and the New York Times, he knows that Obama would geld him somehow, like by moving the real action to the Council of Economic Advisors, plus nominating Geithner to replace Ben Bernanke at the Fed next year.

Yeah, yeah, Obama said almost four full years ago that he wanted to be pressured from the left. Don't tell me you still actually believe that.

This is just the surface of the issue.

Unless I'm in full idealism mode, I prefer online petition drives that are:
1. Relatively realistic;
2. Not in some way connected to fundraising efforts.

The Krugman petition does, as far as I know (especially if it's a White House site one) theoretically cross the second bar. But, it doesn't cross the first.

That's why I don't do global warming petitions to Obama. They're unrealistic, not just because of Mitch McConnell and John Boehner, but also because of Barack Obama. And, they're usually connected to fundraising, especially by Gang Green enviros.

I'll personally kick Obama in the nads if ...

If this rumor/speculation is true and Tim Geithner is his choice to replace Ben Bernanke to run the Fed.

Incompetence, Peter Principle, arrogance, ego, elitism, etc., etc ... dammit, I'm running out of adjectives to describe Geithner.

But, William D. Cohan lays out a strong inside-the-Beltway case for Little Timmy both wanting, and probably getting, the job:

The usual list of highly qualified candidates to replace Bernanke -- including Lawrence Summers, the former Treasury secretary and Harvard University president; Janet Yellen, a current vice chairman of the Fed; and Alan Krueger, the precocious chairman of the White House Council of Economic Advisers -- misses the person who probably wants it the most and continues to have Obama’s ear on a regular basis: Geithner.

Last spring, Geithner told Obama he wanted to leave Treasury as soon as possible and return to New York so that he could rejoin his family, while his youngest child was still in high school. But Obama prevailed on Geithner to stick around until after the election. And he remains in Washington to help Obama negotiate a deal on spending and taxes with Congress. 

Had Geithner been serious about wanting to leave town, he probably would have thrown his hat into the ring to become president of Dartmouth College, his alma mater. But that position went to Philip Hanlon, the provost of the University of Michigan, without Geithner’s name being mentioned. Expect Geithner to seek a short-term sinecure at a liberal think-tank, such as the Brookings Institution, or to return to the Council on Foreign Relations, or to cash in as an adviser to a hedge fund (as Summers did at D.E. Shaw & Co. after he left Treasury) while he awaits the possibility of getting nominated as Fed chairman. 

Doorknob help us all ... the Fed will be cutting all sorts of backdoor deals with the banksters. Even more so if Jaime Dimon is named Geithner's replacement at Treasury.

That said, be honest. Even if you're an off-the-boards Obamiac, would such a move really surprise you?

The only possible condolence is that he might be better at the job than Summers. But, you know? I'm not even sure about that.

Bernanke continues to put incremental stamp on Fed

First, with inflation hawks like Richard Fisher now off the Federal Reserve's policy board, Fed Chairman Ben Bernanke can stop worrying about their hyperfears about nonexistent hyperinflation.

So, he can also say interest rates will stay near zero, albeit indicating he expects recovery to be slow.

More importantly, in a sense, is this increased transparency:

In a separate set of statements, the Fed said that 11 of the 17 members of the committee expected that the Fed would raise interest rates at the end of that period. It noted that the committee expects growth to accelerate over the next three years, from a maximum pace of 2.7 percent this year to a maximum pace of 3.2 percent next year and up to 4 percent in 2014. 

Alan Greenspan never would have even considered making such an announcement.

Instead, he would have kept inner workings of the Fed secret, mumbled some shit-in-one-hand, St. Alan of Greenspan oracularity to Congress on the other and pretended he knew what he meant.

Of course, Bernanke has prodded Congress to do more for the economy than it has. That's not happening, at the earliest, before most Congressional GOP primary races are out of the way, and even after that, is likely to still have a fair degree of GOP BS, only a shade or two lighter on tea party dogma.

But, without getting specific, Big Ben said the Fed will consider more stimulus moves if necessary. Again, having the likes of Fisher out of the way  helps.

But, not so good news from the Fed for Dear Leader. The unemployment rate is only expected to drop to 8.2 percent during the year. I'm sure Obama would feel better, even with Richie Rich Romney or Newt-bar Gingrich as his opponent, if it were below 8.0.

More on the maybe not-so-dumb Obama-IEA oil dump

That joint agreement by the United States and the International Energy Agency to release crude oil from strategic petroleum reserves? The one that had everybody scratching their head over its timing?

Well, there's more to it. As in, this may have been the equivalent of a pool bank shot, primarily involving Washington, the EU, speaking through the International Energy Agency, ... and the Saudis.

As early as May 11, Mr Obama telephoned King Abdullah of Saudi Arabia to “discuss bilateral issues”, according to the Saudi press agency.

Boom ...

And, this wasn't a spur-of-the-moment thing:

For three months, dozens of senior oil officials from the US, South Korea, Germany and Japan worked secretly to execute what was one of the most daring moves by the International Energy Agency since its creation in 1974.

And, that's about the time we first started bombing Libya, on the usual delusional American belief that we'd topple Gaddhafi in a week or two.

There's one "interesting" part. In a story about how the Commodity Futures Trading Commission is investigating "suspicious" trades in oil just before the decision was announced, it notes the Saudis had already agreed to a production increase.

Maybe the White House thought it would take too long. Or that it would be of too low a quality compared to Libya's vaunted low-sulfur crude.

Or maybe all involved wanted to send a double-slapdown message to ... ohhh ... Iran and Venezuela?

Per the FT article linked at top:

In early May, Mr Obama dispatched a team of senior advisers to the region, including Michael Froman, White House deputy national security adviser, Daniel Poneman, deputy energy secretary, and Neal Wolin, deputy treasury secretary, for talks with Riyadh, Kuwait and Abu Dhabi.

Washington found the Saudis willing to ensure adequate supply.

The IEA nonetheless decided to send a clear message to the market that it was ready to act. On 19 May, at the conclusion of a regular meeting of its board of governors in Paris, the agency said: “We are prepared to consider using all tools that are at the disposal of IEA member countries.”

Venezuela and Iran, along with Algeria, were the three hardliners in the most recent OPEC meeting against raising production.

At the same time, Western nations didn't want to look like this was being done for too narrowly economic reasons, but, after the Saudis couldn't "carry" OPEC with them, decided to act. Japan, Britain and South Korea were other major "movers" on getting the IEA to act.

The primary beneficiary? Most of Libya's oil, of a very high quality, goes to Europe. So, even though the White House started the ball rolling, Europe had good reason to jump in, via the IEA.

The U.S.? Well, analysts as far away as Hong Kong are saying this will be the gateway for more "quantitative easing," but by different name and means. In fact, Forbes calls it QE2.5. If that's the case, and if it actually gets Obama himself, not just Fed Chairman Ben Bernanke, to do something more in the way of stimulus-like action, then that's good.

EU readies lifeline for Greece

It's not officially been accepted yet, but a financial backstop of more than 30 million Euros is now available. At the same time, it's carefully structures as to not a "bailout." Too bad folks like Big Ben Bernanke and Little Timmy Geithner weren't that smart, eh?

Go, Bernie Sanders, go!

The Vermont senator has put a hold on President Barack Obama’s nomination of Ben Bernanke to another term as chairman of the Federal Reserve Board.

I love this line from the story, which says Big Ben will surely got an eventual confirmation:

Mainstream senators give credit to Bernanke for pulling the economy out of the deepest ditch since the Great Depression.

First, there’s the implication Sanders is not “mainstream.”

Second, there’s the convenient overlooking of Big Ben partially driving the economy into that ditch in the first place.

Reich: Raise interest rates!

Yes, you heard me right. Former Labor Secretary Robert Reich says raising U.S. interest rates might be part of what’s need to make the “Wall Street recovery” into the “Main Street recovery.”

Of course, Reich should recognize that President Barack Obama cares little more for bottom-up Main Street recovery than did Reich’s old boss, Bill Clinton.

(When the Slickster “fulminated” about how his presidential program was captive to the bond market, at the start of his first term, he was pulling off his first great presidential acting job. He knew Jackson Stephens too well from his time in Little Rock to really be that surprised.)

And, Big Ben Bernanke probably never learned the biggest lesson from his study of the Great Drepression, and that is that we didn't get too much recovery then, either, until it got to Main Street.

Why not stimulus money for the Small Biz Admin?

Big Ben Bernanke, Federal Reserve chairman, is the latest person Washington mahatma to rue the lack of bank lending to small businesses. So, why not give the SBA a bunch of stimulus money?

Mission NOT accomplished on recession

Paul Krugman, anticipating Federal Reserve Chairman Ben Bernanke imitating flyboy George W. Bush from summer 2003 and declaring the recession, like the Iraq war, as “over,” pre-emptively takes him to the woodshed. He then pounds the drums for more federal stimulus, even citing the deficit-averse IMF in his favor.

Of course, the dishonest conservatives who claim FDR made the Depression worse (not true, he cut unemployment in half his first term, only to THEN worsen it again by trying to balance the budget) don’t want to listen.

Fed more mistrusted than IRS

But, the detailed results and public comments from a new Gallup poll still probably won't dissuade President Barack Obama from renaming Ben Bernanke as Fed chairman.

Roubini sez re-appoint Bernanke; ugh

Well, Nouriel Roubini has been right about a lot of things related to the current recession, but not this one.

Sure, he possibly may have kept this recession from being worse; even then, was his solution the best? And, as Roubini notes, he helped get us here in the first place. In fact, he got enough wrong in 2006-08, what’s to say he won’t fuck up more if reappointed?

Of course, inside the “bipartisan economic policy establishment” that we have today, maybe you can’t find a better person to run the Fed than Ben Bernanke. Of course, that’s an indictment of the bipartisan economic policy establishment.

Just because I haven’t Geithner-bashed in a while …

I probably have been remiss, so I point you to Salon and Andy Kroll’s six-point laundry list on why TARP, etc. sucks.

Let’s not forget the dynamic duo of Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke have done their level, and non-level, best, or worst, to keep not just the general public, but even Congress, in the dark as to just what all this bailout money is doing.

Government bailout approaching annual GDP total?

Maybe, maybe not.

When the federal government has loaned, given or guaranteed nearly $13 billion or, in other terms, nearly one year’s Gross Domestic Product for the entire country, it might be easy to say you blame other industrialized and developing countries for saying, “We’ll give it a second thought” rather than immediately signing up for something similar?

On the other hand, the Bloomberg total includes a lot, a lot, in stuff that’s “guaranteed” but hasn’t been disbursed. If you only include what’s been disbursed, whether through loans, payments or guarantees invoked, we’re still below $2 trillion.

That said, who knows how much of the remaining $11 trillion will be needed or not? Since Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke like being opaque, they’re not going to say.

Inflation fear– TARP beneficiaries sell America short

The dollar has just hit a 25-year low spot. Why? Fears that Federal Reserve Chairman Ben Bernanke is not just stoking inflation, but actually “clipping” the dollar, with his buyback of Treasuries announced last week.

“What it introduces is the problem of the currency to the extent that the Fed is buying what isn’t desired by foreign holders,” said Bill Gross, co-chief investment officer of Pacific Investment Management Co., in an interview on Bloomberg Television on March 19. “The Fed can keep interest rates where they want to keep them, at least for a 6- to 12- to 18-month period of time, but it will have consequences down the road.”

Plus, that 1985 low point was a coordinated international strategy.

This ain’t.

And — chutzpah alert:

TARP beneficiaries Goldman Sachs and Citigroup are telling people to buy euros.

Brad DeLong has an interesting idea: Why doesn’t Bernanke buy undervalued private bonds instead?

‘Paulsonism’ is the $10 trillion word of the day

And, not a damn thing to legally do…

Well, one of several words and phrases of the day from Matt Taibbi, who explain how former Treasury Secretary (and former Goldman Sachs CEO) Henry Paulson joined with former AIG CEO Hank Greenberg, Phil Gramm and many others royally screwed over the country either directly or indirectly, by commission or omission.

Basically, the thrust of Taibbi’s story, in depth and snarky, is that Wall Street has become like former GM CEO Charlie Wilson, and essentially saying, “What’s good for Wall Street is good for the nation.” And, since these financial instruments are a bit more complex than a 1955 Bel-Air, Wall Street and its government enablers can flip the public the bird:

As complex as all the finances are, the politics aren’t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future.

And, speaking of those government enablers …

Forget TARP or TARP 2.0; direct Federal Reserve money-pushing has already shuffled off $3 trillion or so to these monoliths of megalomania, via loans, and perhaps as much as $6 trillion more through guarantees.

That’s nearly $10 trillion to the likes of AIG. And it’s current CEO, Edward Liddy, wonders why we’re so pissed off?

So, who puts the reins on the Fed? According to Taibbi, on page 7, The Accounting and Auditing Act of 1950 – relevant section, 31 USC 714(b) – says NOBODY. That’s right, Ben Bernanke can flip you and me off, too, allegedly.

And, of course, he has, with the full connivance of Geithner, who knows the Fed flip-off ropes from his former position running the NY Fed.

Meanwhile, while cronies of Paulson get the money with no questions asked, after five months of the TARP program, Joe Blow banks, in some cases, not only haven’t gotten any money, they haven’t even gotten a phone call.

Oh, don’t look for Team Obama to change this, either. It, too, gets a full blast of Taibbi’s scorched-earth writing:

The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson to be his top aide.

But, Obama will never fire Geithner. Per the start of Taibbi’s report, Democrats have been in the tank for Wall Street for a decade, and, although Taibbi doesn’t come out and say it, Obama is Poster Child No. 1 for that, worse than the Slickster ever was.

Is that Rev. Jeremiah Wright I hear?

God DAMN Barack Obama; God DAMN Barack Obama …

Warm up the pipes, Rev.; you can substitute for the fat lady

Bernanke-Geither CYAed for Euros as well as Goldman with AIG

The Wall Street Journal has at least halfway opened the bag as to who’s the ultimate beneficiary of them refusing to disclose who benefits, ultimately, from the ever-ongoing AIG bailout.

Yep, Goldman Sachs is up there at the top.

As is Deutsche Bank, French bank Société Générale SA, Royal Bank of Scotland and HSBC Holdings, among others.

That earthquake you just heard?

It’s the pre-cratering of European stock exchanges.

Why all the Euro banks are involved is that AIG floated them money to let them lower their margins on mortgages and other investments, through a variety of swaps.

In other words, some of the American financial alphabet soup, such as CDSs, is washing away at the shores of European finance, too.

Again, that earthquake you just heard?

Subpoena time for Bernanke or Geithner

Over at Talking Points Memo, an e-mailing reader, talking about the crap behind the Fed’s bailout of AIG makes very clear why Congress needs to grow a pair and SUBPOENA Federal Reserve Chairman Ben Bernanke, Treasury Secretary Tim Geithner or both.

Maybe if, per Rep. Barney Frank, we prosecuted some top execs at AIG or elsewhere, Bernanke, Geithner, et al would wise up.

Maybe some banks aren’t so bad off

New Iberia Bank, in New Iberia, La., is paying back TARP money it’s received, by the end of this month, with interest. Minnesota’s TCF Financial is doing the same.

Per the Newsweek story linked first, I smell more and more of a rat at the banks much bigger than TCF or New Iberia. Per that story, and Federal Reserve Chairman Ben Bernanke’s refusal to give out disbursement details on TARP funds.

Some of the big banks, especially AIG customers, appear to be worse off than anybody will admit, and Big Ben, Treasury Secretary Tim Geither and economic czar Larry Summers are playing a shell game.

Where’s that famous Obama openness?

Bernanke – Obama Admin needs to do more on banks

Federal Reserve Chairman Ben Bernanke told the Senate Finance Committee today we need “strong government action to stabilize financial institutions and financial markets.”

If not, he said, the current recession definitely could extend into 2010.

No, he didn’t use the “financial N-word,” but I think you can count Big Ben as another voice for “doing whatever it takes” with bad banks.

Dollar betters worry about Bernanke and inflation

With Federal Reserve Chairman Ben Bernanke cutting the federal funds rate to zero, has he increased the possibility of future inflation?

The Wall Street Journal’s editorial board said the continued sagging in the dollar’s value says yes.