Category Archives: Media watch

Deutsche Bank Didn’t “Ignore” Losses of LSS Trade, It Went Through the Mother of All Canadian Restructurings

A default position among what passes for finance cognoscenti in the blogosphere is to argue that media stories pointing up bank improprieties are making a mountain out of a molehill. The form of the argument is usually, “If you only understood XYZ technical issue, this is not such a big deal.” Now that isn’t to say that position is wrong; we’ve more than occasionally made just that type of argument. But if you are going to go that route, it’s incumbent on you to take account of the relevant background; otherwise, whether you intend to or not, your argument can wind up being the equivalent of “Look, over there!”

We’ve seen this type of diversion-as-argumentation take place on the brewing Deutsche Bank scandal over losses that three separate whistleblowers allege that that bank hid from investors during the crisis. Matt Levine and Felix Salmon say, to use Levine’s turn of phrase, that all the German bank did was ignore the losses until they went away. That is a misrepresentation of what actually happened.

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Bill Black:  Why is the Failed Monti a “Technocrat” and the Successful Correa a “Left-Leaning Economist”?

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

The New York Times produces profiles of national leaders like Italy’s Mario Monti and Ecuador’s Rafael Correa. I invite readers to contrast the worshipful treatment accorded Monti with the Correa profile. The next time someone tells you the NYT is a “leftist” paper you can show them how far right it is on financial issues.

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Fiscal Cliff Propaganda Watch: Business Owner Says the Fiscal Cliff Made Him Fire His Son

The lies told to sell the chump public on the necessity of enduring cuts to the social safety net are already at a breathtaking level. Where would you like to begin? The idea that big reductions in spending (going over the edge of the world off the fiscal cliff would be horrific, while only somewhat big cuts would be salutary? That Social Security “reforms” are necessary to fix the budget? Even former budget chief Peter Orszag ‘fessed up that one was not true. Or the favorite refuge of the Republicans, that raising taxes on the wealthy will hurt job creation. Ahem, we’ve pushed the low taxes model further than any other advanced economy, and the result is crumbling infrastructure, an overpriced and mediocre health care system, and record corporate profits combined with extreme measures to pay less to workers and a lack of new investment (the corporate sector has been a net saver since the early 2000s).

The propagandizing nevertheless has gotten so shameless it appeared to be time to point out particularly egregious examples.

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Abigail Field: HousingWire Propaganda Part II – The Irresponsible Borrower Myth, Harry & Louise Style

By Abigail Field, a lawyer and writer. Cross posted from Reality Check

Showalter pushes the ‘it’s not the mod terms, it’s the bad borrower’ idea with far more than just a “Living Large” headline. He invents two couples, pitched as archetypes of good and evil, probably hoping to copy the policy-killing success of Harry and Louise. But this invocation of the irresponsible borrower myth is particularly egregious–both borrowers are trying to be responsible in the face of insolvency.

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Abigail Field: HousingWire Propaganda Not to Be Believed, Part I – Reanalyzing the Data

By Abigail Field, an attorney and writer. Cross posted from Reality Check

Friday HousingWire ran a six-and-a-half page big bank/mortgage servicer propaganda piece called “Living Large“, by Tom Showalter. The article, subtitled “A person’s lifestyle plays into whether they will pay their mortgage after a loan modification”, purports to explain why people default on loan modifications. Instead, it spins a bank-exonerating morality play not justified by the data supposedly being interpreted.

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Homeless in New Jersey

Yves here. This article points out what others have noted: that Hurricane Sandy has given much more visibility to the dangers of climate change. It’s an environmental version of the old economists’ joke: A recession occurs when your neighbor loses his job. A depression takes place you lose your job. The media and policymakers in large measure live in a bubble centered on New York and Washington DC, and it has taken an event that hit their sheltered world hard to get them to wake up and take notice.

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Shock Doctrine, American-Style: Hurricane Sandy Devastation Used to Push for Sale of Public Infrastructure to Investors

As a result of fully warranted bad press for some privatization deals, such as the lease of Chicago’s parking meters, there has been a bit (stress only a bit) more critical scrutiny of the de facto sale of public assets to consortia of private investors. Nevertheless, major banks have been using the financial distress of states and municipalities to push these deals as a solution to budget woes, when it’s a short-term expedient that leaves the public worse off.

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What Ex-Goldmanite Greg Smith Didn’t Say, and Some Guesses as to Why

Greg Smith’s book on his time at Goldman has generated a hailstorm of criticism, aptly summed up by Jesse:

But the absolute trashing and personal attacks on Greg Smith in the past week that were orchestrated by Goldman and supported, heavily, by the US financial networks got my attention. Generally ad hominem attacks are used by those who consider the facts of the case to be dangerous ground, and wish to do anything that they can to avoid discussing them.

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Quelle Surprise! Sorkin Tells Remarkable Whoppers to Defend His Wall Street Sources

Andrew Ross Sorkin has a remarkable piece of hogwash masquerading as a story today. His new piece, “Nowadays, Wall Street Saviors May Wish They Weren’t,” blatantly rewrites crisis history claiming that buyers of failed firms were “pressured” by the government do transactions during the crisis and the Big Bad Government got the better of them.

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More JP Morgan Whitewash

Via e-mail, some updates from Michael Crimmins, a bank compliance expert and member of Occupy the SEC, on the continuing failure of the media to portray the real significance of the JP Morgan London Whale losses: that it revealed glaring deficiencies in internal controls that warrant prosecution of Jamie Dimon under Sarbanes Oxley.

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New York Times Profile of London Whale Boss, Ina Drew, Camouflages Dimon’s Risk Management Failures

A New York Times profile of Ina Drew, the former head of the JP Morgan Chief Investment Office, almost certainly produced high fives in the bank’s corporate communications office. This piece is the best sort of PR you can get: it treats the trading losses as yesterday’s news, of interest only as point of entre into the downfall of a heretofore unknown but once hugely successful and personally appealing trading manager.

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