Author Archives: George Washington

→ Washington’s Blog As a story in the Christian Science Monitor shows, the Gulf oil spill is much worse than we’ve been told: It’s now likely that the actual amount of the oil spill dwarfs the Coast Guard’s figure of 5,000 barrels, or 210,000 gallons, a day. Independent scientists estimate that the renegade wellhead at […]

→ Washington’s Blog Partisan GOP hacks say the financial crisis was caused by too much regulation, and government interference in the markets. But Glass-Steagall was repealed, derivatives were left unregulated, and the regulators were watching porn instead of preventing fraud. Giant banks, hedge funds and other fat cat private players knowingly gamed the market and […]

→ Washington’s Blog As everyone from Paul Krugman to Simon Johnson has noted, the banks are so big and politically powerful that they have bought the politicians and captured the regulators. But the giant banks are not only dangerous because they skew the political system. There are five economic arguments against the mega-banks as well. […]

→ Washington’s Blog You might assume that the reason for the implosion in the Eurozone is a mystery. But it’s not. There Wouldn’t Be a Crisis Among Nations If Banks’ Toxic Gambling Debts Hadn’t Been Assumed by the World’s Central Banks There wouldn’t be a crisis among nations if banks’ toxic gambling debts hadn’t been […]

→ Washington’s Blog It’s not just Greece and Portugal. As Simon Johnson reports: This is not now about Greece (with 2 year yields reported around 20 percent today) or Portugal (up 7 basis points) or even Spain (2 year yields up 27 basis points; wake up please) or even Italy (up 6 basis points). This […]

→ Washington’s Blog Boeing CEO Jim McNerney succinctly summarized a recent study by Northeastern University’s Center for Labor Market Studies regarding unemployment rates for different income brackets: The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009. In the face of one of the worst economic environments in […]

→ Washington’s Blog Preface: If this essay is too serious or over the top for you, just watch former Wall Streeter Max Keiser and Stacy Herbert’s funny coverage of this story, as well as their coverage of Yves’ must-read article on Magnetar. Experts on third world banana republics from the IMF and the Federal Reserve […]

→ Washington’s Blog Derivatives are the world’s largest market, dwarfing the size of the bond market and world’s real economy. The derivatives market is currently at around $600 trillion or so (in gross notional value). In contrast, the size of the worldwide bond market (total debt outstanding) as of 2009 was an estimated $82.2 trillion. […]

→ Washington’s Blog While Paul Krugman has seemed to go against the rising tide of experts calling for the giant banks to be broken up, he clarified his position last week: My view is that I’d love to see those financial giants broken up, if only for political reasons: it’s bad to have banks so […]

In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, […]

→ Washington’s Blog Given the tremendous water pressure involved, even a small crack in a huge dam can lead to catastrophic failure. Similarly, even a small breach in a seemingly invincible army’s defenses can lead to defeat. The SEC’s fraud action against Goldman Sachs is really small potatoes. It alleges only civil – not criminal […]

→ Washington’s Blog The Goldman fraud charge is obviously huge news. The Connecticut Attorney general wants to file criminal charges. And New York might not be far behind. Germany and other European nations and companies might also sue. ProPublica points out that other major banks did the same thing as Goldman. Yves Smith points to […]

→ Washington’s Blog General Electric got bailed out by American taxpayers. Specifically, it was given $139 billion in FDIC guarantees and support by the Federal Reserve for it’s commercial paper (see this). So you’d think that GE would return the favor by paying American taxes, right? Wrong. GE paid no U.S. taxes for 2009. As […]

→ Washington’s Blog Many of us have pointed out that the economy will not stabilize until the too big to fails are broken up. We have also pointed out that derivatives are still very dangerous for the economy, that the derivatives “reform” legislation previously passed has probably actually weakened existing regulations, and the legislation was […]

→ Washington’s Blog Greenspan and many other bankers, regulators and industry insiders say that “no one could have known” that we were in a housing bubble. For example, Greenspan: Stood by his conviction that little could be done to identify a bubble before it burst, much less to pop it. And he claimed that: We […]