William Black, former S&L crisis regulator, is referencing the Flim-Flam man, never ending scam, coming out over the Financial collapse. The entire financial meltdown didn't need to happen if our government and regulators and especially the Federal Reserve had been doing their jobs. He calls the SEC criminally negligent. The below video clip is from the Lehman Brothers hearing in the House Financial Services Committee yesterday. The hearing is specifically the Lehman Brothers Holdings, Inc. bankruptcy examiner's report.
The municipal budget crisis currently striking the largest states in America is about to enter its worst phase. This NY Times article warns that as many as 300,000 teachers could be laid off this summer.
As a result, the 2010-11 school term is shaping up as one of the most austere in the last half century. In addition to teacher layoffs, districts are planning to close schools, cut programs, enlarge class sizes and shorten the school day, week or year to save money.
“We are doing things and considering options I never thought I’d have to consider,” said Peter C. Gorman, superintendent of the Charlotte-Mecklenburg schools in North Carolina, who expects to cut 600 of the district’s 9,400 teachers this year, after laying off 120 last year. “This may be our new economic reality.”
Neil Barofsky, SIGTARP, the TARP inspector general, is gunnin' for Wall Street. So reports Reuters:
The special inspector general for the government's bailout program said he would probe whether securities sold by Goldman Sachs Group Inc (GS.N) led to losses at AIG and if the American taxpayer was a victim of fraud.
Gets better:
Barofsky said he is in touch with the SEC and will possibly coordinate with the Department of Justice "to see if there are cases of fraud and if AIG and as a result, the American taxpayers, were victims of similar types of fraud."
Barofsky made the comments in response to questions from the ranking Republican on the Senate Finance Committee, Charles Grassley, at a hearing examining the TARP.
Looks like we might be seeing some movement to stop Too Big to Fail for real, or we might just see some politickin' instead. Bloomberg is reporting:
Senate Democrats likely will scrap a proposal for a $50 billion fund to wind down big failing companies in an effort to draw Republican support for financial- overhaul legislation being considered later this week.
Senators Susan Collins and Olympia Snowe, both Maine Republicans who are seen as potential supporters of the bill, told reporters yesterday they oppose the fund. Treasury Secretary Timothy Geithner told Collins that the Obama administration also is lukewarm to the idea.
The on-again, off-again bailout of Greece is running out of time, and the markets are getting nervous. This is reflected in the widening gap between yields on German and Greek bonds.
"I wouldn't bet on sharp decreases in Greek bond yields, especially those in the longer end of the maturity spectrum, given that the market will continue to reason that the risk of a default remains, even if the package is activated," he said, speaking by telephone from Amsterdam.
In 2008, while the Recession was still a-brewing some of us tried in vanity and naivete to link the collapse of Manufacturing with the increase in unemployment and the Housing Crisis and then the Financial Crisis. Happily, we can move beyond the anecdotal to the empirical now for data on unemployment over the last decade. Many of us just sort of knew that when you put folks out of good jobs, they lose their houses, then they lose their Banksters.
In the much-publicised fraud case involving a lawsuit filed by the Securities and Exchange Commission against Goldman Sachs, it is absolutely no surprise to us to find that this deal, known as Abacus 2007-AC1, involves:
Issuer: Abacus 2007-AC1, Ltd., Incorporated with limited liability in the Cayman Islands Co-Issuer: Abacus 2007-AC1, Ltd., Incorporated with limited liability in Delaware.
For those of you who have not picked up Yves Smith's book, ECONned, perhaps you've never heard of the Magnetar Trade.
In the wake of the Goldman Sachs civil fraud charge, Journalists and Bloggers are wondering and hoping where the next investigative shoe will drop. Hence, the Magnetar fund, a hedge fund of synthetic CDOs, where buttloads of CDS bets were placed against them, is being revisited.
"Hundreds of millions of pounds have been traded here and it looks as if people were misled about what happened. I want the Financial Services Authority to investigate it immediately. - Gordon Brown
Germany's Prime Minster is also taking about taking legal steps against Goldman Sachs.
Now the world is awash in Goldman Sachs stories. If you have no idea what they are talking about. Credit Slips explains an Abacus CDO in English (semi):
A CDO is more or less a hedge fund. It's an actively managed, unregulated investment fund. The assets can be anything. In the case of the Abacus 2007-ACA deal, the assets were a portfolio of credit default swaps (CDS). The Abacus CDO was the securitization of a bunch of CDS positions (if it has cash flow, it can be securitized).
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