Does Anyone feel like Bailing

[sugarpop]

Originally Posted by lookout123

More than a few people did warn people about this. People did see it coming. Those people will continue to 1) preserve assets, and 2) grow assets in any market environment because they don't get caught up with the crowd. The reason they didn't stop it is because it can't be stopped. People are greedy. People are stupid. People are sheep. Individuals who are quite intelligent become sheep when put into groups - welcome to human nature. That is why fortunes are made and lost in every economic cycle.

Well, we certainly agree about that!

You may not have seen it coming or you may have ignored the warnings of those who saw it on the horizon, but that doesn't mean everyone was caught by surprise.

You realize when I made that crack about financial wizards I was joking, right? Well, half joking. I really need to start using smiley face icons.

[xoxoxoBruce]

Does "irrational exuberance" ring a bell?

[sugarpop]

Who? Moi? My exuberance is perfectly rational thank you very much.

[classicman]

Bank secrecy moves may force wealthy back onshore

Wealthy people who have stashed cash in undeclared accounts in Switzerland and other offshore centers may now seek ways to legitimize their money after Berne and other tax haven governments relaxed bank secrecy laws.

In landmark statements, bank secrecy strongholds Switzerland, Luxembourg and Austria offered on Friday more cooperation on tax evasion than ever before to avoid being blacklisted by G20 countries as unco-operative tax havens.

The decision, which comes on the heels of similar moves in other offshore centers, will not eliminate the principles of banking secrecy that have allowed the $7-trillion offshore industry to thrive, and the countries will offer help only on limited cases of suspected tax evasion.

"It is not an open door policy. It is an easing of access to information in respect to tax crime," Swiss President and Finance Minister Hans-Rudolf Merz said on Friday.

But Berne is already looking for a transitory solution to help its client come onshore, and did not rule out the option of negotiating tax amnesties with other jurisdictions.

"This is not a fantasy. It is more than appropriate to talk about amnesties," Merz told a news conference.

Liechtenstein, a tiny Alpine tax haven that also committed to more tax transparency on Thursday, has said it wants a legal solution to help its clients bring undeclared money onshore to stem the massive client withdrawals its banks have been suffering since a tax spat with Germany.

"Tax amnesties are the most attractive solution for banks and bank clients to get out of a problem," said Dirk Hoffmann-Becking, an analyst with Bernstein Research, who says the changes on the tax arena are coming at a faster pace that the industry originally anticipated.

"But it's not in Switzerland's hands to determine them."

There are a lot of people who have inherited undeclared money from their parents," he added. "The younger generations wants to use the money and they cannot do it if the money is not clean."

Swiss tax lawyers say it has become more and more difficult for holders of undeclared accounts to benefit from these as the money cannot be moved and can only be spent in Switzerland.

"This is dead money. It is money that burns under your fingers," said a tax lawyer who declined to be named.

Very interesting.

[xoxoxoBruce]

Originally Posted by sugarpop

Who? Moi? My exuberance is perfectly rational thank you very much.

No, not you.

[tw]

The legacy and attitude of MBAs and George Jr continue. From the NY Times of 14 Mar 2009:

A.I.G. Planning Huge Bonuses After $170 Billion Bailout
The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

When GM was suffering losses some ten plus years ago, employees got no Christmas bonuses and executives reaped record bonuses. GM is also a company dominated by MBAs. When Nardelli was destroying Home Depot, he was given some $200million to leave. Their entitlement as educated financial wizards continues because so few still describe business school graduates properly.

Ironically Geithner is constantly criticized by wacko extremists because he is a threat to financial deregulation and their entitlements. Their attitude, so strongly promoted by George Jr and the extremists, has not changed. As John Stewart asks, where are the prosecutions?

Extremists so love this stuff as to even stifle the prosecution of Enron executives until all but forced to act even by the State of Oklahoma. And still those so often protected by extremists (anybody say Halliburton yet) know it is their right to hundreds of $millions in bonuses because they have an MBA degree; because they are finance people and are therefore superior.

Your stock broker is typically one of the less knowledgeable and yet successfully promotes himself as smart. Have you seen through him yet? If he was smart, he told you to bail last October. The smarter ones even said this last April. But they are not paid to be smart. They are paid to sell you something - whether it is good for you or not.

Legacy and entitlement still live on even in AIG. Wacko extremists would howl if we prosecute the problem. Who created the mythical CA energy crisis? Who ran a nuclear power plant with a potential Three Mile Island problem and a hole in the containment building – and then created the NE blackout – then were protected by extremists after a massive George Jr fund raiser? Legacy and attitude continues. It even explains extremist attacks on Geithner.

When will those extremists call for an investigation of Morgan Stanley and the suspected market manipulation to create $4 per gallon gasoline? Will not happen. Their power comes from promoting entitlement and a legacy agenda. These are the people who Rush Limbaugh praises. Thank you George Jr for creating this economy and its continuing legacy.

AIG knows they deserve bonuses because work by those executives four years ago have created today's spread sheets.

So has Fox News yet broken any of these stories? Did they report any of them? Does the wacko extremist propaganda machine ignore these AIG bonuses? After all, they know Obama is evil and Geithner is to blame.

[classicman]

nah - its all Bush's fault. He teleported into all those meetings and created this "entitlement" mentality. . . yeh thats it.

[sugarpop]

Originally Posted by xoxoxoBruce

No, not you.

It's funny, because I just heard that expression today on TV for the first time. I of course thought of you.

[xoxoxoBruce]

Then you know who I was quoting.

[sugarpop]

I do now.

[sugarpop]

Gee, I'm feeling all warm and fuzzy...

[xoxoxoBruce]

Hormones?

[sugarpop]

ummmmm...

[classicman]

AIG, Larry Summers and the Politics of Deflection

The issue is over AIG announcing it was obligated to pay its traders in its high-risk London unit a sales bonus totaling $165 million for the year. Obama Treasury Secretary, Tim Geithner has announced a novel strategy for ‘justice.’ AIG will ‘reimburse’ the taxpayers up to $165 million for bonuses the company is giving employees. AIG will pay the Treasury an amount equal to the bonuses, and the Treasury will deduct that amount from the $30 billion in government (taxpayer) assistance that will soon go to the company. But he said that the Obama administration hasn't given up on efforts to recoup the money from the employees who got the bonuses. Good luck.

Larry Summers is the man directly responsible for the mess. As Clinton Treasury Secretary from 1999-January 2001 he shaped and pushed the financial deregulation that unleashed the present crisis. He was Treasury Secretary after July 1999 when his boss, Robert Rubin left to become Vice Chairman of Citigroup, where Rubin went on to advance the colossal agenda of deregulated finance directly.

As Treasury Secretary in 1999, Summers played a decisive role in pushing through the repeal of the Glass Steagall Act of 1933 that was instituted to guard against just this kind of banking abuses taxpayers now are having to bail out. Not only Glass-Steagall repeal. In 2000 Summers backed the Commodity Futures Modernization Act that incredibly mandated that financial derivatives, including in energy, could be traded between financial institutions completely without government oversight, ‘Over-the-Counter’ as in where the taxpayer is now being dragged. Credit default Swaps, at the center of the current storm, would not have been possible without Larry Summers and the Commodity Modernization Act of 2000. He is now the White House Economic Council chairman, mandated to find a solution to the crisis he helped make along with Tim Geithner, his friend who is Treasury chief. Foxes should never be asked to guard the henhouse.

There is an awful lot of interesting stuff in this article.
Anyone know anything about the author - F. William Engdahl?

[sugarpop]

No classic, but the more I hear Larry Summers speak, the more full of shit I believe he is. I'm thinking Obama may have to replace some of his financial team.