Banking/Finance

Perhaps you hadn't noticed, but in late August 2010 Ben Bernanke took on complete responsibility for everything -- especially everything mediocre or bad -- that occurs in the economy.

I know this because on August 27 and 28 (covered here and here), the Associated Press issued three reports essentially telling readers that it was up to Ben to save us. There wasn't anything Barack Obama, Tim Geithner, Nancy Pelosi, Harry Reid, or then-present Larry Summers could possibly say or do to improve the economic situation, described at the time as "appears to be stalling" in one of those AP items.

Out of this came what has come to be known as "QE2" (the second round of "quantitative easing"), otherwise known as "electronically printing money to buy U.S. debt because possibly no one else will."

Well, it hasn't worked out so well, according to the New York Times, whose Binyamin Appelbaum reported the "surprisingly" pathetic results on Sunday:

If you had any questions about just how far to the left New York Times columnist Paul Krugman is, they were answered Monday when he expressed enthusiastic support for the Congressional Progressive Caucus's radical tax-hiking "People's Budget."

In his "Let's Take a Hike," the Nobel laureate left no doubt about his desire to swiftly redistribute America's wealth with little regard for the economic consequences:

For the second night in a row Tuesday, MSNBC's Ed Schultz called Republicans liars.

Also for the second night in a row, he did so moments before lying himself (video follows with transcript and commentary):

On Monday, the New York Times assembled a panel of alleged experts in its Room For Debate section. Each weighed in on Monday's ratings agency outlook downgrade by Standard and Poor's in an item entitled "Is Anyone Listening to the S.&P.?" (Don't ask me why "the" is there. It shouldn't be; the item is about the firm Standard and Poor's, not "the" Standard and Poor's stock index.)

One of the contributors was Yves Smith. Ms. Smith "writes the blog Naked Capitalism. She is the head of Aurora Advisors, a management consulting firm, and the author of 'Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.'"

Wait until you read Ms. Smith's reaction to S&P's move after the jump (bold after title is mine):

As night follows day, the press is beginning to go after a business entity which had the nerve to do its job and call attention to Uncle Sam's dire fiscal situation.

Standard and Poor's is presumably not 100% populated with angels, but it didn't deserve the gratuitous and ignorant shots fired at it this evening by the Associated Press's Bernard Condon and an "expert" he quoted. In attempting to tar the firm, Condon acted as if the mortgage-lending mess was the creation of "banks" which marketed mortgage-backed securities and asleep at the switch ratings agencies. He didn't once mention Fannie Mae or Freddie Mac, the fiasco's Democratic crony-run uber-culprits, which for 15 years consistently deceived the markets about the quality of the already marginal loans underlying the securities they issued .

Here are selected paragraphs from Condon's cracked creation, including a headline which gives away a resentment that the ratings agencies are still actually able to do what they were designed to do (bold is mine):

Last November, MSNBC's Lawrence O'Donnell proudly declared himself a socialist on national television.

On Wednesday, "The Last Word" host took this a huge step further saying the whole idea that Americans are rugged individualists is an illusion because they're all really socialists (video follows with transcript and commentary):

As debate rages across the country about whether it is reasonable to reduce federal spending in light of the fact that the federal government is spending more than eight times what it takes in, the same publications willing to defend that spending often simultaneously criticize spending by businesses that make a profit. One such story ran in publications nationwide this week, including the Chicago Tribune.

In a story blaringly entitled "Eight Outrageous Executive Perks" circulated by Tribune Media Services, author Kathy Kristoff laments the compensation packages offered by varied companies to their founders and/or CEOs.

For example, Qwest CEO Ed Mueller’s family was permitted use of the company jet, an expense totaling $281,182 for the year. Occidental Petroleum served as another example; the company's CEO moved from Texas to California to do his job. Texas has no state income tax; California had a 9% state income tax at the time. Occidental agreed to pay the tax for him.

Last Friday, in what one would think would be a bombshell story headlined "Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak," Bloomberg's Bradley Keoun and Craig Torres reported that foreign banks secretly and routinely tapping the Federal Reserve's "discount window" lending program, primarily in 2008 and 2009. Some specifics:

• "(The) loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya."
• Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch ..."
• "Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion."
• "...foreign banks ... (accounted) for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record."

Fed Chairman Ben Bernanke fought for two years to keep the information secret after Bloomberg filed a Freedom of Information Act request in 2009. The Bloomberg report quotes Bernanke as claiming in April 2009 that disclosure "might lead market participants to infer weakness."

In the Bloomberg report, Congressman Ron Paul is quoted making a prediction that has sadly been way off the mark:

New York Times columnist Paul Krugman was in his predictable defend Obama at all costs mode on Sunday's "This Week."

When former Bush administration official Torie Clarke said unemployment remains high because the private sector is concerned about future regulations, the Nobel Laureate scoffed, "All of this stuff about uncertainty is just a myth being made up to blame this on Obama" (video follows with transcript and commentary):

Former Clinton Labor Secretary Robert Reich, in a column appearing at Business Insider, says that we're heading in the direction of a "double-dip" -- and though he doesn't follow it with the word "recession," it's obvious he's not talking about an ice-cream cone. It's also obvious that he's less than pleased with the media spin that things are really okay.

Along the way, Reich had to go back to the mid-1930s, the era of Franklin Delano Roosevelt's ongoing economic depression (at least as far as employment was concerned) to exemplify what a supposedly good recovery from an economic trauma looks. He was clearly desperate to avoid saying anything nice about the more historically relevant and objectively more impressive recovery and subsequent prosperity that occurred under Ronald Reagan. This is also true of the establishment press.

Are you one of them small-gubmint conservative weirdos?  A critter who cringes when someone tells you they're from the government and there to help you?  Well, answer this: are you, or have you ever been . . . a fan of The A-Team?

Because, yes: one of Rachel Maddow's guests has, with a straight face, advanced the argument that Mr. T and company were complicit in undermining Americans' belief in the benign powers of government.  David Sirota made an appearance with Maddow on her MSNBC show this evening to promote his book that advances the A-Team-as-enemy-of-government-love theory.

View video after the jump.

Most readers here aren't aware that Associated Press reporters began withholding their bylines this week in support of their union's "quality journalism proposals." Participating reporters are refusing to have their name placed on AP stories. It appears to apply to stories datelined in the U.S. and not overseas (as seen here).

It is truly a wonder that the world has gone on while AP reporters refuse to tell us who wrote the wire service's U.S. stories (/sarc).

The byline strike springs from the wire service's refusal, among other things, according to the News Media Guild, the union which represents AP newsroom personnel, to accept a "fixed-cost pension plan." The AP wants a defined-contribution plan (i.e., something similar or identical to a 401(k)).

Here are some economy, business, and political "gems" appearing at AP during the past few days which can't be traced to a specific reporter:

You begin to get an idea of how poorly served the news-consuming public is by the Associated Press when you compare its "reporting" on Obama czar Elizabeth Warren's appearance tomorrow before the House Financial Services Committee to an information-packed editorial -- yes, an editorial -- in the Wall Street Journal this morning.

You can read all of the over 750 words in the unbylined AP report without learning that Ms. Warren and various state attorneys general are attempting to shake down the banking system for $20 billion. You would think from the wire service's selective content that it's only Republicans who have opposed and continue to oppose the broad, unchecked authority her brainchild, the Consumer Financial Protection Bureau, will have over U.S. banking policy and practices. It ain't so.

Here are key paragraphs from the AP's 5:32 p.m. report (saved here at my host for future reference, fair use and discussion purposes):

CNN's Joe Johns hyped a recent Michael Moore speech on Monday's Newsroom as "incredible" and "riveting." Johns highlighted a clip from the left-wing film director, who spoke at a pro-union rally in Madison, Wisconsin, where he claimed that "America is not broke...The country is awash in wealth and cash. It's just that it's not in your hands! It has been transferred, in the greatest heist in history, from the workers...to the banks and the portfolios of the uber-rich."

Anchor Brooke Baldwin brought on the correspondent for the regular "Political Pop" segment 40 minutes into the 4 pm Eastern hour, and asked about Moore's March 5, 2011 address in Madison. Johns immediately gushed over the director's words:

BALDWIN: What was he up to in Madison?

JOE JOHNS: Yeah. Well, it was a speech and it was really pretty incredible. Have you seen it by the way?

[Video embedded below the page break]

If banks and credit card companies are willing to lend you money, does that mean you're not broke?

According to Nobel laureate Paul Krugman, America is doing just fine financially because we're having no problem borrowing money:

Interviewing Donald Trump this morning, MSNBC's Chris Jansing put on her Democratic strategist hat to press the Republican real estate mogul with liberal talking points.

After Trump, responding to Jansing's question about what he would do to fix the economy, suggested cutting taxes to spur economic growth, the host of Jansing & Co. groused: "A lot of people sitting out there, with all due respect, saying spoken like a true businessman but not about the little guy. Tax breaks for the rich, not for the middle class."

Not missing a beat, Trump retorted: "But Chris we're the highest-taxed nation in the world, as it stands right now. And that's a pretty bad statement when you think of it."

[Video embedded after the page break.]

In his lifetime, Princeton economics professor and Nobel Laureate Paul Krugman has published 20 books, over 200 papers, and since the year 2000 two columns a week at the New York Times.

Clearly without understanding the irony of his question, the man once accused by the Gray Lady's ombudsman of possessing a "disturbing habit of shaping, slicing and selectively citing numbers" asked his readers Monday, "How can voters be so ill informed [sic]?":

The search for ways to rehabilitate the Obama administration in the eyes of the public is seemingly a never-ending enterprise at the Associated Press.

Oh, they slip up occasionally. Late last week (covered yesterday at NewsBusters; at BizzyBlog), in an item primarily about how Congress really, really can't stop planned stimulus spending (uh-huh), the wire service's Brett J. Blackledge let slip that President Obama's stimulus program is "politically unpopular." In noting that the government wasn't able to spend the funds as fast as intended, Blackledge also indirectly confirmed an obvious truth the President admitted to the New York Times that he needed almost two years to learn: "there’s no such thing as shovel-ready projects."

So what do you do if you're "The Essential Global News Network" and need to recover? Why, you find something that appears to be working (sort of), and rename it "stimulus." Voila! See how easy that is?

The AP's Jeannine Aversa, with the help of her item's headline, performed the sleight-of-hand today:

Former Reagan Chief of Staff James Baker on Sunday took issue with having the 40th President blamed for financial deregulation.

When "Meet the Press" host David Gregory brought this up at the end of his program, Baker replied, "[The deregulation of the financial industry didn't occur on Ronald Reagan's watch, it occurred for the most part, I think, on Bill Clinton's watch" (video follows with transcript and commentary):

On his Wednesday 4PM ET show on MSNBC, host Dylan Ratigan denounced the fact that the recent Financial Crisis Inquiry Commission (FCIC), convened to detail the causes of the 2008 economic collapse, only had a budget of $8 million, while back in 1998, the "Clinton-Lewinsky blowjob investigation" had a $40 million budget. He was apparently referring to special prosecutor Ken Starr investigating perjury charges against the former president.

The report from the FCIC was highly partisan, with the six Democrats on the commission claiming that primary reason for the financial crisis was the lack of government regulation in the private sector. As a result, the four Republican commissioner refused to sign on to the findings and released their own dissenting report.

Ed Schultz on Tuesday spent a great deal of time blaming the crisis in Egypt on rising food prices tying commodity inflation to former President George H.W. Bush and Wall Street speculators.

Not once in over fifteen minutes of air time were the name Bill Clinton or the two bills he signed into law that deregulated the financial services and commodity futures industries mentioned (videos follow with partial transcripts and commentary):

Trick? Or "tweak"?

On Friday, a Reuters report at CNBC noted the Federal Reserve's journey into the accounting and reporting twilight zone earlier this month. In doing so, it conducted a clinic in how to make unreality look acceptable and make a dangerous situation appear palatable.

In the el bizzarro world at Reuters and those the wire service interviewed for its article:

• A change in how one accounts for things can magically make a functionally insolvent entity solvent again.
• Such a change can also mean that an entity which has run out of cash and has to beg for funds no longer has to.
• Calling a genuine erosion of capital something other than an erosion of capital means that it's no longer an erosion of capital.

Gee, why didn't they just do this at Fannie Mae, Freddie Mac, and Lehman Brothers 2-1/2 years ago and let things go on as usual?

Here's most of the Reuters report (bolds supporting the bullet points above are mine):

Do a media company's political activities affect the way its subsidiaries report the news? The folks at MSNBC sure think so. That channel's hosts have insisted ad nauseum that Fox News parent company News Corporation's political actives compromise the ability of Fox to report the news fairly and accurately.

But MSNBC has, as I have noted before, shilled for policies that would enrich its parent company, General Electric, under the guise of "environmental awareness." Today the Washington Post exposed yet another such conflict, reporting that GE took $16 billion in loans from the Federal Reserve during 2008 and 2009.

Gosh, what's a bigger story -- that to the extent it was ever happening at all the housing recovery "seems to have been aborted," or that according to the government there was very little inflation in October?

When you increase demand for something, its price should go up.

In the case of bonds, if the demand for them increases, their price should go up, and their effective interest-rate yield should go down.

That didn't happen on Friday when the Federal Reserve began executing its second round of "money from nothing" quantitative easing. Even though the Fed increased demand, bond prices went down and yields went up.

Why? If you read a late Friday afternoon report by the Associated Press's Matthew Craft you essentially get a bunch of blubbering "I don't know" statements (bolds after headline are mine):

Treasury prices take a dive; Interest rates jump

Don't go overboard with it, but have some pity on Sewell Chan at the New York Times.

On Thursday evening online and in Friday's print edition, Chan was among three Times reporters who composed a report ripping President Obama's lack of results at the G-20 summit. The piece's original title -- "Obama's Economic View is Rejected on World Stage" -- originally appeared online and actually made its way into the print edition. The headline apparently didn't sit well with someone at the Times. As I noted in a previous post (at NewsBusters; at BizzyBlog), it was changed to "Obama Trade Strategy Runs Into Stiff Resistance" sometime on Friday.

That was apparently not enough to satisfy whoever is charge of politically correct revisionism at the Times. Chan seems to have been assigned the thankless task of composing not one, but two, kiss-and-make-up pieces to smooth things over.

CNN's Kathleen Parker and Eliot Spitzer endorsed Matt Taibbi's bashing of conservatives on their Monday program. Spitzer marveled over the Rolling Stone editor's "brilliant" label of the Tea Party as "15 million pissed-off white people sent chasing after Mexicans on Medicaid." This was the second straight evening that the network brought on an anti-conservative author to promote their latest work.

The two hosts devoted 12 straight and uninterrupted minutes during the first half of the 8 pm Eastern hour to their interview of Taibbi. Parker mentioned Taibbi's new book, "Griftopia: Bubble Machines, Vampire Squids and a Long Con that is Breaking America,"  in her introduction of the author and labeled it "a scathing and often hilarious account of the financial crisis...it's hard to make the financial crisis funny, but you did that successfully." She continue by quoting one of the writer's attacks on Sarah Palin: "I want to read you a description that you wrote of Sarah Palin. You called her a 'narcissistic money-grubbing hack.'"

After laughing at this label, the pseudo-conservative writer sought her guest's take on Palin: "She's got the Republican establishment scared to death, so there must be something more to Sarah than just that, huh?" Taibbi replied with some guarded praise of the former Alaska governor, along with the Tea Party movement:

A current headline at an Associated Press story (saved here at my web host in case it's updated) has to be seen to be believed:

G20 leaders meet amid strains as US splashes cash

"Splashes cash"? If the AP's headline writer was trying to be cute, it didn't work for me. Sadly, replacing "splashes" with "trashes" might have been more appropriate, but of course less "funny."