How Chuck Schumer Caused the Second Largest Bank Failure in US History (CNBC)
Federal officials aren’t supposed to cause bank runs. In fact, much of the New Deal bank regulatory apparatus was set up for the purpose of eliminating such panics. When FDR was hit with a massive set of bank runs shortly after taking office, he gave an address in order to calm terrified depositors, assuring them that the banks would reopen shortly, and that everything would be fine. But Chuck Schumer is no FDR. He doesn’t stop bank runs; he starts them. Or, at least, has started one. The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senator’s comments was not a coincidence. Director Reich concluded that Senator Schumer had ‘given the bank a heart attack’.
Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?
Perhaps this might help answer the question: Indymac has been under attack from the hard left. The Center for Responsible Lending issued an attack on Indymac within a few days of Schumer’s letter. CRL is part of a small army of left of center ‘research’ groups, community organizers, and public interest law firms who make their living accusing home lenders of racial redlining and predatory lending. On June 20th the Center accused Indymac of unfair practices regarding minority borrowers.
A suspicious person might think that a network of lefty attack groups proficient in bank bashing and frequently funded by trial lawyers and short-sellers, coordinated their activities with a law firm on the hunt and a Senator who works closely with the network.
On the other hand, maybe it is a coincidence that CRL and Sen. Schumer attacked the same bank in the same week. Maybe he didn’t know about the CRL report, nor CRL about his letter. Maybe the community group didn’t know about the trial-lawyer class action lawsuit which was launched against Indy a couple of weeks before all of this started.
Yeah, right.
The political class is shifting left. We’re likely to get Obama and Nancy and Harry running the most advanced economy in the world next year. The investor class doesn’t like what it sees coming. That’s why it is scaling back. Capital is going on strike, and we won’t come back to the table until we see that we have a chance to a fair deal.
The World Needs More Speculators [Slate]
Stop demonizing the investors who are betting heavily on oil prices.
Posted Saturday, July 12, 2008, at 7:27 AM ET
When the economy is in turmoil, no one is demonized more than the speculator. First, we are told, speculators have driven up the price of oil, condemning us to expensive heating and driving. Then, they have driven down the price of bank shares, dealing vicious blows to the nation’s noblest banks. All of this, we are supposed to believe, is immensely profitable and highly destabilizing.
With one exception—I’ll come to it—I am not persuaded. I struggle to understand how speculation is supposed to be both profitable and destabilizing all at once. Profitable speculation requires buying low and selling high. Destabilizing speculation requires the opposite: short-selling shares in a trough, thus deepening the trough, and betting that frothy shares will become frothier. In other words, destabilizing speculation means selling low and buying high. If that is a recipe for profit, I am missing something.
Meet our neighbors
Straight out of pulp fiction.
Man charged with 12 felonies in Wis. abductions
By ROBERT IMRIE – 2 hours ago
WISCONSIN RAPIDS, Wis. (AP) — A paper mill worker accused of abducting and sexually assaulting two men was charged with 12 felonies Friday, and authorities said he told an investigator “he knew what he did was wrong.”
A judge found probable cause for a preliminary hearing for 46-year-old Edward Lanphear.
Police say Lanphear held two men in his house, stripped them, chained them up, beat them and assaulted them several times. One of the men told police Lanphear threatened him with a gun.
Police said that after one of the men escaped early this week, the other was found in the basement of Lanphear’s home in a rural area outside Wisconsin Rapids, in the central part of the state.
Lanphear faces felony counts of kidnapping, sexual assault, reckless endangerment, false imprisonment, substantial battery, and misdemeanor impersonating a peace officer. He’s being held in lieu of $1 million bond.
Another cRaZy!
This time, it’s Jesse Jackson (we’re not surprised).
WILLIAMS: Scapegoating speculators
Despite Congress’ periodic hauling of weak-kneed oil executives before their committees to charge them with collusion and price-gouging, subsequent federal investigations turn up no evidence to support the charges.
Right now oil company executives are getting a bit of a respite as Congress has turned its attention to crude oil speculators, blaming them for high oil prices and calling for tighter control over commodity futures trading.
Let’s look at the futures market and for simplicity use corn futures discussed in my May 28 column titled “Futures market.” While corn is different from oil, both obey the laws of supply and demand, just as humans are very different from bricks but both obey the laws of gravity.
A Bipartisan Fix for the Oil Crisis
Opinion column in the WSJ today:
A Bipartisan Fix for the Oil Crisis
July 10, 2008; Page A15
As president of Gulf Oil, New England’s largest independent petroleum company, and as someone who has spent his life in and around energy markets, I find the tone and substance of the current debate about our energy policy to be profoundly disappointing.
Partisan sides are using a serious crisis to advance political agendas, create political attack sound bites, and launch hearings to “expose” the culprit. Pick your favorite: speculators, Big Oil, environmentalists, China, India, etc.
This is not leadership.
A fundamental misunderstanding of how markets work, and how an effective government can support the private sector, is delaying remedies that will bring down energy prices now. These remedies are to be found in both supply and demand – and both Democrats and Republicans need to demonstrate their command of this fact. Energy is too important a cornerstone of domestic prosperity and international stability to be used as a debating prop.
Friedman: et al
” Most of the greatest evils that man has inflicted upon man have come through people feeling quite certain about something which, in fact, was false.” - Bertrand Russell
The following is from the Thomas Friedman’s opinion in the International Herald Tribune. I thought it was worth a read.
Friedman: The energy to be serious
It is great to see that we Americans finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead the United States, it takes your breath away.
Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: We Americans borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build the country.
When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.
KS Local Going to the Olympics
Dive and conquer
Desperate lunge at finish line completes Smith’s journey from rural Kansas to Olympic team
By George Schroeder
The Register-Guard
In the moments before the race, a thought occurred to Cate Holston, advice for her boyfriend. If it was close at the end, she would tell him, don’t lean.
Dive.
On the morning after, the track world still was buzzing about the men’s 800 meters. Our ears still were tingling from what might have been Hayward Field’s loudest moment. Our minds still were reeling from the hometown sweep.
But for the lasting image of the race, and of the larger meaning of the Olympic Trials, what about Christian Smith’s desperate lunge for third place? It’s the kind of thing someone should make into a motivational poster: “Determination.” “How bad do you want it?” Something like that.
Smith has been telling friends how, if he hadn’t dived, he’d have had to live with what-if for the rest of his life. So he went for it.
“Just leaned forward and pushed,” he said. “It was all I had left.”
4th of July in Chicago
Maxine Waters is cRaZy!!!
