What we have on the other hand, however, is a bunch of financial companies who consciously created huge volumes of bad loans, dumped them on retirees and foreigners and union stiffs, then doubled down on the problem by creating mountains of new liabilities based on those bad loans via synthetic derivatives. Then, when it all blew up, they came to us and asked us to buy the whole pile at full retail prices, clones and all. Which we did, flooding them with bailout cash. This allowed them to instantly jack their annual bonus pools back up into the $150 billion range while the rest of the country waited out mass unemployment and a foreclosure epidemic. So these people created giant masses of these defective loans, pumped the global system full of toxic debt, asked for the biggest government handout in history when it all went wrong, then walked away in the end even richer than before, forcing the rest of us to deal with their messes. It baffles me that people can look at that behavior and still think it’s individuals in foreclosure who need to be lectured about “personal responsibility.” A lot of people had to make bad decisions for the crisis to happen. People had to buy houses they couldn’t afford. Ratings agencies had to give AAA ratings to junk securities. Regulators had to be asleep at the wheel. The GSEs had to lower their standards and provide billions of dollars of government-backed financing for dicey home loans. Nobody is denying that all of those things played roles in the crisis. But the main driving factor was the simple fact that banks were able to make trillions of dollars selling defective products. You take away that simple market-driven reality, there’s no bubble and no crash, no matter what people like Michael Bloomberg say. No one is insisting that they take the whole rap — but don’t insult us by trying to say they shouldn’t take any at all.

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Matt Taibbi

Just in case you forgot what you should be mad about.

So the primary regulator of the banking industry is encouraging a functionally insolvent megabank to respond to a credit downgrade by pushing its most explosively risky holdings onto the laps of the taxpayer. This is lunacy…. Remember that story about the Chinese man who had a world-record 33-pound tumor removed from his face? This would be like treating that patient by removing the tumor and surgically attaching it to the face of a new patient, in this case the U.S. taxpayer.

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Matt Taibbi, in response to this news about Bank of America:

The government’s patronage of the bank was never clearer than in recent weeks, when B of A quietly decided to move trillions of dollars (trillions, not billions) in risky Merrill Lynch derivatives contracts off Merrill’s books and onto the books of the parent/retail arm, Bank of America.

This decision was done at the behest of counterparties to those transactions, who wanted those contracts placed under the aegis of Bank of America, whose deposits are insured by the FDIC. The move was made, according to reports, so that Bank of America could avoid posting $3.3 billion in collateral to satisfy the company’s creditors. In other words, Bank of America just got You the Taxpayer to co-sign as much as $53 trillion worth of dicey derivative contracts.

The FDIC wasn’t pleased by the move, but the Fed apparently encouraged it. Bloomberg, citing people with “direct knowledge” of the deals, reported that,

The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Yes, because the real story is, “How does this affect me?”

Yes, because the real story is, “How does this affect me?”

Congratulations are in order.

Like job markets everywhere in all kinds of fields, things kind of suck right now in Ohio.  But for the last several years, things have sucked especially bad for Ohio teachers.  It’s pretty much routine for one job posting in a desirable district to receive as many as 1000 (yes, one thousand) applications or more.  I’m not a teacher myself, but I come from a family of them, and my little brother graduated with an education degree in 2008, right when things turned to utter shit.

So I wanted to take this opportunity to congratulate my brother, who (finally) just got hired to teach high school English — in a district rated “Excellent,” no less — after two years of continuous searching (and shitty luck) in the worst job market in decades.

I’m really happy for you.  You deserve this.

Money woes killed plans for this year’s Oktoberfest bash, the annual celebration of German culture organized by the German Village society, said a board member.

'Something might drop out of the sky and make it possible, but that only happens in fairy tales,' said Fred Holdridge, a board member who served four terms as board president.

The society’s board unanimously voted to cancel the festival at its Monday night meeting, Holdridge said. Board members said the faltering economy and problems obtaining critical permits stalled this year’s celebration.

The society hoped to move the festival from Genoa Park to a section of S. 3rd St. between Beck and Frankfort streets this year. The society pleaded with locals to sign a petition allowing the road to close from Oct. 1 to Oct. 4. At the time, several local business owners said they feared the crowds would drive away business and voiced opposition to the move.

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German Village Society cancels Oktoberfest | The Columbus Dispatch

FFFFFFUUUUUU-

Ok, Oktoberfest wasn’t necessarily the most exciting festival, even though they routinely claim that it was once ranked as one of the best events in North America.  Still, I gladly accept pretty much any excuse to gorge myself on Schmidt’s Bahama Mama brats and Juergen’s cream puffs.  Oh, and beer.  Lots and lots of beer.

So, thank you shitty economy — in addition to all the other things you’ve destroyed, you can add to the list a pleasant fall weekend that I was really looking forward to.

I tried to stimulate the economy today

But Filene’s Basement didn’t have shit to buy.

Sorry America!

So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.

- Paul Krugman, who for some reason, really wants to frighten me.

Amazing how much damage the lame ducks can do in the time remaining.

- Paul Krugman, on Citigroup’s bailout

Krugman’s favorite new site:  lolfed.com.

Krugman’s favorite new site:  lolfed.com.

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i'm dave.
i live in columbus, ohio.

thebusstopblog at gmail dot com


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